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Monday, January 12, 2015

Roche to purchase majority stake in Foundation Medicine, (NASDAQ: FMI)

Swiss drug maker Roche Holding AG plans to acquire a majority stake in U.S.-based molecular and genomic analysis firm Foundation Medicine Inc by buying a combination of outstanding and newly issued shares, the companies said on Monday. Roche said it will tender for around 15.6 million Foundation shares at $50 a share, worth up to about $780 million, a premium of 109 percent to their Friday closing price. Roche will also invest $250 million in Foundation by acquiring 5 million newly issued shares at $50 per share.The transactions will result in Roche owning between 52.4 percent and 56.3 percent of Foundation, based in Cambridge, Massachusetts. Roche will obtain minority representation on the board of Foundation, which will retain its current management team.The initial focus of the collaboration will be on developing genomic profile tests for cancer immunotherapies and for continuous blood-based monitoring. The companies said the deal includes the potential for more than $150 million in additional funding by Roche.

Foundation Medicine, Inc. is a commercial-stage company. Shares of FMI traded higher by 3.37% or $0.78/share to $23.93. In the past year, the shares have traded as low as $18.25 and as high as $45.00. On average, 268540 shares of FMI exchange hands on a given day and today's volume is recorded at 312316.