Roche to collaborate with Foundation Medicine to boost cancer efforts

Roche to collaborate with Foundation Medicine to boost cancer efforts

Roche will acquire stake in FMI through a tender and acquisition of newly issued shares

• Roche is committing funding of potentially more than $150 million for a minimum of five years

• Both companies are working to bring personalized healthcare in oncology to the next level.

Swiss global healthcare company Roche Holding is acquiring majority stake of up to 56.3 percent in US- based Foundation Medicine (FMI) for up to $1.18 billion to promote collaboration as both the companies strive to make progress on personalized treatments for patients with cancer

Roche will acquire stake in FMI through a tender and acquisition of newly issued shares. Roche will tender for approximately 15.6 million FMI shares at $ 50 per share with an aggregate tender value of approximately $780 million. In addition, Roche will invest $250 million in FMI by acquiring 5 million newly issued shares at $50 per share, the Swiss company said in a statement Monday.

The offer price constitutes a 109 percent premium over the closing price of last Friday, January 9, 2015.

Under the terms of the collaboration agreement, Roche is committing funding of potentially more than $150 million for a minimum of five years and will contribute its expertise and breadth in oncology.

"We are very pleased to enter into this collaboration with FMI, which has the potential to improve both the development of medicines and patient care," said Daniel O'Day, COO of Roche Pharma. "By combining FMI's pioneering approach to genomics and molecular information with Roche's expertise in the field of oncology, we can bring personalized healthcare in oncology to the next level."

Cambridge, Massachusetts based FMI supports physicians by providing comprehensive molecular information to characterize a tumor that is being matched with approved targeted therapy options and novel treatments under development.

Understanding the comprehensive genomic profile of a cancer patient's disease will enable better personalized healthcare solutions to optimize treatment outcomes for patients.

"We are excited to announce this strategic collaboration with Roche, which will help accelerate our business, and importantly, represents significant potential for individuals with cancer around the world," said Michael J. Pellini, M.D., President and Chief Executive Officer of Foundation Medicine.

"We believe that putting molecular information at the center of cancer care will help transform the delivery of care for patients and speed the pace of drug discovery and development.

"The structure of our agreement with Roche also allows us to maintain the entrepreneurial spirit at Foundation Medicine and ensures that our business model, network of partnerships and objectives are not altered."

Roche will be able to utilize FMI's proprietary molecular information platform to standardize clinical trial testing. This aspect of the relationship is designed to enable comparability of clinical trial results for research and development purposes, and ultimately in the clinic.

FMI's pharmaceutical business will not be impacted and could be enhanced as FMI capabilities increase with the investments and experience in working with Roche as a customer.

The collaboration agreements will become effective upon the completion of Roche's direct investment in FMI and the tender offer.

The deal is conditional to FMI shareholder approval, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Roche said last month that it would buy privately-held Bina Technologies for an undisclosed price and pay up to $489 million to acquire Austrian biotech company Dutalys.

California-based Bina Technologies provides technology for the processing and management of genomic information, while Dutalys is a specialist in the discovery and development of so-called bi-specific antibodies.