NEW YORK (GenomeWeb News) – Complete Genomics CEO Clifford Reid has told the firm's employees that its purchase by BGI-Shenzhen is anticipated to be completed during the first quarter of 2013, while disputing suggestions that a merger with the Chinese sequencing services firm poses national security issues.
In a letter to employees yesterday, Reid sought to allay concerns among Complete Genomics' employees surrounding the $117.6 million bid by BGI made in September, which has since been muddied by an unsolicited bid by Illumina and questions about national security implications.
The BGI deal is currently under review by the US Federal Trade Commission, and while Reid said that he does not know when it will be completed, Complete Genomics and BGI "are working hard to facilitate a speedy conclusion."
Simultaneous with the FTC review, the Committee on Foreign Investments in the United States is scrutinizing the transaction — customary when US firms are being acquired by foreign parties — and Reid said that that review is scheduled to be finished by Dec. 31.
While an acquisition by BGI has raised concerns among some who say the deal could compromise national security, Reid reiterated that those worries are unfounded. Illumina President and CEO Jay Flatley warned Complete Genomics' board in a letter in November that "CFIUS reviews of transactions involving state-owned entities have been problematic, and several transactions have been abandoned rather than be subjected to a Presidential order to unwind the transaction."
Also, yesterday in a letter published in the San Jose Mercury News, two members of the US-China Economic and Security Review Commission called for "the strictest scrutiny" of the BGI-Complete Genomics deal by CFIUS, saying, "Targeted genomic weapons are still somewhat hypothetical. But advances in genome and synthetic biotechnology could allow for bioweapons to be targeted at specific populations, groups or, indeed, individuals."
Reid shot down those claims in his letter. BGI is a privately owned enterprise owned by BGI employees as private citizens, and is not a state-owned operation, he said.
Reid also characterized concerns about human genome sequencing being used for biological weapons as "wild and speculative … There is also no basis for asserting that Complete or BGI — or any of the other many US institutions or companies that already work with Complete, BGI or Illumina — could or would do anything in any way related to biological weapons development using human genome sequencing."
Reid also disclosed that Illumina originally made an offer to buy Mountain View, Calif.-based Complete Genomics in June, but two months later withdrew its offer.
In November, Illumina re-entered the picture with a bid about 5 percent over BGI's offer. Complete Genomics has turned down the San Diego company's bid, citing antitrust concerns. Illumina has a dominant market position, and Reid noted that Illumina has said that it generates "90 percent of all the world's sequencing data" and the same percent of sequencing output globally is produced on an Illumina instrument.
"Given the antitrust issues, we do not believe that Illumina could acquire Complete, at any price, if we can complete our merger with BGI," Reid said.
Completion of a deal with BGI carries some urgency for Complete Genomics, which has said that without an infusion of cash it would not have sufficient funding to operate beyond Jan. 31, 2013.
If the deal is completed, Complete Genomics would be a US subsidiary of BGI and remain headquartered in Mountain View.