Roche Builds on its Foundation Medicine Deal

Three years after its first investment, Roche AG (SIX: RO) bought the rest of Foundation Medicine, Inc., a Cambridge, Massachusetts-based molecular information company. In January 2015, Roche plunked down $1.03 billion to acquire approximately 57% of Foundation Medicine from its venture capital backers Google Ventures, Third Rock Ventures and Kleiner, Perkins, Caufield & Byers.

Roche acquired approximately 15.6 million shares in Foundation at $50 per share. It also invested $250 million by acquiring 5 million newly issued shares at $50 per share.

My, how times (and markets) have changed. On June 19, Roche announced it would pay $2.4 billion to buy the shares it didn’t own. The price per share is now $137, for approximately $2.4 billion.

Foundation collects genetic data from samples of cancer tissue or blood, and makes molecular-diagnostic tests that identify alterations in a patient’s cancer. The results are used to match patients with targeted treatments or clinical trials.

This is Roche’s third acquisition this year, and its second involving cancer data. In February, Roche paid $1.9 billion to acquire Flatiron Health, a privately held healthcare technology company that developed oncology-specific electronic health record (EHR) software, as well as the curation and development of real-world evidence for cancer research.

That was also a follow-on deal, as Roche held an existing equity stake of 12.6%, after leading a $175 million round in the company in January 2016.

Flatiron partners with more than 265 community cancer clinics, six major academic research centers and 14 out of the top 15 therapeutic oncology companies. After the closing, Flatiron has continued with its business model, network of partnerships and overall objectives.



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