Illumina (NASDAQ: ILMN) announced that it will acquire GRAIL, a healthcare company focused on life-saving early detection of multiple cancers, despite an ongoing regulatory review by the European Commission. The San Diego biotech will move forward with the deal, but hold GRAIL as a separate and independent unit, pending ongoing regulatory and legal review.
Illumina initially announced that it intended to acquire GRAIL for $7.1 billion back in September 2020. However, regulatory agencies in the United States and Europe opposed the deal citing concerns that it would stifle competition in the market, lead to higher prices and fewer services offered by Illumina.
The U.S. Federal Trade Commission (FTC) voted 4-0 in March to block the deal and the European Commission is conducting its own investigation into the deal and plans to reach a verdict by Nov. 29. With this in mind, Illumina decided to move forward with the acquisition before the deal’s Sept. 20 deadline and comply with regulators during this process.
“The decision to make the acquisition and hold the companies separate permits the regulatory processes to proceed while safeguarding the life-saving, pro-competitive benefits of this vertical transaction without the deal expiring,” said Charles Dadswell, general counsel of Illumina. “We will abide by any outcome ultimately reached by the courts.”
GRAIL’s Galleri blood test detects 50 different cancers before they are symptomatic and Illumina contends that the merger will “accelerate access and adoption of this life-saving test worldwide.” According to Illumina’s 8-K filing, the Galleri test costs $950 because it is not covered by insurance and that this deal is “the fastest way to make the test broadly available and affordable.”
“Just as we are now able to screen for early-stage diabetes and high cholesterol, we will soon be able to conduct multi-cancer early detection with a simple blood test in your doctor’s office,” said Francis deSouza, chief executive officer of Illumina. “Since early detection of cancer saves lives, this new genomic test will be nothing short of transformational for human health and the economics of healthcare.”
Founded in 1998, Illumina is the global leader in DNA sequencing. GRAIL, a company headquartered in Menlo Park, was originally founded by Illumina in 2016 and then spun out from the San Diego biotech back in March 2017.
“The merger with Illumina will get the Galleri test to people far faster. We aim to accelerate this process so the test will be available in doctors’ offices everywhere, fully reimbursed,” said Hans Bishop, CEO of GRAIL. “A one-year acceleration of access to the Galleri test for the U.S. population has the potential to save 10,000 lives over a 9-year period.”
The Aug. 18 announcement came in after the stock market closed for the day.