Roche's approach to buying Illumina may have cost the Swiss drug development and diagnostic firm a chance at the San Diego-based next-generation sequencing firm, Illumina President and CEO Jay Flatley tells Bloomberg.
As Daily Scan's sister publication GenomeWeb Daily News previously reported, Roche launched its failed hostile bid for Illumina earlier this year first with a $40-per-share offer and then with subsequent offers of $44.50 per share and $51 per share. In April, after Illumina's shareholders re-elected four board members and voted down Roche's attempt to expand Illumina's board, effectively blunting Roche's hostile takeover bid, Roche abandoned its pursuit.
Flatley tells Bloomberg that while Roche's offers were "woefully inadequate" Illumina remained open to a possible acquisition by the Swiss firm, had Roche taken a different tack.
By trying to force Illumina into a corner with a hostile bid, Roche essentially cut off its own nose, he says, as the public nature of the proposed deal prevented Illumina's board from openly discussing a price that could have enticed the company to sell. Any such discussions would have had to be disclosed, and Illumina's directors weren't willing to see that happen.
Of course, Roche also could have thrown more money at Illumina.
"We never took an entrenched position that we wanted to be independent, it really came down to the pricing of the transaction," Flatley says. "Had that bid risen into a range where we thought it was the right deal for our shareholders, then we would have supported the deal. But we never got into that range."
With US budget sequestration looming and deep cuts to the National Institutes of Health on the horizon, Flatley also acknowledges that Illumina may be adversely affected. About one-third of the firm's customers will feel some pain if the cuts go through, but he says, "Our view is, even if it goes into place, it's going [to be] probably pretty short-lived. NIH is widely supported in both parties."