An eagerly anticipated vote at the Annual General Meeting of Illumina shareholders on April 18, 2012 will bring to a head the hostile takeover campaign underway by Roche Holding AG. After Illumina rejected initial offers, Roche raised the stakes last week by increasing the price offered per share by 15 percent to a total of about $6.7 billion. Illumina, a California based maker of gene-mapping tools and diagnostics, has until 6 p.m. on April 20 to tender their stock at $51 a share.
The Basel-headquartered Roche group issued a second letter to shareholders urging them to accept its bid and vote for its nominees at the meeting. The Illumina board countered with its own (and third) appeal to shareholders urging stockholders to reject Roche’s efforts to acquire the firm, noting that that Illumina’s next-generation sequencing technology was poised as a leading player in research and clinical settings.
In the letter, Illumina says that “the molecular diagnostics space alone represents a $3 billion long-term growth opportunity” and its platforms “are already being adopted by leading diagnostic reference labs such as Sequenom, Genomic Health, Partners Healthcare and many others”. Illumina is partnering with firms such as Siemens Healthcare, deCode Genetics and the Fred Hutchinson Cancer Center to develop diagnostic kits that they believe will eventually be used in thousands of hospital labs worldwide.
The board concluded that that future market opportunties were very positive. “Assuming a $1,000 cost per genome and only 1% penetration, (opportunties) could easily result in more than $600 million of new revenue for Illumina”.
In addition to commercial markets, Illumina has a widespread presence across federal research laboratories including the USDA Agriculture Research Service, the National Institutes of Allergy and Infectious Diseases, Environmental Protection Agency, Animal and Plant Health Inspection Service, U.S. Army Medical Reasearch Institute of Infectious Diseases and the Centers for Disease Control.