Roche to Acquire Foundation Medicine for $2.4 Billion

On June 19, 2018, Roche announced that it has agreed to acquire Foundation Medicine (FMI), a molecular information company focused on cancer care based in Cambridge, MA, in a deal worth $2.4 billion.

Under the terms of the agreement, Roche will promptly commence a tender offer to acquire all of the outstanding shares of FMI’s common stock not already owned by Roche at a price of $137.00 per share in cash. The closing of the tender offer will be subject to a majority of FMI’s outstanding shares not already held by Roche being tendered in the offer. The transaction is subject to other customary closing conditions.

The total transaction value is $2.4 billion, and the total company value is $5.3 billion. Following completion of the tender offer, Roche will acquire all remaining shares at the same price of $137.00 per share through a second-step merger. The closing of the transaction is expected to take place in the second half of 2018.

The agreement has been unanimously approved by the board of Roche and a special committee of the independent directors of FMI and by its full board of directors.  The Roche-designated directors will abstain from deliberations and voting. All current members of the FMI board have indicated that they intend to tender their FMI shares in the tender offer.

FMI’s services include a full suite of comprehensive genomic profiling (CGP) assays to identify the molecular alterations in a patient's cancer and match them with relevant targeted therapies, immunotherapies, and clinical trials.

“This is important to our personalized healthcare strategy as we believe molecular insights and the broad availability of high quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments,” said Daniel O’Day, CEO at Roche Pharmaceuticals, in a company press release. “We will preserve FMI’s autonomy while supporting them in accelerating their progress.”

“Foundation Medicine and Roche share the philosophy that every cancer patient should have access to personalized care informed by validated molecular information. 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 Troy Cox, CEO at Foundation Medicine, in the release.

This recent deal follows Roche’s $1.9-billion acquisition of Flatiron Health in April 2018, an earlier move to strengthen its personalized cancer healthcare strategy. 

Source: Roche