CHICAGO – Fresh off a $200 million funding round that closed last week, DNAnexus has now raised nearly $473 million since its inception in 2009. The investment has greatly accelerated in the last three years.
The Mountain View, California-based provider of cloud-based analysis and management of sequencing data also completed an unnamed $100 million financing round in 2020 and a $68 million Series F in 2019.
DNAnexus said it would use the new $200 million investment to refine its core genomics and multiomics technology platform, integrate new artificial intelligence and machine learning tools, and continue its international growth. The company has more than 12,000 users in 48 countries to date and counts UK Biobank and the US Food and Drug Administration among its customers.
Geographically, DNAnexus still considers North America and Europe to be its core markets. CEO Richard Daly expressed disappointment with growth in China, primarily because national policy there makes it difficult to manage large-scale genomic data. The firm has smaller but more successful operations in other Asian countries, particularly Singapore.
As is typical after a major investment, the $200 million fundraise will allow the company to add employees, particularly sales and marketing staff in the US and EU. Daly said that an engineering and data science development office in Prague is "very rapidly growing."
DNAnexus is trying to expand its work in multiomics and to integrate new artificial intelligence technologies. Daly said that there is a convergence between DNAnexus customers in hospital-based diagnostics and in pharma research around the use of real-world data.
DNAnexus was a sponsor and the lead technology partner for the Genome in a Bottle Consortium's new benchmarking dataset for 273 medically relevant autosomal genes that were previously excluded in its reference data due to their repetitiveness or polymorphic complexity.
According to Daly, the total addressable market for the company is growing in an area he called digital diagnostics, thanks to increasing integration of genomic and phenotypic data. "If you're doing a cancer test and you can pull parts of the patient's medical record from your customers that are using the test, you can put that into an environment which then deploys machine-learning AI and develops predictive algorithms," he explained.
At this point, diagnostic data becomes the basis of another diagnostic test.
"This is a very important area that we're investing in," Daly said. "It brings together the ability to access and integrate and federate datasets that are not genomic, put them into a high-security platform … and applies machine learning AI and allows it to generate predictive insights."
Daly said that DNAnexus is developing that kind of technology this year with an eye toward a product launch in 2023.
DNAnexus initially was not seeking $200 million when it opened the latest funding round.
Daly said that he started out last year only looking for $100 million. However, lead investor Blackstone Group, according to Daly, was looking to support a "breakout" company in bioinformatics with an investment that, with additional partners, grew to $200 million because DNAnexus and Blackstone had what he called a "shared vision" over where the field was going in the next five years.
Where everything — including data management projects, processes, and analytics — is going is to the cloud. "What's happened in the last few years, which is really driving this, is that the size of the databases now that are required to gain these insights are very large," Daly said.
DNAnexus and Amazon Web Services are managing a particularly massive database for the UK Biobank. When they launched that plan in August 2020, the partners expected the database to grow to 15 petabytes within five years. It now contains more than 25 PB of data, according to Daly.
At the time, DNAnexus put out a statement about the UK Biobank partnership, but declined to comment further. This month, Daly called it a "classic example where that dataset has become so large that it can't be downloaded" to local computing centers. "It has to go into the cloud," he said. "That's a strong wind at our back, cloud adoption."
Daly said that DNAnexus and Blackstone wrote a business plan together as they put together the investment deal. "It was a partnership to really drive this particular space forward with them and use their capital and our market position to accelerate," he said.
The investment firm, whose partners include former CEOs of major pharmaceutical companies and former industry regulators, also has made those contacts available to DNAnexus, which Daly expects to help open doors for future growth.