Illumina Falls as Roche Drops Deal to Buy U.S. Company

Illumina Inc. (ILMN), a U.S. maker of DNA sequencing equipment, fell the most in 15 months after Roche Holding AG (ROG) indicated it may no longer be interested in buying the company.

Illumina declined 7.1 percent to $50.90 at the close of New York trading, its biggest one-day drop since Oct. 7, 2011. The Illumina deal that has been in the works for a year is no more, Roche Chairman Franz Humer told the Swiss newspaper SonntagsZeitung.

“Illumina is definitively off the table,” Humer told the newspaper. “The other side wasn’t ready to retreat from their totally excessive price demands. Roche doesn’t do acquisitions that don’t create added value. We have self-discipline.”

Illumina rejected Roche’s $44.50-a-share hostile bid in January 2012 as well as a sweetened, $51-a-share proposal. Basel, Switzerland-based Roche walked away after investors held out for an even higher offer. L’Agefi, a Swiss newspaper, reported last month that the companies had agreed to a $66-a- share deal.

“We do not believe this precludes Roche from returning to Illumina as a targeted asset in the future and does not diminish its attractiveness as a potential M&A target,” Ross Muken, a New York-based analyst for ISI Group LLC, wrote in a note to investors late yesterday.

Verinata Acquisition

Alexander Klauser, a spokesman for Roche, confirmed Humer’s comments. Laura Trotter, Illumina’s director of corporate marketing, said in an e-mail that the company had no comment on Roche.

Earlier today, Illumina said it agreed to acquire closely held Verinata Health Inc., a Redwood City, California-based provider of tests for abnormalities in fetal chromosomes, for $350 million plus as much as $100 million in potential milestone payments. With the acquisition, Illumina will gain what it calls the broadest non-invasive prenatal test available for high-risk pregnancies.

Illumina makes machines that can provide a full transcript of a person’s DNA, information used to diagnose rare disease, identify the risk for a genetic condition, or match cancer treatments to patients’ tumors.

To contact the reporters on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net; Anna Edney in Washington at aedney@bloomberg.net

To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net; Reg Gale at rgale5@bloomberg.net