More than 20 companies in Europe developing liquid biopsy tests could benefit from the European Commission’s recent decision to ban Illumina’s acquisition of Grail in the EU. The GlobalData MIC Pipeline Products database highlights companies such as Angle, Elypta, Inivata and Hummingbird Diagnostics that are conducting several clinical trials in Europe for early cancer detection blood tests. The quest for the Holy Grail of Illumina has come to a halt following a landmark decision by the European Commission under the EU Merger Regulation (EUTMR) to block the deal over concerns that Illumina does not take hold of the liquid biopsy market.
In a Sept. 6 announcement, the European Commission said the $8 billion deal would stifle innovation and reduce choice in the emerging market for liquid biopsy tests. Although Illumina offers solutions to address the concerns, the Commission judged that the acquisition could prevent Grail’s rivals who depend on Illumina’s sequencing technology from developing and commercializing their own cancer detection tests.
“Illumina is currently the only credible provider of technology to develop and process these tests. With this transaction, Illumina would have an incentive to prevent Grail’s rivals from accessing its technology, or otherwise disadvantage them,” said EU Competition Commissioner Margrethe Vestager. “It is vital to preserve competition between developers of early cancer detection tests at this critical stage of development. Since Illumina did not offer any remedies that would have resolved our concerns, we prohibited the merger.
Vestager claimed that Grail’s rivals could develop potentially cheaper new tests, so blocking the acquisition ensures these tests can reach the market to benefit patients. Competition in the liquid biopsy field is fierce, with several companies vying to bring early cancer detection tests to market. According to the GlobalData MIC Pipeline Products database, approximately 100 companies worldwide are actively developing liquid biopsy tests, the majority in the United States. The revenue potential is extremely high, with analysts predicting the market could exceed 40 billion euros ($) per year by 2035.
Grail’s Galleri test has been particularly hyped because it can detect up to 50 different types of cancer in a single test. The company has already signed several partnership announcements with companies such as Quest Diagnostics, Amgen, AstraZeneca and Bristol Myers Squibb to advance studies. Although it is currently available as a laboratory-developed test in the United States, Grail expects to see a submission for FDA approval by 2023 after the completion of its PATHFINDER clinical trial.
“The fear in Europe around this deal could be because Illumina can build a monopoly position across a wide range of diseases, such is the power of NGS [next-generation sequencing], thereby driving up prices, and not necessarily conducive to developing the “best” possible test due to lack of competition,” said Andrew Thompson, Director of Therapeutic Research and Analytics, Medical Devices at GlobalData. “The new European Medical Devices Regulation, in its preamble, states that the intention of the Regulation is to provide EU citizens with access to the most effective and safest medical devices, through a process that increases the need for clinical evidence. A monopoly could conflict with this objective.
A landmark decision
According to Dr Christophe Carugati, a researcher in competition law at the European think tank Bruegel, the Commission’s decision was surprising for several reasons that the industry should pay attention to. “The case has shown several things, the first is that the Commission will be able to use this referral system, Article 22, to accept referral requests from a national competition authority (NCA) of a Member State in order to to examine transactions on which the NCA disagrees.are competent under national law.Secondly, the Commission has shown its willingness to block vertical mergers as well as agreements which, in its opinion, , could have an impact on innovation, which is very rare. It is complicated to assess the impact of an agreement on innovation, so this is the first time that the Commission has blocked an agreement because it wants to protect innovation in a market.”
The EU ban decision came less than a week after Illumina won a lawsuit brought by the US Federal Trade Commission (FTC) to block the deal. Although the FTC is appealing the decision, for now the companies will be subject to conflicting rulings.
“There are two schools of thought regarding competition in this case,” says Stijn Huijts, competition law expert at Geradin Partners and former legal director of the UK’s Competition and Markets Authority (CMA). “The first is that these tests have to come to market as quickly as possible and by concluding this agreement which will be concluded. While authorities say that if Illumina owns Grail, it no longer has an interest in making this technology available to other early testing providers. If you subscribe to this second view, this agreement will be positive, because you would assume that lllumina will continue to provide its technology to other early test providers and that competition in this space will be preserved.
One thing that remains to be determined is whether Illumina will face a fine for making the deal, without waiting for the European Commission to make a decision. Illumina initially completed the acquisition in August 2021, causing the Commission to open an investigation against Illumina for breaching its “standstill obligation”. If Illumina and Grail are found to have implemented the transaction in violation of the EUTMR, they could each be fined up to 10% of their annual worldwide revenue.
“It will be very interesting to see what the Commission does in this regard,” adds Huijts. “I think the FTC and the European Commission are on the same page on this deal. They both think it will be bad for competition, but obviously the FTC has suffered a loss in court. They will therefore be very happy to see that the European Commission proceeds to block the agreement, because the appeal of the FTC would be much more difficult if the European Commission had indeed authorized the agreement.
Slow clinical impact
Despite the buzz around liquid biopsy tests, their clinical arrival has been slow and the price around the tests is a subject of debate. Exact Sciences has managed to convince healthcare providers that its Cologuard test’s utility is worth $500, but Grail aims to make its liquid biopsy test available for around $995. The Guardant360 test is also expected to cost $6,800. For the tests to have a lasting impact, healthcare providers and payers will need to see the benefits of these new tests supported by strong clinical evidence before finalizing reimbursement limits.
Several companies are also tackling the field of colorectal cancer (CRC). Guardant Health develops precision oncology tests, including LUNAR-2 liquid biopsy for the early detection of CRC in people at average risk. Considerable investment has gone into other liquid biopsy technologies, including nearly $600 million from Roche in two rounds of funding to Freenome, which is being used to fund the PREEMPT CRC study, the world’s largest prospective study. on non-invasive screening for CRC with more than 30,000 patients. A previous study by Freenome, AI-EMERGE, detected early-stage CRC with 94% sensitivity and 94% specificity. A new generation of liquid biopsy technology is also being applied as a companion diagnostic for oncology therapies.
So, for now, liquid biopsy innovators can breathe a sigh of relief at the European Commission’s decision. “Of the products in the pipeline monitored, 102 are in the clinic, for Europe or the world. So this decision may not have much of an effect on the future availability of liquid biopsy tests, but it will push sequencer manufacturers more towards partnerships, much like what is seen with companion diagnostics, where a diagnostics company may collaborate with more than one pharmaceutical company,” says Thompson.
And although Illumina has said it will appeal the European Commission’s decision, it seems unlikely that it will be able to remedy the case in the EU. “We now have a ban decision, so the only possibility of reversal is to convince the courts that the Commission was wrong to reject the proposed remedies,” concludes Huijts. “If that were to happen, then the case could be reopened by the European Commission, and they could accept the remedies that had been offered before. But it would be quite unusual for that to happen.