Genomics revolution ignites new M&A talk, showstoppers

Roche's $5.7 billion hostile bid to scoop up DNA sequencing machine maker Illumina ($ILMN) has triggered talk of further merger targets in the promising genomics arena. And the race to invent faster and cheaper ways of decoding the genome has pushed small companies to the cutting edge of the field, giving industry leaders such as Illumina and Life Technologies ($LIFE) a run for their money.

While Swiss drug giant Roche continues its advance to gobble up a resistant Illumina, analysts have noted that rival Life Technologies could generate interest from other companies wanting a foothold in the blossoming market for DNA sequencers, Bloomberg reports. Genomics touches drug development, diagnostics and basic research. Other potential targets could be cancer test maker Genomic Health and Affymetrics, a maker of gene-analysis products, JMP Securities said, as quoted by Bloomberg.

"Roche's hostile bid for Illumina sparked a lot of interest in the genetic sequencing space," Alex Morozov, a Morningstar analyst, told the news service. Buyers could "look to supplement their internal R&D with external candidates, especially if they see something that could potentially be promising."

Both Life Technologies and Illumina announced last month their latest sequencers promise to push the cost of decoding a whole genome to the prized price tag of $1,000, making the technology more practical for screening patients' DNA for genetic clues about the best treatments. Drugmakers have seized the fruits of the technology as sequencers uncover new genetic targets for personalized drugs against cancer and genetic diseases.

Roche, which is also a leading diagnostics company, has stood alone among the Big Pharma groups making bids for sequencing companies. Sanofi CEO Chris Viehbacher has already said his company would prefer to stick to partnerships to access such platform technologies. Rather, the large potential buyers include companies with diversified healthcare businesses such as General Electric ($GE) and Siemens, Bloomberg reported. Experts have pointed out the speed at which the genomics field is changing, potentially making the standout products of today obsolete in a short period of time.

The field was reminded of this rapid change last week at a genomics meeting in Florida, during which Oxford Nanopore Technologies technology chief Clive Brown unveiled a sequencer that will cost just $900 and fit neatly in a device that is the size of a computer thumb drive, Xconomy reported.

- check out Bloomberg's article

- see Xconomy's report