Roche bags full con­trol of Foun­da­tion Med­i­cine in $2.4B fol­low-up buy­out

What­ev­er Foun­da­tion Med­i­cine has been do­ing since Roche threw its weight be­hind an R&D col­lab­o­ra­tion three years ago, both part­ners are lik­ing it. And now, Roche wants all of it, putting $2.4 bil­lion more on the ta­ble.

The val­u­a­tion of Cam­bridge, MA-based Foun­da­tion has grown quite a bit since Roche ac­quired a ma­jor­i­ty stake in Jan­u­ary 2015 at $50 a share — a hefty pre­mi­um then — with each share now cost­ing the Swiss phar­ma gi­ant $137. That’s 29% more than its clos­ing price on Mon­day. Roche’s as­sess­ment of the com­pa­ny val­ue: $5.3 bil­lion.

Daniel O’Day

With per­son­al­ized med­i­cine writ­ten all over it, this ac­qui­si­tion fol­lows that of Flat­iron, a tech start­up build­ing an elec­tron­ic health record sys­tem used by on­col­o­gists. There, Roche al­so bought a stake in the com­pa­ny and cul­ti­vat­ed a re­la­tion­ship be­fore swoop­ing in for a buy­out. And last De­cem­ber they swooped in to buy Igny­ta $RXDX for $1.7 bil­lion, putting the phar­ma gi­ant in di­rect com­pe­ti­tion with Loxo On­col­o­gy $LOXO, with its work in ROS1 and NTRK fu­sion-pos­i­tive tu­mors.

While Foun­da­tion Med­i­cine does have an FDA-ap­proved di­ag­nos­tic called Foun­da­tionOne CDx, Roche is choos­ing to high­light its broad­er po­ten­tial in com­pre­hen­sive ge­nom­ic pro­fil­ing of can­cers, which can both guide de­vel­op­ment of treat­ments and match pa­tients with the ap­pro­pri­ate ther­a­pies. Mean­while, Roche has carved out a place for it­self in di­ag­nos­tics, in­vest­ing 12% of its en­tire R&D bud­get on the area.

“We will pre­serve FMI’s au­ton­o­my while sup­port­ing them in ac­cel­er­at­ing their progress,” said Daniel O’Day, CEO of Roche Phar­ma­ceu­ti­cals and for­mer di­ag­nos­tics chief, in a state­ment.

It’s a big win for Foun­da­tion Med­i­cine ex­ecs, who now get to op­er­ate as a “sep­a­rate and au­tonomous” unit.

Troy Cox

“Join­ing forces with Roche as an in­de­pen­dent op­er­at­ing com­pa­ny al­lows Foun­da­tion Med­i­cine to con­tin­ue its col­lab­o­ra­tion with Roche, as well as our bio­phar­ma part­ners, to dri­ve ubiq­ui­tous ac­cess to CGP test­ing and in­no­v­a­tive da­ta ser­vices,” said Foun­da­tion Med­i­cine CEO Troy Cox.

The deal is ex­pect­ed to close in sec­ond half of 2018. Citi and Davis Polk & Ward­well are the fi­nan­cial ad­vis­ers and le­gal coun­sel to Roche, re­spec­tive­ly, while Gold­man Sachs and Good­win Proc­ter ad­vised and coun­seled for Foun­da­tion Med­i­cine.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Alaa Halawaa, executive director at Mubadala’s US venture group

The ven­ture crew at Mubadala are up­ping their biotech cre­ation game, tak­ing care­ful aim at a new fron­tier in drug de­vel­op­ment

It started with a cup of coffee and a slow burning desire to go early and long in the biotech creation business.

Wrapping up a 15-year discovery stint at Genentech back in the summer of 2021, Rami Hannoush was treated to a caffeine-fueled review of the latest work UCSF’s Jim Wells had been doing on protein degradation — one of the hottest fields in drug development.

“Jim and I have known each other for the past 15 years through Genentech collaborations. We met over coffee, and he was telling me about this concept of the company that he was thinking of,” says Hannoush. “And I got immediately intrigued by it because I knew that this could open up a big space in terms of adding a new modality in drug discovery that is desperately needed in pharma.”

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Rohan Palekar, 89bio CEO

89bio’s PhII da­ta add to quick suc­ces­sion of NASH read­outs as field seeks turn­around

89bio said its drug was better than placebo at lessening fibrosis without worsening nonalcoholic steatohepatitis, or NASH, in two of three dose groups.

The San Francisco biotech said it thinks the Phase IIb data pave the way for a potential Phase III, following in the footsteps of another biotech in its drug class, Akero Therapeutics. To fund a late-stage study, CEO Rohan Palekar told Endpoints News 89bio “would need to raise additional capital,” with the company having about $188 million at the end of last year.

