Tuesday, August 17, 2010

Life Tech Gobbles Ion Torrent

Tonight's big news is that Life Technologies, the giant formed by the merger of ABI and Invitrogen, has acquired Ion Torrent for an eye popping $375M (mixed cash & stock) with another $325M possible in milestones and such.

I'm not shocked Ion Torrent was shopping itself; by linking with an established player Ion Torrent can access marketing channels -- a talent they have displayed a serious handicap in. While Ion Torrent was adept at creating buzz with founder Jonathon Rothberg's rock star presentations and their sequencer giveaway contests, actual marketing infrastructure to follow-up on all the leads generated through those efforts was clearly lacking (as in, they have yet to contact me!).

One interesting detail of the press release is the fact that the price point for their sequencer is placed at "below $100K"; Ion Torrent had previously billed their machine at under $50K. Is this a real shift, or does it simply reflect the true cost once sample prep gear is thrown in?

Now, there are several interesting angles to watch. First, how will Life position their full lineup of sequencers -- now that they have 3 different technologies (SOLiD, Ion Torrent & VisiGen) with very different performance characteristics. Plus, they had the SOLiD PI in line to be an entry level second generation sequencer -- how will this affect that?

Another area to watch is how tightly Ion Torrent is tied into the SOLiD line. While the chemistry is very different, there are opportunities. For example, can the EZ Bead emulsion PCR robots be used for Ion Torrent sample prep (with the whole sample prep issue being a big black box for the technology? Will the same library prep reagents for SOLiD be usable with Ion Torrent? I'd love to see that -- especially if Ion Torrent drives volumes which ultimately result in driving kit costs down. Of course, the biggest question is when can people actually buy one of the beasts?

Roche/454 seemed like a more obvious partner for Ion Torrent -- very similar chemistries & a tie-up of that sort might have meant a very rapid extension of Ion Torrent read lengths. Roche should be quite nervous; between Ion Torrent and Pacific Biosciences they are going to be under extreme pressure in long read niches and their next technology (GE's nanopores) are unlikely to be ready for many years. Ion Torrent could have also been an interesting play for a reagent company looking to jump into sequencing instruments. Such a company could have also brought the right sales network into play. A non-bio player could have happened, but I doubt that would have ended well -- Ion Torrent needs to complete their act & get their machine out to biologists.

7 comments:

Nash said...

Don't you mean $325 million? I mean, lets not short change Ion Torrent here.

Keith Robison said...

Thanks - fixed that pair of dumb omissions plus a typo.

Prithwish said...

Nice roundup.

Just wanted to clarify what you meant by 'GE's nanopores': I thought Roche was investing in IBM's nanopore technology.

GE is developing some NGS technology too, but of a different sort.

Thanks

Keith Robison said...

You are correct - wrong ancient tech behemoth - IBM is Roche's partner.

NexGen said...

From what I've been hearing, Ion does sample attachment, maybe even amplification, on metal (gold?) beads. It is probably better suited for their sensor and detection technology.

I suspect the valuation is that high because of a bidding war between Life and Roche. Re. GE, they have the Amersham team who were working on the phosphate fluorescent tags (similar to PacBio), I think we can expect them to reveal a sequencing technology as well, perhaps you typo was a premonition?

Jackal said...

Ion Torrent is not a single molecule sequencing (SMS) technology. What does this very large investment say about the future of SMS at Life Technologies? I believe that they called the new LifeTech SMS platform "StarLight" at AGBT conference back in February.

http://web.me.com/leonardvisser/Site/Synthetic_Biology_and_Genomics.html

NexGen said...

Re: Jackal, I think it is rather more indicative of Life's deep pockets than any difficulties with their 3rd gen technology (the technical challenges with optical detection are nowhere close to being met, but StarLight is still very elegant). Second gen. sequencing is doing extremely well now, and it might be so for the next 3-4 years at least, so the investment in Ion seems reasonable (albeit overpriced). They are clearly looking to square up against Illumina and Roche.