Roche Pays $1.03 Billion for Majority Stake in Foundation Medicine, Inc.
January 12, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Cambridge, Mass.-based Foundation Medicine, Inc. announced today that it is entering into a strategic collaboration with Roche , which will fund its research and development for more than $150 million for a minimum of five years and throw in its expertise and oncology experience.
Foundation Medicine will use its comprehensive genomic profiling tests for oncology and continue to work independently. The initial collaboration will focus on developing genomic profile tests for cancer immunotherapies and blood-based monitoring.
“We are excited to announce this strategic collaboration with Roche, which will help accelerate our business, and importantly, represents significant potential for individuals with cancer around the world,” said Michael Pellini, Foundation’s president and chief executive in a statement. “We believe that putting molecular information at the center of cancer care will help transform the delivery of care for patients and speed the pace of drug discovery and development. The structure of our agreement with Roche also allows us to maintain the entrepreneurial spirit at Foundation Medicine and ensures that our business model, network of partnerships and objectives are not altered.”
Part of the results of the collaboration is expected to allow comparability of clinical trials results for research and development purposes. Both organizations also agreed to a commercial collaboration deal that will broaden Foundation Medicine in clinical and molecular markets. Roche will acquire rights outside the U.S. under the Foundation Medicine brand to existing products, as well as to future co-developed products.
The deal totals about $1.03 billion, which will give Roche a 56.3 percent stake in Foundation Medicine. Roche will buy 15.6 million Foundation shares for $50.00 per share on the open market. It will also acquire another 5 million newly issued shares at the same price. Even though Roche will have a majority stake in the company, it will only have three of nine seats on Foundation’s Board of Directors.
Foundation has previously received investments from Bill Gates, Google Ventures, and inked partnerships with Novartis and Celgene .
Pellini will continue to head Foundation Medicine after closing, maintaining the current management team.
“We are very pleased to enter into this collaboration with Foundation Medicine, which has the potential to improve both the development of medicines and patient care,” said Daniel O’Day, chief operation officer of Roche Pharma in a statement. “By combining Foundation Medicine’s pioneering approach to genomics and molecular information with Roche’s expertise in the field of oncology, we can bring personalized healthcare in oncology to the next level.”