A few days into the New Year and Flatiron is already down to business, having raised $175 million in a funding round. The cloud-based oncology company develops software, based on information gathered and analyzed on the various cancer treatments. Roche Holding is one of the pharmaceutical giants showing strong interest in the startups operations.
Other participants in the funding round included Allen & Company Baillie Gifford and Casdin Capital. Money is not the only thing that the startup got from the funding round. Roche has agreed to buy some of its software products on offer in subscriptions. The agreement is a big win for the startup expected to bolster its revenue stream going forward.
Roche and Flatiron’s agreement is non-exclusive meaning the oncology software can ink similar deals with other companies. The deal follows a year of consolidation in the healthcare sector that saw companies engage in mergers and acquisitions in ways never seen before.
For Flatiron inking such an agreement with Roche is a big achievement as it comes at a time when venture firms remain reluctant to write big checks to startups. The deal also highlights belief in the company’s software products on offer.
What the Agreement Means To Roche
The agreement, on the other hand, provides Roche an opportunity to address challenges currently facing its core business. A move by insurers to only pay for treatments when proved to be effective continues to considerably affect the company’s health care payment system. A major player in oncology, the company has since reiterated its intentions to use Flatiron’s data for bringing new drugs to market.
Roche also plans to use Flatiron’s software products to keep its pipeline of innovative drugs and treatments. The startup’s data should also be of great help in helping match patients with treatments that are most effective.
Flatiron’s growth continues to elicit interest from a good number of health care players looking to bet big on personalized medicine. By paying a great deal of attention on personalized medicines, health care costs should drop in the United States while patient outcomes improve.