The biotech firm
Illumina
said it would sell or spin off subsidiary Grail after a battle with regulators.
Grail, which is seeking to market blood tests for cancer, was wholly acquired by San Diego-based Illumina in 2021 for $7.1 billion. U.S. and European regulators objected to the deal, arguing it would stifle medical innovation. The European Commission ordered Illumina to unwind the deal in October, after the U.S. had made a similar demand earlier this year. Last week, a U.S. court ruled that the government had the right to challenge the deal.
The decision shows Illumina didn’t see a way to overcome regulators’ objections. The antitrust battle has weighed on Illumina shares, which were down 37% this year coming into Monday trading, and led to the departure of CEO Francis deSouza in June.
The decision not to challenge objections to the deal further will free up Illumina to focus on its gene-sequencing business. Shares gained 1.5% to $129.01 in premarket trading Monday.
Illumina said it expects to complete the divestment next year. If it spins Grail off, it will be required to capitalize the company for more than two years and ensure it is as competitive afterward as before. Illumina may also seek a corporate buyer for the unit.
Shares of competitor
Thermo Fisher Scientific
were up 0.3% early Monday. Pharmaceutical company
Pfizer
‘s stock was up 1%.
Write to Brian Swint at [email protected]
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