SoftBank Acquires $5 Billion Stake in Roche
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First reported by Bloomberg, SoftBank’s investment in Roche is something of a departure for the company, which often looks to technology companies and early-stage biotechs. According to the Financial Times, SoftBank’s chief executive officer is bolstering the investments after a series of strategic missteps for its SB Northstar unit.
With the acquisition of the Roche stake, SoftBank has become one of the company’s biggest stakeholders, Bloomberg reported. Shares that SoftBank acquired are non-voting shares, the Financial Times reported. SB Northstar was launched last year by SoftBank founder Masayoshi Son. According to Bloomberg, it was a means to put the company’s massive cash pile to use. Son personally holds a one-third stake in SB Northstar. SoftBank has nearly $20 billion in liquid capabilities for investments, Bloomberg said.
This year alone, SoftBank has made several significant investments in companies like Pacific Biosciences, Unoja Biopharma, Invitae and CMR Surgical. The $5 billion invested in Roche will be among its biggest investments.
According to the Bloomberg report, SoftBank was drawn to Roche largely because of its Genentech subsidiary. SoftBank allegedly believes the South San Francisco-based company is undervalued. Specifically, the investment bank is high on Aviv Regev, a computational and systems biologist who was recently hired by Genentech to lead its research unit. Regev pioneered methods for deciphering sequences of RNA in single cells. Additionally, she has created machine-learning algorithms for distilling biological knowledge from the resulting information. Those efforts resulted in the first demonstrations of the discovery of new insights into a range of molecular circuits, systems, and fields, including immunology, neurobiology, development, inflammatory disease, cancer, and evolution.
Sequencing has become a significant focus for Roche and Genentech. Over the past few years, Roche has made significant investments to bolster its precision medicine offerings that rely on sequencing. In 2018, Roche acquired Flatiron Health and its health oncology cloud platform. Prior to the acquisition, Roche held a 12% stake in the company. The company has said its software creates a technology platform that is designed to learn from the experience of individual cancer patients.
That same year, Roche acquired Foundation Medicine, a company with significant stake. That deal brought Foundation Medicine’s sequencing diagnostics platform under the Roche umbrella.
More recently, Roche acquired GenMark Diagnostics to bolster its position. The company was one of the first to secure authorization for a COVID-19 test. That deal complemented the company’s existing diagnostics capabilities.
Roche could be moving closer to regulatory approval of an Alzheimer’s drug. Following the controversial approval of Biogen’s Aduhelm, the Swiss company is in talks with the U.S. Food and Drug Administration regarding its investigational candidate gantenerumab. A Phase III study of the medication is expected to conclude next year.