Illumina ($ILMN) hasn't been shy about its liquid biopsy ambitions, with CEO Jay Flatley telling investors back in July that the company would focus on its work in the field to generate long-term growth. Now Illumina is taking things to the next level, launching a new company that's focused on developing a screening test for the early detection of cancer.
The San Diego-based company will transfer its liquid biopsy work to a new spinoff, dubbed GRAIL, which is backed by $100 million in Series A financing from Illumina and ARCH Venture Partners and investments from the likes of Bill Gates, Sutter Hill Ventures and Bezos Expeditions. The "holy grail" in oncology is finding biomarkers that can flag cancer, Illumina CMO Rick Klausner said in a statement, and GRAIL will use the company's sequencing tech to pinpoint nucleic acids from tumors in the bloodstream, potentially identifying the disease in earlier stages.
"We hope today is a turning point in the war on cancer," Flatley said in a statement. "By enabling the early detection of cancer in asymptomatic individuals through a simple blood screen, we aim to massively decrease cancer mortality by detecting the disease at a curable stage."
The company is not wasting any time getting the ball rolling. GRAIL will spend the rest of this year "developing the underlying technology and building the infrastructure to conduct large-scale clinical trials" for its pan-cancer screening tests, Flatley told investors Sunday on a call. Starting in 2017, the company will kick off clinical studies for its circulating tumor DNA (ctDNA) tests. If all goes swimmingly, GRAIL could roll out its tests by 2019, Flatley said.
Leerink analysts agreed with the prospects, saying in a note that cancer screening "has long been the holy grail market opportunity" for Illumina. A ctDNA test that can screen for stage 2 cancers such as breast, colon, prostate and ovarian could translate into a $20 billion to $40 billion market, Flatley said. And a ctDNA test for stage 1 cancer could unlock a $100 billion to $200 billion market, presenting an even more lucrative opportunity for the company, he added. Leerink analysts are on board with these numbers, predicting a market between $20 billion and $200 billion for GRAIL's tests.
The spinoff builds on Illumina's previous efforts in the liquid biopsy space, including a partnership with Memorial Sloan Kettering Cancer Center (MSK) to develop a ctDNA test. GRAIL will incorporate this initiative into its work, Flatley said, with employees working on the initiative transferring to the company.
In the meantime, Illumina is "actively recruiting" a CEO for GRAIL, the company said. Ideally, the right candidate will "either come from the high-tech world or deep in the life sciences world" and will "bring very, very strong leadership" abilities and an "appreciation for the clinical and technical challenges" of the initiative, Flatley said.
The announcement comes on the heels of progress for Illumina. The company on Sunday revealed strong Q4 numbers, including revenue of $590 million that beat the Street's prediction of $570 million. And Illumina sees big things in store for the year ahead, forecasting about 16% revenue growth in line with analysts' numbers. The company was up almost 4% in premarket trading on Monday following news of the spinoff and positive Q4 results.
- read the statement
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