By Sam Boughedda
Illumina (NASDAQ:ILMN) will appeal the Federal Trade Commission's (FTC) decision to order the unwinding of Illumina's $7.1 billion acquisition of GRAIL, the company announced.
The FTC issued an Opinion and Order on Monday, requiring the DNA sequencing provider to divest GRAIL, stating that the deal would stifle competition and innovation in the U.S. market for life-saving cancer tests.
The decision by the FTC reverses an administrative law judge's initial decision that dismissed the charge.
The FTC stated: "The Commission found that the acquisition would diminish innovation in the U.S. market for MCED tests while increasing prices and decreasing choice and quality of tests. This is extremely concerning given the importance of swiftly developing effective and affordable tools to detect cancer early."
Other concerns raised by the FTC include Illumina being able to "easily foreclose" GRAIL's competitors by raising costs and Illumina remaining "the only viable supplier of a critical input."
"Real-world evidence of Illumina's past behavior reinforces the Commission's antitrust concerns," the regulator added. "For instance, Illumina gave GRAIL special pricing and other benefits while it was wholly owned by Illumina."
In its response on Monday, Illumina said it will appeal the decision and intends to file a petition for review with a U.S. Court of Appeals. The company expects a resolution in the US Court of Appeals by late 2023 or early 2024, at around the same time as the decision in the European Court of Justice (ECJ) jurisdictional appeal. The ECJ last year prohibited the company's acquisition of GRAIL, with Illumina stating it intends to appeal the decision.
"Following the FTC Chief Administrative Law Judge's (ALJ) decision in favor of Illumina in September 2022, Illumina believes that it has a strong case on appeal," the company said.
Illumina shares are down over 1% on Monday.