Genetic testing firm Illumina’s $7.1 billion acquisition of its former subsidiary Grail can’t be unwound by U.S. regulators, a federal administrative judge ruled in a decision released Thursday.
Illumina is still facing a challenge from EU regulators that could force it to unwind the deal and potentially pay hundreds of millions of dollars in fines.
Regulators fear the consolidation of the two firms would decrease competition and harm consumers.
The U.S. Federal Trade Commission filed an administrative complaint in March 2021, saying the deal would “harm competition in the U.S. market for life-saving multi-cancer early detection (MCED) tests.”
Illumina has defended its acquisition of Grail, which develops cancer tests. The firms closed the merger before receiving approval from the FTC and its European Union counterpart, which is still reviewing the transaction.
In a Thursday statement announcing the decision, Illumina said the judge rejected the FTC’s position that the deal would stifle competition.
“As we’ve stated from the outset, this transaction is procompetitive, will advance innovation, lower healthcare costs and save lives. We are pleased that, after considering the evidence, the ALJ has reached the same conclusion,” Charles Dadswell, Illumina’s general counsel, said in a statement.
The FTC did not respond to requests for comment by publication time.
Illumina valued the deal at $8 billion when it was announced in September 2020.
Grail was spun out of Illumina in 2016. Its Galleri blood test is intended to screen for multiple types of cancer. Illumina has said that merging the two companies will ease access to the Galleri test, including obtaining regulatory approval and insurance reimbursement, and scaling production and distribution of the test.
The Wall Street Journal first reported the judge’s decision earlier on Thursday.
This article was updated to show the potential penalties Illumina could face from the European Commission.