Roche To Acquire Majority Interest In Foundation Medicine - Quick Facts

(RTTNews) - Foundation Medicine Inc. (FMI) and Roche (RHHBY) announced they will enter into a broad strategic collaboration. Roche will invest $250 million in Foundation Medicine at a per share issuance price of $50 (5 million shares) to fund its operations and development. Additionally, Roche will tender for approximately 15.6 million Foundation Medicine shares with an aggregate tender value of approximately $780 million. The tender offer at a per share price of $50, which, when combined with Roche's direct investment in Foundation Medicine, will result in Roche owning a minimum of 52.4% and a maximum of 56.3% of Foundation Medicine on a fully diluted basis.

Under the R&D collaboration agreement, Roche is committing to R&D funding of potentially more than $150 million for a minimum of five years. The initial focus of the R&D collaboration will be on developing genomic profile tests for cancer immunotherapies and for continuous blood-based monitoring. In addition to the R&D collaboration, both parties also agreed to a commercial collaboration agreement. Specifically, Roche will obtain rights ex-U.S. (under the Foundation Medicine brand) to existing Foundation Medicine products, as well as to future co-developed products. In the U.S., Roche will engage its medical education team in providing medical information to pathologists.

Foundation Medicine will continue to operate independently. FMI's board will be increased to 9 directors and will include three designees of Roche, including Daniel O'Day. Four existing independent directors of Foundation Medicine and Michael Pellini, will continue as directors and one new independent director will be added. It is anticipated that Alexis Borisy will remain Chairman.