Drug Giant Roche Buys Former Google Execs' Flatiron in $1.9B Deal
Switzerland-based Roche already had a 12.6 percent stake in the company and the new deal will firmly bring privately-held Flatiron under the pharma giant’s umbrella. Founded by former Google employees Nat Turner and Zach Weinberg, Flatiron Health has become a key driver in health tech. The company developed its Health OncologyCloud platform that includes the industry-leading electronic medical record for oncology, advanced analytics, patient portal and integrated billing management. Its tech is an aggregating data resource that enables researchers to develop real-world insights into the ever-changing oncology landscape.
Roche Chief Executive Officer Daniel O’Day said the acquisition of Flatiron is an important step in the company’s personalized healthcare strategy. He touted the “regulatory-grade real-world evidence” that Flatiron’s technology can provide. Flatiron’s oncology-specific electronic health record software is used by a large network of oncology practices that includes more than 265 cancer clinics, six academic research centers and more than a dozen oncology-focused companies. The company has said its software creates a technology platform that is designed to learn from the experience of individual cancer patients. O’Day said Flatiron’s tech is a key ingredient that will allow the company to accelerate development of new cancer treatments.
“As a leading technology company in oncology, Flatiron Health is best positioned to provide the technology and data analytics infrastructure needed not only for Roche, but for oncology research and development efforts across the entire industry. A key principle of this is to preserve Flatiron’s autonomy and their ability to continue providing their services to all existing and future partners,” O’Day said in a statement.
The outright acquisition of Flatiron amplifies Roche’s interest in healthcare technology. In 2015, Roche dropped $1.03 billion to take a majority stake in Foundation Medicine, which specializes in comprehensive genomic profiling tests for oncology.
The deal for Flatiron is expected to close in the first half of 2018. Flatiron said it will continue its current business model, which contains a network of partnerships that includes partnerships with Celgene and Amgen.
Turner, Flatiron’s co-founder and CEO, praised the company’s partnership with Roche and said the Swiss company shares its vision for “building a learning healthcare platform in oncology” that will ultimately benefit the treatment of patients. Turner said the acquisition will allow the company to increase investments in its technology and services platform, as well as its evidence-generation platform, which Turner said will remain available to the “entire healthcare industry.”
In an interview with CNBC, Turner said that Flatiron will remain an independent company under the Roche umbrella. He said the executive team and the employees are expected to remain with the company. Turner said that was one of the conditions of the deal with Roche, CNBC reported.