Swiss drug giant Roche ($RHHBY) has erased DNA decoding outfit Illumina ($ILMN) from its M&A wish list, with the drugmaker preferring now to navigate the fast-changing DNA sequencing field via internal projects and partnerships. And Roche CEO Severin Schwan isn't fretting the failed buyout bid.
"I'm totally unemotional. We always look back on acquisition opportunities, and only a fraction of it is implemented. It was not possible in the case" to buy Illumina, Schwan told the Swiss weekly called Sonntag in an interview.
Roche didn't have an unlimited budget for the Illumina buyout, on which the drugmaker gave up in April after deciding not to go any higher than $51 per share. If there were any hopes of Roche re-engaging Illumina, Schwan dashed them, saying that his company's interest was "off the table" and that there "are no conversations," according to a translation of the Sonntag interview.
What's next for Roche in DNA sequencing? To hear Schwan tell the Swiss rag, the company plans to invest in internal technology while continuing to seek partnerships with other players in the sequencing arena. Roche, of course, owns 454, a group based in Bradford, CT, that develops genome sequencers on a much smaller scale than market leader Illumina. And the drugmaker makes use of such technology to develop gene-targeted cancer drugs and molecular diagnostics--two areas of strength for the company.
With the partnership route, Schwan uses a strategy that pharma chiefs from Sanofi ($SNY) and Novartis ($NVS) told Reuters they preferred earlier this year during the rocky courtship between Roche and Illumina. In the meantime, Schwan told Sonntag that the company would rather do small- or mid-sized buyouts over large deals, another popular refrain among the captains of the drug industry.