Illumina’s acquisition of Grail, a cancer-test developer, has been met with opposition from the Federal Trade Commission (FTC) due to concerns that it stifles competition. The deal, worth $7.1 billion, closed nearly two years ago. However, the FTC has ordered Illumina to undo the deal, prompting the San Diego-based DNA-sequencing company to appeal the ruling.
Support for the Deal
Republican lawmakers, state attorneys general, and several advocacy groups have voiced their support for Illumina’s acquisition of Grail. In total, 14 amicus briefs were filed on Monday urging the U.S. 5th Circuit Court of Appeals to reverse the FTC’s order. The groups argue that the FTC overstepped its authority in trying to unwind the deal and that blocking the merger could harm the development of life-saving technology.
The attorneys general from 12 states, including Alaska, Arkansas, and Virginia, said in one of the briefs, “Unaccountable federal agency power undermines liberty, and overzealous, unfair agency enforcement impedes technological advancements benefitting citizens’ wellbeing.”
Thirty-four Republican lawmakers praised Grail’s early screening test, which can detect more than 50 types of cancers through a single blood draw. Although the test is not approved by the Food and Drug Administration, it has generated limited sales over the past year. The lawmakers argue that Grail needs Illumina to obtain regulatory approval and commercialize production of the test, which are “required steps to delivering the full benefits of these tests to the public and detecting cancer as quickly as possible.”
Opposition to the Deal
The deal has faced opposition from various parties. Last year, the European Commission blocked the acquisition citing similar competition concerns. Illumina has appealed that order. Activist investor Carl Icahn, who holds a 1.4% stake in Illumina, launched a proxy fight with the company over the Grail deal.
Illumina shareholders also voted to oust the chair of its board late last month. Company CEO Francis deSouza stepped down on Sunday after weeks of harsh backlash from Icahn. Icahn’s opposition stemmed from Illumina’s decision to close the acquisition without first gaining approval from antitrust regulators.
In summary, Republican lawmakers, state attorneys general, and advocacy groups have expressed their support for Illumina’s acquisition of Grail. They argue that the FTC overstepped its authority and that blocking the deal could harm the development of life-saving technology. However, the deal has faced opposition from the European Commission and activist investor Carl Icahn. Illumina shareholders have also expressed their dissatisfaction with the acquisition.
Leave a Reply