Roche Takes Big Stake in Foundation Medicine

Swiss pharmaceutical company Roche, one of the world's largest developers of cancer drugs and diagnostics, has acquired a majority stake in the tumor-sequencing firm Foundation Medicine, a move that could spur the development of more effective cancer therapies and expand the use of comprehensive genetic profiling.

Under the terms of the deal, which is expected to close in the second quarter of this year, Roche will make a tender offer for 15.6 million shares of Cambridge, MA–based Foundation Medicine at $50 per share and purchase 5 million newly issued shares for $50 per share, for a total investment of just over $1 billion. The alliance, which has been approved by Foundation Medicine's board and is awaiting approval by shareholders, gives Roche a stake in the company of up to 56%.

“The deal further validates just how important molecular profiling is going to be,” says George Demetri, MD, director of the Center for Sarcoma and Bone Oncology and senior vice president for experimental therapeutics at Dana-Farber Cancer Institute in Boston, MA. “For Roche to reach outside its own molecular diagnostics group is an indication of the significance of this technology and how much respect Foundation Medicine has gleaned since its founding in 2010.”

On the research side, Roche committed to spend at least $150 million over five years on research and development at Foundation Medicine. Initially, new product development will focus on genomic profiling tests for cancer immunotherapies and continuous blood-based monitoring, according to the company.

Roche will use its global reach to market Foundation Medicine's signature diagnostic tests—FoundationOne for solid tumors and FoundationOne Heme for hematologic cancers and sarcomas—which provide genetic sequencing of tumor samples to help oncologists make treatment decisions. The company also announced that it will use Foundation Medicine's database of samples to help identify new drug targets and select patients for clinical trials.

Roche has the resources to accelerate development of the “liquid biopsy,” a blood test that potentially offers a more comprehensive and less invasive alternative to tissue biopsies, says Demetri. The test analyzes circulating free DNA from tumor cells, revealing the cancer mutations that different metastatic lesions within a single patient may potentially harbor, an advantage over current practice since it is not practical to biopsy every individual site of metastatic disease in every patient. The test also holds promise for monitoring patients' response to therapy and possibly for guiding treatment decisions.

It is still unclear how the FDA will be involved in regulating these molecular tests, says Demetri. Although the FDA has not mandated approval for such testing in the past, there is renewed interest in the agency becoming involved in ensuring the quality of such testing, as such assays are “extraordinarily important” for research and have the potential to revolutionize the way cancer is treated.

“Should the FDA have to approve the algorithms used to make sense of the results of these tests?” says Demetri. “That should be the subject of ongoing discussion between academic, regulatory, and industrial sectors, and the FDA draft guidance is currently in a period of open public comment.”