Last month, Grail publicly spread word of intentions to raise more than $1 billion in an ambitious quest to develop a blood test that can diagnose and detect cancer at its earliest stages. Today, the Menlo Park, CA, startup has revealed the crop of drugmakers and others it has secured to fund the effort.
Grail said today that it has raised more than $900 million in a Series B round led by Arch Venture Partners. Johnson & Johnson Innovation made the largest investment of any involved in the massive financing, Grail said in a statement, but it was also helped by three other drugmakers (Bristol-Myers Squibb, Celgene, Merck), tech giant Amazon, the venture arm of healthcare services firm McKesson, China-based Tencent Holdings, and Varian Medical Systems, a developer of radiation cancer treatments.
Grail still expects to push past the $1 billion figure it mentioned in a press release in January by closing the remainder of its Series B, which is still expected before the end of the first quarter with the help of additional unspecified institutional investors. But its financing already blows past some of the biggest life sciences financings ever, among them Moderna Therapeutics’s $450 million raise in 2015 and Human Longevity’s $220 million round last year. The new cash goes on top of the $100 million Series A Grail secured when it was spun out by gene sequencing giant Illumina (NASDAQ: ILMN) in January 2016. (Grail said some of the financing proceeds were used to repurchase some of Illumina’s stake in the startup; Illumina now owns “slightly less than 20 percent” of Grail.)
Grail needs the huge war chest to fund an exceedingly difficult quest. It is conducting large, long trials to test the worth of a blood test meant to catch cancer when it’s most treatable—long before patients show any symptoms—by detecting fragments of cancer DNA shed by tumors. If Grail were to successfully screen seemingly healthy people for signs of cancer, it could be a major breakthrough. But that practice is controversial; unnecessary biopsies and other medical procedures for people who are wrongly diagnosed or whose cancer might never have spread can also hasten health problems. There are also significant questions regarding so-called liquid biopsies, like Grail’s test, which are slowly gaining traction as a way to help doctors treat patients already diagnosed with cancer. (Here’s more on that, and the obstacles facing Grail going forward.)
Nonetheless, Grail has convinced a slew of big name investors that the potential payoff is worth the risk, and the expensive clinical trials that go along with it. Grail has already begun its first multi-center clinical trial, dubbed the Circulating Cell-free Genome Atlas (CCGA) study, in which it plans to eventually analyze blood samples from 10,000 participants. Other large trials are planned, in which Grail intends to enroll hundreds of thousands of patients. Former Illumina CEO Jay Flatley said upon Grail’s launch that, assuming the company is successful, a diagnostic test could be introduced as early as 2019.