Slide 1: Roche's Offer to Acquire Illumina: Response to Illumina's Key Claims
[GRAPHIC OMITTED] Roche's Offer to Acquire Illumina Response to Illumina's Key Claims April 2012 [GRAPHIC OMITTED]
Slide 2: Forward-looking statements
This presentation contains certain forward-looking statements. These forward-looking [GRAPHIC OMITTED] statements may be identified by words such as `believes', `expects', `anticipates', `projects', `intends', `should', `seeks', `estimates', `future' or similar expressions or by discussion of, among
Slide 3: Situation Update
Situation Update o On April 2, Illumina released an investor presentation explaining why it believed Roche's offer to purchase all shares of the company for $51.00 per share was inadequate o However, Illumina did not offer any quantitative evidence why Roche's offer is not full and fair - Nor did Il
Slide 4: Key Claims
Key Claims -------------------------------------------------------------------------------- Key Claims Made in Illumina Investor Presentation -------------------------------------------------------------------------------- o Roche's tender offer bid is "timed to take advantage of a temporary disloca
Slide 5: Key Claims (cont'd)
Key Claims (cont'd) -------------------------------------------------------------------------------- Key Claims Made in Illumina Investor Presentation -------------------------------------------------------------------------------- o "Illumina has delivered consistent and superior growth" ----------
Slide 6: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT THESE MATERIALS ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ILLUMINA COMMON STOCK. THE TENDER OFFER IS BEING MADE PURSUANT TO A TENDER OFFER STATEMENT ON SCHEDULE TO (INCLUDING THE OF
Slide 7: Roche's Offer to Acquire Illumina: Presentation to Investors
-------------------------------------------------------------------------------- Roche -------------------------------------------------------------------------------- We Innovate Healthcare 7 Roche's Offer to Acquire Illumina Presentation to Investors April 2012 HIPPE 1. We have a slide presentatio
Slide 8: Forward-looking statements
This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as `believes', `expects', `anticipates', `projects', `intends', `should', `seeks', `estimates', `future' or similar expressions or by discussion of, among other things, str
Slide 9: Executive Summary
Executive Summary Roche is increasing its all-cash offer to acquire Illumina to $51.00 per share. o Offer is highly attractive, representing both full and fair value as well as value certainty - Implies 1-day and 1-month average premiums to the unaffected price of 88% and 84%, respectively and LTM r
Slide 10: Executive Summary (Cont'd)
Executive Summary (Cont'd) Roche is increasing its all-cash offer to acquire Illumina to $51.00 per share. o _______ Illumina has continually emphasized significant growth opportunities for sequencing in clinical settings as well as industrial end markets - However, no detail has been provided as to
Slide 11: Situation Update
Situation Update o On April 2, Illumina released an investor presentation explaining why it believed Roche's offer to purchase all shares of the company for $51.00 per share was inadequate o However, Illumina did not offer any quantitative evidence why Roche's offer is not full and fair - Nor did Il
Slide 12: Key Claims
Key Claims Key Claims Made in Illumina Investor Roche Response Presentation o Roche's tender offer bid is "timed to take advantage of a temporary dislocation in Illumina's stock price" o Over two of the past three years, Illumina traded in line or below an index of its peers and the broader market,
Slide 13: Key Claims (cont'd)
Key Claims (cont'd) Key Claims Made in Illumina Investor Roche Response Presentation o "Illumina has delivered consistent and o Illumina's past performance has no bearing on its ability to deliver superior returns to superior growth" shareholders in the future o Over the past three years, Illumina's
Slide 14: Illumina's Business Faces Significant Challenges
Illumina's Business Faces Significant Challenges o All-cash offer transfers 100% of risk from Illumina's shareholders to Roche o Maturing market and unsettled global economic conditions imply reduced growth prospects o Uncertainty around longer-term outlook for genetic funding by NIH and other U.S.
