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Illumina Launches Firm to Develop NGS Blood-Based Screening Test for Early Cancer Detection

NEW YORK (GenomeWeb) – Illumina said on Sunday that it has launched a new company called Grail, which will develop a next-generation sequencing blood-based screening test for early cancer detection.

Grail has raised more than $100 million in a Series A financing round from Arch Venture Partners and Illumina, which contributed $40 million. Bezos Expeditions, Bill Gates, and Sutter Hill Ventures also invested in Grail.

In addition, Illumina plans to transfer its existing circulating tumor DNA and RNA research program, including external collaborations and personnel, over to Grail. The two companies have also entered into a multi-year supply agreement for NGS instruments and reagents. Any intellectual property that Grail develops that is based on circulating tumor nucleic acids, but not directly related to early cancer detection, will be transferred back to Illumina.

During conference calls with members of the press and investors, Illumina CEO Jay Flatley said that Grail would begin large-scale clinical trials in 2017 and would launch a pan-cancer liquid biopsy assay for asymptomatic individuals in 2019 that would cost $1,000 or less.

"Nearly all cancer screens measure indirect surrogate markers for cancer that don't define the cancer itself," Flatley said. "And there is no screening for most cancers, like ovarian and pancreatic." By contrast, a ctDNA or ctRNA test would be a direct measure of the tumor itself.

Grail will be based in the San Francisco Bay Area, plans to build a CLIA-certified laboratory, and will initially have a five-person board of directors including Flatley; Richard Klausner, former chief medical officer at Illumina; Illumina Chairman William Rastetter; Robert Nelsen, a director at ARCH Venture Partners; and Grail's eventual CEO.

Its scientific advisory board will include Klausner; Jose Baselka, physician-in-chief at Memorial Sloan Kettering Cancer Center; Brian Druker, director of Oregon Health and Science University's Knight Cancer Institute; Mostafa Ronaghi, Illumina's chief technology officer; Don Berry, professor at MD Anderson Cancer Center; Timothy Church, professor at the University of Minnesota School of Public Health; and Charles Swanton, group leader at the Francis Crick Institute.

Grail is the second spinout Illumina has launched this year. In April, it spun out consumer genomics firm Helix.

Flatley said the reason for launching spinout companies in the areas of early cancer detection and consumer genomics was that those were areas outside of Illumina's core business focus and also areas in which there is a significant market opportunity.

He predicted the size of the market for a ctDNA test that detects stage II cancer could be between $20 billion and $40 billion. For a test that could detect stage I cancer as well as identify the tissue of origin, the market could be between $100 billion and $200 billion, Flatley said.

Flately stressed that Grail would focus solely on early cancer detection, rather than applications such as tumor profiling to match patients to drugs, monitoring for relapse, or detecting residual disease. Many of Illumina's customers are currently developing ctDNA assays for those purposes, including Guardant Health, Trovagene, and Sequenom.

"None of those companies have begun to address" the screening market, Flatley said, although he acknowledged that some have intentions to.

Prior to launching the pan-cancer assay in 2019, Flatley said there will likely be opportunities for Grail to launch tests geared toward early detection of specific cancers. Klausner, who also spoke during the conference call, said that there is a huge opportunity in cancer types for which screening tests already exist to demonstrate that an NGS blood-based test could outperform them.

"Cancer screening programs suffer from two problems," Klausner said during the call. "Many cancers are not detected at all. And second, most of what the tests do detect is not cancer."

For instance, according to the National Cancer Institute, approximately 50 percent of women in the US who are screened annually via a mammogram for 10 years will have a false positive result. In addition, between 6 percent and 46 percent of women who do develop invasive breast cancer will have negative mammograms.

Klausner said that the quickest way to demonstrate the value of Grail's blood-based cancer test would be to compare it to existing screening tests, such as a mammogram for breast cancer and a spiral CT for lung cancer.

Already, Illumina has been collaborating with Memorial Sloan Kettering Cancer Center in the area of circulating tumor DNA, a collaboration that will now be transferred to Grail. Baselka said during the conference call that under this collaboration researchers have detected ctDNA in early breast and lung cancers.

Grail is currently planning at least two clinical trials that will begin in 2017: a clinical trial in breast and lung cancer patients, and a large-scale population-based trial in asymptomatic individuals.

The firm will also work with regulatory agencies and payors globally. Details of the test, like the number of genes it will analyze and whether Grail's initial offerings will be a different set of markers from the pan-cancer test are still being worked out.

"We are working on multiple assay methods now that all work slightly differently," Klausner said. One or two methods would be selected for which to develop tests. He said the company is considering developing multiple tests that could be run sequentially or in parallel.

Flatley said that the test would have to detect mutations at frequencies as low as .01 percent in order to be relevant. The test would also have to sequence "ultra deep," potentially as much as 10,000-fold coverage.

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