Grail bets big on flagship cancer test after spin-off from Illumina

Illumina

24/06/2024 21:44

By Julie Steenhuysen
       CHICAGO, June 24 (Reuters) - U.S. cancer diagnostic test
maker Grail, which will list its shares on the Nasdaq on Tuesday
after being spun out of Illumina  ILMN.O , is betting that
commercial partnerships with health systems, employers and life
insurance companies of its flagship cancer-detection test will
power its near-term growth as an independent company. 
    The blood test, called Galleri, can detect multiple types of
cancer early and looks for 80% of the cancers that are currently
not screened for, Grail CEO Bob Ragusa said in a telephone
interview on Monday.
    “The long game is to get that technology out with broad
access around the world," said Ragusa, adding that that will
come with regulatory approvals in the U.S. and elsewhere.
        Ragusa estimates there are about 100 million people in
the U.S. that are at elevated risk of being diagnosed with
cancer, with another 90 million in the UK, 160 million across
the EU and almost 50 million in Japan.
    “It's really an enormous opportunity that we're looking at,
and so we'll be doing the work to unlock that opportunity over
the next couple of years," said Ragusa. 
    Galleri is a so-called lab-developed test and currently only
sold in the U.S., with a test priced at $949. 
    The company promotes the test as a way of detecting cancers
at an earlier stage, when it is more likely to be cured. The
company is running two large clinical trials, including one in
the UK, which it will use to submit for FDA approval in early
2026. U.S. approval could lead to broader adoption of its test.
    However, some groups, including the American Cancer Society,
 want proof that Grail's test prevents cancer deaths, something
Grail's studies are not powered to prove.
    Grail currently has more than 100 commercial partnerships
that span health systems, employers, and life insurance
companies, Ragusa said.
    During Illumina’s fight with antitrust authorities in U.S.
and Europe, Grail initiated large-scale clinical trials, has
delivered over 180,000 commercial tests, and scaled up its lab
infrastructure, Ragusa added. 
    Illumina founded Grail and spun it off in 2016. Grail went
on to raise funding from investors such as Bill Gates and Jeff
Bezos. Illumina was left with a 12% stake, and decided in 2021
to acquire Grail to enter the cancer early-detection market.
    The deal was opposed by antitrust regulators over concerns
Illumina would stop Grail's rivals from accessing its technology
to develop competing blood-based early cancer detection tests.
    Illumina proceeded with the acquisition regardless, only to
be slapped with a 432 million euro ($463.19 million) fine by the
European Commision, which ordered the company to sell Grail.
    In December, Illumina said it would divest Grail through
either an outright sale to a buyer or by spinning it off. 
    As part of the spin-off, Illumina has provided Grail with
funding to pursue its long-term strategy. Illumina will hold a
minority stake of 14.5% in Grail, following the spin-off.
    Grail's shares will begin trading on the Nasdaq on Tuesday
under the symbol 'GRAL'. 
    Morgan Stanley and law firm Latham & Watkins advised Grail
on its spin-off from Illumina. 

($1 = 0.9327 euros)

 (Reporting by Julie Steenhuysen in Chicago; Editing by Anirban
Sen and Josie Kao)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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