Roche Holding AG announced that it would spend as much as $1.725 billion to purchase Seragon Pharmaceuticals, a U.S. biotech privately held company that researches treatments for breast cancer.
Roche for very a long period of time has dominated the breast cancer field with drugs like Herceptim and just recently was given approval for Perjeta and Kadcyla, two other treatments for patients that have cancer cells that contain higher amounts of HER2 protein.
Seragon, based in San Diego, was spun off last year from Aragon Pharmaceuticals when it was purchased from Johnson & Johnson.
Seragon is focusing on developing new generation medicines that are oral that if feels offer improved methods of tackling breast cancer that is hormone receptor-positive, as well as other cancers.
Its experimental drug that is most advanced is ARN-810, which is currently in an initial Phase I trial for patients with breast cancer who did not respond to today’s hormonal agents.
Roches has said that Seragon’s SERDS – oral selective estrogen receptor degraders – would complement its existing research programs that are underway in breast cancer at its Genentech unit.
The drug maker, based in Basel will pay cash in the amount of $725 million and might give as much as $1 billion more if development milestones for drugs are met by Seragon.
The price that Roche is paying to purchase Seragon looks to be high for a company with just one treatment in a study that is still Phase I. However, it is justifiable for Roche since it is filling a big gap for future treatments in breast cancer with this purchase, said a pharmaceutical analyst.
Roche shares were up by 0.5% on Wednesday, outpacing the increase of 0.3% in a wider index of drug makers in Europe.
Since Roche acquired Genentech in 2009 at a price of $46.8 billion, it has earned a reputation for being a purchaser that is disciplined that is prepared to turn away from possible deals rather than overpay for them.
Severin Schwan the CEO abandoned a deal for $6.8 billion to purchases Illumina a gene sequencing business based in the U.S. back in 2012. He purchased a pair of small companies in 2014 instead of looking for multi-billion dollar deals.