Illumina hits the antitrust wall – again
The quest for the Grail is beset with challenges.
The US Federal Trade Commission is really gunning for Illumina. Just over a year after squashing the sequencing giant’s proposed $1.2bn takeover of PacBio, the antitrust regulator is examining Illumina’s $8bn bid for its own spinout, the liquid biopsy developer Grail.
The move comes weeks after the FTC announced it was considering a crackdown on pharmaceutical megamergers. In this instance, the agency says that the proposed Illumina deal risks creating a monopoly for the sequencing technology that underlies multi-cancer screening tests, potentially leading to decreased quality and higher prices. But no such test is yet on sale in the US – not even Grail’s.
Multi-cancer liquid biopsies from Guardant and Roche are already approved in the US, making the FTC’s conclusion seem, on the face of it, an odd one. But these two companies’ tests are geared towards monitoring patients’ response to therapy, rather than screening apparently healthy people to pick up early-stage cancer.
Grail’s Galleri liquid biopsy is intended for this application – but it is not yet commercial. Its US launch as a lab-developed test, without formal oversight by the FDA, is pencilled in for later this year.
The only other pan-cancer test known to be in development as a screen is Thrive Earlier Detection’s CancerSeek. The acquisition of Thrive for $1.7bn by Exact Sciences closed in January.
|Selected multi-cancer liquid biopsy tests|
|Company||Liquid biopsy||Test details||Status in US|
|Guardant Health||Guardant360||Helps assign targeted therapy||Approved Aug 7, 2020|
|Foundation Medicine (Roche)||FoundationOne Liquid CDx||Helps assign targeted therapy||Approved Aug 27, 2020|
|Grail*||Galleri||Screening for early detection and identification of tumour origin||Launch as LDT expected in H2 2021|
|Exact Sciences**||CancerSeek||Screening for early detection and identification of tumour origin||FDA breakthrough device status|
|*Acquisition by Illumina yet to close. **Acquisition of Thrive Earlier Detection closed Jan 2021. Source: Evaluate Medtech, company websites.|
No intended launch date for CancerSeek has yet been given, and analysts from Leerink write that multi-cancer early detection is still years away from becoming a meaningful market, not least because a first-ever FDA approval would be required. Approval is helpful for reimbursement and inclusion in guidelines, which are in turn necessary to build decent sales.
Illumina has come out fighting. Arguing that it has a vested interest in ensuring equal and fair access to sequencing technology, the company’s management called the FTC’s challenge to the transaction “a marked departure from longstanding antitrust precedent”. It added that it is committed to driving prices down by more than 40% by 2025.
Still, when the Illumina-Grail deal was first announced there were worries that it would risk Illumina competing with its own customers in the cancer testing sphere. This already happens in other areas of the group's business such as non-invasive prenatal testing, where it provides sequencers and consumables to other players so they can test pregnant women’s blood for foetal DNA that might contain chromosomal abnormalities.
Illumina also currently sells sequencing instruments and reagents to Grail and also some of the other liquid biopsy developers; it has agreements with both Guardant and Roche, for instance. Should these latter two groups decide to position their tests for early detection rather than just guiding therapy, it is possible that they could become beholden to Illumina in a way that might inhibit competition.
But that is conjectural, and with no multi-cancer tests for early detection on the market yet anyway the FTC is making a call on a future that has yet to unfold. Illumina might have a better case here than it did with the PacBio deal – the question is whether it will get a better result.