The first-quarter revenue figures come just a day after Roche published both an open letter to Illumina shareholders and a public statement lobbying for its unsolicited bid. The Basel-based drug company said it would also consider sweetening the approach once again if the Illumina board would enter negotiations.
"As we have said earlier, if Illumina were to engage with us, we would consider any information supporting Illumina's contention that our offer undervalues the company and its prospects," Roche CEO Severin Schwan said in the release.
Roche on Jan. 25 unveiled a surprise $44.50 per share offer for San Diego-based Illumina, later boosting the bid to $51 to try to win over investors and lure the target's board to the bargaining table. But Illumina has resisted, decrying the offer as too low, and three proxy firms have since advised Illumina shareholders to vote against a host of Roche proposals during an April 18 general meeting.
The Swiss suitor is asking Illumina investors to expand their company's board to 11 from nine members and appoint six of its nominees, giving it a majority. Shareholders would also have to remove a poison pill.
Illumina's shares closed Wednesday at $52.57, lower than analysts have said they expect Roche to ultimately pay. The share price may suggest that investors expect only a modest further sweetener from Roche. The share price may also reflect some investor expectation that Roche could walk away.
The suitor Thursday said first-quarter sales slipped 1% to 11.03 billion Swiss francs ($12.04 billion), as 4% and 3% growth in the U.S. and Japan, respectively, failed to offset a 9% decline in sales in Europe.
"International growth is becoming increasingly important, especially through access to the Chinese market," wrote UBS analyst Gbola Amusa in a note. "Pricing pressure and drug restrictions in western Europe are creating a strong headwind." Amusa has a neutral rating on the shares.
In the past week, proxy firms Glass, Lewis & Co. LLC, Institutional Shareholder Services Inc. and Egan-Jones Ratings Co. all advised investors to vote against Roche's proposals at next week's meeting. Glass Lewis agreed with Illumina that Roche may be taking advantage of a dip in the target's share price to secure a discount.
But ISS said it saw the logic of a deal between Illumina and Roche. A merger of the two companies would allow Roche to identify the DNA of tumors and provide targeted, personalized treatment.
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