Roche to Acquire Majority Interest in Foundation Medicine (FMI)

Shares of Foundation Medicine Inc. (FMI) were trading up +25.81 or +107.86 percent to $49.74 per share in Monday's premarket, after news late last night that Roche Holdings AG would be buying a majority interest in the company. Foundation Medicine stock closed at $23.93 per share, up +0.78 or +3.37 percent in Friday's regular trading session.

Cambridge, Massachusetts based Foundation Medicine Inc. is a molecular and genomic information company specializing in personalized medicine based on an individual's genes.
The company has two clinical assays for treating patients, FoundationOne, a genomic sequencing technology for solid tumors, and FoundationOne Heme for pediatric cancers, sarcomas and hematological malignancies. Foundation's molecular information platform provides an informative genomic profile that identifies molecular alterations in the patient's cancer and then matches the cancer with relevant targeted treatments and clinical trials.

Founded in 1896, Basel, Switzerland based Roche Holdings AG is the holding company for the world's largest biotech firm. The company is at the cutting edge of technology, offering medicines for infectious diseases, ophthalmology, oncology and immunology. The company is the world's leader for in vitro and tissue based diagnostics for cancer. Roche is the owner of U.S. based Genentech and a majority owner of Chugai Pharmaceutical in Japan.

Roche will pay $780 million for approximately 15.6 million shares of Foundation at $50 per share and invest another $250 million in 5 million newly issued Foundation shares, also at $50 apiece. The deal will leave Roche holding between 52 percent and 56.3 percent of Foundation.

In addition, the partnership will include both a commercial collaboration agreement to globally expand Foundation's sales efforts, and a broad R&D collaboration with the potential for another $150 million funded by Roche to speed up Foundation's product development.

Foundation president and Chief Executive Officer Michael J. Pellini, M.D. will continue leading the company after the closing of the deal with Foundation retaining operational independence. Roche will get a minority representation on an expanded Foundation Board of Directors. The boards of both companies have unanimously approved the deal.

Foundation CEO Pellini stated in a press release that, "We are excited to announce this strategic collaboration with Roche, which will help accelerate our business, and importantly, represents significant potential for individuals with cancer around the world. We believe that putting molecular information at the center of cancer care will help transform the delivery of care for patients and speed the pace of drug discovery and development," he continued saying, "The structure of our agreement with Roche also allows us to maintain the entrepreneurial spirit at Foundation Medicine and ensures that our business model, network of partnerships and objectives are not altered."

Daniel O'Day, Chief Operating Officer of Roche Pharmaceutical said that, "We are very pleased to enter into this collaboration with Foundation Medicine, which has the potential to improve both the development of medicines and patient care, by combining Foundation Medicine's pioneering approach to genomics and molecular information with Roche's expertise in the field of oncology, we can bring personalized healthcare in oncology to the next level."

Foundation Medicine stock will open significantly higher this morning, since the deal is only for a majority stake, remaining shares could continue higher. The stock is already trading over the deal's target price, which was a +109 percent premium over Foundation stock's Friday's close.

Other News About Foundation Medicine
Foundation Medicine Launches ICE 2, Its New Version of Interactive Cancer Explorer, Featuring PatientMatch
New version of portal will allow physicians access to patient's genomic profiling .
Foundation Medicine and Collaborators to Present New Clinical Data on the Application of FoundationOne® at the 2015 Gastrointestinal Cancers Symposium
Company will make a presentation in San Francisco, January 15th �? 17th.

Other Stocks in the News
Family Dollar reaches out to investors as buyout vote looms
The vote on the Dollar Tree takeover is in two weeks.
Alibaba At $130? Daiwa Thinks So
Two Daiwa Securities analysts say the company should be trading 30 percent higher than its Chinese peers.

Published on Jan 12, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

Posted in ...