This discovery led to the development of a blood test that can now detect 50 types of cancer and has the potential to save tens of thousands of lives a year if it becomes widely available. But regulators may slow the process.
The Federal Trade Commission last month wrapped up an administrative trial in which it seeks to block Illumina’s $8 billion acquisition of Grail, which makes the blood test. Illumina founded Grail in 2015 and spun it off a year later. The Menlo Park, Calif.-based start-up is named Grail because scientists have long been on a quest for a blood test that can diagnose cancer early.
"We know that cancer kills about 10 million people a year—about 600,000 in the U.S. And we know that even for some of the deadliest cancers, your odds of survival are much higher if you catch the cancer in stage 1 or stage 2," says Illumina CEO Francis deSouza, 50, by Zoom from San Francisco. "So a blood test that can catch cancer early can truly be life-changing."
There are currently recommended screenings for only five cancers (breast, colon, prostate, cervical, and lung in high-risk smokers), and they often produce false positives—that is, they signal cancer that isn’t there. Cancer is absent in about 70% of patients who show elevated levels of prostate-specific antigen and 7% to 12% those with suspicious mammograms. Grail’s test has a false-positive rate of less than 1%.
The Grail test doesn’t pick up every cancer, and its sensitivity varies by the type and stage of the disease. But it can detect the 12 deadliest cancers with 60% accuracy. Grail estimates that adding the blood test to existing screenings could reduce late-stage cancer diagnoses by more than half among patients 50 to 79, which would translate into a 26% overall reduction in five-year cancer mortality. Patients who are diagnosed at an early stage are more than four times as likely to survive at least five years, and their odds are 10 times as high for pancreatic, liver and lung cancer.
Mr. deSouza relates a story he heard from an oncologist of a man in his 50s who appeared healthy and got a Grail test based on a friend’s recommendation. The test showed that he had stage 2 pancreatic cancer. "It’s so rare to find a stage 2 pancreatic cancer, because pancreatic cancer usually has no symptoms until stage 4. And by stage 4, it’s a virtual death sentence, and very often the people who discover they have stage 4 pancreatic cancer have less than a year to live," Mr. deSouza says. "This man, because it was discovered in stage 2, was able to get treated, and now he is healthy and his prognosis is excellent."
A blood test for cancer became possible thanks to recent advances in genetic sequencing and machine learning. Tumors shed DNA into the blood that signals a cancer’s locations. Grail’s test scans for these DNA fragments.
discovery, more research, clinical testing and investment were needed before a test could launch to the public. Illumina spun off Grail so that it could raise more money for studies. Grail ultimately raised $1.9 billion in capital from investors including
Illumina maintained a 12% stake. With a commercially viable product nearly in hand, Grail in September 2020 was exploring an initial public offering. That’s when Illumina swooped in with its $8 billion offer.
Illumina is the leading manufacturer of gene-sequencing machines, which run an array of DNA-based tests including Grail’s. Its machines were the first to identify the novel coronavirus in late 2019, and more than 70 countries are using them to find new variants. Moderna and
also relied on DNA sequencing from Illumina machines to develop their mRNA vaccines. There are veterinary applications too: sequencing DNA "to understand sort of the marbling tendencies of a cow and the milk production, but also the diversity of a herd to understand how at risk they are to diseases," Mr. deSouza says.
The CEO adds that the acquisition would let Illumina speed up the rollout of Grail’s tests: "We already have large-scale production labs where we run other genetic tests, so we can scale up their tests very quickly into our production labs." Illumina has a decade of experience negotiating reimbursements with governments and insurers for DNA tests. The Grail test currently isn’t covered by insurance and costs patients $949 out of pocket.
Grail projects its test could prevent 90,000 to 100,000 cancer deaths each year if it were administered annually to all Americans 50 to 79. The sooner people get access to the test, the more lives will be saved. Illumina estimates that 10,000 lives will be saved over the following nine years for every year that it accelerates bringing the test to market. "By accelerating the global rollout of the test in the European Union, into Africa, into Asia, into Latin America, we believe we can save a lot more lives than that around the world," Mr. deSouza says.
The company’s dominance in the DNA-testing market, however, attracted regulatory scrutiny. In March the FTC sued Illumina and Grail to block the acquisition, arguing that it would "lessen competition in the U.S. multi-cancer early detection (‘MCED’) test market by diminishing innovation and potentially increasing prices."
