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.

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.

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.