Becoming the latest company to enter a merger agreement in recent weeks, Swiss drugmaker Roche Holding AG (XSWX:RO, Financial) (RHHBY, Financial) announced on Tuesday it is acquiring the remaining shares of Foundation Medicine Inc. (FMI, Financial) it does not already own in a deal valued at $2.4 billion.
Paying $137 per share, the offer is a 29% premium to the Cambridge, Massachusetts-based company’s closing price on June 18. Further, the deal brings the company’s total value to $5.3 billion.
Foundation Medicine is a molecular information company that specializes in cancer care. It conducts comprehensive genomic profiling, also known as CGP, assays in order to identify molecular alterations in a patient’s cancer so they can be matched with targeted therapies, immunotherapies and clinical trials.
While Foundation will continue to operate independently, by combining with Roche, the company said it will be able to “enhance the development of personalized medicines and care” for patients. According to Troy Cox, CEO of Foundation Medicine, the two companies “share the philosophy that every cancer patient should have access to personalized care.”
“Joining forces with Roche as an independent operating company allows Foundation Medicine to continue its collaboration with Roche, as well as our biopharma partners, to drive ubiquitous access to CGP testing and innovative data services,” he added.
Daniel O’Day, head of Roche Pharmaceuticals, echoed that sentiment.
“This is important to our personalized health care strategy as we believe molecular insights and the broad availability of high-quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments,” he said.
The deal is expected to close in the second half of the year.
Following the announcement, American Depositary Receipts of Roche were up 0.42% on Tuesday morning at $26.50 per share. Year to date, GuruFocus estimates the stock has fallen 17%.
Foundation Medicine, which closed at $106.45 on Monday, climbed nearly 30% on Tuesday morning to $136.65 per share. GuruFocus estimates the stock has gained 118% so far this year.
Disclosure: No positions.
