Roche, an international pharmaceutical company, is taking a step into the healthcare IT marketplace by acquiring Flatiron Health, a vendor with an oncology-specific electronic health record, data and intelligence for cancer research.

Roche, which already owns 12.6 percent of Flatiron’s stock, expects to acquire all remaining shares of the company, which is privately held and backed by several venture capital firms. Completion of the deal is set for the first half of this year.

Under the terms of the agreement, Roche will make a payment of $1.9 billion to Flatiron Health on a fully diluted basis, subject to certain adjustments. The parties expect that following the closing, Flatiron Health will continue its current business model, network of partnerships and overall objectives. The integrity of segregated patient protected health information will be preserved, executives say.

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Roche officials say they’re making the deal to “accelerate industry wide development and delivery of breakthrough medicines for patients with cancer.” The companies will leverage their expertise to advance the use of real-world evidence for oncology research and development.

Flatiron Health will operate as a separate legal entity, the companies say. Flatiron has a large network of community oncology practices and academic medical centers that use its technology platform. It has worked with industry leaders and regulators to develop new standards for how real-world evidence is used in regulatory decision making, including the design and validation of novel endpoints. Its executives say that its work with its network of healthcare organizations has enabled it to develop a suite of software products that permit the use of real-world evidence at the point of care.

“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,” says Daniel O’Day, CEO of Roche.

Flatiron says that more than 265 community oncology practices across the country now use OncoEMR, its cloud-based EHR, and it’s recently launched several more applications and services to support these practices. The company says its platform now has information on 2 million unique cancer patients.

“Roche has been a tremendous partner to us over the past two years and shares our vision for building a learning healthcare platform in oncology,” says Nat Turner, Flatiron’s co-founder and CEO. The acquisition and cash infusion “will allow us to increase our investments in our provider-facing technology and services platform, as well as our evidence-generation platform.

“By coming together with Roche, Flatiron will have an accelerated ability to achieve our mission while continuing to operate independently with access to greater resources,” Turner adds. “We have a clear mandate and structure to continue to operate industry-wide with all stakeholders and customers as we build a learning healthcare platform for oncology. Importantly, this does not change our strategic objectives and our priorities; it only helps us get to the finish line faster.”

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