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Illumina declines following analyst downgrade

NEW YORK (AP) -- Shares of genetic analysis instrument company Illumina Inc. slumped Monday after an analyst downgraded the stock, pointing to concerns about its competition.

THE SPARK: Robert W. Baird & Co. analyst Jeffrey Elliott lowered his rating to "Neutral" from "Outperform." He noted that one of Illumina's largest customers, the Chinese genomics company BGI-Shenzen, is buying a competitor to Illumina. It's not clear what that deal will do to the relationship between Illumina and BGI, Elliott said. The analyst said BGI-Shenzen has more than 130 of Illumina's HiSeq gene sequencing systems.

Elliott said other competition to Illumina's products could be on the market soon.

Illumina shares have received a boost recently from speculation the San Diego company might be acquired by Swiss drugmaker Roche, which sought to buy Illumina earlier this year. He said the company's stock is trading at a fair price.

THE BIG PICTURE: BGI agreed to buy Complete Genomics in September for about $113 million in a deal that is expected to close in early 2013. Illumina also made a bid for Complete Genomics but was rejected.

Roche offered to buy Illumina for $5.7 billion in January and later raised its offer to $51 per share, or $6.5 billion. Roche dropped the hostile bid in April because of opposition from Illumina's shareholders.

SHARE ACTION: Illumina stock lost $1.56, or 3 percent, to $51.37 in afternoon trading. Since Oct. 15 the shares are up 9.7 percent.