US FTC urges judge to block Illumina's Grail takeover
The US's Federal Trade Commission has urged a judge to prevent US biotech company Illumina from merging with cancer screening company Grail over fears it could harm competition and have an adverse effect on prices.
The two companies finalised the deal last week, coming in at roughly $8 billion (€6.85 billion), despite ongoing antitrust investigations by the EU, allegedly because the two came to an agreement without EU approval.
Read more: Illumina finalises $8bn Grail merger despite ongoing EU probe
The FTC trial could run until early October, with FTC senior council member Susan Musser suggesting the merger could enable the company to stifle market competitors.
She said Grail and its competitors are dependent on Illumina's technology in order to conduct their affairs, fearing the takeover could incentivise Grail to put its rivals out of business, adding that "the war on cancer, if it is to be won, will be won by competition, not by this acquisition."
"Grail is in an 'innovation race' to develop and market its early-detection test, and Illumina would have the power to anoint Grail the winner if the deal is not cancelled," she concluded.
The FTC first lodged a complaint against the deal in March over fears the merger would harm the test-detection market and drive up prices.
The circumstances surrounding the deal are rare for a number of reasons. Firstly, the deal was approved despite ongoing legal proceedings by the EU, with the FTC also considering action against the two companies. Secondly, antitrust charges are seldom levied against "vertical mergers" - a merger between two companies that are not direct competitors.
In a statement announcing the merger, Illumina revealed the deal went through because an outcome of the EU's investigation was "projected [to end] after the deal expires" on December 20.
It claims there was no legal barrier blocking the deal.
It also believes the European Commission has no jurisdiction over Grail due to the fact it does not operate within the European Union.
Illumina originally owned Grail from its inception in 1998 but spun it off in 2016 to allow it to forge its own path. Illumina retained a 12% stake in the company after letting it go.
"The FTC's theory asks the court to forego the life-saving benefits of this transaction to avoid the potential harm that could not possibly occur for years - that could only occur, we submit, if other tests actually in fact ultimately are developed," Illumina's lawyer David Marriott said in his opening statement, suggesting the merger would actually accelerate the development of cancer screening services.
He accused the FTC of "gambling" with human lives.
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Illumina first expressed interest in reacquiring Grail a year ago, four years after spinning the company off.
Grail's primary claim to fame is a blood test that can reportedly detect 50 types of cancer before symptoms appear.
The company is also backed by billionaire donors like Bill Gates and Jeff Bezos.
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