WASHINGTON (Reuters) -A U.S. administrative judge has ruled in favor of Illumina Inc (NASDAQ:ILMN)'s acquisition of cancer detection test maker Grail Inc, the U.S. maker of genetic analysis equipment said on Thursday.
Michael Chappell, the U.S. Federal Trade Commission's Chief Administrative Law Judge, ruled the acquisition will not hurt competition, in a blow to the FTC under President Joe Biden which challenged the deal.
Increasing competition has been a mandate of the Biden administration, and the FTC's Director of the Bureau of Competition Holly Vedova said they may challenge the court ruling.
"The Bureau of Competition is disappointed with this decision. We are reviewing the opinion and evaluating our options," she said in a statement.
Reuters reported in July Illumina's acquisition of Grail will likely be blocked by EU antitrust regulators because of concerns about concessions offered by the U.S. life sciences firm, people familiar with the matter said on Wednesday, citing sources.
Illumina closed the deal in August 2021 but said it would hold Grail as a separate company with regard to the EU review.
The FTC filed a lawsuit in March 2021 to stop Illumina's $7.1 billion deal to buy its former subsidiary Grail, arguing the deal would slow innovation for tests designed to detect multiple kinds of cancer. The vote to sue was unanimous.
The judge "rejected the FTC's position that the deal would adversely affect competition in a putative market for multi-cancer early detection (MCED) tests," Illumina said in a statement.
FTC staff can appeal the decision to the five-member Commission, which has the authority to overturn the judge's decision.
Two key Republicans on the House Judiciary Committee in September 2021 had raised concerns about what it called the FTC's "unusual approach" to the merger, alleging the FTC chose to use its internal administrative court rather than a federal district court where they were more likely to lose. The House Judiciary Committee Republicans on Thursday tweeted the ruling was "a big development."
The FTC has said Illumina is the dominant provider of DNA sequencing for multi-cancer early detection tests, which Grail uses to make a blood test to detect cancers.
The deal would mean Illumina would have no incentive to provide the DNA sequencing to Grail's rivals, or would have an incentive to try to raise their costs, the agency had argued.