Grail Aims for $1 Billion B-Round as It Moves Toward Independence from Illumina

 IlluminaThe company announced,Subsidiary Focused on Early Cancer Screening to Launch OperationsBSeries [X] Financing Round, Funding Target10billion U.S. dollars, with a potential peak of18hundred million U.S. dollars. The investors have been confirmed but not yet announced; it is understood that they are mainly private and strategic investors,GrailThe company also plans to secure partial financing from other investors, with Goldman Sachs Investment participating as well.GrailPlanned for completion in the first quarterBRound of financing.

Perhaps due to its prestigious origins, Grail attracted significant attention from the moment it was founded. Last January, Grail announced that it had secured $100 million in Series A financing. The investors included globally renowned venture capital firms and prominent figures from BAT, such as Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos, Google Ventures, ARCH Venture Partners, and Silicon Valley private equity firm Sutter Hill Ventures.

Illumina has long been a proponent of precision medicine, having previously invested $100 million to establish the world’s first FDA-approved cancer screening laboratory. GRAIL represents another major initiative by this industry giant.

At the J.P. Morgan Healthcare Conference in early 2016, Illumina announced the establishment of a new company, Grail. Co-founded by Illumina and ARCH Venture Partners, the company is primarily engaged in cancer screening through simple blood tests.

Leveraging Illumina’s sequencing technology, GRAIL will conduct pan-cancer screening by directly measuring circulating cell-free DNA in the blood. By capturing high-resolution genetic fragments from deceased tumor cells for early cancer diagnosis, patients can receive treatment before the disease progresses. Currently, this technology is being used to monitor disease status in patients with confirmed cancer diagnoses.

Such tests require a high degree of precision; otherwise, they risk causing clinical misdiagnosis. However, Francis deSouza, President and CEO of Illumina, is firmly convinced that Grail can overcome numerous technical challenges. He believes that Illumina is the only company with deep sequencing capabilities. Grail plans to launch a product in 2019 capable of early detection for multiple types of cancer, priced under $1,000. The aim is to provide patients with an affordable screening method to enable timely diagnosis and treatment before symptoms appear.

Compared with many startups, Grail was born with a silver spoon in its mouth: backed by Illumina, it enjoyed greater ease in securing financing and partnerships than its peers. At its inception, Grail raised $100 million, far outpacing other companies. Moreover, with Illumina’s technological support, Grail was able to bypass the early-stage development phases altogether.

Although there was no need to develop the technology from scratch, cell-free DNA (cfDNA) blood testing had never previously been applied to early cancer detection. At this stage, Grail requires substantial funding for clinical trials, particularly for its previously announced Circulating Cell-Free Genome Atlas (CCGA) program, which involves analyzing the genomic profiles of at least 7,000 cancer patients and comparing them with those of healthy individuals.

This round of financing will be used to continue developing and validating the company’s cancer blood test research, including the previously announced circulating cell-free DNA profiling study and other trials. The research requires large-scale clinical trials, with an expected enrollment of over 10,000 patients.

“We founded Grail a year ago to leverage Illumina’s sequencing technology for early cancer detection from blood samples,” said Jay Flatley, Executive Chairman of the Illumina Board of Directors and Chairman of Grail. “This technological advancement provides Grail with the resources necessary to develop its first product and conduct large-scale trials to demonstrate the rigor of blood-based cancer testing.”

Furthermore, the proceeds from this transaction will also be used to repurchase the shares held by Illumina. As GRAIL plans to invest substantial capital and its Series B financing round is nearing successful closure, Illumina intends to accelerate GRAIL’s spin-off into an independent entity. Illumina will amend the commercialization agreement, with future interactions between the two parties governed by market-based terms rather than through board-level arrangements. Illumina will retain a minority stake in GRAIL (slightly below 20%), a move regarded as an investment.

“We are very pleased with the achievements Grail made last year,” said Francis. “This investment will enable Grail to undertake significant technological, market, and managerial development, as well as validate blood-based cancer detection. For Illumina, it has cultivated its largest customer.”

Jeff Huber, CEO of Grail, added, “We are honored to have the support of world-class investors in our mission to reduce global cancer mortality through early detection. We particularly value the backing from Illumina since the company’s inception, and we look forward to our next phase of growth.”

If the plan proceeds as scheduled, Grail will no longer be a subsidiary reliant on Illumina’s support but rather its largest customer.