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Roche acquiring Ignyta in $1.7B deal

Roche Holding AG agreed to fully acquire Ignyta Inc. in an all-cash deal valued at $1.7 billion.

The Swiss pharmaceuticals giant will acquire all of Ignyta's outstanding common shares for $27 apiece in a tender offer. Afterwards, the San Diego-based oncology company's remaining shares will be acquired at the same price.

The price represents a 74% premium to Ignyta's Dec. 21 closing price and premiums of 71% and 89% to Ignyta's 30-day and 90-day volume weighted average share prices, respectively, on Dec. 21.

Ignyta's lead drug candidate entrectinib is a tyrosine kinase inhibitor being developed for tumors that harbor ROS1 or NTRK fusions, which are gene mutations that figure in non-small cell lung cancer and other solid tumors. An ongoing pivotal phase 2 clinical trial will support, if successful, dual new drug application submissions.

Recent phase 2 results that tested entrectinib showed that 78% of the 32 ROS1 fusion-positive lung cancer patients enrolled saw their tumors shrink. Patients had a median duration of response of 28.6 months and a median progression-free survival of 29.6 months before their disease worsened.

"The agreement with Ignyta builds on Roche’s strategy of fitting treatments to patients and will allow Roche to broaden and strengthen its oncology portfolio globally," Roche CEO Daniel O'Day said in the news release.

Ignyta will continue its operations in San Diego and be responsible for the ongoing pivotal study of entrectinib.

The transaction, which has been approved by both companies' boards, is expected to close in the first half of 2018.

Citi is acting as financial adviser to Roche, with Sidley Austin LLP as legal counsel. Bank of America Merrill Lynch and J.P. Morgan Securities LLC are acting as financial advisers to Ignyta, with Latham & Watkins LLP as legal counsel.