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Analyzing Roche’s Acquisition of Flatiron Health

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Apr. 9 2018, Updated 12:41 p.m. ET

Emergent BioSolutions

In October 2017, Emergent BioSolutions (EBS) completed the acquisition of raxibacumab from GlaxoSmithKline (GSK). Raxibacumab is a fully human monoclonal antibody with approval from the FDA for treating inhalational anthrax. Raxibacumab has orphan drug designation in the US and was approved by the FDA in 2012.

Emergent BioSolutions is expected to assume responsibility for a multiyear contract with the Biomedical Advanced Research and Development Authority (or BARDA) valued at ~$130.0 million.

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Roche’s acquisition of Flatiron Health

On February 15, 2018, Roche (RHHBY) announced the acquisition of Flatiron Health, a privately held healthcare technology and services company. Under the agreement, Roche would acquire all shares of Flatiron Health.

Roche currently holds a 12.6% stake in Flatiron Health. The acquisition is expected to help the companies leverage their combined expertise in oncology research and development. Under this agreement, Roche would pay $1.9 billion to Flatiron Health on a fully diluted basis.

Flatiron Health is focused on oncology-specific electronic health record (or EHR) software and real-world evidence for cancer research. The company created a technology platform that learns from the experience of each patient via its network of community oncology practices and academic medical centers across the US.

Merger between Roche and Ignyta

On December 22, 2017, Roche (RHHBY) entered into a merger agreement with Ignyta (RXDX). Under the agreement, Roche would fully acquire Ignyta for $27.00 per share in an all-cash transaction at a total value of $1.7 billion on a diluted basis. This represented a 74.0% premium to Ignyta’s closing price on December 21, 2017.

Ignyta’s lead molecule, entrectinib, is a central nervous system active tyrosine kinase inhibitor. It is under development for tumors that harbor ROS1 fusions in non-small cell lung cancer (or NSCLC) and NTRK fusions across a range of solid tumors.

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