Pharmaceutical giant Roche will buy New York City-based Flatiron Health. The Swiss company will pay $1.9 billion for Flatiron, adding to its existing stake of 12.6 percent in the startup. That makes the whole shebang worth about $2.1 billion, according to CNBC.
Officials expect the deal to close in the first half of this year.
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Flatiron Health was founded in 2012 by Nat Turner and Zach Weinberg, two young entrepreneurs who sold their ad-tech company, Invite Media, to Google in 2010.
Its technology is geared toward the oncology community, and it has developed an EMR for cancer clinics. The startup’s model revolves largely around its OncologyCloud suite, which includes various components: OncoEMR, OncoBilling, OncoAnalytics and OncoTrials.
Roche has previously signaled its interest in the company. In early 2016, Flatiron announced a Roche-led $175 million Series C fundraising round. Allen & Company, Baillie Gifford and Casdin Capital also participated.
“What Roche has seen is Flatiron has developed a true expertise in analyzing data, specifically real-world oncology evidence, and fundamentally accelerating cancer care,” Dr. Bobby Green, Flatiron’s senior vice president of clinical oncology, said in a phone interview. “I don’t think this would have happened without [Roche] being up close and seeing what we’re doing.”
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In a statement, Roche Pharmaceuticals CEO Daniel O’Day said:
This is an important step in our personalised healthcare strategy for Roche, as we believe that regulatory-grade real-world evidence is a key ingredient to accelerate the development of, and access to, new cancer treatments. Flatiron Health is best positioned to provide the technology and data analytics infrastructure needed not only for Roche, but for oncology research and development efforts across the entire industry.
Green noted that Roche “shares the vision of the importance of [Flatiron’s] network and electronic health record.” Both companies are dedicated to moving the needle on and improving cancer care, he added.
This isn’t the first health IT company Roche has acquired. Last year, it scooped up mySugr, an Austrian digital health business whose self-stated goal is “to make diabetes suck less.”
As for Flatiron, its funding has also come entities aside from Roche, including an $8 million Series A round led by Google Ventures, First Round Capital and LabCorp. Google Ventures also spearheaded a $130 million Series B round just two years later.
Jenny Edelston, Flatiron’s senior manager of corporate communications, said via email that upon the closing of the deal, the startup will operate as an independent subsidiary of Roche. Its leadership will remain in place and its products will stay the same.
During the interview, Dr. Green repeated what he told employees today: “Same team, same mission, more resources.”
Sources told CNBC that McKesson had also expressed interest in buying Flatiron Health.
Photo: designer491, Getty Images
