Solexa to be acquired in $600m deal
Cambridge genome sequencing pioneer, Solexa is to be acquired by US company, Illumina in an all-share deal that values the company at £313m ($600m).The stock-for-stock merger, which has been unanimously agreed by both boards, will see NASDAQ listed Solexa’s shareholders receiving $14 worth of Illumina stock for each of their shares.
Solexa expects its first-generation instrument, the 1G Genome Analyzer, to generate over a billion bases of DNA sequence per run and to enable human genome resequencing below $100,000 per sample, making it the first platform to reach this important milestone.
The company's longer-term goal is to reduce the cost of human re-sequencing to a few thousand dollars for use in a wide range of applications from basic research to personalised medicine.
The news sent Solexa's shares into orbit, which increased $3.37 or 34.7 per cent to $13.07. The fact that this is still almost a dollar short of Illumina’s offer demonstrates the degree of potential it sees in Solexa.
In addition to the Cambridge roots of its technology, Solexa was also backed by the city's Amadeus Capital Partners prior to its move onto NASDAQ. The company opportunistically secured its listing on NASDAQ in March 2005 through a merger with prone US company, Lynx Therapeutics.
The latest announcement accompanied Solexa's Q3 results which showed a $275k reduction in revenues compared to the same period in 2005, reflecting a wind-down in unprofitable activities. Cost of service revenue was down from $3.9m to $339k accordingly.
CEO John West said that he was confident that revenues would be increasing substantially over the next year as the company continues to deliver sequencing hardware to its customers.
Since Solexa’s second quarter update in mid August, the company said it had placed three additional systems with leading genome centers in the US and Canada, for a cumulative total of six placements.
“Our Early Access program is designed to better prepare us for broad commercial launch of the Solexa Genome Analysis System,” said West.
“We have increased our manufacturing production and now have the capacity to start making approximately one instrument per workday. In addition to honing our operations and field support activities, our principal focus is on obtaining comparable performance across all sites.
“Our first-generation Solexa Genome Analysis System outperforms all other sequencers on the market by a large margin on the basis of cost and throughput. We expect to ship additional units in the fourth quarter with an increasingly robust roll-out into 2007.”