FOCUS-Cancer researchers question antitrust arguments against Illumina-Grail deal

Authors: Deena Beasley and Julie Steenhuysen

LOS ANGELES/CHICAGO, Dec 16 (Reuters) – U.S. and European antitrust regulators want to pull out of gene sequencing leader Illumina Inc’s purchase of cancer testing company Grail, saying it would stifle competition in a critical medical field, but some cancer researchers they argue that it is definitely too early to make such an assessment.

Illumina is a leading manufacturer of high-speed genome sequencing systems that can examine pieces of DNA found in blood or other samples for use in everything from crime solving to drug research.

Antitrust authorities argue that Illumina, whose sequencers are used by companies, hospitals and research centers, may unfairly prioritize Grail in the race to create tests for the early detection of many types of cancer. Illumina could raise prices or withhold technology that rival test makers need to thrive.

But Reuters interviews with 13 cancer researchers, genomics experts and potential competitors for Grail and Illumina show the list of winners and losers among early detection cancer test makers is still far from settled, suggesting a $7.1 billion deal dollars won’t strengthen the Grail’s hand as much as regulators fear.

In court documents, competition enforcement authorities cite concerns that Grail’s rivals will be disadvantaged by the tie-up.

Exact Sciences Corp and six other companies testified in the US that they relied on Illumina’s system. They claim that the Illumina system is more advanced than others and too expensive to change.

At the same time, Grail is the only company on the market with blood tests designed to detect many cancers at an early stage, giving it a first-to-market advantage as doctors prescribe the tests. But it doesn’t have regulatory approval and likely needs much more data to prove it works.

“The jury is still out on which technology will dominate,” said Dr. Sadik Esener, director of the Center for Advanced Research in Early Cancer Detection at the OHSU Knight Cancer Institute in Portland, Oregon. He added that it could take up to 20 years to show that early cancer detection tests save lives.

The EU ordered Illumina to sell Grail, which the company plans to appeal.

“While there is still uncertainty about the exact results of this innovation race and the future shape of the early cancer detection test market, protecting current innovation competition is crucial,” a European Commission spokesman said.

The US Federal Trade Commission lost the case to halt the transaction and is appealing the decision. The FTC declined to comment. In court documents, the agency said the deal, even in the early stages of competition before a transparent commercial market is established, would reduce innovation.

“At the moment, Grail is the only one on the market. In antitrust law, we pay a lot of attention to what’s on the market,” said Michael Carrier, who teaches antitrust law at Rutgers Law School. Still, he noted that “thoughts about reducing their role in the future are speculative.”

Esener, who uses gene sequencing machines from Illumina and Pacific Biosciences of California (PacBio) in research aimed at detecting liver cancer in its earliest stages, noted that the field of early cancer detection is diverse, with about 30 companies working on five different testing methods to detect signs of very early cancer – including the types of Grail and its competitors they focus on primarily.

If early cancer detection tests prove effective, they could help doctors determine patients’ cancer risk long before symptoms or other indicators appear.

DIFFERENT APPROACHES

Several leading competitors are taking completely different approaches to detecting cancer, and it is not yet clear which methods will prove most useful and when. Experts say large, long-term clinical trials are also needed to show the tests can benefit patients.

“All the data published so far is promising, but nothing more,” said Dr. Ernest Hawk of the Anderson Cancer Center at the University of Texas.

Sequencing system companies competing with Illumina include Thermo Fisher Scientific Inc, Ultima Genomics Inc and 10x Genomics.

Each group implementing the test uses a different approach. Grail’s Galleri test uses genetic sequencing and artificial intelligence to scan blood samples for patterns of chemical changes associated with specific cancers. Delfi Diagnostics Inc uses machine learning to analyze cancer DNA in the blood and focuses on the early detection of just a few common cancers, such as lung cancer. Guardant Health is working on a blood test that detects colorectal cancer using a combination of changes in DNA and other biomarkers.

Other cancer test developers don’t rely on gene sequencing at all. Some are working on blood tests to detect various markers of early cancer, including proteins.

Until evidence shows early detection is feasible, tests may come and go, scientists say, and companies sell them to paying patients while trials are ongoing. (Reporting by Deena Beasley in Los Angeles and Julie Steenhuysen in Chicago; additional reporting by Diane Bartz in Washington and Foo Yun Chee in Brussels; Editing by Caroline Humer and Chris Sanders)