Illumina to Acquire GRAIL to Launch New Era of Cancer Detection

Illumina (NASDAQ: ILMN) and GRAIL, a healthcare company whose mission is focused on multi-cancer detection, announced they have entered into a definitive agreement under which Illumina will acquire GRAIL for a cash and stock consideration of $8 billion. In addition, GRAIL shareholders will receive future payments representing a tiered single digit percentage of certain GRAIL-related revenues.

This is an exciting moment for both Illumina and GRAIL, and most importantly patients. The combination will enable us to accelerate the global adoption of NGS-based multi-cancer early detection tests, increase accessibility, and improve patient outcomes. In 2019 alone, there were 15M new cases of cancer and 10M cancer-related deaths – early detection has the potential to change that.

Increases Illumina’s Directly Accessible TAM and Offers Multiple Future Growth Opportunities

GRAIL extends Illumina’s portfolio to include cancer screening, diagnosis and cancer monitoring, creating a portfolio of best-in-class, proprietary tests in each of the major oncology testing application areas. The total NGS oncology opportunity is expected to grow at a CAGR of 27% to $75 billion in 2035.

Accelerates Adoption of NGS-Based Early Multi-Cancer Detection Test to Reach More Patients Faster

Illumina plans to leverage its global scale, manufacturing and clinical capabilities to lead GRAIL’s commercialization efforts, realize the total addressable market potential and drive significant growth in the clinical value chain.

Enhances Illumina’s Position in Clinical Genomics 

NGS is poised to revolutionize oncology care, and this acquisition allows Illumina to participate more fully in the high value clinical solutions that are enabled by its NGS sequencing technology.  With GRAIL, Illumina will continue as a leading sequencing innovator and partner, while also becoming a proprietary test provider.

Detecting Cancer Early, When it Can be Cured

71% of cancer-related deaths are in cancers with no recommended screening

Source: SEER Program (www.seer.cancer.gov) *Stat Database: Incidence – SEER 18 Regs Research Data, Nov 2018 Sub. Includes persons aged 50-79 diagnosed 2006-2015 “Early/Localized” includes invasive localized tumors that have not spread beyond organ of origin, “Late/Metastasized” includes invasive cancers that have metastasized beyond the organ of origin to other parts of the body. Noone AM, Howlader N, Krapcho M, et al. (eds). SEER Cancer Statistics Review, 1975-2015, National Cancer Institute, Bethesda, MD, http://seer.cancer.gov/csr/1975_2015/, based on November 2017 SEER data submission, posted to the SEER website April 2018.

Beating Cancer Starts with Finding It

Introducing GalleriTM

Expected LDT
Launch 2021

1

Required Blood Draws

43%

Positive Predictive Value (modeled)

44%

Sensitivity for All Cancers (Stages 1-3)1

50+

Cancers Detected

93%

Tissue of Origin Accuracy

>99%

Specificity

1 Based on current trial status

Earlier this year, GRAIL shared positive results from its Circulating Cell-free Genome Atlas (or CCGA) study that has enrolled 15000 participants.  The study found that the first version of Galleri reported sensitivity of 44% for stage 1 through 3 tumors, and 67% sensitivity for the 12 deadliest cancers. Further, Galleri was able to detect more than 50 cancers across all stages, more than 45 of which do not have recommended screening in the US. And in 93% of the positive results, the test correctly identified the tissue of origin. All with a specificity of greater than 99%.

Galleri is expected to launch commercially in 2021 as a laboratory developed test for early cancer detection from blood.

Meets Patient, Physician & Payor Needs

Screens for 50+ Cancers

Galleri can detect more than 50 cancers across all stages, of which 45 do not have recommended screening in the U.S. This 10x increase in the types of cancers that can be screened could help avert nearly 40% of the 5-year cancer mortality, or nearly 100,000 annual deaths in the U.S.1

Identifies More Early Stage Cancers

Without the use of blood-based testing, it is estimated only 31% of cancers are identified in stages 1 and 2, when they are most treatable. Based on analysis of GRAIL’s studies to date, this could increase to 82% with broad adoption of Galleri in addition to recommended single-cancer screening.2

Identifies Cancer Location to
Inform Next Steps

With 93% accuracy in identifying tissue of origin, this allows physicians to simplify their diagnostic workup and more rapidly determine the appropriate cancer treatment.

Improves Outcomes

Today, 71% of cancer-related deaths are in cancers with no recommended screening. With limited screening, cancer is more likely to be detected in late stages but when we diagnose cancer too late, less than 20% of patients will survive more than 5 years. In contrast, if we diagnose cancer early, approximately 90% of patients are expected to survive beyond five years.3

Up to 65% Reduction in Cost

Galleri has the potential to more efficiently identify cancers and reduce overall diagnostic workup costs.4 We estimate that ~43% of patients who are tested positive will have cancer. This represents a very significant step forward compared to today’s most commonly used screening tests, which often have a positive predictive value in the 3 to 5% range.


1 Clarke et al. Cancer Epidemiology, Biomarkers, & Prevention 2020
2 Modeled based on GRAIL’s recent data from ESMO 2019 and SEER cancer registry
3 Surveillance, Epidemiology, and End Results (SEER) Program (www.seer.cancer.gov)
4 Diagnostic workup cost estimates include downstream costs + initial screening test

Illumina Will Continue to Enable, Partner and Supply Customers

GRAIL will operate as a separate division

Existing Illumina business will operate separately

Continued access to innovation

Support and enable the work of our clinical customers

Over the last four years, GRAIL’s talented team has made exceptional progress in developing the technology and clinical data required to launch the Galleri multi-cancer screening test. Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome GRAIL back to Illumina to help transform cancer care using genomics and our NGS platform. Together, we have an important opportunity to introduce routine and broadly available blood-based screening that enables early cancer detection when treatment can be more effective and less costly. Multi-cancer early detection is better for patients, their physicians, and payors. As we accelerate our path to clinical leadership and the path to multi-cancer early detection, we will continue to drive significant value creation for our shareholders.

Francis deSouzaCEO, Illumina

Cancer is one of society’s most significant challenges, with most cancer being detected too late. We believe multi-cancer early detection technology could address a tremendous unmet need and reduce the cancer burden worldwide. Combining forces with Illumina enables broader and faster adoption of GRAIL’s innovative, multi-cancer early detection blood test, enhancing patient access and expanding global reach. We are excited about this next step in our journey to transform cancer detection and outcomes and create value for patients and their families and communities, health care providers and payors, employers, and stockholders.

Hans BishopCEO, GRAIL