Genomic sequencing supernova Illumina, whose European research HQ is in Cambridge UK, is paying $8 billion in cash and stock to acquire California healthcare business GRAIL and spark a new era of cancer detection technology.

The move looks a master stroke as the play addresses a market forecast to grow to $75bn by 2035.

GRAIL stockholders will also receive future payments representing a tiered single digit percentage of certain GRAIL-related revenues. The deal has been backed by both companies’ boards.

Francis deSouza, Illumina’s president and chief executive officer, has no doubts the move is a game-changer in the fight against cancer.

He said: “Over the last four years GRAIL’s talented team has made exceptional progress in developing the technology and clinical data required to launch the GalleriTM multi-cancer screening test. 

“Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome GRAIL back to Illumina to help transform cancer care using genomics and our NGS platform.

“Together we have an important opportunity to introduce routine and broadly available blood-based screening that enables early cancer detection when treatment can be more effective and less costly. 

“Multi-cancer early detection is better for patients, their physicians, and payors. As we accelerate our path to clinical leadership and the path to multi-cancer early detection, we will continue to drive significant value creation for our stockholders.”

The deal is very much a case of ‘back to the future’ for Illumina. GRAIL was founded by Illumina in 2016 and spun out as a standalone company, powered by Illumina’s NGS technology, to develop state-of-the-art data science and machine learning and create the atlas of cancer signals in the blood, enabling multi-cancer early detection tests. 

GRAIL raised around $2 billion to support its innovative technology platform and develop Galleri. An earlier version of Galleri was able to detect more than 50 cancer types, over 45 of which have no recommended screening in the United States. 

Nextgen Galleri is expected to launch commercially in 2021 as a multi-cancer, laboratory developed test for early cancer detection from blood. GRAIL plans to follow Galleri with future blood-based tests for cancer diagnosis, detection and post-treatment monitoring of cancer patients.

CEO Hans Bishop said: “Cancer is one of society’s most significant challenges with most cancer being detected too late. We believe multi-cancer early detection technology could address a tremendous unmet need and reduce the cancer burden worldwide. 

“Combining forces with Illumina enables broader and faster adoption of GRAIL’s innovative, multi-cancer early detection blood test, enhancing patient access and expanding global reach. 

“We are excited about this next step in our journey to transform cancer detection and outcomes and create value for patients and their families and communities, health care providers and payors, employers, and stockholders.”

The cash consideration to GRAIL stockholders excluding Illumina of approximately $3.1bn is expected to be funded using balance sheet cash of both Illumina and GRAIL plus up to $1bn in capital raised through either a debt or equity issuance. 

In advance of this anticipated issuance, Illumina has obtained financing commitments for a $1bn bridge facility with Goldman Sachs Bank USA.