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Gene sequencing firm Illumina mentioned on Sunday it should divest most cancers diagnostic check maker Grail after the businesses battled each U.S. and European antitrust enforcers for greater than two years and confronted fierce opposition from activist investor Carl Icahn.
The divestiture shall be executed via a third-party sale or capital markets transaction, San Diego-based Illumina mentioned in a press release, including that it will finalize the phrases by the second quarter of 2024.
Grail will proceed to be held individually with dedicated funding from Illumina for the corporate’s enterprise via the divestment course of, the previous mentioned in a separate assertion.
Grail, valued at $7.1 billion underneath Illumina’s deal, is searching for to market a blood check that may diagnose many sorts of most cancers, often known as a liquid biopsy.
Illumina had spun off Grail in 2016 however retained a 12% stake. It reacquired Grail in 2021 regardless of competitors considerations.
A U.S. appeals court docket on Friday ordered the Federal Commerce Fee (FTC) to conduct a brand new evaluation of Illumina’s buy of Grail, saying the company had utilized the fallacious authorized normal in its arguments. However the court docket mentioned the FTC had substantial proof to indicate the deal would reduce competitors and opened the door to the regulator pursuing a brand new authorized technique to dam the deal.
Illumina had determined to not pursue additional appeals of the Fifth Circuit’s choice, it mentioned.
The FTC was involved that Illumina, the dominant supplier of DNA sequencing of tumors and most cancers cells that assist match sufferers with remedies almost certainly to profit them, would possibly elevate costs or refuse to promote to Grail’s check rivals.
Europe had proposed measures for Illumina to unwind its acquisition of Grail.
In July, Illumina was fined a document 432 million euros ($471 million) by the European Union for closing its takeover of Grail earlier than securing EU antitrust approval.
Illumina had mentioned in October it will divest Grail in 12 months, in response to the phrases of the European Fee’s order, if the corporate doesn’t win its problem in court docket.
Final week, Illumina argued that it does no enterprise in Europe and subsequently the EU competitors enforcer has no jurisdiction.
Illumina’s acquisition of Grail additionally got here underneath strain from traders, together with billionaire Icahn, who led a profitable board problem in Might. Icahn in October sued Illumina, accusing the corporate of breaching its fiduciary duties over the Grail deal.
Illumina’s inventory worth has tumbled greater than 37% to this point this yr, and the board changed the CEO quickly after Icahn received one board seat.
Icahn didn’t instantly reply to Reuters request for remark.
