Roche has struck a $1.9 billion deal to acquire Flatiron Health. The takeover gives Roche ownership of the cancer software and real-world evidence that turned Google Ventures-backed Flatiron into a rising star.
Flatiron built its business around oncology-focused electronic health record (EHR) software and a repository of real-world cancer evidence. The software has gained traction and given Flatiron links to more than 250 community oncology practices, a network that could prove useful to Roche’s clinical trial unit. But the Big Pharma pointed to the real-world evidence as a key driver of the deal.
“This is an important step in our personalized 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,” Daniel O’Day, CEO of Roche Pharmaceuticals, said in a statement.
The takeover is reward for the work Flatiron put in to build its real-world evidence repository. Data are plentiful in modern healthcare, but lots of data are held in free text fields or PDF documents, making the information tough to analyze. Flatiron set itself apart by pulling data out of these hard-to-access sources and using them to build high-quality curated repositories. Although healthcare data are plentiful, data sets of that standard are rare—and valuable.
Flatiron was gearing up to add to its more than $300 million in VC funding when the idea of selling up gained pace. Nat Turner, one of the two ex-Googlers who founded Flatiron, told Forbes the shift in strategy followed the realization that cash wasn’t the main bottleneck on the business. What Flatiron needed was resources, specifically a global footprint. Roche can provide that.
Importantly, the Swiss pharma is allowing Flatiron to continue as a separate legal entity that will continue to provide services to the rest of the healthcare industry.
“We're going to continue to work with everybody, which was very important for us. Hopefully it means not much change. It just means a bigger platform for us,” Turner said.