Roche buys majority stake in Foundation Medicine for $1.03B
- As the largest maker of cancer drugs, Roche's $1.03-billion investment in Foundation Medicine says a lot about its confidence in Foundation, which used genetics to help select drugs for cancer patients.
- Roche is buying 15.6 million Foundation shares for $50 each and has another purchase planned for the future.
- Roche will have three of the nine seat on Foundation's board.
This story if making headlines for a couple of reasons. First, although Foundation has had some important investors (like Bill Gates), overall, many investors are not excited about the use of generic testing as a critical part of cancer therapeutics. Roche's vote of confidence is a big deal—though it doesn't mean that Foundation is totally out of the woods. In fact, Foundation shares are down 32% since its IPO in 2013. Another point of interest is that fact that Foundation may actually emerge as an acquisition target for Roche: The setup here echoes Roche's previous set-up with Genentech, which Roche eventually acquired.