On Sunday, gene sequencing company Illumina shared its plan to sell cancer diagnostic test maker Grail. The decision comes after a two-year struggle with U.S. and European antitrust authorities and opposition from investor Carl Icahn.
Illumina, based in San Diego, will carry out the sale through a third-party or capital markets transaction. The terms are expected to be finalized by the second quarter of 2024.
Grail, valued at $7.1 billion, is working on a blood test, called a liquid biopsy, to diagnose different cancers. Throughout the process, Grail will continue separately with funding from Illumina.
Illumina had initially spun off Grail in 2016 but bought it back in 2021. A U.S. appeals court recently told the Federal Trade Commission (FTC) to review the acquisition again. The Company decided not to appeal further, but the court acknowledged evidence of potential reduced competition.
FTC was worried Illumina might raise prices or refuse to sell to Grail’s test rivals. In Europe, measures were proposed to undo the Grail acquisition.
In July, the European Union fined Illumina 432 million euros ($471 million) for completing the Grail takeover without EU approval. It is committed to divesting Grail in 12 months unless it wins its legal challenge.
Recently, Illumina argued it doesn’t do business in Europe, challenging the EU’s jurisdiction. Investor Carl Icahn also opposed the acquisition and sued the company in October, alleging a breach of duties.
The stock price of Illumina dropped over 37% this year, leading to a CEO change after Icahn won a board seat. Icahn has not yet responded to Reuters’ requests for comment.