Illumina accused of ‘playing delay tactics’ to push back EU decision on divesting Grail: Financial Times

Dive Brief:

• Officials in the European Union think Illumina is “playing delay tactics” to hold up a ruling on the divestiture of Grail, according to the Financial Times.
• Citing an anonymous person with direct knowledge of the EU’s position, the newspaper reported that Illumina wants to drag the legal process out. Delaying the decision on divesting Grail could enable Illumina to sell the liquid biopsy business when the market is more favorable.
• The report contradicts Illumina’s public statements. As it fought back against a challenge by activist investor Carl Icahn, Illumina said it was working with regulators to “define Grail’s path forward as expeditiously as possible.”

Dive Insight:

After the EU blocked the acquisition of Grail last year, Illumina appealed the decision and triggered a process that will lead to a final ruling on whether it needs to divest the liquid biopsy business. The Financial Times cited four people with direct knowledge of the matter, who said that Illumina opposed an EU application to expedite the appeal and delivery of the final ruling. 

A delay could buy time to sell Grail at better market value, a person described by the newspaper as familiar with the company’s strategy told the FT. Illumina agreed to buy Grail in Sept. 2020, before the downturn in the stock market that has decreased the value of some diagnostics and life sciences companies.

“Illumina doesn’t want a fast process in court, they are playing delay tactics,” a person with direct knowledge of the EU’s position told the newspaper. “The way Illumina is behaving contradicts its claim that it wants to solve the issue fast.”

Shares in Exact Sciences, one of Grail’s rivals for the liquid biopsy market, fell 60% between Sept. 2020 and Oct. 2022. The stock has recovered in recent months but the slump and broader market downturn show how the timing of the Grail divestiture could affect the price Illumina gets. The number of initial public offerings, one way for Illumina to divest Grail, is down 41% compared to the same period of 2022.

Illumina has another explanation for the delay, telling the Financial Times “the EC’s request for expedited treatment was entirely one-sided” and “would have unfairly deprived us of any ability to respond in writing to the EC’s extensive arguments on appeal and would have also deprived the intervenors of any ability to present their views in writing, thus limiting their ability to participate in the proceedings.”