The outlook darkens for Illumina

Last week Evaluate Vantage highlighted the two crucial questions for Illumina’s shareholders; today it seems that both have been answered in a less than ideal way. First, the US FTC appealed a ruling that the sequencing group’s acquisition of liquid biopsy maker Grail was legitimate. Second, the European Commission has decided to prohibit the combination, which completed last summer despite the authorities’ not having granted permission. Naturally Illumina is to appeal the Commission’s verdict, insisting that the combined company could allow Galleri, Grail’s blood test for screening asymptomatic patients for more than 50 types of cancer, to reach the EU market at least five years earlier than under Grail alone. But Illumina is preparing for the worst anyway: it is mulling strategic alternatives for Grail in case its appeal is unsucccessful. It has also set cash aside to pay any fine the Commission may impose.

Timeline of a contested deal
Date Event
Jan 10, 2016 Illumina spins Grail out as a separate company
Mar 1, 2017 Grail raises a $900m series B round, then the largest-ever VC funding deal
Sep 9, 2020 Grail says it intends to float on the Nasdaq
Sep 21, 2020 Illumina announces its intention to acquire Grail
Mar 30, 2021 The FTC challenges the deal
Aug 18, 2021 Illumina closes the acquisition, keeping Grail as a separate business unit
Sep 1, 2022 US administrative law judge rules that the deal is not anticompetitive
Sep 2, 2022 The FTC appeals administrative law judge's decision
Sep 6, 2022 European Commission prohibits deal; Illumina says it will appeal the Commission's decision
Source: company releases; SEC filings; the FTC; the European Commission. 

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