Fresh off a proxy battle, Illumina has filed an appeal against an FTC order that would have it divest Grail, an early cancer detection company.
In the appeal, Illumina is arguing that FTC "violated due process by depriving Illumina and Grail of a fair proceeding before an impartial tribunal," according to a report from Reuters citing a filing in the U.S. Fifth Circuit Court of Appeals.
The appeal follows FTC ruling for a second time that Illumina should divest Grail. FTC’s complaint alleged that “even if a viable substitute to Illumina’s NGS platform entered the market, it would take years for MCED test developers to switch to a platform other than Illumina’s because they would have to reconfigure their tests to work with the new NGS platform, and in some situations, conduct new clinical trials.”
Illumina acquired Grail in 2021, despite scrutiny from both the FTC and then the European Commission. The move sent shockwaves to both regulatory bodies and launched investigations into the deal.
At the time, Illumina argued that said if it didn’t take these steps to acquire Grail, then the company would be locked into a situation where the deal terms would expire before there is a chance for a full review.
Another Twist in the Merger
If the saga between the two companies couldn’t get more convoluted, earlier this week news outlets reported that Grail incorrectly informed 400 people that they might have cancer.
The company noted it wasn’t a problem with the Galleri cancer detection test, but rather blamed PWN Health, a vendor. Grail noted the error was a “software configuration issue,” according to a report from CBSNews.com.
Proxy Battle
Recently, Carl Ichan, a veteran activist investor, launched a one of the biggest proxy battles in years because of the acquisition. Shareholders gave the boot to John Thompson, the company’s chair. Ichan failed for two other nominees to take board positions, resulting in Francis deSouza and director Robert Epstein being re-elected.