Slide 15: Roche is Best Positioned to Overcome these Identified Challenges
However, Roche is Best Positioned to Overcome these Identified Challenges Roche's global reach and expertise in diagnostics will allow Roche to reinvigorate Illumina's growth in ways unattainable as a standalone company. o _______ Roche is better positioned to make the type of investments that are r
Slide 16: Offer Multiples Above All Peers
Offer Multiples Above All Peers Roche's offer values Illumina well above any of its peers based upon a P/E multiple. Even after adjusting for growth, the P/E/G multiple is well above the peer median P/E/G. 2012E P/E 34. 2x 29 .6x 25.3x 20 .5x 20 .3x 18.6x 18.4x 18.2x Illumina Illumina (2) Illumina T
Slide 17: Offer Multiples Above Precedents
Offer Multiples Above Precedents Roche's offer is at the high end of valuation multiples paid in recent precedent life science tools transactions. Enterprise Value / LTM Revenue 7.0x 6.5x 6.0x 5.6x 4.9x 5.0x 4.3x 4.0x 3.3x 3.3x Median: 3.3x 3.0x 2.9x 2.0x 1.5x 1.0x -- Roche's Offer Roche's 1/24 Offe
Slide 18: Offer Premiums Above Precedent Transactions
Offer Premiums Above Precedent Transactions Unaffected Premiums 1 Day Premiums 88% Roche's Offer ($51.00/share) Roche's 1/24 Offer 64% ($44.50/share) Merck KGaA / Millipore 50% 02/28/10 MDS / Molecular 49% 01/29/07 Illumina / Solexa 44% 11/13/06 Agilent / Varian 33% 07/27/09 Thermo Fisher / Median:
Slide 19: Illumina Rolling NTM P/E/G Analysis
Illumina Rolling NTM P/E/G Analysis Roche's offer implies a price-to-earnings-growth ratio that is a 16% premium to Illumina's three-year high and well above its three-year average. 2.25x 2.00x P/E/G 1.75x NTM 1.50x Two-year avg.: 1.47x Three-year avg.: 1.42x One-year avg.: 1.40x 1.25x 1.00x 0.75x 0
Slide 20: Absent Roche's Offer, Illumina Would Likely be Trading at Much Lower Levels
Absent Roche's Offer, Illumina Would Likely be Trading at Much Lower Levels P/E/G Adj. Price $60.00 Actual Stock Performance 3-Year Avg. Forward P/E/G 1.42x P/E/G Adj. Price $55.00 Current LT Consensus Growth Rate 16.6% Offer: $51.00 Implied Forward P/E 23.6x $50.00 $49.88 Current 2012E EPS Guidance
Slide 21: Roche's Offer Represents Value Certainty Amidst Significant Headwinds
Roche's Offer Represents Value Certainty Amidst Significant Headwinds o $51.00 all-cash offer provides attractive value today for Illumina shareholders - Roche to hold all risk related to increasing competitive pressures and tightening fiscal policy related to government funding - Removes execution
Slide 22: Path Forward: Vote the Gold Proxy Card
Path Forward Show support for Roche's proposals by voting your shares for Roche's proposals and director nominees. Vote the Gold Proxy Card o 2012 annual meeting to be held on April 18th, 2012 - If you hold shares in your name: vote today by phone, Internet or by signing, dating and returning the pr
Slide 23: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT THESE MATERIALS ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ILLUMINA COMMON STOCK. THE TENDER OFFER IS BEING MADE PURSUANT TO A TENDER OFFER STATEMENT ON SCHEDULE TO (INCLUDING THE OF
Slide 24: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT ‘THESE MATERIALS ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ILLUMINA COMMON STOCK. THE TENDER OFFER IS BEING MADE PURSUANT TO A TENDER. OFFER STATEMENT ON SCHEDULE TO (INCLUDING THE
Slide 25: We Innovate Healthcare
We Innovate Healthcare 18