European Union Sees Competition Threat If San Diego's Illumina Buys Cancer Test Maker GRAIL

San Diego CA

23 July, 2021

11:28 AM

Description

By Reuters, Times of San Diego July 22, 2021 San Diego-based Illumina's proposed acquisition of cancer test maker GRAIL could curb innovation and competition, European antitrust regulators warned Thursday as they opened a full-scale investigation. The European Commission's announcement confirmed a Reuters story last week. Illumina announced the $8 billion cash-and-stock deal for startup GRAIL last September, buying out investors including Amazon founder Jeff Bezos, to regain control of a company it spun out five years ago. GRAIL makes a non-invasive, early detection biopsy test to screen for many kinds of cancers using DNA sequencing. The EU executive, which acts as the competition enforcer for the 27-country bloc, said its preliminary investigation showed that Illumina could have an economic incentive to block GRAIL's cancer detection rivals. "It is very important to preserve market conditions, allowing the best solutions to emerge for the tests to ultimately reach the market at affordable prices," Commission Executive Vice-President Margrethe Vestager said in a statement. The EU watchdog will decide by Nov. 29 whether to clear or block the deal. Illumina said it will work with the Commission but warned against a veto of the deal. "Re-uniting GRAIL with Illumina will accelerate availability of the GRAIL test by many years in the EEA and globally, saving tens of thousands of lives, and leading to significant health care cost savings," said CEO Francis deSouza in a statement. In Washington, the Federal Trade Commission has filed a complaint seeking to block the deal, arguing that Illumina is the sole provider of the DNA sequencing that GRAIL uses and could prevent others from entering the market. To address antitrust concerns, deSouza told Reuters on Thursday that Illumina had offered a 12-year contract to supply its technology to potential rivals. He also argued that Illumina was best placed to broadly market the test. "This is all about access," he said of the proposed deal. "This will be a test for the rich otherwise, for a while." The deal will face an August trial at the FTC. While seeking EU approval for the deal, Illumina is also challenging in court the EU decision to examine it even though it does not meet the revenue criteria. Regulators say such powers are necessary to prevent companies buying rival start-ups to close them down. Critics however say it creates uncertainties for companies. Times of San Diego is an independent online news site covering the San Diego metropolitan area. Our journalists report on politics, crime, business, sports, education, arts, the military and everyday life in San Diego. No subscription is required, and you can sign up for a free daily newsletter with a summary of the latest news.