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European Union regulators will order U.S. biotech Illumina to sell cancer test developer Grail after it acquired the $8 billion company without Brussels approval, three people with direct knowledge of the matter said.
In July, Brussels fined the world’s largest genetic sequencing company 432 million euros for violating what the regulator called a “cornerstone” of its authority, a move aimed at deepening punishment against Illumina.
New York-listed Illumina and Brussels have been locked in a legal dispute since the San Diego-based company completed its acquisition of Grail in 2021, although EU regulators are still reviewing whether the deal would harm competition.
A year later, Brussels chose to block the deal, saying it would stifle innovation and limit consumer choice. Illumina disputed the EU’s right to review the deal, noting that Grail has no revenue in Europe. The transaction was completed in August 2021.
Illumina is already challenging a similar order from the U.S. Federal Trade Commission, which in April called for the sale of Grail, saying the deal would harm efforts to develop cancer detection methods. The company said it had “strong grounds” to appeal the order.
Brussels competition regulators could issue an order requiring Illumina to sell Grail as early as next week, people familiar with the matter said. But one of the people warned that the timing could still be delayed.
The move is rare for regulators and is intended to deter other companies from defying its authority. Under EU law, companies must submit deals for review and can only complete them after regulators approve them.
“They bought something illegally and now need to sell it,” said a person with direct knowledge of the matter.
Illumina plans to appeal any order to sell Grail, people familiar with the matter said. Illumina and the European Commission declined to comment.
Illumina was fined 10% of its revenue, the largest fine ever imposed by the authorities for such infringement.
In announcing the fine, the commission said Illumina “considered the potential profits that could be gained by acting hastily, even if it was ultimately forced to divest Grail. It then intentionally decided to go ahead and complete the deal while the commission was still investigating the deal that was ultimately enjoined.” .”
Grail, which counts Bill Gates and Jeff Bezos as early investors, aims to create a cancer screening test for people without symptoms. Illumina has accused Brussels of putting lives at risk by blocking a deal to bring a blood test to market to screen for dozens of different cancers.
The Grail acquisition also angered some Illumina shareholders. Activist investor Carl Icahn criticized the deal as reckless and urged Illumina’s longtime CEO Francis deSouza, who agreed to resign in June, to quit.
Additional reporting by Hannah Kuchler in London
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