The Carlsbad, CA-based maker of life sciences instruments said today it has agreed to acquire Ion Torrent Systems for a whopping $375 million in cash and stock. And that's not the end of the deal. Shareholders of Ion Torrent, which is based in Guilford, CT, and South San Francisco, could receive an additional $350 million in cash and stock if the company can reach certain technical milestones through 2012.
This is a blockbuster deal for Life Technologies as it seeks to take away market share from the industry-leading maker of gene sequencing machines -- San Diego-based Illumina
Ion Torrent Systems had been in stealth mode for three years until it burst onto the scientific scene in late February, when CEO Jonathan Rothberg unveiled a desktop sequencing machine that his start-up planned to sell for $50,000 apiece -- about one-tenth the cost of existing instruments -- and could perform a single sequencing "run" for about $500 in one hour. While the machine might not be ideal for complete genome sequencing, it intrigued scientists who heard Rothberg's talk because it could be used for numerous cheap and easy genome experiments that don't require scientists to get the entire 3 billion letter sequence of A, C, G, and T in every human.
Life Tech, in today's statement, said it plans to introduce the Ion Torrent instrument to the marketplace at a price of less than $100,000 later this year. It will be billed as an "easy-to-use, highly accurate bench top instrument optimal for mid-scale sequencing projects, such as targeted and microbial sequencing," the company said.
"We believe Ion Torrent's technology will represent a profound change for the life sciences industry, as fundamental as the one we saw with the introduction of quantitative PCR," said Life Technologies CEO Greg Lucier, in a statement. "This technology will usher in a new era in science, one in which DNA sequencing can be done easier, faster and more cost effectively than ever before."
We broke news about Ion Torrent back in November, when it raised $23 million in venture capital for its new technology. The company, in a memorable line on its website at the time, said it was looking to hire people who "want to do what it takes to put a dent in the universe."
Whether it puts a dent in the universe is still to be determined, but founder and CEO Jonathan Rothberg certainly has another hit on his hands. He previously co-founded CuraGen, and 454 Life Sciences, a company that was sold to Roche in 2007 for $140 million in cash.
What's really different about Ion Torrent is that it goes about sequencing an entirely different way than conventional systems have used. As I put it in the March headline, it introduces Watson & Crick to Moore's Law.
The existing sequencing players -- Roche, Life Technologies, and Illumina -- tag the individual units of DNA with light, or fluorescent, signals, as I described in the March story. And they use sophisticated lasers and cameras to read the flow of those tags. The tags add some cost, and the cameras make for expensive capital equipment that can run around $500,000, plus the chemicals to keep them running.
Ion Torrent found a way to avoid the tags, lasers, and optics. It uses a proprietary ion sensor which spots hydrogen ions that have an electrical charge associated with each individual base of DNA-represented by the individual letters A, C, G, and T. Those ions are read as they pass through a tiny pore at the bottom of a sample well.
Illumina has sought its own entry point into ion scanning, through an equity investment and partnership with U.K.-based Oxford Nanopore Technologies. And both Complete Genomics and Pacific Biosciences are looking to load up with more capital through IPOs they hope to complete. It will be a fascinating battle to watch over the coming years, whether the existing heavyweights can maintain their edge, or whether the hungry upstarts can take over the field of faster, cheaper gene sequencing that's coming to biomedical research.
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Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. You can email him at email@example.com, or follow him at twitter.com/ldtimmerman.