Roche (SIX: RO) couldn’t let a good startup slip away. The Swiss drug maker announced it will pay $1.9 billion to keep New York City-based Flatiron Health, Inc. from going public.
When it was founded in 2012, Flatiron’s goal was to gather and analyze data on cancer treatments and sells software based on those insights to help researchers develop drugs more quickly, and with more targeted precision. Toward that end, the company produced an oncology-specific electronic health record (EHR). It currently partners with more than 265 community cancer clinics, six major academic research centers and 14 out of the top 15 therapeutic oncology companies.
Roche already holds a 12.6% stake in Flatiron, after leading a $175 million round in the company in January 2016. As part of that deal, Roche bought a few of the company’s SaaS products in a non-exclusive transaction. Flatiron continued to work with other pharmaceutical companies.
Other investors included Allen & Company, Baillie Gifford and Casdin Capital. Previous investors included Google Ventures (now GV) and First Round Capital. Flatiron was looking forward to going public in two or three years’ time.
Roche has been serious about oncology, asthma and other diseases since it plunked down $46.8 billion for the remaining stake in Genentech (then NYSE: DNA) that it didn’t own, back in July 2008. Ensuing years brought more big deals, including $8.3 billion for InterMune, Inc. (NASDAQ: ITMN) in August 2014 and most recently, $1.7 billion for Ignyta, Inc. (NASDAQ: RXDX) in December 2017.
After closing of this latest acquisition, Flatiron is expected to continue its current business model, network of partnerships and overall objectives. According to a mutual press release, “The integrity of segregated patient protected health information will be preserved, as will dedicated sales and marketing, provider-facing and life science business activities.”
