Source: Business Wire
Former Grail CEO Jeff Huber, who stepped down in August 2017.
Grail, the cancer detection start-up backed by tech giants Alphabet and Amazon, is already seeking new funding, mere months after it closed a $900 million round in March. The company had previously raised $100 million in 2016.
Grail is primarily pitching sovereign funds, with mixed success, according to two sources familiar. It has approached Softbank and Mubadala, Abu Dhabi’s $125 billion sovereign fund, according to one of the people.
The start-up is primarily planning to use the funds for its massive breast cancer trial that it announced in April of this year. That study involves analyzing the blood of 120,000 women in many different locations.
But the company has also had some other expenses that may be pushing it back to the fund-raising market.
Grail announced in March that some of the proceeds from its financing would be used to buy a large portion of its shares from parent company Illumina, reducing Illumina’s ownership to a minority stake. The aggregate purchase price was $278 million, according to a public filing.
It also shelled out more than $100 million to merge with a Chinese company called Cirina, according to one of the sources. Cirina is developing an early-stage commercial test for a type of cancer called nasopharyngeal carcinoma.
Additional funds were earmarked for another expensive clinical study, its Circulating Cell-Free Genome Atlas Study (CCGA), which involves enrolling 10,000 participants. This study is meant to give Grail a more detailed map of cancer genetics.
The company declined to comment on its financing plans, but said “we are always in touch with the capital markets.”
Meanwhile, the company has seen multiple senior leaders depart in recent months, including former CEO Jeff Huber, formerly of Google; data scientist Franz Och; and former head of clinical development Mark Lee. These departures were previously reported by Buzzfeed. Business development lead Elaine Cheung also departed recently, according to her LinkedIn profile.
When Grail burst onto the scene in 2016, it announced an ambitious objective to have its first test on the market within three years.
The idea behind such early-detection tests, which are in development by Grail and its chief competitors Guardant Health and Freenome, is to catch cancer early by picking up signals of free-floating tumor DNA in the bloodstream. The hope is that at that point, it would be easier and cheaper to treat.
The biggest challenges to get these tests to market include price — the tests might be too expensive to get covered by insurers — and high rates of both false positives and negatives. For that reasons, these companies need to invest heavily on clinical studies.
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