The European Commission announced Thursday that it's launching an in-depth investigation into San Diego sequencing giant Illumina's $7.1 billion bid to buy Bay Area cancer diagnostic firm Grail.
The commission, which functions as the European Union's executive arm, has until Nov. 29 to decide whether the deal would stifle competition in the field of early cancer detection. That timeline could be a problem for Illumina, as the company's lawyers have previously stated that the deal will expire by Sept. 20 unless extended.
Grail, which spun out of Illumina in 2016, has developed a test that can spot signs of 50 different cancers from a blood sample. Illumina says it's got the resources to get the Menlo Park company's test widely used and approved by federal regulators, potentially saving 100,000 cancer-related deaths a year. But the commission is worried that acquiring Grail would give Illumina a reason to make it harder for Grail's competitors to develop cancer tests that rely on the company's sequencing technology by driving up prices and offering them fewer services.
"It is very important to preserve market conditions, allowing the best solutions to emerge for the tests to ultimately reach the market at affordable prices, for the benefit of patients," said Margrethe Vestager, the commission's executive vice president, in a statement.
In response, Illumina issued its own statement Thursday, pointing out that it's already offered concessions to competitors. Blocking the deal, according to CEO Francis deSouza, would be a costly mistake.
"When people have access to early cancer detection, lives will be saved," deSouza said. "If this acquisition does not proceed, Grail's European roll-out will be slower and the cost will be measured in the unnecessary loss of life."
Illumina argues that European regulators don't have jurisdiction to review a deal between two U.S. companies. But the U.S. Federal Trade Commission also moved to oppose the deal in March by a bipartisan 4-0 vote.
The FTC initially requested a preliminary injunction to block the deal from going through until a D.C. judge could decide whether the acquisition would be anti-competitive. But the agency later successfully nixed its own request, arguing before a San Diego judge that it didn't need an injunction to block the deal now that the EU was conducting its own review.
