I mean, what did you THINK I was going to write about today? Roche’s acquisition of oncology data company Flatiron Health for a total value of $2.1B is the talk of the (health) town.
This is a huge deal for both the New York tech scene and digital health scene. It’s the largest vc-backed exit in New York and also the largest digital health M&A. The only larger digital health exits were the IPOs of Fitbit and Veeva, which have both slid significantly lower in public markets.*
As the digital health space starts to see more liquidity events, we’ll hopefully start to see a reinvestment of capital, new companies started by ex-employees (e.g. a Flatiron Health “mafia”), and new investors entering the space.
*First exits only
This also isn’t the first time Roche has acquired a company out of its venture portfolio: it’s the fourth. Foundation Medicine, Viewics, and mySugr were also data plays — in genomics, laboratories, and diabetes management, respectively — that moved from Roche Venture to an acquisition by the parent company.
Using its venture arm is a smart way to get access to potential M&A targets and test the utility of the products themselves firsthand. It’s possible that the Flatiron acquisition was borne from Roche finding some promising cancer therapy areas via Flatiron and spun it into an acquisition.
Either way it’s clear Roche is increasing its cancer activity and spend, with its $1.7B acquisition of Ignyta a few months ago and Flatiron now.
With the Flatiron Health acquisition, Roche is making it clear that it’s definitively a data-first drug company. With Flatiron’s OncoEMR, Roche has access to structured, real world data from oncologists about how drugs/therapies are actually performing.
This data has become much more valuable thanks to the 21st Century Cures Act, which lets companies speed up drug approvals by using this kind of real-world evidence.
I expect this acquisition + the new regulation to spur other drug companies (with some repatriated cash) to start scooping up other companies with structured real-world data.
Roche isn’t the only one using its venture fund strategically: healthcare has been a major focus among corporates.
You can see our 2017 CVC report here for more trends. Take a guess about who the most active CVC in AI is and see if you’re right.
Have you ever gotten into a conversation about CRISPR/gene-editing and just nodded your head because you were too afraid to ask how it works?
Have no fear, we wrote you a guide! It includes the mechanism, limitations, and experiments — including reviving the woolly mammoth.
Reviving ancient animals seems like a great idea. I can literally think of no reasons or pop culture examples that might suggest consequences!