The $2.1B exit of cancer data software company Flatiron Health has spurred speculation of similar transactions. Here we explore why Roche acquired Flatiron, companies similar to Flatiron, and other potential acquirers.
Pharma giant Roche recently acquired Flatiron Health, developer of a cancer electronic health record software that collects and aggregates data from cancer patients, for $2.1B. Roche was the lead investor in Flatiron Health’s $175M Series C financing in January 2016, so this move was a continuation of their strategic partnership.
So, why did Roche acquire the company?
Flatiron Health’s value comes from its collection and synthesis of cancer patient data, which will help expedite Roche’s cancer drug pipeline through more streamlined clinical trials. Specifically, Flatiron puts an emphasis on real-world evidence taken from cancer patients within a network of participating physicians across the country. These physicians help in both collecting the data and in deciding treatment options for each patient, a practice known as precision medicine.
This means Flatiron’s data will give Roche better insight into what types of compounds and drug combinations might be better candidates for clinical trials and what treatments caused adverse reactions in past trials (and in certain populations).
Flatiron’s achievement is taking unstructured patient data (aka not just lab results or other biometrics) within the cancer patient population and integrating it with electronic health records (EHRs) systems. Flatiron’s own 2014 acquisition of a cloud-based oncology EHR company, Altos Solutions, allowed the company to gain a cancer-specific EHR platform along with the network of 1000+ oncologists already using it.
Flatiron Health’s publications continued to prove its unique place in the healthcare industry. For example, it collaborated with the Food and Drug Administration (FDA) for a study on immunotherapy treatments for a type of lung cancer using real-world evidence taken from de-identified patient information available in its EHR platform.
As Roche leverages Flatiron’s platform, other pharma giants may also have their sights set on acquiring similar technology (real-world data companies with a focus on cancer and patient insights) to speed up their own R&D process.
Beyond just pharma, tech giants could be eyeing a similar move. As Google, Apple, and others increasingly inch towards different areas of healthcare, this type of acquisition may help them gain an advantage in the industry.
We used the CB Insights platform to identify and analyze both the next potential cancer data company acquirer and acquisition target.