- GeneralM&A
- March 31, 2021
- 4 minutes read
FTC Opposes Illumina’s $8B Purchase Of Cancer Detection Startup Grail
The US Federal Trade Commission (FTC) has sued to block the $8 billion purchase of cancer detection startup Grail by Illumina,…
The US Federal Trade Commission (FTC) has sued to block the $8 billion purchase of cancer detection startup Grail by Illumina, a publicly-traded genetic sequencing company.
Illumina has sought to acquire Grail, which’s working on blood-based cancer detection tests, for $3.5 billion in cash and $4.5 billion in stock net of the 12% stake it already owns as an investor in Grail. To note, Grail was itself spun out of Illumina.
- With a legal case in the brews, the FTC argues that Illumina’s planned purchase of Grail will “diminish innovation in the U.S. market” for multi-cancer early detection (MCED) tests, given that the blood-based early cancer detection test that Grail is developing depends on a type of DNA sequencing that only Illumina provides.
- On its end, the FTC is challenging Illumina’s planned Grail purchase as one that’ll give it an unfair edge in the MCED test market and has thus sued to block the purchase. A trial for the case will begin on Aug. 24, 2021.
- On Illumina’s end, it’s vowed to fight the FTC’s lawsuit and to push to proceed to acquire Grail. The company says it “strongly believes that acquiring GRAIL is in the best interest of patients, is procompetitive, and benefits the multi-cancer early detection field as a whole.”
- With the FTC on its neck, Illumina’s planned acquisition of Grail is now contingent on the court of law giving it a greenlight. Many times, a lawsuit from the FTC in opposition to an acquisition by a company has made things difficult and in some cases led to such acquisitions being called off.
- One recent notable case is that of Visa and fintech startup Plaid, which Visa agreed to buy for over $5 billion but then backed out of the purchase after opposition from the FTC.
- In Illumina’s case, we’ll closely watch to see if it’ll able to proceed to acquire a company that it originally founded and spun out five years ago. Notably, Grail had already filed for an IPO and was on its way to the public markets before Illumina swooped in with a lucrative offer to buy the company.
