Illumina to sell cancer test maker Grail after antitrust fight By Reuters

© Reuters. File photo: This is a photo of a sign at the main entrance to Illumina’s global headquarters in San Diego, California, USA, November 28, 2022. REUTERS/Mike Blake/File Photo

(Reuters) – Genetic sequencing company Illumina (NASDAQ:) will sell cancer diagnostic test maker Grail on Sunday, after battling antitrust enforcers in the U.S. and Europe for more than two years and facing fierce opposition from activist investor Carl Icahn. It was stated in

San Diego-based Illumina said in a statement that the sale will occur through a third-party sale or capital markets transaction, adding that it expects to finalize terms by the second quarter of 2024.

Through the sale process, Grail will continue to receive committed funds from Illumina for the company’s business, which will remain separate, Grail said in a separate statement.

Grail, valued at $7.1 billion following its deal with Illumina, is exploring the market for blood tests that can diagnose various types of cancer, known as liquid biopsies.

Illumina spun off Grail in 2016 but retained a 12% stake. Despite competition concerns, it reacquired Grail in 2021.

A U.S. appeals court on Friday ordered the Federal Trade Commission (FTC) to conduct a new review of Illumina’s purchase of Grail, saying the agency applied the wrong legal standard to the claims. But the court said the FTC had substantial evidence showing the deal would lessen competition and opened the door for regulators to pursue new legal strategies to block the deal.

Illumina said it has decided not to pursue any further appeal of the Fifth Circuit’s decision.

The FTC was concerned that Illumina, a provider of DNA sequencing of tumors and cancer cells that helps find treatments most likely to benefit patients, could raise prices or refuse to sell Grail’s tests to competitors.

Europe has proposed steps to cancel Illumina’s acquisition of Grail.

In July, Illumina was fined a record 432 million euros ($471 million) by the European Union for halting its acquisition of Grail before it received EU antitrust approval.

Illumina said in October that it would sell Grail within 12 months, subject to the terms of a European Commission order, if the company did not win in court.

Last week, Illumina argued that the EU competition enforcer had no jurisdiction because it did not do business in Europe.

Illumina’s acquisition of Grail has come under pressure from investors, including billionaire Icahn, who led a successful board challenge in May. Last October, Icahn filed a lawsuit accusing Illumina of breaching its fiduciary duties in the Grail deal.

Illumina’s stock has fallen more than 37% so far this year, and its board replaced its CEO shortly after Icahn won one board seat.

Icahn immediately responded to Reuters’ request for comment.

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