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Caris Life Sciences Facing FTC Lawsuit After Resisting Subpoena in Illumina, Grail Antitrust Case

NEW YORK – Caris Life Sciences has been caught in the crossfire between the US Federal Trade Commission and Illumina, as they clash over Illumina's decision to acquire Grail. If the FTC has its way, Caris, which is not a party to the antitrust case, claims it could be compelled to provide what it considers to be "core trade secrets" directly to a major competitor.

Since the end of September, Irving, Texas-based Caris has been fighting a lawsuit filed by the FTC, which has asked the US District Court for the District of Columbia to enforce a subpoena issued to Caris by Illumina, asking for certain information, and to make David Spetzler, Caris' president and chief scientific officer, available for a deposition.

The requests are part of Illumina's defense strategy in the FTC administrative hearing challenging the Grail acquisition and relate to Caris' plans to develop a liquid biopsy multi-cancer early detection (MCED) test, including details of precisely how it is developing a competing product. The extent to which Caris' plans are important to the FTC's case aren't clear. Court documents have been heavily redacted, and many portions of the hearings were held out of public view. At the very least, FTC lawyers spoke to Spetzler early in their investigation into Illumina and Grail and, in their opening arguments of the administrative hearing, referenced Caris' plans to share study data and to develop an MCED test with funding from a recent $830 million financing round.

In a Nov. 10 court filing, Caris said the information's release "will do little to affect the FTC litigation but may seriously harm Caris." The company said it has already provided materials to Illumina and Grail and should not have to indulge a "fishing expedition for irrelevant, highly sensitive details." 

Moreover, Caris has alleged that Grail violated the protective order in the case by furnishing information to an expert witness affiliated with Grail. "The expert reviewed Caris' confidential and proprietary information; it is impossible for him to unsee those facts," the firm wrote. "Caris simply cannot bear the risk of a similar future violation, particularly with respect to the additional discovery that Illumina and Grail seek, which compromises highly sensitive information about Caris' core trade secrets." The firm added that the request is "unnecessary and unduly burdensome."

Meantime, until the Caris subpoena issue is resolved, the FTC cannot wrap up its case against Illumina and Grail. In a Nov. 5 order, Administrative Law Judge Michael Chappell, denied the FTC's request that the trial record be closed and to set a schedule for post-trial briefing. Both parties must submit post-trial briefs to the ALJ before he can make a recommendation. The last live witness to testify in the case did so on Sept. 24.

Illumina did not publicly respond to a request for comment. Caris and the FTC declined to comment, both citing the ongoing litigation.

According to court documents, Illumina and Caris have gone back and forth over the subpoena since April. As Chappell noted in his order denying the FTC's motion to close the record, Illumina and Grail have argued as part of their defense that "there are no 'rivals' to Grail because 'no NGS-based cancer screening tests have been launched on the market anywhere in the world.'"

Illumina has argued that it has not had the opportunity to rebut important evidence from Caris introduced by the FTC, and that it needs the subpoenaed information to do so. According to Chappell, "the Commission acknowledged the relevance of the documents and testimony from Caris to the allegations and defenses in the case."

In its Nov. 10 filing, Caris said Illumina and Grail initially sought "ten broad categories of documents." The full list of categories of documents were redacted from the public court filing, but Caris said it produced over 8,000 pages of documents to Illumina and Grail.

Caris said that Illumina and Grail at one point threatened to file motions to compel additional document production and testimony from Spetzler, a move which the company invited.

In July, as negotiations continued, Illumina sent Caris a list of 11 proposed topics for a deposition including Caris' supply agreements with Illumina and any other NGS-based sequencing company or platform provider; Caris' assessments of any other cancer screening or MCED test, including the Galleri test; Caris' responses to the European Commission's request for information relating to the Illumina/Grail transaction; all topics contained in the subpoena ad testificandum issued to Caris; and all topics covered in Spetzler's investigational hearing with the FTC.

Caris has resisted the deposition request, saying it is "irrelevant" and that Illumina is "poised to use Spetzler's deposition to explore wholly irrelevant issues."

Caris has asked the district court to deny the FTC's request to enforce the subpoenas. Most recently, on Nov. 16, the FTC responded, asking for the court to order Caris to comply with the subpoena.

Meanwhile, Illumina has asked Chappell to exclude all evidence from Caris if it is not provided the additional discovery and deposition.