Roche's $5.7B Illumina bid risks standing alone

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In the wake of Roche's ($RHHBY) $5.7 billion hostile takeover bid for gene sequencing company Illumina ($ILMN), the jury is still out as to what it means for the industry at large.

On the one hand, as Bloomberg is reporting, the push to bring DNA scanning into more routine medical use may lead to similar deals. Illumina competes with Life Technologies ($LIFE), Affymetrix ($AFFX), and others that might also make good takeover targets. Though their customers are primarily scientists rather than hospitals, the article correctly notes that the $1.5 billion market for gene sequencing machines could grow substantially if companies can increase their use in doctor's offices, to enable more personalized treatments. The tests could pair particularly well with cancer treatment, Bloomberg adds, and the National Human Genome Research Institute is supporting studies to figure out how to blend genetic information with day-to-day clinical care.

But if competitors Sanofi ($SNY) and Novartis ($NVS) are any indication, the market may not see any other acquisition bids any time soon. As Reuters reports, both companies' executives said at the World Economic Form in Davos, Switzerland, that they'd be more likely to pursue partnerships rather than outright acquisitions.

"You can get access to this technology without necessarily having to acquire the company," Novartis CEO Joe Jimenez told Reuters at the forum.

That's two potential acquirers. But Reuters notes that others could at least try to trump Roche's offer, including Amgen ($AMGN), Siemens ($SI), General Electric ($GE) and Johnson & Johnson ($JNJ).

Meanwhile, as The Wall Street Journal and others have reported, Illumina, in response to the bid, adopted a "poison pill" shareholders rights plan that triggers once a party purchases more than 15% of the company's shares. Illumina had said it would review the bid and recommend to shareholders the best course of action. Roche responded that it was "disappointed" that Illumina's board wouldn't agree to "substantive discussions" regarding the all-cash offer.

- here's the Bloomberg story
- read the Reuters analysis
- check out the WSJ piece

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