Roche Holding AG continued to shore up its cancer pipeline even as the year drew to a close, announcing the acquisition of U.S. cancer specialist Ignyta Inc. for $1.7 billion, adding new precision medicines and molecular diagnostics to the Swiss pharma giant's oncology portfolio.
The acquisition, at $27 a share, is expected to close in the first half of 2018 and offers shareholders in the San Diego-based cancer specialist a 74% premium over the share's closing price Dec. 21. In the event that the merger is terminated, Ignyta will be liable to pay Roche termination fees of $58 million, according to a filing with the U.S. Securities and Exchange Commission.
Nasdaq-listed Ignyta was founded in 2011 by Jonathan Lim and Gary Firestein to focus on precision medicine in oncology by testing, identifying and treating patients with specific rare mutations. The newly acquired group will remain in California, where it is carrying out a pivotal phase 2 study into its entrectinib experimental medicine.
"Ignyta has been singularly focused on developing precisely targeted therapeutics guided by diagnostics for patients with rare cancers," said Chairman, CEO and Co-founder Jonathan Lim. "We are excited that Roche, the global leader in oncology and personalized healthcare, recognizes this powerful approach and shares our passion for advancing entrectinib for the benefit of patients."
The acquisition caps a busy week for the Swiss drugmaker, following regulatory approvals in the U.S. and Europe for breast and lung cancer drugs, and after it struck a research collaboration with Swiss biotech group Idorsia Ltd., which listed in Switzerland in June having demerged from Actelion and whose chairman is former GlaxoSmithKline plc CEO Jean-Pierre Garnier.
Roche's cancer business reported strong results at the European Society for Medical Oncology Immuno-oncology conference in Geneva on Dec. 7, showing that the Basel-based pharma group may potentially leapfrog over rivals including Merck & Co. Inc. and Bristol-Myers Squibb Co. in the cutting-edge field of immuno-oncology. The combination of Roche's Tecentriq and Avastin with chemotherapy cut the risk of disease returning or death in 38% of patients with non-small cell lung cancer who had not previously been treated.
"This sets chemo-IO up to be an 'omnibus' treatment for NSCLC," said Jefferies Analyst Jeffrey Holford in a Dec. 8 note to clients. "Roche will dominate this opportunity through the IMpower program, which will soon yield data across all major chemo regimens used in first line NSCLC."