Administrative Judge Dismisses FTC’s Attempt to Block Acquisition of Early Cancer Detection Company

Lori Kalani, Bernard Nash
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  • In a September 9, 2022 decision, Administrative Law Judge D. Michael Chappell dismissed a complaint filed by the FTC alleging that the $7.1 billion acquisition of multi-cancer early detection (MCED) test maker Grail, Inc. by DNA sequencing company Illumina, Inc. would violate the FTC Act and the Clayton Act.
  • MCED tests examine DNA fragments in the bloodstream, resulting in very early diagnosis and treatment of a wide range of cancers. The FTC had argued that because Illumina’s services and technology were necessary for every MCED company—including Grail’s competitors—the merger would diminish innovation, potentially increase prices and reduce choice and quality of MCED tests.
  • In his Initial Decision, Judge Chappell held that, among other things, the FTC had not met its evidentiary burden of proving its prima facie case that the acquisition would result in a substantial lessening of competition. An important factor in this conclusion was the Open Offer letter—a boilerplate, long-term supply agreement available to all U.S. oncology testing customers who purchased Grail’s products for the purpose of developing or commercializing oncology tests—which prevents Illumina from harming Grail’s competitors.
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