Life Tech, In Competitive Frenzy for Cheap DNA Sequencing, Buys Ion Torrent for $375M
Life Technologies just made a very aggressive move in the ultra-competitive world of fast and cheap gene sequencing.
The Carlsbad, CA-based maker of life sciences instruments (NASDAQ: LIFE) said today it has agreed to acquire Ion Torrent Systems for a whopping $375 million in cash and stock. And that’s not the end of the deal. Shareholders of Ion Torrent, which is based in Guilford, CT, and South San Francisco, could receive an additional $350 million in cash and stock if the company can reach certain technical milestones through 2012.
This is a blockbuster deal for Life Technologies, as it seeks to take away market share from the industry-leading maker of gene sequencing machines—San Diego-based Illumina (NASDAQ: ILMN)—and fend off fierce competition from upstarts like Menlo Park, CA-based Pacific Biosciences and Mountain View, CA-based Complete Genomics. These companies are all pursuing the lofty goal of super-fast, super-cheap sequencing of entire human genomes. The original Human Genome Project took 13 years and cost $3 billion, but the prize will go to the company that can offer reliable sequencing for $1,000 per genome or possibly less, which could help crack open a market worth an estimated $3.6 billion by 2014.
Ion Torrent Systems had been in stealth mode for three years until it burst onto the scientific scene in late February, when CEO Jonathan Rothberg unveiled a desktop sequencing machine that his startup planned to sell for $50,000 apiece—about one-tenth the cost of existing instruments—and could perform a single sequencing “run” for about $500 in one hour. While the machine might not be ideal for complete genome sequencing, it intrigued scientists who heard Rothberg’s talk, because it could be used for numerous cheap and easy genome experiments that don’t require scientists to get the entire 3 billion letter sequence of A, C, G, and T in every human.
Life Tech, in today’s statement, said it plans to introduce the Ion Torrent instrument to the marketplace at a price of less than $100,000 later this year. It will be billed as an “easy-to-use, highly-accurate bench top instrument optimal for mid-scale sequencing projects, such as targeted and microbial sequencing,” the company said.
“We believe Ion Torrent’s technology will represent a profound change for the life sciences industry, as fundamental as the one we saw with the introduction of quantitative PCR,” said Life Technologies CEO Greg Lucier, in a statement. “This technology will usher in a new era in science, one in which DNA sequencing can be done easier, faster and more cost effectively than ever before.”
We broke news about Ion Torrent back in November, when it raised $23 million in venture capital for its new technology. The company, in a memorable line on its website at the time, said it was looking to hire people who “want to do what it takes to put a dent in the universe.”
Whether it puts a dent in the universe is still to be determined, but founder and CEO Jonathan Rothberg certainly has another hit on his hands. He previously co-founded … Next Page »