NEW YORK (GenomeWeb) – Illumina has pushed back the expected completion date of its acquisition of Pacific Biosciences, due to an ongoing review by UK regulators regarding competition concerns.
Illumina now expects the deal to close in the fourth quarter of 2019, according to a filing with the US Securities and Exchange Commission. The San Diego-based firm also said that the UK Competition and Markets Authority (CMA) announced today that it will refer the proposed acquisition for further review "if the parties are unable to address the CMA's concerns."
"Illumina's proposed takeover of PacBio raises competition concerns in the supply of specialist DNA sequencing systems in the UK," CMA said in a statement. "The CMA is therefore concerned that Illumina could face insufficient competition after acquiring PacBio and that the deal could result in more expensive or lower quality products and less innovation in the market."
In a brief notice about its decision, CMA added that it will refer the deal for a Phase 2 investigation, to be carried out by a group of independent CMA panel members, "unless the parties offer acceptable undertakings to address these competition concerns."
Illumina announced plans to acquire PacBio for approximately $1.2 billion in cash in November 2018. Illumina's public comments about the deal, including those during its first quarter results filed April 26, had said the firm expected to close the deal mid-2019.
CMA has been investigating the deal since April.
Illumina said it expects Phase 2 of the investigation "to be initiated within the next week."
In a note to investors, SVB Leerink's Puneet Souda wrote that "the decision was widely anticipated, and despite the investigation moving to Phase 2… we believe a final decision is unlikely to alter Illumina's growth trajectory in near- or longer-term."
In morning trading on the Nasdaq, shares of Illumina were up less than 1 percent at $352.95.