M&A status: A likely target (again). In the bid by Big Pharma to develop drugs that can be marketed with a companion diagnostic, the California gene sequencer and diagnostics company ($ILMN) caught Roche's ($RHHBY) eye earlier in 2012 in a $5.7 billion hostile takeover bid that quickly escalated to $6.7 billion, and then unceremoniously collapsed by April. Illumina played hard to get, refusing to negotiate but also leaving a small window open by terming the initial offer as "insufficient" rather than rejecting it outright. Of course, Roche's higher offer wasn't enough either, and Illumina resumed its independent path, but for how long? The company hasn't been without successes. In September, for example, Illumina won an FDA contract worth up to $17 million over 5 years to deploy its sequencing and diagnostic technology to ferret out food-borne pathogens. And the company's revenue and net income are growing robustly. Who wouldn't want a diagnostics company on the upswing?
Likely acquirer: A Big Pharma company seeking diagnostics expertise (pick one; there are many still looking). The push to personalized medicine will only accelerate this trend, and it is a matter of time before Illumina becomes an acquisition target again. Of course, the company's asking price could be even higher by then.
Illumina inks $17M FDA Dx contract
Roche breaks ground on $300M diagnostics expansion
Illumina results impress despite Roche drama
Roche's bid for Illumina may be kaput