Three years after acquiring a majority stake Foundation Medicine, Pharma giant Roche has agreed to buy up all outstanding shares for about $2.4 billion and bring the company’s sequencing diagnostics platform under the Roche umbrella.
Three years after acquiring a majority stake in Cambridge, Mass.-based Foundation Medicine, Pharma giant Roche has agreed to buy up all outstanding shares for about $2.4 billion and bring the company’s sequencing diagnostics platform under the Roche umbrella.
As part of the Roche family, Foundation Medicine will remain an autonomous company, Roche said this morning. The Massachusetts company’s services include a full suite of comprehensive genomic profiling (CGP) assays that are used to identify the molecular alterations in a patient’s cancer and match them with relevant targeted therapies, immunotherapies and clinical trials. Roche initially became a majority stakeholder in Foundation Medicine in 2015. The $1.03 billion deal was expected to provide funding of Foundation Medicine’s genomic profiling tests for up to five years.
In December Foundation Medicine secured approval from the U.S. Food and Drug Administration for its sequencing diagnostics test for solid tumors that can detect cancer-causing mutations in 324 genes. The F1CDx test is the second IVD (in vitro diagnostic) approved by the FDA. According to Foundation Medicine, the F1CDx test assesses all classes of genomic alterations in 324 genes known to drive cancer growth. It provides physicians and caregivers “potentially actionable information to help guide treatment decisions.”
As could be expected, shares of Foundation Medicine rocketed on news of the deal. In premarket trading, Foundation Medicine’s stock shot up 28 percent to $136.25. The stock closed Monday at $106.45. Under terms of the deal, Roche said it priced the shares of Foundation Medicine at $137. This price represents a premium of 29 percent to Foundation Medicine’s closing price on June 18. The total deal will hit about $2.4 billion. Roche said Foundation Medicine has a total company value of $5.3 billion on a fully diluted basis. The acquisition, which was supported by the Roche and Foundation Medicine boards, is expected to take place in the second half of 2018.
Daniel O’Day, chief executive officer of Roche Pharmaceuticals, said the acquisition of Foundation Medicine is an important part of the company’s personalized healthcare strategy. O’Day said Roche believes “molecular insights and the broad availability of high quality comprehensive genomic profiling” will be drivers in the development of new cancer treatments.
“Foundation Medicine and Roche share the philosophy that every cancer patient should have access to personalized care informed by validated molecular information. Joining forces with Roche as an independent operating company allows Foundation Medicine to continue its collaboration with Roche, as well as our biopharma partners, to drive ubiquitous access to CGP testing and innovative data services,” Foundation Medicine CEO Troy Cox said in a statement.
Foundation Medicine has a number of partnerships with pharma companies, including Pfizer and Merck.
