A $250-million foundation
CAMBRIDGE, Mass.—Foundation Medicine Inc. (FMI) has announced the closing of its strategic transaction with Roche. This transaction included the purchase by Roche of approximately 15.6 million shares of common stock by means of a tender offer from FMI stockholders at a price of $50 per share. Concurrently, Roche also purchased an additional 5 million newly issued shares directly from the company at the same price per share for gross proceeds to FMI of $250 million. As a result of these two related transactions, Roche is a majority shareholder in Foundation Medicine. FMI will maintain its operational independence with Roche having minority representation on its board of directors.
As part of the closing, the previously announced research and development and commercial collaborations between the parties became effective. Pursuant to these collaborations, FMI and Roche will partner on multiple programs to develop products and services, to distribute Foundation Medicine products and services outside the United States and to increase awareness of comprehensive genomic profiling in the United States.
Roche has been working with FMI through the Lung Cancer Master Protocol, or Lung-MAP (SWOG S1400), media relations spokesman Ulrike Engels-Lange explained when the collaboration was announced in January, “which is a multi-drug, multi-arm, biomarker-driven squamous cell lung cancer clinical trial that uses cutting-edge genomic profiling to match patients to investigational treatments that may target the genomic alterations, or mutations, found to be driving the growth of their cancer.” FMI will now be integrated into late-stage oncology trials run by Roche’s Pharmaceutical Development.
“Molecular information is playing an ever-increasing role in the treatment and management of cancer,” said Daniel O’Day, chief operating officer, Roche Pharmaceuticals Division. “We believe that Roche, in collaboration with Foundation Medicine, has a unique opportunity to optimize the development of and access to novel treatment options for cancer patients and to advance personalized healthcare in oncology.”
The strategic collaboration includes a broad R&D collaboration with the potential for more than $150 million in funding by Roche to accelerate FMI’s product development initiatives and to support enhanced and expanded clinical trial activities based on molecular information. The collaboration also expands commercialization efforts outside the United States through the distribution by Roche of FMI’s current and future co-developed products under the Foundation Medicine brand. Additionally, in the United States, Roche will support FMI by engaging its medical education team in providing non-branded information about comprehensive genomic profiling to pathologists. “They will function as a complement to our commercial organization in the U.S., providing medical education on the importance of integrating comprehensive genomic profiling into routine clinical care in oncology,” an FMI spokesman tells DDNews. “On the commercial side, Roche will be our commercialization partner for our products ex-U.S. In the U.S., Roche/Genentech medical education liaisons will provide medical education for comprehensive genomic profiling. On the R&D side, there are several R&D initiatives underway. There are no plans for Roche personnel to join FMI in Cambridge because FMI is an independent company.”
“Today marks an important milestone in the ongoing growth of Foundation Medicine as we continue our efforts to build our company, create value for shareholders and, importantly, improve the outlook for those impacted by cancer,” said Dr. Michael Pellini, CEO and director of Foundation Medicine, who will continue to lead the company, along with FMI’s current management team. “With this transaction closed and our balance sheet strengthened, we’re eager to begin working with Roche to advance research and innovation, accelerate new product development and expand our commercialization efforts, all with the common goal of driving a transformation in cancer care.”