- Swiss pharma Roche will pay $2.4 billion to acquire the rest of Foundation Medicine that it doesn't already own, advancing its efforts to develop treatments targeted to the molecular make-up of a patient's cancer.
- Roche will buy the remaining 42.5% of the genomic profiling company for $137 per share — a 29% premium over Foundation stock's closing price on June 18 and nearly triple the $50 per share it paid for its initial investment back in 2015.
- The deal for full control of Foundation is the latest in a series of acquisitions that have made clear Roche's ambition to lead the industry's drive toward personalized cancer medicine. While still more promise than reality, specifically tailoring treatments to patients is seen as the future of oncology.
Buying out Foundation looks to be another step in Roche's strategy to maintain an edge in oncology.
In the past half year, Roche has bought out cancer data specialist Flatiron Health and acquired San Diego-based biotech Ignyta, which had impressed with data for its targeted cancer drug entrectinib. Including the deal for Foundation, the Swiss pharma has now spent $6 billion on investments aimed at strengthening its capabilities to develop and deliver new cancer medicines.
Through Foundation Medicine and Flatiron Health, Roche gains control of technologies that, respectively, could improve both how it designs clinical trials and how it assesses the impact of approved medicines in the real world.
Foundation Medicine has developed a series of diagnostic tests that can identify specific mutations in a patient's tumor, enabling drugmakers to better match patients with treatment. This has become particularly crucial in immuno-oncology, where it's still not clear why some patients respond and others don't.
The company's flagship assay, FoundationOne, tests for 315 cancer genes in solid tumors, while the company's more recently developed FoundationOne CDx is approved as a companion diagnostic guiding to 17 treatments across five cancer types.
Foundation also commercializes an assay for hematological malignancies and has developed a liquid biopsy test.
Flatiron, on the other hand, sells oncology-focused electronic health record software and data platforms for the collection of real-world data. Roche believes it can use this technology to support regulatory decisions on its medicines and help illustrate the value of its products.
"As a big ship on a rising tide, we think we are going to have a distinct advantage to this as a first mover in this area," said Daniel O'Day, head of Roche Pharmaceuticals, discussing personalized healthcare at an investor event earlier this month in Chicago.
Flatiron and Foundation can help Roche build a framework to advance and commercialize more personalized treatments. Acquiring Ignyta, on the other hand, bought Roche molecules through which it hopes to realize this vision.
The biotech's lead candidate, entrectinib, is a small molecule inhibitor of neurotropic tropomyosin receptor kinases (NTRK) and ROS1 proteins. Data from an open-label study in October showed promising efficacy from the drug in lung cancer patients with ROS1 mutations. Roche will also assess the drug across patients with a range of solid tumors who also present NTRK fusions.
"It is very clear that as we move from large populations to subgroups to looking at smaller populations and even individual patients that the need for data and analytics increases significantly — being able to identify those ROS1 mutations, NTRK mutations, ALK mutations — it goes hand in hand with our data analytics strategy," O'Day said.
Roche said it would continue to operate Foundation as a separate and autonomous legal entity. This is important as Foundation has collaborated with much of the industry, working with over 30 biopharma partners by its count.
Notably, Bristol-Myers Squibb has bet heavily on the potential of tumor mutation burden in its testing of its immunotherapy Opdivo (nivolumab), relying on an assay developed by Foundation Medicine.