Illumina, the genetic sequencing biotech, has taken the rare step of asking EU judges to prevent a Brussels probe into the group’s $8bn acquisition of Grail, the cancer screening company backed by Jeff Bezos and Bill Gates.
Lawyers for San Diego-based Illumina said they were making the move because Grail had no presence or turnover in Europe. They claimed that an investigation by authorities in Brussels would delay completion of the deal and stifle the development of important medical technology.
Regulators in Brussels said earlier this month they would review the deal after receiving referrals from several countries, including France, Greece and Belgium.
As part of a broader overhaul of competition regulation, Brussels has encouraged countries to refer deals even if they don’t meet the standard thresholds that trigger investigations.
Charles Dadswell, senior vice-president and general counsel for Illumina, said in a statement on Thursday that Brussels took the decision to examine the deal without engaging with the companies.
“The commission’s actions will stifle innovation, fail patients and increase healthcare costs by needlessly delaying this transaction. The acquisition will allow Illumina to bring Grail’s life-saving testing to more patients, more quickly and at a lower cost,” he said.
The company has filed a lawsuit at the General Court in Luxembourg.
The European Commission said it would defend its decision to look into the probe.
Illumina dominates the market for sequencing genomes, providing machines to researchers, for clinical prenatal tests, and more recently, to labs identifying new variants of the virus behind Covid-19. The group’s sales climbed 27 per cent in the first quarter to $1.1bn, the company reported this week.
Grail is pioneering a new kind of test called a liquid biopsy, creating early screening programmes where blood tests can be used to identify tumour DNA before cancer progresses and identify where it is in the body. It is only just beginning to sell its lab tests in the US and has not received FDA approval for its product.
The liquid biopsy start-up was originally spun-out of Illumina in 2016, raising $2bn dollars to fund the early research. It attracted private investors and was planning an initial public offering before Illumina offered to buy it last September.
The potential Brussels probe is not the only hurdle the deal faces. The US Federal Trade Commission has already launched a lawsuit to stop the deal on concerns the tie-up could diminish innovation.
Ilumina has been burnt by regulators before, calling off a $1.2bn merger with Pacific Biosciences last year when competition watchdogs in the UK and the US investigated whether the combined company could become too dominant in DNA sequencers.
“This deal doesn’t fall within the merger control rules because Grail has no presence or turnover in the EU,” said Sebastian Vos, a lawyer at Covington advising Illumina, said of the Grail transaction. “Brussels’ move goes against the fundamental principles of legal certainty.
“I don’t think this helps in these post-Covid times as we are trying to rebuild Europe,” he added.