Illumina drops deal to acquire Pacific Biosciences

Faced with resistance from antitrust authorities concerned about a lessening of competition, Illumina has dropped plans to acquire its next-generation DNA-sequencing (NGS) rival Pacific Biosciences of California for about $1.2 billion.

Announced in November 2018, the deal would have would united Illumina, the largest NGS company and the leader in short-read DNA-sequencing technology, with PacBio, the long-read sequencing leader.

However, in October, the UK’s Competition and Markets Authority issued provisional findings skeptical of the deal. Then late last year, the US Federal Trade Commission also challenged the deal on the grounds that it would substantially lessen competition in the US NGS market. It ordered an administrative trial for August and said it would seek a restraining order if necessary to prevent the deal from going through before then.

“When a monopolist buys a potential rival, it can harm competition,” Gail Levine, deputy director of the FTC’s competition bureau, said in an agency statement.

In a joint announcement, the companies said terminating the agreement is in the best interest of their respective shareholders and employees, given the lengthy regulatory approval process to date and the continued uncertainty of the ultimate outcome. In accordance with the original agreement, Illumina will pay PacBio a termination fee of $98 million.

“We believe this proposed combination would have broadened access to Pacific Biosciences sequencing technology, significantly expanded and accelerated innovation, and ultimately increased the clinical utility and impact of sequencing,” Illumina CEO Francis deSouza said in a statement.