US court strikes down FTC order against Illumina’s purchase of Grail

By Diane Bartz and Mike Scarcella

(Reuters) – A U.S. appeals court on Friday struck down the U.S. Federal Trade Commission’s order against Illumina (NASDAQ:)’s purchase of cancer diagnostic test maker Grail, a former subsidiary, saying the agency had applied the wrong legal standard in the antitrust case.

The New Orleans-based panel of the 5th U.S. Circuit Court of Appeals ordered reconsideration of Illumina’s deal, in a 34-page order that marked a setback for FTC.

A three-judge panel said the commission improperly held Illumina to a higher standard under U.S. antitrust law in weighing the company’s defense of the acquisition.

Representatives from the FTC and Illumina did not immediately respond to requests for comment on Friday.

San Diego-based Illumina had filed the appeal in June after the FTC demanded that it divest Grail, with Illumina saying that the agency had denied it due process.

Grail, valued at $7.1 billion under Illumina’s deal, is seeking to market a powerful test to diagnose many kinds of cancer from a single blood test, known as a liquid biopsy.

The companies have battled both U.S. and European antitrust enforcers for more than two years.

The FTC is concerned that Illumina, the dominant provider of DNA sequencing of tumors and cancer cells that help match patients with the best treatment option, might raise prices or refuse to sell to Grail’s rivals.

The agency filed a complaint aimed at stopping the deal in March 2021, but lost before an FTC administrative law judge. The case went back to FTC commissioners, who reinstated the case. Illumina then took it to an appeals court.

Despite the fight with the FTC, and a similar battle in Europe, Illumina closed the acquisition of Grail in mid-2021.

Europe has since proposed measures for Illumina to unwind its acquisition of Grail. Illumina is arguing that it does no business in Europe and therefore the EU competition enforcer has no jurisdiction.

Illumina has pledged to continue selling its DNA sequencing services to other firms. It has offered to sign contracts to supply any of Grail’s rivals and to not raise prices.