DNA Sequencing

The ongoing debate over the Illumina-Pacific Biosciences merger has come to a head with their competitor Oxford Nanopore rejecting the revised remedies. In documents filed with the UK’s Competition and Markets Authority (CMA) and published online Oxford Nanopore comments on Illumina’s offer and what could be done to restore the market balance.

The Backstory

Earlier this year the UK’s Competition and Markets Authority began investigating the planned merger of the two giants of sequencing technology: Illumina and PacBio. The CMA’s decision to halt the deal was based on the likely monopoly the two companies combined would hold on the Next Generation Sequencing (NGS) market. Currently Illumina holds an 80% share of the market globally and 90% in the UK. Their only true competitor, Oxford Nanopore understandably had their own reservations.

Announcing the CMA’s October decision to provisionally prohibit the proposed $1.2 billion merger, the regulatory body urged the two firms to put forward possible remedies of which they had not already evaluated. Illumina did so by proposing to lend out the intellectual property (IP) of PacBio to competitors, including Oxford Nanopore, and to continue to develop the PacBio brand.

Oxford Nanopore Responds

At the outset Oxford Nanopore states Illumina’s updated response is an “illusory offer which does little to offset the anticompetitive effects of the proposed merger either in the UK, or on a worldwide basis.”

The limitations of the IP are then examined and are deemed to be too restrictive as it would exclude analysis of RNA, short tandem repeats, circulating DNA, and low frequency variants. The full list can be found in the supplementary here.

Oxford Nanopore’s views are clear; “while an IP remedies offer may give some reprieve from litigation tactics by Illumina and PacBio…it will not exhaust their ability to engage in these tactics in an attempt to thwart competitors.

What’s Next?

In a closing statement Oxford Nanopore reiterates how little the remedy proposed by Illumina would help deal with the potential monopoly over NGS and that more work needs to be done – proposing the divestment of lllumina’s NovaSeq product line. Illumina is unlikely to accept this offer as its NovaSeq line is incredibly important to the business and generating the most sequencing data of any platform.

The CMA today announced the extension of the inquiry period, citing the complexity of the subject matter. Whatever happens next to Illumina and PacBio it is now not likely to be resolved before February 2020.

For more information from the CMA on the case – click here.

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