FTC Seeks To Block Illumina’s Planned $7B Grail Deal

The Federal Trade Commission (FTC) filed a lawsuit Tuesday, March 30, that seeks to block Illumina’s planned US$7.1 billion acquisition of a developer of a long-sought blood test that promises to detect cancer early, reported The Wall Street Journal.

The case sets up a major test for US antitrust enforcement because Illumina’s proposed acquisition of Grail Inc. is a vertical merger of companies that don’t compete head-to-head. Most merger lawsuits involve challenges to so-called horizontal deals that involve the combination of direct rivals.

There has only been one litigated challenge to a vertical merger in more than 40 years: the Justice Department’s 2017 case against AT&T’s acquisition of Time Warner, which the government lost.

Grail is among a number of companies that are trying to develop blood-based tests for detecting cancers early. The tests, known as liquid biopsies, look in blood samples for genetic signs of cancer.

Illumina develops and sells next-generation sequencing machines that run these tests, and the chemicals used in them. It founded Grail in 2016 and owns a 15% stake in the company. Illumina announced its intent to buy the remaining stake last year, as Grail was preparing to go public.

The FTC’s lawsuit alleges the deal would diminish innovation in the US market for multicancer early detection tests. Test developers have no choice but to use Illumina’s instruments, and because of its role as a critical supplier, Illumina could raise the prices it charges to Grail’s competitors and impede their research and development efforts, the commission alleged.

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