Roche Takes Majority Stake in Foundation Medicine for $1 Billion
(Bloomberg) — Roche Holding AG will pay more than $1 billion for a majority stake in Foundation Medicine Inc., giving the drugmaker access to genomic tests to screen tumors and aiding the development of a new generation of treatments that use the body’s own immune system to fight cancer.
Roche will buy 5 million newly issued shares of Foundation for $50 each, then buy about half of the company’s existing shares for the same price, the companies said in a statement today. The share price is a 109 percent premium over Foundation’s closing stock price last week. It will give Roche a stake of as much as 56 percent and the rights to sales of Foundation’s tests outside the U.S.
“This is a transformational relationship for us,” said Foundation Chief Executive Officer Michael Pellini in a telephone interview.
Foundation, based in Cambridge, Massachusetts, makes cancer genomic tests, one for solid tumors and the other for blood cancers. The diagnostic tests take a tissue sample from a patient’s cancer and analyze it for gene mutations that could be causing the tumor’s growth. That information can help doctors pick the best possible drug.
The tests are particularly attractive to drugmakers working on a new wave of cancer treatments that rely on personalized approaches. Foundation has sold about 35,000 of its tests worldwide, according to Pellini.
Roche and Foundation are planning to develop a profiling test specifically to be used for what are known as immunotherapies, treatments that aid the immune system’s attack against tumor cells.
Foundation has partnerships with about 25 biotechnology firms and pharmaceutical companies, said Pellini, including Novartis AG and Johnson & Johnson. Current and future partnerships won’t be affected by the Roche deal, said Pellini, who will stay on as CEO.
To contact the reporter on this story: Caroline Chen in San Francisco at cchen509@bloomberg.net To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net Drew Armstrong
