The Divestiture Process
San Diego-based Illumina (NASDAQ:ILMN) announced on Sunday its plans to divest cancer diagnostic test maker Grail after enduring a more than two-year-long struggle with both U.S. and European antitrust enforcers. The relentless opposition from activist investor Carl Icahn further complicated the scenario. Illumina stated that it aims to accomplish the divestiture through a third-party sale or a capital markets transaction. The terms of the divestiture are expected to be finalized by the second quarter of 2024.
Grail’s Blood Test for Cancer Diagnosis
Grail, valued at $7.1 billion under the agreement with Illumina, is currently focusing on marketing a potentially groundbreaking blood test capable of diagnosing various types of cancer through a liquid biopsy. This innovative approach could revolutionize cancer detection and contribute to earlier diagnosis and treatment.
U.S. Appeals Court Ruling
The decision to divest follows a ruling on Friday by the U.S. appeals court which invalidated a Federal Trade Commission (FTC) order against Illumina’s acquisition of Grail, a former subsidiary. The court concluded that the FTC had misapplied the legal standard in its evaluation.
Concerns and Proposed Measures
The FTC expressed concerns regarding Illumina’s dominance as the primary provider of DNA sequencing for tumors and cancer cells, enabling the identification of optimal treatments for patients. Worries emerged over the potential for price increases and refusal to provide services to Grail’s test rivals. In response, Europe proposed certain measures to unwind Illumina’s acquisition of Grail. By strategically navigating the antitrust battles and addressing concerns raised by regulatory bodies, Illumina hopes to move forward and continue its mission to advance cancer diagnostics through innovative technologies.