Nonsense, Mr. deSouza says. "Today, there is nobody who is even starting the studies to develop a 50-cancer test like Grail, and once you start the study, it’s still a few years before you actually get the test. We think there will also be blood tests for single cancers, for colorectal cancer and other cancers. Those won’t compete with Grail. They will be complementary to Grail."
Illumina promised the FTC it wouldn’t thwart Grail’s potential competitors and would give its clinical oncology customers contractual guarantees of "equal and fair access." The FTC wasn’t satisfied. Although it asked the federal judge overseeing the case to dismiss its complaint in June, it’s still alive as an administrative proceeding.
The FTC might have withdrawn the lawsuit because it was worried it might lose in court. Instead, the FTC is planning to let European regulators run out the clock on the deal, which had to be completed by Dec. 20 under the terms agreed to by Illumina and Grail.
The European Commission invoked Article 22, an obscure provision in its competition rules that lets it review deals at the request of member countries when they don’t have jurisdiction under their own laws. Illumina is contesting the European Commission’s claim of jurisdiction. "Grail has no business in Europe. The deal is between two American companies. It should not need to be reviewed by the European Commission," Mr. deSouza says. "Imagine if China does that. Imagine if suddenly everybody can assert jurisdiction globally on any merger."
Frustrated by the hangups, Illumina and Grail closed the deal in August despite the risk that it could be undone if it loses in U.S. or European courts. Last month the FTC held its own administrative trial, which Illumina is likely to lose. Unsurprisingly, the FTC has a nearly perfect batting average before its own administrative judges.
Illumina plans to appeal an adverse FTC ruling in federal court, where it seems likely to prevail. The U.S. government hasn’t successfully challenged in court a vertical merger—a combination of noncompeting businesses that operate in different parts of the supply chain—since 1972. But Mr. deSouza says the legal snags will cost lives since Illumina doesn’t plan to integrate Grail into its business until it clears legal hurdles in Europe. As for the U.S., the Supreme Court likely wouldn’t hear a case until 2025, so Illumina faces the risk that the deal could be blocked for years.
Why are regulators targeting Illumina when they ostensibly have Big Tech to fry? Mr. deSouza demurs. But both the U.S. and European Commission have stepped up scrutiny of acquisitions in general amid a backlash against big business. And some of Illumina’s competitors have complained to the FTC about the Grail acquisition.
Like some other U.S. biotech CEOs, Mr. deSouza is an immigrant. "My mother is half Ethiopian, half Greek, and my dad was half Portuguese, half Indian. So you should see my
—it lights up a lot of the map," he says, laughing. He was born in Ethiopia, but by the time he was 4, "there was a communist revolution and my parents ended up leaving. They went to India for a bit, but then we settled in Dubai. We didn’t have a lot of money growing up. We were five kids, but a super tight-knit family."
At 16 he enrolled at the Massachusetts Institute of Technology, where he earned bachelor’s and master’s degrees in computer science and electrical engineering. He had worked in tech for 25 years when he got the call from Illumina: "I spent nine months actually talking to people in the field, trying to understand what genomics was about. And what I felt then, and I feel even more strongly now, is that genomics is probably going to be most transformative force that I will see in my lifetime."
Genetic testing does more than find disease: "It’ll tell you what you’re susceptible to. Even for infectious disease, genomics will help you identify the pathogen that’s causing the disease. It will also help you understand the impact that that pathogen is likely to have on you. Two people can get Covid. For some it’s fatal, and for some it’s not, and a lot of it has to do with your genome."
DNA tests can already help people understand their predispositions for some cancers, and more research will uncover other risk factors. At the same time, drug makers are developing therapies such as mRNA vaccines that are personalized for the genomic profile of a cancer.
Blood tests could also soon be used to scan for biomarkers of recurrence. Grail has formed partnerships with
Bristol Myers Squibb
to monitor for residual cancer cells after treatment. "I truly believe that, within our lifetime, we can make a significant dent in cancer survival rates, and a lot of that will come through the work that’s done in genomics." Let's hope regulators don’t kill the cures in the crib.
Ms. Finley is a member of the Journal’s editorial board.