SAN DIEGO (AP) — Diagnostics company Illumina Inc. again rejected a $5.7 billion offer from Roche AG on Tuesday, saying the Swiss drugmaker's bid was "grossly inadequate."
The company also reported its fourth-quarter results, and said its profit fell 70 percent as it moved its headquarters to a bigger facility and its sales decreased.
Illumina's board unanimously turned down the offer and said shareholders should not tender their stock in support of Roche's bid, which was launched Jan. 27. It said Roche is not properly valuing the growth potential of Illumina's business, its products in development, and its track record. Illumina added that Roche timed its offer to take advantage of a drop in its stock price in late 2011, when concerns about research funding knocked its share price down by almost two-thirds.
The offer "is grossly inadequate in multiple respects, dramatically undervalues Illumina and is contrary to the best interests of Illumina's stockholders," Illumina said. The company added that advisers Goldman Sachs and BofA Merrill Lynch agreed the bid was too low. The tender offer expires midnight EST on Feb 24.
Illumina shares set an all-time high of $79.40 on July 6, but the stock had dropped to $27.17 by Dec. 21. That was the day rumors began circulating that Roche was interested in buying Illumina. Roche went public with its bid last month after Illumina refused to enter negotiations. Roche's offer of $44.50 per share was a premium of 18 percent to the latest closing price of Illumina shares and a premium of 64 percent to its price before the rumors started.
Shares of Illumina finished at $51.80 Tuesday. That's 16.4 percent above the offer price, an indication that investors think Roche will make a larger bid. The stock was unchanged in aftermarket trading.
After Roche took its offer public, Illumina adopted a "poison pill" measure intended to ward off unwanted attempts to acquire the company. Roche says it plans to nominate a slate of directors to Illumina's board as part of its effort to gain control of the company.
Illumina makes systems that analyze an individual's DNA, and it is the biggest gene-sequencing company. It's expected that future breakthroughs will use that information to tailor treatments in ways that are especially effective for people with certain genes.
The San Diego company said its quarterly profit dropped to $11.7 million, or 9 cents per share, from $38.4 million, or 25 cents per share. Excluding one-time items Illumina said it earned 35 cents per share. Its revenue slid 4 percent, to $250.1 million from $261.3 million.
Analysts expected the company to report a profit of 29 cents per share and $248.6 million in revenue, according to FactSet.
The quarter included $30.2 million in costs related to the relocation and $8.1 million in restructuring charges.
In 2011, Illumina's profit fell 31 percent, to $86.6 million, or 62 cents per share, from $124.9 million, or 87 cents per share. Revenue grew 17 percent, to $1.06 billion from $902.7 million.
The company forecast an adjusted profit of $1.40 to $1.50 per share in 2012, and said revenue will rise to a range of $1.1 billion to $1.18 billion. Illumina's guidance includes a first-quarter profit of 29 cents to 32 cents per share. It expects first-quarter sales of $250 million to $260 million, which represents a drop from first-quarter 2011 revenue of $282.5 million.
Analysts expect Illumina to report a profit of 31 cents per share and revenue of $259.2 million in the first quarter, and a profit of $1.39 per share with $1.1 billion in revenue for the full year.