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Roche pays $1bn-plus for stake in genomics specialist

Shares in Foundation Medicine Inc doubled following the announcement

Roche Basel Switzerland 

Roche has beefed up its position in the cancer genomics sector by taking control of Foundation Medicine Inc (FMI), which seeks out new drug targets in tumours.

The Swiss pharma giant is buying five million new shares in FMI at $50 each, or $250m, and is also offering existing shareholders in the company the same price for their holdings, which will amount to an investment of around $780m.

If the deal goes through as planned it will give Roche a 56% majority stake in the Cambridge, Massachusetts genomics specialist. Shares in FMI doubled on news of Roche's plans and were trading at almost $47 this morning.

The stake in FMI consolidates Roche's position in the fast-growing cancer immunotherapy field, with the Swiss firm's chief operating officer - Daniel O'Day - suggesting it will help it "bring personalised healthcare in oncology to the next level."

In addition to the equity stake, Roche is also providing up to $150m in funding for FMI's new product development activities, specifically in the area of "genomic profiling tests for cancer immunotherapies and for continuous blood-based monitoring."

The aim is to find new drug targets in cancer, improve the enrolment of patients into trials and ultimately support the development of new combination therapies.

FMI made a little over $42m in revenue in the first nine months of 2014, more than double the same period of 2013, largely from the sale of clinical assays FoundationOne for solid tumours and FoundationOne Heme for haematologic malignancies, sarcomas and paediatric cancers. The company posted a net loss of $39m over the same period.

Roche has made a push into stratified cancer immunotherapy a core component of its R&D strategy and has bolstered its internal drug and diagnostic development efforts in this area with a string of licensing deals and acquisitions in recent quarters.  

Last month it announced a deal to buy genomics specialist Bina Technologies for an undisclosed sum, and agreed a $489m takeover of Austrian antibody specialist Dutalys, while earlier in 2014 it bought gene-sequencing firm Genia Technologies for up to $350m.

In 2013 Roche licensed a series of early-stage cancer immunotherapy programmes from German company Immatics in a deal valued at more than $1bn, and promised up to $422.5m to license two further immunotherapies from Inovio.

Forges $750m antibiotic resistance alliance

Meanwhile, Roche has also entered into a three-way deal with Japan's Meiji Seika and Canadian firm Fedora Pharmaceuticals for OP0595, a beta-lactamase inhibitor in phase I clinical development for multidrug resistant (MDR) bacterial infections.

The Swiss company has taken a worldwide license to OP0595 outside Japan and will pay Meiji and Fedora upfront, development, regulatory and sales-related payments of up to $750m, along with tiered royalties.

Roche had not been a player in the antibiotic sector for many years but returned to the fray in 2013 with a $560m deal development deal with Switzerland's Polyphor focusing on POL7080, a macrocycle compound in testing for hospital-acquired Pseudomonas aeruginosa infections.

Article by
Phil Taylor

13th January 2015

From: Sales



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