Roche would pay $27 per share for Ignyta, representing a premium of
about 74 percent to the stock's closing price on Thursday, they
said.
Reuters had reported on Thursday that Ignyta was in advanced talks
to sell itself, just three years after going public with a focus on
precision drugs and diagnostics.
Ignyta will continue its operations in San Diego and will be
responsible for the ongoing pivotal study of entrectinib, its most
advanced drug.
The U.S. company has a suite of drugs in early stage development
that use gene therapy to kill off the underlying diseases that drive
cancer tumor growth.
"Cancer is a highly complex disease and many patients suffer from
mutations which are difficult to detect and treat. 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," said the company's pharmaceuticals head, Daniel
O'Day.
The deal is expected to close in the first half of 2018, the
companies said.
Roche stock eased 0.3 percent by mid-morning, in line with the
European sector average <.SXDP>.
Zuercher Kantonalbank analyst Michael Nawrath said the deal
reflected Roche's strategy of making bolt-on acquisitions, adding it
was not overpaying for the new assets.
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"The data speak for themselves. We expect approval in the first half
of 2019 and this could become a blockbuster given the wide field of
use," he wrote in a research note, keeping his "market weight"
rating.
Bank Vontobel analysts said the deal was set to boost Roche's
efforts to address cancers with specific mutations by precision
medicines that work hand in hand with diagnostics.
Citi advised Roche on the deal, while BofA Merrill Lynch and J.P.
Morgan Securities LLC advised Ignyta.
Sidley Austin LLP and Latham & Watkins LLP were legal counsel to
Roche and Ignyta, respectively.
(Reporting by Parikshit Mishra in Bengaluru and Michael Shields in
Zurich; Editing by Gopakumar Warrier and Edmund Blair)
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