On January 2, 2020, Illumina, Inc. (“Illumina”) and Pacific Biosciences of California, Inc. (“PacBio”) abandoned their proposed $1.2 billion merger following antitrust probes by the Competition and Markets Authority (the “CMA”) in the United Kingdom and the Federal Trade Commission (the “FTC”) in the United States. The antitrust enforcers articulated serious concerns about the transaction’s effects on competition in the global market for DNA-sequencing systems.
This scenario highlights the ongoing – and perhaps escalating – antitrust scrutiny that companies in the biopharmaceutical and technology sectors are facing across jurisdictions. The case exemplifies the regulators’ increased attention to the preservation of nascent competition and comes on the heels of statements by authorities on both sides of the Atlantic that “the elimination of even a very small or nascent competitor could remove an important source of competition.” The Illumina/PacBio combination demonstrates both the CMA’s and FTC’s willingness to scrutinize acquisitions by established competitors of smaller players still in the development phase – especially in the biopharmaceutical sector.