Flare Therapeutics biochemists Yong Li (L) and Valerie Vivat

A $123M Flare will get Third Rock on­col­o­gy biotech in­to the clin­ic this year

Flare Therapeutics will start its first human trial this year with an investigational urothelial cancer drug after pulling together a $123 million Series B from Big Pharmas, VCs and its incubator, Third Rock Ventures.

Launched in 2021 on the idea that a biotech could finally succeed at drugging the much-sought-after but stubborn transcription factor, Flare Therapeutics said Wednesday it is now primed for the clinic after closing its large financing haul earlier this year. The raise is a relatively stark figure in a tough startup financing environment but further buoys the upbeat signals coming out of other Third Rock biotechs in recent weeks, including the $200 million CARGO Therapeutics and $100 million Rapport Therapeutics rounds.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,300+ biopharma pros reading Endpoints daily — and it's free.

Francesco Marincola, newly-appointed Sonata Therapeutics CSO

Kite's head of re­search leaves for Flag­ship start­up Sonata

Another leader is departing Kite Pharma, and will to spend the “last part” of his career exploring how cancer evades the immune system.

Kite’s senior VP and global head of cell therapy research Francesco Marincola left the Gilead CAR-T unit last week for Sonata Therapeutics. Flagship last May unveiled the startup, which was pieced together from two fledgling biotechs Inzen and Cygnal Therapeutics. As CSO, Marincola will lead Sonata’s push to reprogram cancer cells to make them more immunogenic.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,300+ biopharma pros reading Endpoints daily — and it's free.

FDA in­di­cates will­ing­ness to ap­prove Bio­gen ALS drug de­spite failed PhI­II study

Ahead of Wednesday’s advisory committee hearing to discuss Biogen’s ALS drug tofersen, the FDA appeared open to approving the drug, newly released briefing documents show.

Citing the need for flexibility in a devastating disease like ALS, regulators signaled a willingness to consider greenlighting tofersen based on its effect on a certain protein associated with ALS despite a failed pivotal trial. The documents come after regulatory flexibility was part of the same rationale the agency expressed when approving an ALS drug last September from Amylyx Pharmaceuticals, indicating the FDA’s openness to approving new treatments for the disease.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,300+ biopharma pros reading Endpoints daily — and it's free.

NIH re­jects an­oth­er at­tempt to 'march-in' on Astel­las' prostate can­cer drug over ex­ces­sive price

The National Institutes of Health has again declined to use so-called “march-in” rights to lower the price of Astellas and Pfizer’s prostate cancer drug Xtandi despite being invented at UCLA with grants from the US Army and NIH.

“Given the remaining patent life and the lengthy administrative process involved for a march-in proceeding, NIH does not believe that use of the march-in authority would be an effective means of lowering the price of the drug,” NIH told prostate cancer patients Robert Sachs and Clare Love, in a letter shared with Endpoints News. The institutes’ analyses found Xtandi “to be widely available to the public,” an indication that there was not a pressing need for the US to act.

No­vo Nordisk re­mains un­der UK scruti­ny as MHRA con­ducts its own re­view in 'in­cred­i­bly rare' case

The UK’s Medicines and Healthcare products Regulatory Agency is now reviewing Novo Nordisk’s marketing violation that resulted in its loss of UK trade group membership last week. Novo Nordisk was suspended on Thursday from the Association of the British Pharmaceutical Industry (ABPI) for two years after an investigation by its regulatory arm found the pharma broke its conduct rules.

MHRA said on Tuesday that its review of the Prescription Medicines Code of Practice Authority (PMCPA) investigation is standard practice. An MHRA spokesperson emphasized in an email to Endpoints News that the situation with Novo Nordisk is “incredibly rare” while also noting ABPI took “swift and proportionate action.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,300+ biopharma pros reading Endpoints daily — and it's free.

Mar­ket­ingRx roundup: What could a US Tik­Tok ban mean for phar­ma? Pfiz­er, Lil­ly lead phar­ma March Mad­ness ad­ver­tis­ers

Just as pharma marketers finally make moves into TikTok, the threat of a US ban on the social media channel is now looming. Already banned on federal employee phones by an initial Congressional act, more bills and maybe bans are on the way. With rare bipartisan agreement, lawmakers have introduced legislation that would give the US president the power to ban TikTok (although not mentioned by name) and other foreign-owned technology platforms that represent a security threat to the US.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 163,300+ biopharma pros reading Endpoints daily — and it's free.