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Finerman’s Fine Print: Roche Hostility

Wednesday, 25 Jan 2012 | 6:29 PM ET

Illumina landed squarely on Karen Finerman’s trader radar Wednesday with the company in the cross hairs of a hostile bid from Roche.

The Swiss drugmaker offered $5.7 billion in cash to acquire Illumina in a move that could boost the profile of gene sequencing in every day medicine.

The Background

Gene sequencing allows researchers and physicians to better predict which patients are likely to respond to a particular drug and is considered by some to be the future of medicine.

Illumina is a market leader in the sequencing machines that give details on an individual's genome.

Strategists says their products would nicely complement Roche's world-leading position in cancer drugs, which are increasingly being developed with companion diagnostic tests to determine the best fit with patients.

Finerman's Fine Print: Roche Hostility
Fast Money trader Karen Finerman explains what's behind Roche's tender offer for Illumina; and the best way to play the biotech takeout trend.

Wall Street Angle

In the wake of Roche’s hostile offer, Illumina shares traded up to $55 - more than $10 above Roche's offer of $44.50 per share.

The action suggests investors think Illumina will command a significantly higher price that what’s already on the table – either from Roche or a rival.

The Trade

How should you play the developments? Fast trader Karen Finerman always parses through the fine print to form a trading thesis - and this time is no different.

Watch the 1st video to hear from the Chairwoman.

Then get even more analysis from Keith M. Moore, Ph.D. of MKM Partners in the second video.


Roche Makes $5.7B Bid for Illumina
Keith Moore, MKM Partners, discusses how to play Roche's hostile bid for gene sequencer, Illumin, saying ILMN is likely to fight the takeover. Also an update on SanDisk's earnings, with the Fast Money crew.





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Trader disclosure: On Jan. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long SU; Terranova is long SJM; Terranova is long BRCM; Terranova is long MUB; Terranova is long EMC; Terranova is long F; Terranova is long SBUX; Terranova is long V; Terranova is long AXP; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long JNPR; Terranova is long CSCO; Terranova is long WFM; Terranova is long XOM; Terranova is long UNG April $5 puts; Finerman is long (JPM); Finerman is long (BAC); Finerman is long (PLCM); Finerman is long (IBM); Nathan is long AAPL Jan puts; Nathan is long BAC Jan puts; Nathan is long MS Jan puts; Nathan is long NFLX Jan calls; Nathan is long INTC Jan put spreads; Nathan is long MSFT puts; P. Najarian is long AAPL; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long JCP

For Karen Finerman
Finerman's fund is long (AAPL)
Finerman's fund is long (JPM)
Finerman's fund is long (PLCM)
Finerman's fund is short (SPY)
Finerman's fund is short (MDY)

For Mike Khouw
No Disclosures

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