The FTC on Monday ordered Illumina to unwind the merger, reversing an administrative law judge’s ruling that supported the big medical testing company and furnishing the latest sign the commission is taking a more aggressive stance toward deal making.
All the commission’s members voted in support of the decision, including its sole Republican member.
A combination of Grail and Illumina would hurt development of tests that can detect cancers early while increasing prices, the FTC said, because Illumina is the dominant producer of the gene-sequencing machines that the tests use to look for signs of cancer in blood samples.
“This is extremely concerning given the importance of swiftly developing effective and affordable tools to detect cancer early,” the agency said.
Illumina said it would appeal the FTC’s decision to a federal court, and it expects the FTC’s order to be delayed pending the appeal.
The scrutiny of the deal concerns an important and emerging field in medicine: the use of sophisticated tests to diagnose disease before it gets too late to treat.
Grail’s cancer-detection tests, sometimes known as liquid biopsies, are at the forefront of these efforts. The tests could help doctors cure patients because they promise to detect tumors during earlier stages of disease, when they are easier to treat.
Grail’s cancer-detection tests could help doctors cure patients. Illumina, which is best known for its gene-sequencing machines, had founded Grail but spun it off in 2017, while retaining a small stake.
San Diego-based Illumina reached a deal to buy the part of Grail, of Menlo Park, Calif., that it didn’t already own in 2020 and completed the acquisition the next year
Illumina went ahead even though FTC and European antitrust authorities raised concerns it would hurt competition. The FTC moved to block the deal in 2021, and the European Union last year started to detail its plans for ordering Illumina to unwind the Grail acquisition.
The company pushed ahead even though the regulatory environment for deal making showed signs of tightening, after several years in which technology and healthcare companies had been able to pursue ever bigger combinations unchallenged.
The government’s attitude has shifted as researchers point to examples of healthcare consolidation resulting in higher prices and lawmakers criticize big social-media companies for exposing children to harmful content.
FTC Chairwoman Lina Khan has said the agency would scrutinize mergers more closely, especially those between technology and healthcare companies.
She and the three other members of the commission voted 4-0 against Illumina. Christine Wilson, the sole Republican, issued a concurring opinion before resigning Friday.
In its decision, the FTC said Illumina is expected to remain the primary supplier for the products needed to conduct multi-cancer screening tests.
The commission said Illumina has strong financial incentives to ensure that Grail outperforms competitors, and that Illumina could easily raise costs for those competitors or take other steps to impede their competitiveness.
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