Foundation Medicine Inc. (NASDAQ:FMI)

Discussion in 'Men's Economics' started by Michael Scally MD, May 15, 2014.

  1. Voltrader

    Voltrader Member

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  2. Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Re: FMI valuation model

    Applying a 25x multiple to this $75M net income seems reasonable given the high growth rate of the revenue and income stream, which yields an enterprise value of $1.9B, or $55/sh based on 34M diluted shares I project to be outstanding in 2016 (vs. 28.1M shares and 2.3M options outstanding currently).
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  3. Michael Scally MD

    Michael Scally MD Doctor of Medicine

    Foundation Medicine – Emerging competition does not impact long-term value proposition

    "The only thing that should make Foundation Medicine investors worry is if Illumina stops selling its sequencers to Foundation Medicine, which seems highly unlikely. In fact, Illumina will probably sell its sequencers to multiple players in the field of cancer diagnostics (Dx)."
  4. Michael Scally MD

    Michael Scally MD Doctor of Medicine

  5. Michael Scally MD

    Michael Scally MD Doctor of Medicine

    This is right up there with some of my very best picks.

    Almost $50 in PM!!!

    Roche to Buy Majority Stake in Foundation Medicine, Leader in Tumor Testing from NYT Dealbook

    The Swiss pharmaceutical giant Roche said on Monday that it would acquire a majority of the tumor-testing company Foundation Medicine for more than $1 billion, in a deal aimed at improving both cancer treatment and drug development.

    Foundation is the leader in the growing area of sequencing the genes of tumor samples, looking for mutations that can help predict which drug will be most effective for a particular patient.

    Roche, which is the world’s largest seller of cancer drugs, said it would use some insights from that testing to develop drugs and better tailor them for specific groups of patients. In addition, Roche, which also has a huge diagnostics business, will sell Foundation’s tests outside the United States.

    “I think it just brings personalized health care in oncology to a new level,” Daniel O’Day, who runs Roche’s pharmaceutical business, said in an interview.

    For its part, Foundation, which is based in Cambridge, Mass., will get financial support and work with Roche on some new products. Roche will also help promote such testing to oncologists and pathologists in the United States.

    “We believe this approach will become the norm in oncology in the not-too-distant future, and this takes us another step in that direction,” Dr. Michael J. Pellini, the chief executive of Foundation, said in an interview.

    Under the terms of the deal, Roche will invest $250 million in Foundation by acquiring five million newly issued shares at $50 a share, a 109 percent premium to Foundation’s closing price on Friday. Roche will also make a tender offer at the same price to acquire about 15.6 million shares.

    In total, Roche would pay just over $1 billion and end up with a stake of between 52.4 percent and 56.3 percent on a fully diluted basis, the companies said.
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  6. Voltrader

    Voltrader Member

    Still glad I have some. Very nice doc!!!!