H3 hooks up with Foundation Medicine for data-driven oncology R&D

Foundation Medicine ($FMI) has followed up its transformational deal with Roche ($RHHBY) by inking an oncology alliance with Eisai-backed H3 Biomedicine. The deal sees Foundation Medicine pair its genomic database with H3's computational biology capabilities.

Cambridge, MA-based Foundation Medicine touted the H3 deal as an example of how biopharma companies are finding new ways to use its capabilities, notably its database of 35,000 genomic profiles. Originally, drug developers primarily tapped Foundation Medicine for retrospective studies, but its databases are now helping H3 and others to identify new targets. The expansion could prove lucrative, with H3 on the hook for technology access fees, milestones and royalties.

H3 views the resource Foundation Medicine has as being worth the outlay. "We believe Foundation Medicine offers one of the most comprehensive cancer genomics knowledgebases available," H3 CEO Markus Warmuth said in a statement. The database provides a new avenue for R&D at H3, which has built its drug discovery operation around in silico interpretation of genomics information. Foundation Medicine's database will feed into this effort, while also informing H3's move into clinical trials.

Roche has similar plans. Foundation Medicine revealed more details of the deal on a conference call to discuss its fourth quarter results. Finance SVP Jason Ryan expects the company to pull in around $85 million from Roche for providing access to its molecular testing platform and databases for use in clinical trials. And a further $70 million could land in Foundation Medicine's coffers if programs hit a series of milestones.

The Roche deal contains other components and its breadth and depth have caused concern in some quarters, although the worries aren't too serious. "While the Roche transaction does carry the risk of driving away existing pharma partners, we have more conviction in our call that Foundation Medicine is a highly differentiated asset with a wide moat and large commercial opportunities," Wells Fargo analyst Tim Evans said in a statement.

- read the H3 release
- check out the call transcript