Illumina Reportedly Set to Acquire Grail for $8 Billion, Derailing Its IPO Plans

Just a week after GRAIL filed for its IPO, its “former parent company” grew restless.

YiOu Healthcare learned on September 17 that, according to a Bloomberg report, Illumina has begun negotiations to acquire cancer screening company Grail, with the final deal potentially exceeding $8 billion. Grail was spun off from Illumina in 2016.

According to Bloomberg, this deal would be the largest in Illumina’s history and could be announced as early as next week. Following the news, Illumina’s stock price fell about 10% to $321.

Grail is arguably the “funding king” in the cancer screening sector. To date, it has completed four rounds of financing with participation from numerous high-profile investors, such as Bill Gates, Chairman of Microsoft, and Jeff Bezos’s personal venture capital fund, Bezos Expeditions. Sources told Bloomberg that Grail was valued at $6 billion in its most recent funding round. According to regulatory filings, Grail has raised more than $1.9 billion.

Notably, Illumina’s support for GRAIL has been unwavering. It participated in and led multiple rounds of financing for GRAIL. According to the prospectus, Illumina is GRAIL’s largest shareholder, holding a 14.6% stake. Furthermore, the two companies have entered into a ten-year supply and commercialization agreement, under which GRAIL pays substantial royalties to Illumina.

Jonathan Palmer, an analyst at Bloomberg Intelligence, described the potential deal as “somewhat problematic,” noting that Illumina may find the opportunity too significant to abandon. However, acquiring Grail would put Illumina in direct competition with its customers, who use Illumina’s sequencers to develop their own liquid biopsy assays.

Having established itself as the dominant player in the sequencing industry, Illumina has been increasingly venturing into the diagnostics sector in recent years. With the acquisition of GRAIL, Illumina could further extend its reach from sequencing into downstream applications.

Previously, it collaborated with Adaptive Biotechnologies (a developer of sequencing analysis platforms) to produce kits capable of reading the human immune system for disease detection. In May this year, Illumina led a $70 million investment round in Ginkgo Bioworks (a genetic engineering startup), and the two parties are currently conducting a sequencing-based Covid-19 testing initiative.

GRAIL is collaborating with biotechnology companies such as Thrive.Early Cancer ScreeningBlood Testcompetition, its recent research achievements have demonstrated considerable development potential. This year, data provided by Grail indicate that its blood test can detect more than 50 types of early-stage cancer, while simplifying oncologists’ diagnostic work by identifying the tissue of origin of the tumor.

Additionally, Grail has planned to commercially launch its cancer screening test, named Galleri, in 2021. Before seeking full FDA approval, the company stated that it would initially market the product as a laboratory-developed test (LDT).

If the acquisition of GRAIL is successfully completed, Illumina is poised to become a leader in the field of early cancer screening.

This article is sourced from EqualOcean, an original piece by author Mi Congcong. For reprint or collaboration inquiries, please click here.Reprint Notice, unauthorized reprints will be subject to legal action.