Freenome, developer of tests that identify early signs of cancer from a small sample of patient blood, is going public in a merger deal that will infuse the company with $330 million to support a pipeline that could yield its first commercialized test in 2026.
The early cancer detection company is merging with Perceptive Capital Solutions Corp, a special purpose acquisition company (SPAC) sponsored by an affiliate of Perceptive Advisors, the firms announced Friday. The combined company will take the Freenome name. When the deal closes, Freenome’s stock is expected to trade on the Nasdaq under the stock symbol “FRNM.”
Brisbane, California-based Freenome is part of a group of companies developing tests that detect biological and genetic signs of cancer by analyzing a small sample of patient blood, a so-called liquid biopsy. Freenome’s platform technology uses artificial intelligence and machine learning techniques to analyze samples and identify cancer signals. Such tests are intended to detect cancer at the earliest stages of disease when treatment has a greater chance of success. Early cancer detection represents a $50 billion market opportunity, Freenome said in an investor presentation.
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A colorectal cancer test is Freenome’s most advanced product candidate. This test, called SimpleScreen, is currently under FDA review with a regulatory decision expected in mid-2026. Freenome’s main competitor in colorectal cancer detection will be Guardant Health, whose Shield test was the first FDA-approved liquid biopsy for this type of cancer. Exact Sciences was expected to compete with its own test, but clinical trial results from a pivotal study were disappointing. Subsequently, Exact struck a deal with Freenome in August, paying $75 million up front for U.S. rights to SimpleScreen for the single indication of colorectal cancer screening.
The Exact Sciences deal allows Freenome to keep rights to colorectal cancer screening as part of a multi-cancer detection test it is developing to screen for more than 10 cancers from a sample of patient blood. Roche, which already has an existing relationship with Freenome as an investor, last month reached a deal securing rights to commercialize the company’s “kitted” multi-cancer early detection tests outside of the U.S. Kitted tests package the assay and software together to enable processing and analysis of a sample without needing a centralized lab. This deal came with a $75 million upfront equity investment in Freenome; another $134 million is tied to the achievement of milestones. Freenome retains rights to U.S. multi-cancer early detection testing as well as U.S. rights to kitted tests.
Freenome is pursuing a “versioning strategy” in which assay and algorithm improvements will be incorporated into later versions of its tests. The regulatory submission currently under FDA review is for version 1 of SimpleScreen. The company expects a regulatory submission for version 2 will be ready by the middle of next year. The investor presentation gives a peek into those data, showing 75% sensitivity for detecting stage I colorectal cancer; sensitivities for advanced adenoma and high-grade dysplasia were 22% and 44% respectively. While those marks top the results reported for version 2 of Guardant’s Shield, William Blair analyst Andrew Brackmann said in a research note that the version 2 data for SimpleScreen is the final clinical validation data and not the pivotal data expected to be submitted to the FDA.
“We, not surprisingly, have questions regarding how this study was run, where the cancers are from, etc., but even still, results do show some nice improvement versus v1,” Brackmann said.
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Guardant’s Shield has first mover advantage in the market, projected to do more than 80,000 tests this year, Leerink Partners analyst Puneet Souda said in a research note. With the second version of SimpleScreen not expected to be filed until the second half of next year, Guardant has time to improve its next test, Shield version 3. But Leerink sees the market for liquid biopsies as large, with about 11 million average-risk individuals willing to be screened with a blood test but not a colonoscopy. That leaves room for multiple competitors, Souda said.
Since its 2014 founding, Freenome had raised more than $1.3 billion, the company said in the investor presentation. The SPAC merger is expected to infuse the company with about $330 million. That sum breaks down to $90 million from a trust account held by Perceptive Capital Solutions and a $240 million private investment in public equity (PIPE) led by Perceptive Advisors and RA Capital. The investors in the PIPE will purchase 24 million Freenome shares at the price of $10 each.
Adding Freenome’s own funds, which includes payments from the Exact Sciences and Roche deals, the company expects to have more than $1.3 billion total when the merger closes, according to the presentation. Proceeds from the transaction and cash on hand will be applied toward product development, clinical testing, and commercialization activities.
The Freenome and Perceptive Capital Solutions boards of directors have approved the merger, which is expected to close in the first half of 2026. The deal still needs the approval of shareholders of both companies.
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