Roche to Pay $1.9B for Flatiron Health

Feb. 16, 2018

Switzerland-based pharmaceutical company Roche has agreed to pay $1.9 billion to buy New York-based Flatiron Health Inc., which has both an oncology EHR and data analytics platform.

David Raths

Switzerland-based pharmaceutical company Roche has agreed to pay $1.9 billion to buy New York-based Flatiron Health Inc., which has both an oncology EHR and data analytics platform.

Privately held Flatiron, which has grown to almost 500 employees, has built a large network of community oncology practices and academic medical centers across the United States. In 2016, it was profiled as one of Healthcare Informatics’ “Up and Comer” startup companies.

In that profile, we wrote that when former Google employees Nat Turner and Zach Weinberg launched Flatiron Health in 2012, their goal was to create a big data analytics offering for cancer centers. And with $8 million in seed funding from Google Ventures, Flatiron began helping cancer centers with analytics. One thing they found was that the clinicians didn’t like their electronic health record systems. “We became acutely aware that their EHRs were more than just a part of the problem; they were most of the problem,” said Turner, the company’s CEO, in a 2016 interview. “The data being entered was really a byproduct of the EHRs being difficult to use. The bigger issue is that cancer care is so complex that the EHRs haven’t caught up to the level of complexity. In fact, it is getting more complex every day because of genomics and immunotherapy, and the EHRs are getting further behind.”

So a year into the development of its analytics package, and after signing up more than 20 cancer centers as customers, they chose to expand their mission to focus also on the day-to-day needs of clinicians. “We realized we needed to become the EHR or at least have an EHR option,” Turner said, which in 2014 led Flatiron to acquire the leading oncology EHR at the time, Altos Solutions.

“We acquired a great piece of technology, doubled the size of the company people-wise and quintupled the number of cancer centers we worked with,” he said.

In a blog post Feb. 15 on the Flatiron web site, Turner wrote that “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. 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.”

He described how Flatiron’s relationship with Roche developed. “We first began working with their pharma division as a client soon after we started the company. And then, in late 2015, Roche led our Series C financing round. This kicked off a strategic partnership whereby Roche Pharmaceuticals became a major client and a proponent of our industry-leading real world evidence platform, helping develop our products and services as well as advance our efforts with the FDA and other stakeholders.”