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Roche invests $1B in Foundation Medicine

Deal includes $150 million R&D investment over five years focused on test development targeting immunotherapies for continuous blood-based monitoring

BASEL, Switzerland – Top five pharma company Roche in mid-January announced it would take a 56 percent stake in molecular and genomic diagnostic company Foundation Medicine, in a deal that would pour just more than $1 billion into the cancer genomics company. The investment will allow Foundation to accelerate investment in its core areas or molecular information and genomic analysis while providing Roche, the leader in cancer therapies, to leverage Foundation’s technology in the identification and development of novel cancer drugs.

Under the terms of the deal, Foundation will operate independently and will retain its management including company CEO Michael J. Pellini, M.D. The investment by Roche will come in three parts: a $50 per tender for 15.6 million Foundation Medicine shares; and additional $250 million for newly issued Foundation shares at $50 each; and a $150 R&D investment spread over five years.

The major prize for Roche will be its ability to use Foundation Medicine’s proprietary molecular testing platform to standardize its clinical trials. The initial focus will be on developing genomic profile tests for cancer immunotherapies and for continuous blood-based monitoring. Blood-based monitoring of patients for early treatment of cancer and ongoing monitoring of treatment efficacy has been gaining steam in the past few years, especially for breast cancer. Roche is the manufacturer of breast cancer drug Herceptin, which was originally developed by early biotech star Genentech. In 2009, Roche, then a majority owner in Genentech, bought out the remaining stake in the company for $48.6 billion.

The important of blood-based diagnostics is a case of ease of sample collection and availability. In the case of early detection or patient monitoring for solid tumor cancers, a sample either is not available, or would often require performing a second biopsy. In both cases the limitation can limit effective treatment.

“So what’s going to be really exciting, and one of the major benefits of this collaboration, is the ability to start moving toward the next technology, which is either going to be naked DNA or circulating tumor cells (CTCs),” said Andre Goy, MD, chairman, director, and chief of the Lymphoma Division at the John Theurer Cancer in an interview with OncLive. “CTCs can be detected early on in a large number of cancers and they are obviously not very numerous, but if you can detect those cells, develop a technology that can be used in the peripheral blood, this will have a huge impact for early diagnosis of recurrence, early diagnosis in general, and for looking at responses while a patient is receiving treatment.”