Illumina buys Grail, deal worth $8 billion


Illumina said on Monday it would buy cancer screening startup Grail in a cash-and-stock deal worth $8 billion, buying out investors including Jeff Bezos and snatching back a business it hived off four years ago as a separate company. The deal comes weeks after Grail filed to go public. 

Illumina will get access to Grail’s “liquid biopsy” blood test, Galleri, which helps identify early-stage cancers and is expected to be launched commercially in 2021, betting on a market that is expected to grow rapidly in coming years.

Grail was founded by Illumina as a separate company in 2016 and had raised about $2 billion, with investors including Bezos and Microsoft.

Illumina is Grail’s largest shareholder, holding a 14.5% stake. Grail stockholders, including Illumina, will receive $3.5 billion in cash and $4.5 billion in shares of Illumina stock, the companies said on Monday.

Grail plans to follow Galleri with more blood tests for cancer diagnosis, detection and post-treatment monitoring of cancer patients.

Most liquid biopsies use next-generation sequencing to scan blood samples for fragments of tumor DNA in people previously diagnosed with cancer.

Analysts peg the market for liquid biopsies in the range of least $30 billion to $130 billion in the United States alone.

But shares of Illumina were down 8.4% at $270.80, as some questioned the rationale.

“We don’t see the clear fit for acquiring a company that is still at a stage where clinical studies and clinical product development are still critical and will be for years,” Cowen analyst Doug Schenkel said in a client note.

Acquiring Grail would also create conflicts with many of Illumina’s existing clinical customers, Schenkel added, noting that many of Illumina’s major customers have ambitions to develop liquid biopsy-based cancer screening tools.

Grail stockholders will also receive future payments based on Grail-related revenue.



Source link

Discover

Sponsor

Latest

NFL’s Chiefs-Texans 2020 season-opener averaged 19.3 million viewers

The Houston Texans line up against the Kansas City Chiefs during the fourth quarter at Arrowhead Stadium on September 10, 2020 in Kansas...

Coronavirus test unlikely to prompt sympathy vote, analyst says

LONDON — President Donald Trump's coronavirus diagnosis is unlikely to move the needle ahead of next month's presidential election, a political analyst told...

South Korea government, Samsung team up after Japan’s export curbs on chip material

A South Korean flag, left, and Samsung Electronics flag fly outside the company's headquarters in Seoul, South Korea, on July 5, 2019.Jean Chung...

Google abandons new Dublin office with enough space for 2,000 staff

The Sorting Office that Google was planning to lease in Dublin, Ireland.Google Dublin Sorting OfficeGoogle has decided not to press ahead with plans...