Roche the Swiss drug maker will pay $2.4 billion to acquire the remaining part of Foundation Medicine, increasing its bet on the ability of the genomic profiling group to personalize cancer care.
This deal has received the support of both companies and is worth $137 a share, which represents a 29% premium to the closing prices of FMI on Monday, valuing the company, based in Cambridge, Massachusetts at more than $5.3 billion.
This transaction will close during the second six months of 2018, said the partners in a dual statement Tuesday.
It becomes the most recent add-on acquisition by Roche as the largest maker of cancer treatments attempts to tap into the promising technology that biotech companies are developing, to help drive growth for the future as its mature drugs face more competition.
Earlier in 2018, Roche agreed to acquire the remainder of the U.S.-based cancer data business Flatiron Health at the cost of $1.9 billion in a deal very similar to this one.
Both of the purchases echo the success it has had in taking control of biotech business Genentech based in California nearly 28 years ago.
FMI is a developer of tests that help doctor to understand genetic profiles of tumors in patients and guide the doctor to more effective therapies.
An industry analyst said this deal fits very well into the position of Roche as a leader in matching treatments to genetic profiles.
The analyst added that it is not just an advantage to the patients, but it should also allow Roche to create more targeted and effective drugs, that should improve the development of drugs and in the end pricing power.
FMI is a developer of comprehensive genomic profiling assays that identify the molecular alterations in the cancer of the patient and match those with targeted immunotherapies, therapies and clinical trials.
Roche, based in Switzerland, said it is planning to preserve the autonomy of FMI with a much broader Roche group.
Roche first acquired a stake of 56% for $1 billion in FMI during 2015, so its investment has already grown in value.
However, it is a long way from matching the value achieved with Genentech, where Roche acquired 60% in 1990 for just less than $2.1 billion and successfully developed a run of different blockbuster drugs. In 2008, Roche bought out the remaining investors at the company for $47 billion.