Illustration: Aïda Amer/Axios
Genetic sequencing giant Illumina will finally divest cancer diagnostic test maker Grail after two years of battling with antitrust regulators.
Why it matters: It's a win for an FTC looking to crack down on antitrust, while offering up a blue chip asset for sale in a moribund M&A market.
Details: According to Illumina's press release, the divestiture will be executed through a third-party sale or capital markets transaction, consistent with the European Commission's divestiture order.
- The company's goal is to finalize the terms by the end of the second quarter of 2024.
Catch up quick: On Friday, the U.S. Fifth Circuit Court of Appeals ordered the FTC to conduct a new review of Illumina's Grail purchase.
- The court said that although the FTC had applied the wrong legal standard in its argument, the agency had substantial evidence to demonstrate the deal would hurt competition.
- Following a review of the Court's opinion, Illumina elected not to pursue further appeals of the Fifth Circuit's decision.
Flashback: Illumina initially spun off Grail in 2016, before buying it back in August 2021 in a deal worth $8 billion.
- Over the ensuing months, Illumina's market value tanked by more than 50%, a drop that prompted activist investor Carl Icahn to launch a campaign to divest the business.
- Former Illumina CEO Francis deSouza resigned in June and was succeeded by Jacob Thaysen.
What they're saying: "We are committed to an expeditious divestiture of Grail in a manner that allows its technology to continue benefitting patients," Thaysen said in the release.
- "This is a major win for the FTC as it works to protect competition in health care," said Henry Liu, FTC Bureau of Competition director.
- "Illumina's decision to unwind its acquisition of Grail ensures the market for cancer detection tests remains competitive and delivers a choice of high-quality tests for patients and physicians, ultimately saving lives."
