Life Technologies extends acquisition strategy, sequencing position
Company signs definitive agreement to buy Ion Torrent for $375M in cash and stock
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CARLSBAD, Calif.—In a move targeting acquisition of the services of life sciences pioneer Dr. Jonathan Rothberg, as well as his company that has spawned the latest innovation in gene sequencing, Life Technologies Corp. recently announced a definitive agreement to acquire Ion Torrent for $375 million in cash and stock.
Under the terms of the agreement, Ion Torrent will also be entitled to additional consideration of $350 million in cash and stock upon the achievement of certain technical and time-based milestones through 2012. Life Technologies' board of directors has approved an additional share repurchase program in order to reacquire its shares associated with the stock portion of the deal, with the impact on total share count expected to be neutral.
Rothberg—founder of CuraGen, 454 Life Sciences and co-founder of Raindance Technologies—and his company have revolutionized DNA sequencing by enabling a direct connection between chemical and digital information through the use of proven semiconductor technology—dubbed PostLight sequencing technology—which represents a new approach to DNA sequencing that eliminates the cost and complexity associated with the extended optical detection currently used in other sequencing platforms.
"Dr. Rothberg was key to this acquisition," Life Technologies President and CEO Mark Stevenson states, "and will run Ion Torrent as an entrepreneurial business reporting to me."
Up to now, scientists have had to go through an intermediary, such as light, to translate chemical data into digital data. That approach requires proprietary chemistry and optics—cameras, lasers and scanners. By contrast, Ion Torrent sequencing technology requires no proprietary chemistries or optics because it's based on a biochemical process.
When a nucleotide is incorporated into a strand of DNA by a polymerase, a hydrogen ion is released as a byproduct. That hydrogen ion carries a charge which Ion Torrent's proprietary ion sensor detects. If a nucleotide, for example a C, is added to a DNA template and a signal is detected, you know that nucleotide was incorporated. The Ion Torrent sequencer—which is essentially a very small solid-state pH meter—has called the base, going directly from chemical information to digital information. Because this is direct detection, each nucleotide incorporation is recorded in seconds and an entire run takes only about an hour. The sequencing system directly translates chemical signals (A, C, G, T) into digital information (0, 1) on the semiconductor chip.
The result is a sequencing system that is simpler, faster, less expensive and more scalable than any other technology available, the company claims.
The first product using this technology will be the Personal Genome Machine (PGM), an easy-to-use, highly accurate benchtop instrument that will initially be marketed for mid-scale sequencing projects, such as targeted and microbial sequencing. The instrument is currently available through an early access program and will be launched later this year at an entry cost of less than $100,000. Subsequent products will benefit from cutting-edge semiconductor fabrication technologies that can expand throughput at an accelerated pace, thereby dramatically lowering the cost to sequence a genome.
With Ion Torrent, says Stevenson, the goal is to bring down the cost of sequencing to $1,000 per genome in order to expand its use into clinical trials and diagnostics. The PGM will expand into whole genome applications in three to five years, he says.
Under the terms of the agreement, Ion Torrent will also be entitled to additional consideration of $350 million in cash and stock upon the achievement of certain technical and time-based milestones through 2012. Life Technologies' board of directors has approved an additional share repurchase program in order to reacquire its shares associated with the stock portion of the deal, with the impact on total share count expected to be neutral.
Rothberg—founder of CuraGen, 454 Life Sciences and co-founder of Raindance Technologies—and his company have revolutionized DNA sequencing by enabling a direct connection between chemical and digital information through the use of proven semiconductor technology—dubbed PostLight sequencing technology—which represents a new approach to DNA sequencing that eliminates the cost and complexity associated with the extended optical detection currently used in other sequencing platforms.
"Dr. Rothberg was key to this acquisition," Life Technologies President and CEO Mark Stevenson states, "and will run Ion Torrent as an entrepreneurial business reporting to me."
Up to now, scientists have had to go through an intermediary, such as light, to translate chemical data into digital data. That approach requires proprietary chemistry and optics—cameras, lasers and scanners. By contrast, Ion Torrent sequencing technology requires no proprietary chemistries or optics because it's based on a biochemical process.
When a nucleotide is incorporated into a strand of DNA by a polymerase, a hydrogen ion is released as a byproduct. That hydrogen ion carries a charge which Ion Torrent's proprietary ion sensor detects. If a nucleotide, for example a C, is added to a DNA template and a signal is detected, you know that nucleotide was incorporated. The Ion Torrent sequencer—which is essentially a very small solid-state pH meter—has called the base, going directly from chemical information to digital information. Because this is direct detection, each nucleotide incorporation is recorded in seconds and an entire run takes only about an hour. The sequencing system directly translates chemical signals (A, C, G, T) into digital information (0, 1) on the semiconductor chip.
The result is a sequencing system that is simpler, faster, less expensive and more scalable than any other technology available, the company claims.
The first product using this technology will be the Personal Genome Machine (PGM), an easy-to-use, highly accurate benchtop instrument that will initially be marketed for mid-scale sequencing projects, such as targeted and microbial sequencing. The instrument is currently available through an early access program and will be launched later this year at an entry cost of less than $100,000. Subsequent products will benefit from cutting-edge semiconductor fabrication technologies that can expand throughput at an accelerated pace, thereby dramatically lowering the cost to sequence a genome.
With Ion Torrent, says Stevenson, the goal is to bring down the cost of sequencing to $1,000 per genome in order to expand its use into clinical trials and diagnostics. The PGM will expand into whole genome applications in three to five years, he says.
Stevenson adds, "This transaction enhances our strategy of providing a complete sequencing offering to our customers across the research and applied markets. Ion Torrent's technologies are highly complementary to our existing portfolio of sequencing CE and SOLiD platforms."
He notes that prior to the 2008 merger of Applied Biosystems and Invitrogen to form Life Technologies, the two partners had acquired 17 other life science companies (15 by Invitrogen) and others have been added since.
Life Technologies' $3.5 billion annual sales are divided among pharma and biotech (30 percent) and academic and government (50 percent), with forensics, food and animal health labs comprising the remainder.
"Our focus is essential life science tools," Stevenson says, "that contribute to understanding the biology of life."
Life Technologies intends to retain Ion Torrent's presence in Guilford, Conn., and South San Francisco, where it has established R&D centers of excellence.
