San Diego genetic sequencing pioneer Illumina has been ordered by European Union antitrust regulators to sell cancer test maker Grail, a former spinoff, for completing the acquisition before securing official approval.
Earlier this year corporate raider Carl Icahn launched a proxy fight for control of Illumnia over the Grail acquisition, and former CEO Francis deSouza ultimately resigned.
Antitrust watchdogs on both sides of the Atlantic have sharpened their scrutiny of pharma and biotech deals in recent years on fears that some of these may stifle innovation and reduce competition in the sector.
The gun-jumping cost Illumina a record EU antitrust fine of $457 million for such an offence.
The EU competition enforcer subsequently blocked the $7.1 billion deal in 2022 on concerns that Illumina would have an incentive to stop Grail’s rivals from accessing its technology to develop competing blood-based early cancer detection tests.
“With today’s decision, the commission has adopted restorative measures requiring Illumina to divest Grail and restore the situation prevailing before the completion of the acquisition,” the European Commission said in a statement on Thursday.
The EU watchdog ordered Illumina to restore Grail’s independence to the same level as prior to its acquisition and to ensure that it is as viable and competitive as before the takeover.
Illumina can choose to divest Grail via a trade sale, a capital markets transaction or other methods, but must do it within strict deadlines.
The company must keep Grail separate and viable until the sale is completed.
Illumina said that it was currently reviewing the divestment order.
The company has sued the EU watchdog for blocking the deal, its decision to examine the case despite not meeting the EU merger criteria, an order to keep Grail separate so that it can unwind the deal and the gun-jumping decision.
Reuters contributed to this article.
