Sector News

Roche in $1 billion-plus Foundation Medicine deal to boost cancer efforts

January 12, 2015
Life sciences
(Reuters) – Roche Holding will acquire a majority stake in molecular and genomic analysis business Foundation Medicine, it said on Monday, signaling its determination to expand in cancer immunotherapy by paying a hefty mark-up on the U.S. company’s current price.
 
The deal will help the world’s largest maker of cancer drugs push ahead in developing treatments that help the body’s own immune cells fight tumors, jostling with rivals including Bristol-Myers Squibb, Merck & Co and AstraZeneca.
 
The Swiss company, which will buy Foundation through a combination of outstanding and newly issued shares, said the deal should help it to develop combination therapies and identify cancer patients more accurately.
 
“By combining Foundation’s pioneering approach to genomics and molecular information with Roche’s expertise in oncology, we can bring personalized healthcare to the next level”, the head of Roche’s pharmaceuticals division Dan O’Day said in a statement.
 
The move to bolster its personalized cancer treatments could cost the Swiss drugmaker up to $1.18 billion.
 
Roche said it will tender for about 15.6 million Foundation shares at $50 a share, worth about $780 million and at a premium of 109 percent to Friday’s closing price. It will also invest $250 million by acquiring 5 million newly issued Foundation shares at $50 a share.
 
“Roche has shown once again its availability on paying no matter what price to strengthen its position in the oncology field,” said one Zurich-based analyst who asked not to be identified.
 
FINANCIAL IMPACT
 
The deal highlights Roche’s belief that personalized treatment will be key in the battle against cancer, while the immediate financial impact on the company is negligible, the analyst said.
 
At the end of the second half of last year Roche had at its disposal 7.9 billion Swiss francs ($7.77 billion) in operating free cashflow.
 
Despite the hefty premium, news of the deal lifted Roche’s shares in morning trade. By 1149 GMT the stock was up 2.2 percent at 284.10 Swiss francs, beating a 1.1 percent rise for the wider European sector.
 
A targeted approach to treating disease is gaining traction in many fields and is attractive to governments and insurers because it means that drugs should go only to patients who are likely to benefit.
 
The initial focus of Roche’s acquisition will be on developing genomic profile tests for cancer immunotherapies and for continuous blood-based monitoring. The companies said the deal includes the potential for more than $150 million in additional funding by Roche.
 
Roche will own between 52.4 percent and 56.3 percent of Foundation and gain minority representation on the board, with the U.S. company retaining its management team.
 
The deal comes fast on the heels of two others. Roche said last month that it would buy Bina Technologies for an undisclosed sum and pay up to $489 million for Austrian biotech company Dutalys.
 
California-based Bina provides technology for the processing and management of genomic information, while Dutalys specializes in so-called bi-specific antibodies.
 
(Reporting by Katharina Bart and Caroline Copley in Zurich and Deena Beasley in Los Angeles.; Editing by David Goodman)

comments closed

Related News

October 10, 2021

Nutraceutical giants’ partnerships inject life back into industry at Vitafoods

Life sciences

Some of industry’s biggest players are joining forces to bring cost-effective yet scientifically backed offerings to the nutraceuticals market. Co-creation is reinvigorating supplement innovation, pairing together companies’ diverse expertise, sales networks and clinical trial investments.

October 10, 2021

Pilot launch complete: GlaxoSmithKline’s malaria shot scores WHO backing for wider rollout in Africa

Life sciences

GlaxoSmithKline has spent many years developing and testing its world-first malaria vaccine, but even after a positive recommendation from European regulators in 2015, the shot still isn’t widely deployed. That’s set to change with the World Health Organization’s (WHO’s) blessing for the vaccine.

October 10, 2021

Henrietta Lacks’ estate sues Thermo Fisher for continued sale of HeLa cells without family consent

Life sciences

A sample of Henrietta Lacks’ tissue was taken from her cervix without her consent while she was undergoing cancer treatment at Johns Hopkins Hospital in 1951. Her cells have subsequently been used to develop the polio vaccine, HPV vaccines and gene-mapping techniques and continue to be sold for research purposes by Thermo Fisher Scientific.

Send this to a friend