Illumina Fined €432M By EU For Jumping Gun On Acquisition Of Grail

Illumina, the US DNA-sequencing giant, was hit with a record-breaking fine of €432 million ($476 million) by the European Union for its premature acquisition of cancer-test provider Grail. The fine imposed by the European Commission is the highest they could impose and has been contested by Illumina, who have referred to it as “unlawful, inappropriate and disproportionate”, reported CNBC.

Before the closure of Grail’s acquisition by Illumina in August 2021, European Commission began investigating the deal on competition grounds due to fears that it could give Illumina a dominant position in the market. Illumina is a major supplier of next-generation sequencing systems for genetic and genomic analysis, while Grail is a health company developing blood tests to detect cancer early.

The European Union went on to accuse Illumina of knowingly and deliberately deciding to close the deal while the Commission was still investigating the transaction. Margrethe Vestager, the EU antitrust chief declared, “If companies merge before our clearance, they breach our rules. Illumina and GRAIL knowingly and deliberately did so by implementing their tie-up as we were still investigating. This is a very serious infringement, which requires the imposition of a proportionate fine, with the aim of deterring such conduct.”

The record fine levied by the EU, exceeding its previous fine of $125 million imposed on Altice in 2018, follows U.S. Republican lawmakers, a dozen state attorneys general, and several advocacy groups who argued that the merger would promote the widespread availability of the life-saving technology.

Illumina spokesperson disputes that the EU decision is “unlawful, inappropriate and disproportionate”. They believe that they have the potential to expand the availability, affordability, and profitability of Grail’s Galleri test, which can screen for more than 50 types of cancers through a single blood draw. This has caused their market value to fall from approximately $75 billion in August 2021 to around $29 billion.

The penalty aims to serve as a warning to companies breaking the rules, as an overhasty acquisition can have serious repercussions. Illumina will continue to challenge the decision, and a court may reduce their fine or overturn it. It is uncertain how this decision will affect the development of new treatments and the competition in this high-risk sector.