Illumina wins fast-track appeal of FTC order to offload Grail

[April 20, 2023]  By Mike Scarcella

(Reuters) - A U.S. appeals court on Tuesday said it will accelerate reviewing Illumina Inc's challenge to a federal agency order requiring the biotechnology company to divest cancer diagnostic test maker Grail LLC.

The New Orleans-based 5th U.S. Circuit Court of Appeals issued its ruling over the objection of the Federal Trade Commission. The agency said Illumina had not shown why the appeals court needed to speed up its consideration of the antitrust dispute.

San Diego-based Illumina, which specializes in gene sequencing, is appealing an April 3 FTC order that said the company's $7.1 billion acquisition of Grail will curb competition in the cancer-testing market. Illumina has denied the allegations.

The accelerated pace of the litigation could impose a burden on the FTC. The agency argued to the 5th Circuit that an expedited schedule would be "highly prejudicial" to it based on what it called the "number and complexity" of the issues Illumina intends to raise.

In a court filing, attorneys for Illumina argued expedited review will "enable the possibility of earlier access to a life-saving screening test and eliminate unnecessary roadblocks in the fight against cancer."

An FTC spokesperson did not immediately respond to a request for comment.

A representative from Illumina declined to comment.

The FTC in 2021 sued Illumina over its bid for Grail, a former subsidiary of the company. Illumina completed the deal that year amid the FTC challenge and another from European Union regulators.

Illumina's global headquarters is pictured in San Diego, California, U.S., November 28, 2022. REUTERS/Mike Blake

The U.S. agency contended Illumina's acquisition will harm innovation and cause prices to rise. Grail uses Illumina's DNA sequencing to make a blood test to detect cancers, the FTC said.

An administrative law judge ruled against the FTC last year in what was the first time the agency's in-house court had dismissed an FTC merger challenge. The agency appealed the decision to FTC leadership and won a divestiture order.

In the EU, Illumina is fighting an order requiring divestiture of Grail. The European Commission last December ordered Illumina to reverse its takeover.

The case is Illumina Inc and Grail Inc v. Federal Trade Commission, 5th U.S. Circuit Court of Appeals, No. 23-60167.

For Illumina: David Marriott and Christine Varney of Cravath, Swaine & Moore

For Grail: Michael Egge, Marguerite Sullivan and Al Pfeiffer of Latham & Watkins

For FTC: Matthew Hoffman of FTC

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