FTC orders Illumina to divest $7.1 billion acquisition of cancer test developer Grail

The Federal Trade Commission on Monday ordered Illumina to divest its controversial acquisition of cancer test developer Grail, saying the deal would stifle competition and innovation.

The decision reverses an administrative judge’s September ruling, which dismissed the FTC’s initial challenge of the $7.1 billion deal.

“The Commission found that the acquisition would diminish innovation in the U.S. market for [multi-cancer early detection] tests while increasing prices and decreasing choice and quality of tests,” the FTC said in a press release. “This is extremely concerning given the importance of swiftly developing effective and affordable tools to detect cancer early.”

Illumina said in a statement that it intends to appeal the FTC’s decision in federal court and will seek an expedited decision. 

The FTC’s order comes as the Grail deal faces opposition from European regulators. The EU’s executive body, the European Commission, last year blocked Illumina’s acquisition over similar concerns that it would hurt consumer choice and innovation. 

Illumina said last month it has challenged the European Commission, arguing the agency lacks jurisdiction to block the merger between the two U.S. companies. 

The DNA sequencing company on Monday said winning appeals of the European Commission and FTC decisions would “maximize value for shareholders.” 

“It enables Illumina to expand the availability, affordability and profitability of the groundbreaking Galleri test in the $44-plus billion multi-cancer screening market,” Illumina said, referencing a Grail test product that screens for multiple cancers.

Illumina’s acquisition of Grail has sparked backlash from another opponent in activist investor Carl Icahn. His resistance to the deal stems from Illumina’s decision to close it without approval from antitrust regulators. Icahn launched a proxy fight last month, seeking seats on Illumina’s board of directors and urging the company to unwind the deal. 

Icahn did not immediately respond to a request for comment.