Roche-Ventana would further gene diagnostics and treatment

Businessweek reports on a possible merger of Roche-Ventana

Swiss Pharmaceutical giant Roche Holdings (RMMBY ) caught Wall Street by surprise in June when it launched a $75-a-share hostile bid for Ventana Medical Systems (VMSI ). The Tucson company pulled in just $238 million last year selling tools that help doctors analyze tissue samples to diagnose cancer. Roche's bid values the company at about $3 billion.

What Roche and Ventana share is an intimate understanding of the next revolution in medicine. In the coming decade, pharmaceutical products--especially cancer drugs--will be created in tandem with diagnostic tests that tell doctors which patients are likely to benefit. Right now, physicians often feel they're flying blind. Each patient arrives at the hospital with a unique genetic makeup, which affects whether a prescribed drug will kill tumor cells, cause devastating side effects, or possibly do nothing at all. If a new generation of gene tests can help predict these different outcomes, patients will be spared expensive and unhelpful ordeals. The pool of target patients for many medications will also shrink. But if doctors are confident a drug will help somebody, they'll prescribe it aggressively, and insurers will be more likely to foot the bill.

Roche is the most ardent evangelist for this pairing of drugs with gene-based diagnostics--an approach called personalized medicine.

Ventana and Roche both are facing regulatory hurdles. At present, the Food & Drug Administration has separate channels for reviewing drugs and diagnostics, and no procedure for reviewing them in combination.

For experts like Abrahams, the logic in pairing tests and treatments is irrefutable.