Illumina to grab Verinata Health for $350M-plus
Illumina ($ILMN) is growing its focus on reproductive health with an agreement to fork over at least $350 million for Verinata Health, which makes a noninvasive prenatal test that performs superearly detection of fetal chromosome abnormalities.
The San Diego diagnostics darling--a rumored target for acquisition--agreed to pay even more over time, as much as an additional $100 million, assuming certain development and marketing milestones can be met.
Illumina is a gene sequencer and diagnostics company that is seeking to broaden its focus. And in the case of this deal, the company explains very simply that it wants to boost its market presence in the noninvasive prenatal test sector, a rapidly growing area that heavily relies on next-generation DNA sequencing. For Verinata, which raised a $48.5 million Series C back in August 2011, the agreed-to sale gives it a way to have its technology reach a larger audience. Also important, the company's investors gain a solid exit strategy in a tepid IPO climate.
Verinata estimates as many as 500,000 high-risk pregnancies annually out of 4 million overall, a statistic that Verinata executive chairman and CEO Jeffrey Bird said in a statement proves "there is a clear need for such tests."
Verinata, which is based in San Carlos, CA, focuses primarily on developing noninvasive tests to identify fetal chromosomal abnormalities. Illumina, in its deal announcement, makes particular mention of Verinata's verifi, a CLIA-certified test in the area that will continue to be offered through Verinata's CAP-accredited laboratory.
The deal does raise more questions about Illumina itself. Roche ($RHHBY) tried hard and failed last year to perform a $6.7 billion hostile acquisition of the company. But just before Christmas, rumors broke that Roche was trying again, with an agreement this time to pay $8.1 billion for the elusive Illumina. Neither side has commented, but the initial speculation--based on a Swiss newspaper account--drove up Illumina's stock in the short term.