Diagnostics

From Grail to Freenome, liquid biopsies seize the day

Wednesday was just short of a billion-dollar day for liquid biopsy companies, with a $65 million Series A announcement from Freenome and a $900 million Series B close from Illumina spin-out Grail.

Blood Sample

If liquid biopsies haven’t yet arrived, they’re definitely preparing the cabin for a timely descent.

On Wednesday, San Francisco, California-based Freenome announced a $65 million Series A funding round, while Illumina spin-out Grail closed a giant $900 million Series B.

Both companies are developing blood-based diagnostics that could enable routine, early detection of cancer. It’s an intriguing look into the future of healthcare screening and intervention.

At the heart of both companies is a growing recognition that there is a lot more diagnostic potential in blood than previously thought. It contains cancer clues such as circulating tumor DNA (ctDNA); fragments of tumor DNA that slough off into the bloodstream. With the right tools and software, researchers can tap into ctDNA and much more to scan the entire body.

It’s a technology known as liquid biopsy.

For its tests, Freenome looks at a range of biological signals, from relevant analytes to markers of the immune system’s response to tumor cells. With such complexity, the science is equal parts biology and software.

“We use machine learning to identify what signatures are most relevant to early detection,” said Riley Ennis, cofounder and COO of Freenome in a phone interview. “We discovered our unique signatures coming from immunological and metabolic changes, which we believe are more robust for early-stage disease detection. And because these signals are more robust, we’ve been able to develop a cost-effective assay that has worked across multiple tumor types.”

The company has partnered with 25 research institutes to design, improve and validate its tests. Ennis said Freenome is still working to understand the full scope of what it can achieve, but it wants to change patient outcomes early in the disease process, possibly even preventing disease onset. This could apply to cancers and other conditions, such as autoimmune diseases.

Launched in January 2016, Grail is developing “high-intensity sequencing” tools that can reliably detect the faintest signals of cancer in the blood, including ctDNA.

In an email forwarded by a company spokeswoman, Grail’s Chief Business Officer Ken Drazan said the R&D is based on “ultra-broad and ultra-deep” sequencing, alongside population-scale clinical trials and “unparalleled” computational power.

Its first trial, the Circulating Cell-free Genome Atlas (CCGA) study, is already underway. Drazen said further, larger clinical trials will also be launched in 2017. The ultimate aim is to enroll over 100,000 patients to generate the huge volumes of data needed to elucidate the critical biomarkers.

Both Freenome and Grail will run into two core issues if they can deliver on the tests. The first is reimbursement. For a screening test to be viable for otherwise healthy patients to take, Ennis said the company needs to price its diagnostics in the hundreds of dollars, not the thousands. He believes Freenome can do that, with an analytical software approach that allows for a more simplified assay.

The second challenge comes with the delivery of information. Not all cancers need to be treated, but all cancer diagnoses are traumatic. Screening healthy patients is a loaded field.

“This a really, really important consideration for us. Especially around our ethos for Freenome, which is actionability,” Ennis said. 

He believes there are two key considerations. The first is what kind of information and detail is helpful to provide. Freenome has worked with experts in each of the four tumor types it currently tests to determine what key question needs to be answered. Ennis gave the example of prostate cancer.

“Prostate versus healthy isn’t necessarily helpful,” he said. “You need to stratify indolent prostate cancer from aggressive prostate cancer because aggressive is what you treat. Indolent you don’t touch.”

Freenome is also cognizant of delivering news at a meaningful time, when action can be taken. Exactly what those intervention points look like remains to be seen, however. Ennis said the company doesn’t yet fully understand its limits of detection.

There is a lot to work out for everyone in the space, but it seems investors and institutions are committing.

Grail expects to announce a second close on is Series B funding before the end of Q1 in 2017, potentially bringing the total to over $1 billion. The round was led by ARCH Venture Partners, with a major contribution by Johnson & Johnson Innovation. Amazon, Bristol-Myers Squibb, Celgene, McKesson Ventures, Merck, Tencent Holdings and Varian Medical Systems also came to the table.

Some of the proceeds will be used to repurchase a portion of Illumina’s stake in Grail, which currently amounts to just under 20 percent.

For Freenome, the $65 million Series A represents a serious endorsement from a solid group of investors.

Andreessen Horowitz led the round, alongside Data Collective (DCVC), Founders Fund, GV (formerly Google Ventures), Polaris Partners, Innovation Endeavors, Asset Management Ventures, Charles River Ventures and Spectrum 28.

Liquid biopsies are gaining momentum and relevance. With them, comes the potential for a momentous shift from symptom or risk-driven diagnostics to routine screening of the healthy population.

Photo: harmpeti, Getty Images

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