I N 2013 MEREDITH HALKS MILLER , laboratory director at Illumina, the world’s largest genetic sequencing company, spotted something strange while examining the blood of pregnant women, looking for abnormalities in fetuses that they wore. In some cases, the DNA of the unborn was normal, but that of the mothers was not. Suspecting that the women had cancer, she went to her superiors, but was met with skepticism. She pushed anyway. “I was determined to bring this to light. As a doctor, I really wanted to help these women,” she says. His intuition proved correct. “Sure enough, everyone I predicted had cancer had cancer.”

His intuition led to the founding of Graal , a pioneering company focused on detecting cancers using blood tests before symptoms even appear. Illumina spun it in 2016 (tech moguls such as Jeff Bezos and Bill Gates were early backers), only to buy it again in a $7 billion deal last month, shortly Soon after Grail released a test in America that screens for up to 50 cancers from a blood sample. And yet, until a recent blog post from his daughter, noting how women scientists are rarely credited for their work, Dr. Halks Miller’s role has been mostly relegated to airbrushing. Grail the story of. When contacted by your columnist, she says she received no additional bonuses or promotions for her efforts. Even today, Francis deSouza, Illumina’s CEO , refers to her simply as Meredith, and when asked about her, says only that she has retired.

Nonetheless, his original idea is now firmly in the spotlight. Grail The Return of Illumina is intriguing for three reasons. First, by acquiring it, Illumina, described by its biggest investor, Baillie Gifford, a Scottish asset manager, as the “Google of genomics”, hopes to become a colossus in the fight against cancer. In short, he wants to make screening the new research. Second, like Google, Illumina faces a showdown with trustbusters in America and Europe, upset by how similar early-stage acquisitions gave rise to today’s tech giants. Third, Illumina defiantly went ahead with the transaction before regulators gave it the green light. The battle pits a corporate buyer on the technological frontier against trustbusters eager to rewrite the rules of technological competition.

There’s no doubt that the $73 billion Illumina is leading the world of gene sequencing. Its machines control 90% of the market in America. Its vast global share is reflected in the fact that Chinese scientists used it for the first sequencing of the SARS – CoV – 2 genome at the start of the covid-19 pandemic. Using technology acquired in the 2007 purchase of Solexa, a British company, it provides gene sequencing tools to genomics companies, including those developing liquid biopsies or blood tests for cancer. Mr. deSouza estimates that the global market for cancer gene sequencing could be worth $75 billion by 2035. That looks promising for a gene sequencing provider. Even more so if Grail can change the effectiveness and economics of cancer care. Mr. deSouza says Illumina’s global clout and ability to convince insurers to cover the cost of genomic testing will help Grail do that. Far from stifling competition, the takeover will stimulate it, he says. Money is flowing into startups trying to catch up with Grail .

Trustbusters see things differently. Last year, the Federal Trade Commission ( FTC ), the US antitrust agency, blocked Illumina’s acquisition of another sequencer, Pacific Biosciences, on the grounds that it would be anti-competitive. Now the FTC says Illumina’s takeover of Grail will hurt innovation in the burgeoning early cancer detection market. The European Commission ( EC ) has launched a parallel investigation, alleging that Illumina could restrict Graal rivals from access to its genetic sequencing technology. On August 18, Illumina defied the Europeans, saying that because a CE decision was not expected until after the deal expired, it would complete the transaction anyway, even if it held Grail separately. He is challenging the EC in a Luxembourg court, arguing that the EU’s executive branch does not have jurisdiction over the merger. Additionally, the commission challenged the deal using an untested and controversial mechanism called Article 22. Illumina’s strategy is bold, some would say reckless. Its stock price has collapsed since the deal closed, in part because investors fear it could spark a regulatory hornet’s nest.

Antitrust concerns can be viewed narrowly or broadly. From a narrow perspective, Illumina customers who hope to compete with Graal in testing may be concerned that Illumina will charge them higher prices for sequencers. This could give Graal , if it has lower sequencing costs, an advantage. Illumina counters that it has no incentive to harm its customers because it makes far more money selling sequencers than selling tests. It also undertook to provide them with sequencers under the same conditions as Graal . More broadly, even as Illumina continues to drive down the cost of gene sequencing, regulators’ focus on non-cost factors such as innovation may reflect a new approach to antitrust that goes beyond duty to protect consumer wallets. In case of bad timing or bad luck, Illumina has thrown down the gauntlet to the trustbusters as they are determined to show that they will not be doormats. It will be up to the courts to decide.

Stick to your guns

Regulators are not the only ones concerned. According to Doug Schenkel of Cowen, an investment bank, some Illumina shareholders say uncertainty about the prospects of the Holy Grail acquisition and the implication that there could be increased risk to the company’s position as an “arms dealer” for the genomics industry weighs on the shares. So is the question of whether Illumina is the best option for bringing the holy grail of blood diagnostics to the market. Some fear this is the latest example of a hardware company botching the shift to software and services. That said, it’s a long-term bet and Dr. Halks Miller, for one, is excited. She says Grail ‘s new test is « incredibly powerful. » She relishes her success and regrets nothing, even if she reaps few rewards. ■

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This article appeared in the Business section of the print edition under the headline « Illumina and the Holy GRAIL »