The pharmaceutical division of Switzerland-based world’s largest biotech company, Roche (RHHBY, Financial), emphasizes developing life-saving drugs and is often referred to as a pioneer in the field of medicine and healthcare. As a well-known biotech company, the company recently announced its plans to acquire the France-based privately held company Trophos to gain access to its lead compound olesoxime for treatment of neuromuscular disorders. Let’s take a sneak peek into what has been shared by the biotech company on its latest strategies around this acquisition that could create a milestone in its drug developmental roadmap.
The intrinsic details
It has been learned that the biotechnology company, Trophos, was in search of potential attractive partnerships to enhance the development of its current programs. And the acquisition by Roche thus has been announced at the right juncture.
In fact, the olesoxime drug is being developed to treat spinal muscular atrophy (SMA) which is a rare genetic disorder that affects children and is the major cause of infant mortality. The drug is currently at the clinical trial phase and is expected to receive U.S. FDA approval by end of this year. Thus, the prospects for the drug look amazing for treatment of SMA as noted during the clinical trial phase when it has been seen to be effective against Type-I and Type-III of the SMA disease.
Nevertheless, it can be stated that Roche will be benefited from this planned acquisition as this drug will boost its profits for the forthcoming quarters. Hence, it is serving as a valuable opportunity for the largest biotech company Roche to improve its bottom line in the coming years.
It seems that Roche wants to ensure that it grows organically by taking the innumerable advantages through such acquisitions. In fact, the company has been associated with acquisitions from the start of the year after it signed a deal with Foundation Medicine Inc. (FMI, Financial) last week for around $1 billion for acquiring 56.3% stake to take advantage of its processes for genetic testing and clinical studies to find possible cures for different cancers. This time while declaring on the possible Trophos acquisition, the Roche management have mentioned that the Trophos shareholders would be entitled to around $140 million as upfront cash payments, and would receive 350 million euros after achieving the specific pre-specified milestones under the terms. So everything seems to be in place for the biotech major that wants to move ahead with its organic growth mode this year and has already begun to take advantage of the latest acquisitions to improve its revenue in 2015 and beyond.
While making the announcement M.D., Chief Medical Officer and Head of Global Product Development at Roche Sandra Horning stated, “This acquisition highlights Roche’s commitment to developing medicines for spinal muscular atrophy, a serious disease with no effective treatment... We will build on the work done by Trophos and the French Muscular Dystrophy Association to advance the development of olesoxime and to bring it to people who live with this devastating condition as quickly as possible.”
Final word
The biotech major has been able to achieve its set targets in the previous year and is expecting to reach newer heights in the field of medicine after such acquisitions. As this transaction is anticipated to close by the first quarter of 2015, the potential first medicine for SMA might provide wide recognition to the work done by Trophos and offer its benefits in the form of better top and bottom line for Roche in 2015 and the coming years. Let’s stay tuned until the completion of the acquisition to find out how the benefits of acquiring Trophos affect Roche stock in the long term.
