Illumina

The firm presented initial study results from the test, which identifies six cancers, showing overall sensitivity at 86 percent and specificity of 95 percent.

The investment firm said that Grail's revenue trajectory is uncertain, and given the firm's operating loss, it will significantly dilute Illumina's earnings.

Along with the downgrade, the investment bank also lowered its December 2021 price target for Illumina from $390 to $280.

The deal, which was approved by the boards of directors of both companies, is expected to close in the second half of 2021, pending customary conditions.

Shares of Illumina fell in afternoon trading on the Nasdaq following a brief rise after the market open.

Some of the firms will receive money to speed up test development, while others will use the funds to expand their testing and manufacturing capacity.