Illumina fends off Roche hostile bid
27 January 2012
Roche has made a $5.7 billion (£3.6 billion) hostile bid for the genome sequencing company Illumina, after the San Diego, US-based company rejected its initial approach. Shares in the Californian company surged on the news - rapidly outstripping the $44.50 bid price, which in itself represented an 18% premium above the share price when the offer was made. Despite this, Roche chief executive Severin Schwan claimed the company would not be increasing its offer.
The Swiss pharma company believes the two companies' combined diagnostics capabilities will help accelerate the uptake of gene sequencing into a clinical setting and routine diagnostics. 'It will provide complementary solutions to our current portfolio,' claimed Daniel O'Day, chief operating officer of Roche's diagnostics division. 'By building on Illumina's capabilities, Roche will be able to use its scale, global distribution and diagnostic test development expertise to develop new diagnostic tests that serve patients and customers even more effectively.'
- Kevin Bottomley, PharmaVentures
Illumina is one of the competitors in the race to sequence entire genomes in a day. Earlier this month, the company announced that a commercial machine capable of doing this will reach the market in the second half of 2012. Rival company Life Technologies announced on the same day that it was taking orders for its own one-day genome sequencer.
According to Kevin Bottomley, head of transactions at consultancy PharmaVentures, Illumina's technology is a very good fit for Roche. 'The interest in Illumina clearly relates to genotyping and Roche's drive to focus on personalised medicine, being able to sequence genomes, and identify particular phenotypes in patients or diseased tissue,' he says. 'It's wholly consistent with the company's strategy stretching back to the early 1990s, for example being able to identify patients who are likely to respond to [breast cancer drug] Herceptin.'
With the bid having gone hostile, it's likely Roche will have to up its offer, he believes. 'There's a "dance" that says the first offer is never enough, and it's the duty of the incumbent management at the target company to hold out for a better one. The company has already been down this road with Ventana [another diagnostics business, finally acquired by Roche in 2008 after a protracted battle]. It will be interesting to see if they can do it with more efficiency this time, but I'm sure Roche will get Illumina in the end.'
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Also of interest
21 July 2011
pH-sensing silicon chips could make the $1000 genome a reality in just two years
15 December 2009
Our round-up of the pharmaceutical industry in 2009 shows the fallout from this year's mega-mergers has swept across the sector
22 February 2009
A technique to electrically detect DNA bases from a single DNA strand could lead to cheap and simple sequencing
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