Grail, the Menlo Park, CA-based startup unveiled last year by genome sequencing firm Illumina (NASDAQ: ILMN), plans to raise more than $1 billion from undisclosed strategic industry partners and other investors, according to a statement today from Illumina. The plans were first reported last month by Fast Company. Grail has hired Goldman Sachs to handle the massive deal, which is expected to close before March 31st.
Illumina, which holds a substantial stake in Grail, said it has “received indications of interest” from investors who want to bankroll Grail’s development of a blood test capable of detecting fragments of cancer DNA shed by tumors. Such a blood test, if it could be developed, would make cancer detection possible at an early stage, when it is usually most treatable—and long before patients show any symptoms. Successfully screening otherwise healthy people for signs of cancer could be a major public health breakthrough. But the practice to date has had its problems, and Grail must hurdle large obstacles.
To demonstrate that Grail’s technology works will require large-scale clinical trials that are expected to sequence hundreds of thousands of patients—and such trials are extremely expensive.
In response to an Xconomy query about the “indications of interest” Illumina has received, a spokeswoman for Grail explained by e-mail, “It is just a conservative… way of saying the money has not yet been received, and that the size of the funding round has not been finalized at this time. There may be others interested in investing and we won’t know that until the round is complete.”
The $100 million Series A financing that Grail raised last year ranks as the largest Series A round the medical technology and device sector has ever seen, according to EP Vantage. Illumina and Arch Venture Partners led that round, which was joined by Bezos Expeditions, Bill Gates, and Sutter Hill Ventures.
Illumina said proceeds of the Series B round also would be used to repurchase a portion of its stake in Grail. In a statement Illumina said, “Given the potential success of the Series B, and Grail’s plan to aggressively invest that capital, Illumina has decided to accelerate their path to independence, which will result in Grail becoming one of Illumina’s largest customers over time.”
When Illumina laid out its vision for Grail almost exactly a year ago, then-CEO Jay Flatley said clinical trials could begin as early as 2017, and a diagnostic test could be introduced by 2019.
Grail said last month it had begun its first multi-center clinical trial, dubbed the Circulating Cell-free Genome Atlas (CCGA) study, and planned to eventually analyze blood samples from 10,000 participants in the first phase of the study.