Liquid biopsy play Freenome bags $65M in Andreessen Horowitz-led round

Freenome has raised $65 million in a round led by Andreessen Horowitz. The funding will enable Freenome to put its cancer-detection tests through more rigorous trials while continuing to work with pharmaceutical companies to predict patient responses to drugs.

Andreessen Horowitz, a storied West Coast tech investor also known as a16z, made Freenome an early addition to its $200 million biotech fund when it led a $5.5 million round in the liquid biopsy startup last year. Now, a16z has returned to lead a $65 million round to enable Freenome to step up its R&D activities in anticipation of bringing its first cancer and disease screenings to market. The scaled-up program builds on progress Freenome has made since it last raised money.

“Through machine learning, we have discovered signatures independent of traditional mutation calling, such as immunological and metabolic changes in cell-free DNA and other analytes, that are more robust for early cancer detection, which allows for a cost-effective assay,” Freenome CEO Gabe Otte said.

The idea of using computers to analyze all genetic material in a blood sample—rather than focus on known cancer signatures—is central to Freenome’s attempts to detect tumors early and affordably. It is this tech-led approach, rather than novel biology, that Freenome sees giving it an edge. The company is wading into a field colonized by incumbents such as Guardant Health and targeted by fellow upstarts, notably superlatively well resourced Illumina spinout Grail.

If Freenome is to carve out a niche, it will need to demonstrate its tests work in larger studies than the five-sample pilot a16z used to assess its capabilities before the initial $5.5 million round. That has led Freenome to start working with 25 research partners—including Massachusetts General Hospital and two University of California campuses—to access thousands of samples.

Buoyed by the funding and progress to date, Freenome will step up its validation efforts and broaden the scope of its research program.

“Our funding will allow for more robust trials, which will continually improve the accuracy of our tests through increased data collection, as well as expanded cancer testing beyond the four cancer types we’re starting with: Lung, colorectal, breast and prostate,” Otte said.

Freenome will also continue to work with five pharmaceutical companies to figure out whether its software can be applied to other cancer questions, such as how a patient will respond to a drug.

To support these activities, Freenome has grown its headcount from five to 25 since the earlier financing. Freenome plans to take on more people with software engineering, machine learning, computational biology and molecular biology experience over the coming months, although it doesn’t have a specific headcount target. Many of the current and planned hires have experience in several of these disciplines, but Otte also sees value in employing some specialists.

“[We] have several team members who have no biology background but strong software and machine learning aptitude to ensure objectivity during our research process,” Otte said.

Freenome raised the $5.5 million and started making headlines at the same time as Theranos was unraveling, and Otte has consistently presented the company as taking a different path from the secretive former unicorn. Otte has spoken of the need for Freenome to validate its approach and work with regulators, and of a16z’s Vijay Pande's belief in such rigor. A peer-reviewed paper has been mooted.