The Banking and Strategy Initiative

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Life, Illumina , Roche and Genomics – Building a $1000 genome map | Deal insight

Apparently the Roche hostile bid for industry expert Illumina is likely to be in the cross hairs of the Anti Trust office . That would be strange as the Genome mapping industry really does not exist right now and the $1 bln machines built by Roche and Illumina (ILMN:US) are not as near commercialisation as others might think But the $5.7 bln bid is a a sign that PE and Big Pharma are likely to run 20112 into a healthcare fest, with KKR, Barclays and JP Morgan continue to steamroll debt for takeover deals apart from runaway advisory targets this year to compensate for a sad 2011. What makes the run for the deals fast and furious is the varied degrees of progeess of each on the same gene sequencing technology and Roche needing an effective one for mass commercialisation of the marketing effort. The industry is in the middle of flipping pancakes to discover the right engine needed

Of course Big Pharma has all the cash it needs and listed stock swaps are also quite common for the niche producers like Pharmassets and Inhibitex (BMY:US). Bristol Myers paid $26 a share in cash. Idenix may also get quick suitors in Hepatitis drug development champions

The couple of $30 bln merger deals of last year including one in Medicare benefits and the other between J&J and Synthes both lost in Anti Trust

Gene/DNA sequencing as yet has not found favor with insurers who would be needed to fund the $1000 DNA mapping  for patients. The techniques are being fine tuned from ahigh $3000 bill today to a likely $1000 per genome ( it takes one week to process one person’s Genome) by end 2012

English: Figure 1. Work flow of Illumina Methy...

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POISON PILL DEFENSE

Bid would have to cover $7 bln at curren ILMN prices. Still the company has added another poison pill, a preference right share as dividend by Feb 5 record date to current shareholders. Roche has earlier pulled in a Genentech acquisition on hostile bid.

The current  machines are being sold to institutions.

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