Biotech
Monday, December 18th, 2023 3:28 pm EDT
Key Points
- Illumina’s Decision to Divest Grail: Illumina, a gene sequencing company, has announced its intention to divest cancer diagnostic test maker Grail after facing more than two years of battles with U.S. and European antitrust enforcers and opposition from activist investor Carl Icahn.
- Divestiture Details: The divestiture of Grail will be carried out through a third-party sale or capital markets transaction. Illumina, based in San Diego, expects to finalize the terms of the divestment by the second quarter of 2024. Grail will continue to be held separately during the divestment process, with committed funding from Illumina for Grail’s business.
- Legal Challenges and Regulatory Concerns: Illumina had reacquired Grail in 2021, leading to legal challenges and regulatory concerns. A U.S. appeals court recently ordered the Federal Trade Commission (FTC) to conduct a new review of Illumina’s purchase of Grail, stating that the FTC had applied the wrong legal standard. The FTC was concerned about Illumina’s potential market dominance affecting competition and pricing. In addition, Europe had proposed measures for Illumina to unwind its acquisition of Grail. Illumina had been fined €432 million ($471 million) by the European Union in July for closing its takeover of Grail before securing EU antitrust approval. Despite these challenges, Illumina has decided not to pursue further appeals and plans to divest Grail according to the terms set by the European Commission.
Gene sequencing company Illumina has announced its decision to divest cancer diagnostic test maker Grail after facing opposition from both U.S. and European antitrust enforcers and challenges from activist investor Carl Icahn. The divestiture will occur through a third-party sale or capital markets transaction, with finalization expected by the second quarter of 2024. Grail, valued at $7.1 billion under Illumina’s deal, aims to market a blood test capable of diagnosing various types of cancer through liquid biopsy. Despite being spun off in 2016, Illumina reacquired Grail in 2021, leading to regulatory concerns. A U.S. appeals court recently ordered a new review of Illumina’s purchase of Grail, citing wrong legal standards, prompting the decision to divest. The Federal Trade Commission (FTC) expressed concerns about Illumina’s potential market dominance affecting competition and pricing. In July, Illumina was fined €432 million ($471 million) by the European Union for closing the Grail takeover without securing EU antitrust approval. Illumina had committed to divesting Grail within 12 months, following the European Commission’s order if legal challenges were unsuccessful. Last week, Illumina argued against EU jurisdiction, claiming it does no business in Europe. The acquisition also faced challenges from investors, including Carl Icahn, who won a board seat and sued Illumina in October over fiduciary duty breaches related to the Grail deal. Illumina’s stock price has declined over 37% in the year, leading to a CEO change after Icahn’s successful board challenge.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/18/illumina-to-divest-cancer-test-maker-grail-after-antitrust-battles.html
