Illumina (ILMN) Up 3 % to $174 on Buyout Speculation in Gene Sequencing

Illumina, Inc. (ILMN) was up as much as 12 points earlier today on a rumored buyout from Thermo Fisher Scientific Inc. (TMO).  Thermo bought another major player in sequencing Life Techologies for $13.6B making it the number two player in the major growth area of gene sequencing (see January 2015 and other Raygent reports on gene sequencing).This acquisition was a success for TMO and earnings were stronger after the deal. Roche (RHHBY) is another major player in molecular medicine, targeted oncology and sequencing with a Foundation Medicine (FMI) deal.

We will dig more into this story as we had previous coverage of both companies and they are both leaders in the field of life science tools and diagnostics. Although a ILMN/TMO deal is possible a merger is unlikely because:

  • Thermo Fisher Scientific (TMO) has grown through M&A in key growth segments of the market and has strong financial management so to acquire ILMN with a market cap of $25.B would be a reach. TMO has a market cap of $60.4B.
  • A merger of the #1 and #2 companies in gene sequencing might be reviewed by the Justice Department due to possible restraint of trade.

Pacific Biosciences (PACB) is up 2.48%  in concert with the chatter on good volume.


Disclosure: Long FMI,PACB, RHHBY

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