The prodigal spinout returns? Since launching Grail into the world in 2016, Illumina has watched the blood test developer grow into a multibillion-dollar startup enterprise by amassing multiple nine-digit funding rounds.
However, Grail’s spending has not been wasteful: It’s also collected clinical data from tens of thousands of patients in a massive bid to prove its liquid biopsy test can detect cancer early.
But now, a week after it has filed to go public—and with commercial launches on the horizon next year—the DNA sequencing giant apparently has decided it’s time for Grail to come home.
According to a report from Bloomberg, Illumina has begun talks to acquire the company and could end up paying more than $8 billion, or a third more than its current $6 billion valuation.
Though a final decision has not yet been made, an announcement could come as soon as this week, amounting to what could become Illumina’s biggest deal ever—and plunge the hardware manufacturer back into the test-making business, the report said.
Illumina began channeling its liquid biopsy work into Grail in 2015 before sending it off on its own in January the year after—alongside a $100 million series A financing that raised money from Bill Gates, Jeff Bezos’ investment arm Bezos Expeditions, Arch Venture Partners and more.
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Since then Grail, a former Fierce 15 winner, has collected a total of about $1.9 billion from Bristol Myers Squibb, Merck, Johnson & Johnson Innovation, Varian Medical Systems, Tencent and others.
Illumina, meanwhile, retains ownership of nearly 15% of the company’s stock—after Grail bought back a portion in 2017—and maintains connections through a number of its board members. After news of the deal broke, Illumina’s stock dropped about 10%, to $321.
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This year, Grail presented data showing that its blood tests could detect over 50 types of early-stage cancers while simplifying oncologists’ diagnostics work-ups by identifying the tumor’s tissue of origin.
Grail has slated the commercial launch of its screening test for 2021, following additional validation work. Named Galleri, the company plans to initially market the product as a lab-developed test before seeking a full clearance or approval from the FDA.