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Illumina Array Customers 'Apprehensive' of Possible Roche Takeover, Fear Platform 'Stagnation'


By Justin Petrone

Some core laboratory directors and other customers who use Illumina's microarrays are "apprehensive" about Roche's bid to acquire the San Diego vendor for $5.7 billion, arguing that while a Roche takeover might have positive implications for the adoption of next-generation sequencing in the clinic, the Swiss diagnostics giant does not have as strong a reputation when it comes to technology innovation.

Those who are concerned referenced Roche's previous acquisitions of 454 Life Sciences and NimbleGen Systems as examples of where they believe technology development slowed after each firm became part of Roche, a characterization that a Roche executive this week denied. On the other hand, some who are warm to the deal think that Roche's experience could drive wider adoption of arrays and sequencing in diagnostics.

"I honestly do not know the full financial picture or research implications of the Roche buyout of Illumina," said Nicholas Beckloff, a genetics instructor at Case Western Reserve University. However, he noted that "if 454 is any indicator, it would seem that Roche acquiring this technology could potentially cause it to become stagnant in terms of development."

Beckloff said that since Roche acquired 454 and NimbleGen in 2007 (BAN 6/19/2007), "454 has not seen many major developments to improve its standing or reduce its overall price."

Beckloff was one of a number of lab directors and customers interviewed by BioArray News this week. Some requested to be quoted anonymously, so as not to jeopardize their relationship with either company.

"Overall I think an acquisition of Illumina by Roche would be a very bad thing," said one such core lab director. "They took over NimbleGen and ultimately hurt them — our representation went from bad to worse," the director said of Roche. "They took over 454 and have done nothing to push the platform along," the director said. "We have never had a strong relationship with Roche, whereas we have a great relationship with Illumina."

Like Beckloff, the director said that Roche's focus on the diagnostic market could impact platform development. "Roche will push, in my estimation, for the MiSeq pathway, trying to get into the diagnostic-type arena, and that could cause the high-throughput sequencing systems to stagnate," the director said.

"Right now the Illumina management seems to have a good strategy," the director continued. "They've made their share of decisions that have messed us up — they are constantly discontinuing array products — but overall Illumina seems to have good direction," the director said. "They became the leaders in this space without Roche and [I] would like to see them remain on their own."

Bill Freeman, director at the Genome Sciences Facility at Penn State College of Medicine, had a similar opinion. "An independent Illumina is much preferable to one merged with Roche," Freeman said. "Illumina, like many research technology companies, is focused on the whole workflow of their technology from sample preparation to data collection and data analysis," he said. "Our experience with tools from larger more diverse companies, such as Roche, is that all of the elements are less integrated."

Another director who wished to remain anonymous is "worried" that Roche will succeed in its bid to buy Illumina. "Roche has not — in my opinion — been a good steward of tool company assets," this second director said. "With NimbleGen, 454, they've not done a great job, in my opinion," the director said. Still, the director noted that Illumina is a much larger company than 454 or NimbleGen was when they were acquired, so "maybe Roche would not mess with them."

This second director added that Roche could facilitate the adoption of Illumina's arrays into diagnostic markets. "My feeling is that Illumina is not interested in their own array market anyway, so I can't see Roche making that relative neglect of arrays over sequencing any greater than it already is," the second director said.

"From my perspective I'd rather see Illumina remain where it is," said Neil Winegarden, head of operations at Universal Health Network's Microarray Center in Toronto. "I'm always wary of a successful company like Illumina being acquired by a large multinational whereby often times the mandate of the original company is modified to meet the desires of the new owners," Winegarden said. "I've seen this happen so many times in this industry that it worries me when I see such news," he said.

In response to such comments, Daniel O'Day, Roche's chief operating officer, defended the company's "strong track record" of investing in businesses that it acquires.

"For 454, we made significant advances on the long-read technology, with new platforms, new applications since we launched that. The same with NimbleGen and our microarray business — we significantly expanded the product offering there," O'Day told BioArray News.

He also cited Roche's 2008 acquisition of tissue diagnostic firm Ventana Medical Systems as an example of how Roche has "invested in that program" and managed to "maintain the culture."

"I think regardless of what business you look at at Roche within diagnostics, I would say our track record speaks for itself in terms of investment, in terms of growing those marketplaces, and we would certainly intend to do the same with Illumina as well," said O'Day. "This is a growth acquisition story, this is an investment scenario, this is something we would significantly invest in also in the future."

Broader Impact

Even though microarray customers are anxious about the implications of a potential Roche acquisition of Illumina, it doesn't mean that Illumina's competitors in the array market, such as Affymetrix or Agilent Technologies, stand to benefit.

