BASEL, Switzerland—Roche has signed a definitive agreement to acquire GeneWEAVE BioSciences Inc., a privately held company focused on innovative, clinical microbiology diagnostics solutions based in Los Gatos, Calif. Under the terms of the agreement, Roche will pay GeneWEAVE shareholders $190 million up front and up to $235 million in contingent product-related milestones. The transaction is subject to customary closing conditions and, once closed, GeneWEAVE will be integrated into Roche Molecular Diagnostics.
The acquisition provides Roche with GeneWEAVE’s Smarticles technology, an innovative class of molecular diagnostics that quickly identifies multidrug-resistant organisms (MDROs) and assesses antibiotic susceptibility directly from clinical samples, without the need for traditional enrichment, culture or sample preparation processes. GeneWEAVE’s first system in development is the vivoDx, a fully automated, random-access system designed to meet the needs of laboratories addressing MDRO detection and antibiotic therapy guidance. The technology is currently being evaluated in multiple sites across the U.S. In the presence of antibiotics, susceptible bacteria targeted by Smarticles will remain dark, while drug-resistant bacteria produce light quickly and efficiently. A DNA molecule designed by GeneWEAVE causes the bacteria to express luciferase, a molecule that produces light.
According to GeneWEAVE’S documented results, among 153 patients Smarticles reduced the time to therapy from 81 to 23 hours, reduced hospital stays by 34 percent and mortality by more than 50 percent.
“With GeneWEAVE, we further strengthen our microbiology diagnostics offerings with cutting-edge technology that will aid in the fight against drug-resistant bacteria. This technology has the potential to provide healthcare professionals access to quick and accurate diagnoses that can lead to rapid, informed treatment decisions,” said Roland Diggelmann, chief operating officer of Roche Diagnostics. “We welcome GeneWEAVE’s employees, who will continue to focus on the development and manufacturing of diagnostics solutions based on the Smarticles technology.”
“We are very excited to continue developing innovative microbiologic diagnostics solutions as part of the Roche Molecular Diagnostics team,” said Steve Tablak, CEO of GeneWEAVE. “Roche is the ideal company to deliver on the promise of our Smarticles technology. We are fully committed to the continued success of GeneWEAVE’s employees, products and pipeline.”
Dan Leonard, an analyst at Leerink Research, states that “We believe Roche’s acquisition of GeneWEAVE Biosciences validates the value in rapid microbiology testing, specifically testing for drug-resistant bacteria.” Leonard goes on to list four other market participants for whom Leerink considers the Roche move a validation: Cepheid Inc., an American molecular diagnostics company that develops, manufactures and markets fully integrated systems for testing in the clinical market and for application in its original nonclinical market; Accelerate Diagnostics Inc., an in-vitro diagnostics company dedicated to providing solutions for the global challenge of drug resistance; OpGen, a diagnostics company helping to combat and control life-threatening multidrug-resistant organisms using DNA testing and bioinformatics tools; and T2 Biosystems.
“In particular,” Leonard adds, “the price tag supports our view that TTOO’s [T2 Biosystems] platform value is currently underappreciated by the Street. GeneWEAVE boasts an ability to detect drug-resistant bacteria directly from a sample of interest, without the need for an intermediate culturing step. This value proposition sounds similar to that of TTOO’s. Unknown to us is whether this technology would allow comparable sensitivity to TTOO, which has a lower limit of detection of one colony forming unit (CFU)/mL, or whether the technology can test for multiple organisms in the same sample.”
At minimum, Leonard noted, Leerink believes T2 Biosystems’s $260-million market cap “looks even more compelling” next to the $425-million price for GeneWEAVE.
GeneWEAVE works to advance clinical microbiology with diagnostic solutions to aid healthcare providers in the fight against drug-resistant bacteria by enabling “impactful surveillance programs, early therapy guidance and successful antibiotic stewardship.” The company’s proprietary Smarticles technology is designed to rapidly detect drug resistance and measure susceptibility information without the need for enrichment, culture or sample preparation. The company refers to this new paradigm as “Sample-In/Susceptibility-Out.”
Roche, a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics, boasts broad skills and products in oncology, immunology, infectious diseases, ophthalmology and neuroscience. Roche says it is the world leader in in-vitro diagnostics and tissue-based cancer diagnostics, and its personalized healthcare strategy aims at providing medicines and diagnostics “that enable tangible improvements in the health, quality of life and survival of patients.” In 2014, the Roche Group employed 88,500 people worldwide, invested 8.9 billion Swiss francs in R&D and posted sales of 47.5 billion Swiss francs. Genentech, in the United States, is a wholly owned member of the Roche Group. Roche is also the majority shareholder in Chugai Pharmaceutical in Japan.