Illumina to buy Jeff Bezos-backed cancer testing firm Grail in $8 billion deal – Metro US

Posted: September 22, 2020 at 11:49 pm

FILE PHOTO: The offices of gene sequencing company Illumina Inc are shown in San Diego, California

Sign up for our COVID-19 newsletter to stay up-to-date on the latest coronavirus news throughout New York City

(Reuters) Illumina Inc said on Monday it would buy cancer screening startup Grail Inc in a cash-and-stock deal worth $8 billion, buying out investors including Jeff Bezos and snatching back a business it spun out four years ago.

Grail is developing a liquid biopsy, a blood test intended to diagnose cancers at early stages when the disease is easier to treat. The company has said it expects to launch its flagship test Galleri in 2021, betting on a market expected to grow rapidly in coming years.

Grail was founded by Illumina as a separate company in 2016 and had since raised about $2 billion, with investors including the founders of Amazon.com Inc and Microsoft . Illumina remained its largest shareholder, owning about 14.5% of its outstanding shares. Illumina Chief Executive Francis deSouza said in an interview that he began speaking to his board early this year about acquiring Grail after the start-up released promising data on its experimental diagnostic. From our perspective, early detection of cancer is the largest application of genomics for the next decade, decade and a half, he said. Many cancers, like ovarian cancer, are difficult to diagnose and often only caught when the disease has spread to other areas of the body, when it is far deadlier. If a blood test can effectively detect these cancers earlier, it could significantly improve the prognosis for many patients.

Analysts have forecast a future market for liquid biopsies as high as $130 billion in the United States alone.However, the technology is still experimental and must demonstrate efficacy in clinical trials before being approved by regulators.

Illumina shares fell 8.3% to $271.07, as some analysts questioned the deals rationale.

We dont see the clear fit for acquiring a company that is still at a stage where clinical studies and clinical product development are still critical and will be for years, Cowen analyst Doug Schenkel said in a research note.DeSouza attributed the stock reaction to the deals cost. Its just a big deal. The numbers are large and so investors want to process what this means, he said. DeSouza said the deal fits into Illuminas long-term strategy of developing next generation technology that uses human genetics to improve patients lives.

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Bernard Orr and Bill Berkrot)

Read more:
Illumina to buy Jeff Bezos-backed cancer testing firm Grail in $8 billion deal - Metro US

Related Post