"If Illumina were to be acquired … I do not think that would necessarily mean that people would turn elsewhere," said UHN's Winegarden. "Illumina has positioned themselves quite strongly as the leaders in the deep-sequencing space, and remain one of the stronger parties in the microarray space," he said. "I don’t see people changing platforms when they are so invested already in the infrastructure and procedures involved in the Illumina platform," he said.

"I think a Roche acquisition would have no immediate impact on Affymetrix and other microarray provider platforms unless Roche decides quickly to abandon the Illumina microarray market altogether," said Janet Hager, director of the Translational Genomics Core at the University of Connecticut Health Center.

O'Day said that Roche will continue to invest in Illumina's array business, should it succeed in acquiring the company.

"We continue to believe that the combination of sequencing and arrays provides the best solutions for the genomics marketplace out there," said O'Day. "They answer different questions, they provide different utility for both researchers and, potentially, clinicians," he said. If Roche acquires Illumina, it "would continue to invest in the microarray business, both Roche's and Illumina's, and find the best path forward there as the technologies continue to evolve."

When asked if Roche had plans to bring array-based diagnostics to market, O'Day said it would be "too premature" to discuss the firm's plans without more information about Illumina's array business and plans.

Still, some customers believe that that Roche is primarily interested in Illumina's sequencing business, and think that emphasis could hamper future array development. Hager noted that a Roche acquisition of Illumina could eventually "have a negative impact on custom expression and genotyping panel arrays and the array [comparative genomic hybridization] market if targeted sequencing solutions are developed."

Winegarden said that acquisition or no acquisition, the UHN Microarray Center will remain "agnostic" when it comes to arrays, and will work with "whatever is best for the question at hand." So unless Roche were to "drastically change Illumina's focus, I don't see it necessarily changing what platform people use," he said.

Seth Crosby, director of the Genome Technology Access Center at Washington University School of Medicine also took an agnostic view of the market. "Our buying decisions will be made based on what they have always been based — quality, support, ease of use and cost [of] labor and price," Crosby said. "Whether Illumina is standalone or a subsidiary should not, in and of itself, affect those things."

Like UHN's Winegarden, Case Western's Beckloff didn't see a Roche acquisition of Illumina as benefitting Illumina's rivals. "With the announcement of new next-generation sequencing platforms, such as Ion Torrent or Nanopore, I don't think the Roche acquisition will make much of a difference for Affy," Beckloff said.

"As sequencing becomes faster and cheaper, microarrays as a whole have been supplanted as a tool for primary discovery and will remain useful for validation," he said. "Unless Affy jumps into the market with an improved sequencing platform I cannot see how their standing in the microarray field will improve."

'A Good Thing'?

Andres Metspalu, director of the Estonian Genome Center at the University of Tartu, said that the idea that he would switch to another array platform given the possibility that Roche will buy Illumina is moot, as he has already switched to using genotyping by sequencing. Metspalu also noted that while he agreed a successful Roche acquisition would be "bad for research," he said that it would be "good for diagnostics."

Rick Jensen, a professor of biological sciences at Virginia Technical Institute, also cast a positive light on a potential acquisition. "I think it's a good thing," Jensen said. He cited recent news from Life Technologies and Illumina about the forthcoming possibility to sequence a human genome for $1,000 as a sign that the technology is trending toward clinical use.

"The economic challenge now is the cost of analyzing the sequence data for diagnostic and therapeutic value," said Jensen. "The Illumina sequencing and microarray platforms have provided a very reliable source of data for the scientific and biomedical communities and would continue to do so with the stable support of Roche as we all continue to work on tackling the challenges of translating the results of these technologies into useful applications," he said.

Other core lab directors and customers said that they could not predict the impact of an acquisition on Illumina's array offering, but were "hopeful" that, should it happen, it would not have a negative impact.

"I think it is natural to be apprehensive of change," said Curt Van Tassell, a research geneticist at the US Department of Agriculture's Agricultural Research Service who has aided in the design of a number of bovine-focused genotyping arrays with Illumina. "I do have some concerns, [but] hopefully, it will all work out," he said.

"For us as users of the Illumina products it is hard to predict if an acquisition of Illumina by Roche is a good or bad thing," said Pieter van der Vlies, manager of the Genome Analysis Facility at the University of Groningen in the Netherlands. "At this moment we are really satisfied [with] the products of Illumina and the service they offer," he said. "I hope that this quality level at least stays the same after acquisition by Roche."

Moreover, van der Vlies noted that Illumina has "profiled itself as a leading and innovative company" that is "always in the forefront" of technology intended for genome-wide research.

"I hope that this drive stays intact, even after an acquisition by another company," said van der Vlies. "That will be a challenge for a new owner of Illumina."

Have topics you'd like to see covered inBioArray News? Contact the editor at jpetrone [at] genomeweb [.]com