After years of battling to retain its hold on Grail Inc., Illumina Inc. finally announced that it will be unwinding the ill-fated acquisition of the multi-cancer early detection test maker. In addition to stiff opposition from activist investor Carl Icahn that cost Illumina’s previous CEO and board chair their positions, European and U.S. regulators have consistently opposed the deal.
The European Commission (EC) has ordered Illumina Inc. to sell Grail Inc. after it closed the acquisition without approval from EU regulators. The EC said that if Illumina fails to comply with the order, the company faces fines of up to 5% of its daily aggregate revenue or up to 10% of its annual worldwide revenue.
The proposed $875 million acquisition of Cook Medical Inc.’s reproductive health business by the Coopercompanies Inc. has been scotched, a development lauded by the U.S. Federal Trade Commission in a statement describing the proposed transaction as anticompetitive. However, the FTC statement also pointed to cooperation from authorities in both the U.K. and Australia as critical in forcing the abandonment of the transaction, a signal that such cooperation is likely to grow in the future.
The European Commission (EC) fined Illumina Inc. a record €432 million (US$476 million) for closing the acquisition of Grail Inc. before receiving regulatory approval. It is the highest fine ever imposed on a company by the EC for completing a deal without its consent. Grail was fined €1,000. The companies were found to be in breach of EU merger control rules.
After winning a brutal proxy battle led by activist investor Carl Icahn, Francis deSouza suddenly resigned as CEO and as a member of the board of Illumina Inc. over the weekend. The company appointed General Counsel Charles Dadswell to serve as the interim CEO while it evaluates internal and external candidates for the position. DeSouza will continue in an advisory role until July 31.
The 2023 American Society for Clinical Oncology Annual Meeting featured several notable developments on the diagnostics side, including significant advances in multi-cancer early detection (MCED). Grail Inc. presented its results from SYMPLIFY, the first major study of its MCED test in symptomatic patients. The test showed a negative predictive value of more than 97% and a positive predictive value that exceeded 75% in individuals who presented to primary care with non-specific symptoms that prompted a referral for cancer evaluation.
Boston Scientific Corp., has announced that it has abandoned its plans to acquire M.I. Tech Co. Ltd., of South Korea after opposition was announced by the U.S. Federal Trade Commission (FTC). The FTC lauded the news with a May 24 statement that cited the agency’s cooperation with other national regulatory authorities as a factor in scotching the proposed acquisition, the second time in recent weeks that government agencies have grounded mergers and acquisitions in the med-tech space.
The U.S. Federal Trade Commission (FTC) issued a final order in connection with the proposed reacquisition of Grail Inc. by Illumina Inc., in an action that might seem to finally conclude a matter that has stretched over several years. However, the FTC acknowledged that Illumina has 60 days to petition the order, which Illumina said it intends to do in conjunction with an effort to overturn a similarly adverse outcome in the EU.
From Carl Icahn’s point of view, Illumina Inc.’s desired reintegration of its former spinoff is more a poisoned chalice than a holy Grail. In his opening salvo to a proxy fight, Icahn published an open letter March 13 to other Illumina shareholders referencing the “extreme displeasure” of investors with Illumina’s “reckless” determination to acquire Grail Inc., despite European regulators’ strong opposition to the deal.
The latest U.S. Federal Trade Commission (FTC) hearing on the merger between Illumina Inc., and Grail Inc., highlighted some sharp disagreements over the impact of the transaction on the market for multi-cancer early detection (MCED) tests, but Illumina has vowed to take steps to blunt any such effects in an open offer.