Skip to main content
Premium Trial:

Request an Annual Quote

European Commission Opens In-Depth Investigation of $8B Illumina-Grail Merger

This story has been updated to include additional information from Illumina.

NEW YORK – The European Commission said Thursday that it has broadened its investigation into Illumina's plans to acquire liquid biopsy firm Grail.

The Commission's competition regulators are opening this second phase of the investigation "to assess whether the proposed transaction … would threaten the ability of developers of cancer detection tests to effectively compete in this area and bring innovative products to the market," Commission Executive VP Margrethe Vestager, who is responsible for competition policy, said in a statement. "It is very important to preserve market conditions allowing the best solutions to emerge for the tests to ultimately reach the market at affordable prices, for the benefit of patients."

The preliminary investigation, begun in April at the behest of France, Belgium, Greece, Iceland, the Netherlands, and Norway, has led the Commission to become concerned that the deal could affect the development and supply of next-generation sequencing-based cancer detection tests and that Illumina could have an economic incentive to disadvantage Grail's competitors in the liquid biopsy market.

The governing body said it will now evaluate what the effects of the deal might be, to determine whether its initial concerns are justified.

Illumina reiterated its commitment to see the deal through. "This acquisition is procompetitive, and we have offered far-reaching structural and behavioral remedies to address any potential concerns," Charles Dadswell, Illumina general counsel, said in a statement. "Illumina will continue to work with the European Commission to ensure that it has the information and assurances necessary to approve this transaction. We look forward to presenting our position during the Phase II process."

Illumina said it could not specify what remedies it had offered, citing European guidelines on sharing information outside of court, but said they were similar to what it has offered in the US: guaranteed supply agreements to customers for up to 12 years and a commitment to lower sequencing price per gigabase by 40 percent by 2025. 

Illumina and Grail also have filed a legal challenge to the Commission's authority to review the acquisition. The deal, announced in September 2020, is one of the first in any industry to receive scrutiny as a result of recent changes to guidance about competition review. The US Federal Trade Commission has also raised concerns about the deal's potential to lessen competition in cancer early detection testing and has sought to block it.

Specifically, the European Commission said it is concerned that by buying Grail, "Illumina could engage in vertical input foreclosure strategies given its leading position in the NGS systems that are crucial inputs for the development and commercialization of NGS-based cancer detection tests. Such foreclosure strategies could have an adverse impact on Grail's rivals and European patients, in particular by hampering innovation; reducing the choice, innovative features, and performance of products available to patients, doctors, and health systems; and increasing barriers to enter the NGS-based cancer detection tests space."

The Commission said it has until Nov. 29 to make a decision. "The opening of an in-depth inquiry does not prejudge the outcome of the investigation," it said.

That deadline potentially leaves a narrow window between the end of the investigation and the deadline for completing the deal, which is Dec. 20, assuming that the parties exercise a three-month extension, SVB Leerink analyst Puneet Souda wrote in a research note.

In afternoon trading on the Nasdaq, shares of Illumina were flat at $484.88.