Dive Brief:
- Grail has detailed its goals for 2024 after Illumina said that it will finally give up its fight with regulators to retain control of the liquid biopsy test maker it acquired two years ago.
- Grail CEO Bob Ragusa said the developer of the Galleri multi-cancer early detection (MCED) test expects to complete the third year of a more than 140,000-participant study with England’s National Health Service and to initiate a real-world study of 50,000 Medicare beneficiaries in the U.S.
- Grail also said it has continued to make progress over the past year on a premarket approval (PMA) application for Galleri with the Food and Drug Administration.
Dive Insight:
Grail provided the business update as Illumina is preparing to unwind its $8 billion purchase of the company. Illumina announced this week that it will divest Grail, following two years of battling with U.S. and European regulators over the acquisition that it finalized prematurely and a proxy battle led by activist shareholder Carl Icahn, who has pushed for the two businesses to be separated.
Illumina founded Grail in 2015, naming the subsidiary to reflect its goal of reaching the “Holy Grail” of cancer research by creating a test that could detect multiple forms of the disease from a single blood sample. The maker of next-generation sequencing (NGS) platforms later spun off the unit to raise capital to move the MCED test to clinical trials.
Galleri was first offered commercially in April 2021 as a laboratory-developed test for early cancer detection, according to the Federal Trade Commission.
In August 2021, Illumina re-acquired Grail, completing the takeover despite an unfinished regulatory review by the European Union and a pending FTC administrative trial. The European Commission subsequently slapped the company with a record fine, equal to 10% of Illumina’s annual revenue, and ordered it to unwind the acquisition. The FTC also ordered Illumina to divest Grail.
Regulators argued that Illumina’s control of Grail threatened competition in the market for cancer detection tests. Illumina is the dominant producer of NGS platforms used to analyze genetic material from MCED test samples. While Illumina appealed the orders to divest Grail, it also began to lay the groundwork for a divestment.
“Illumina’s decision to unwind its acquisition of Grail ensures the market for cancer detection tests remains competitive and delivers a choice of high-quality tests for patients and physicians, ultimately saving lives,” Henry Liu, director of the FTC’s bureau of competition, said Monday in a statement.
Illumina’s plan to divest Grail follows a ruling by the U.S. Fifth Circuit Court of Appeals on Friday remanding the case for reconsideration. Illumina said it has chosen not to pursue further appeals. The company now plans to divest Grail through a third-party sale or capital markets transaction and to finalize the terms by the end of the second quarter of 2024.
Under the EC’s divestiture order, Illumina will be required to support Grail with two-and-a-half years of funding, based on Grail’s long-range plan, if it pursues a spinoff.
Grail, in its business update, said it expects to expand access to Galleri next year through additional partnerships. Over the past two years, the company said it has worked to drive adoption of the test through more than 100 commercial partnerships with health systems, employers and other healthcare providers.
Meanwhile, Icahn, who waged a proxy contest this spring that forced out Illumina board Chair John Thompson and led to the resignation of CEO Francis deSouza, is suing Illumina. The lawsuit seeks the removal of multiple directors from Illumina’s board and damages of at least $476 million to cover the EC fine and legal fees.
