Illumina campus in San Diego
A sign on Illumina’s campus in San Diego. Reuters/Mike Blake

Illumina said Monday it expects the European Union to order that recently acquired Grail be held separately while the acquisition is investigated.

The San Diego-based genomics pioneer is likely to face other measures on top of the hold separate order, however, with the EU competition enforcer sending a warning to other companies.

Grail, which was spun out of Illumina in 2016, makes a non-invasive, early-detection test called Galleri to screen for many kinds of cancers using DNA sequencing.

Illumina says acquiring the company will allow the breakthrough test to get to consumers more quickly.

When the Grail takeover was finalized last month, Illumina said it would hold the company separate while waiting for a European Commission decision on the deal, defying EU merger rules against “gun-jumping.”

Previous instances of gun-jumping have resulted in companies being hit with million-euro fines. Sanctions can be as much as 10% of a company’s global sales.

“We had anticipated that the Commission would seek to impose a hold separate order, and this is the reason why it has already voluntarily agreed to such an arrangement; their proposals are based on Illumina’s voluntary undertakings,” Illumina said in a statement.

It said it would discuss certain changes suggested by the EU in the coming days.

The EU competition enforcer earlier on Monday said it had sent a statement of objections to the companies, setting out the interim measures it plans to take. It did not provide details.

Under EU merger rules, the competition watchdog can order companies to unwind their deals or sell off shares or assets acquired for violations.

Commission Vice-President Margrethe Vestager underlined the seriousness of Illumina’s actions, saying it was the first time companies had openly implemented a deal while regulators were still investigating.

“The standstill obligation is a cornerstone of our ex-ante merger control regime which aims at preventing harmful effects to competition while our review is ongoing,” she said in a statement.

Reuters contributed to this article.

Chris Jennewein is Editor & Publisher of Times of San Diego.