Early cancer diagnosis cancer results in significantly higher survival rates compared to late-stage diagnosis. However, effective screening only exists for a few cancer types, and most cancer is detected in later stages when survival rates are much lower.
To develop a blood test for early-stage cancer detection, an early-stage cancer detection startup Grail spun out of life sciences giant Illumina a year ago. It combines the power of high-intensity sequencing, leading-edge computer science, and large population-scale clinical studies to enhance the scientific understanding of cancer biology.
The company had earlier secured over $100 million in Series A financing from Illumina, Inc. and ARCH Venture Partners, with participating investors including Bezos Expeditions, Bill Gates, Sutter Hill Ventures, and GV. It is now seeking approximately $1 billion for its Series B financing, mainly from undisclosed private and strategic investors. It plans to raise additional capital in the Series B financing from other investors and is in constant touch with Goldman Sachs for the contemplated additional financing. It intends to close the round by the end of Q1 2017.
Grail will use the proceeds for continued development and validation of their blood-based test for cancer screening, which will require large-scale clinical trials. The trials are expected to take place in the United Kingdom with the involvement of about 500,000 people. Reportedly, the round is expected to touch a minimum of $200 million.Also, the funds will be used to repurchase a portion of Illumina’s stake.
Grail’s Chief Executive Officer, Jeff Huber, added,
We are honored to have world-class investors who support our goal of reducing global cancer mortality through early detection — especially the invaluable support we received from Illumina during our start-up phase – and we look forward to the next phase of our growth.
With all the plans and potential success of the Series B, Illumina has decided to accelerate their path to independence, which will result in Grail becoming one of Illumina’s largest customers over time. Illumina will modify the supply and commercialization agreement with Grail to a market-based agreement and will no longer have representation on its Board of Directors. As a part of this transaction, Illumina’s ownership will become slightly less than 20 percent and the Grail will be treated as a cost-method investment. In an official statement, Francis deSouza, President and Chief Executive Officer of Illumina, commented,
This capital allows Grail to take on the significant technology, market, and regulatory challenges of developing and validating a blood-based cancer screening test. This outcome maximizes value to Illumina by creating one of our largest customers of sequencing instruments and consumables over time, providing royalties on future Grail tests and through appreciation of our ownership interest.