Grail Files to Go Public; 5 More Life Science Firms Join the IPO Queue


Grail, a company developing blood tests intended to detect cancer well before symptoms show, is taking its pitch to a broader swath of investors. The diagnostics company is looking ahead to potential commercialization of its technology as early as next year, and it has filed for an initial public offering to support its plans.

In paperwork filed with securities regulators Wednesday, the cancer diagnostics company set a preliminary $100 million target for its IPO. Menlo Park, CA-based Grail has applied for Nasdaq listing under the stock symbol “GRAL.”

Grail’s technology diagnoses cancer by detecting traces of genetic material that tumors shed into the bloodstream. Those biological indicators can be found at the earliest stages of disease, which enables clinicians to start treatment sooner and potentially achieve better patient outcomes. The company’s technology is a platform from which it can launch multiple blood tests for diagnosing cancer.

Grail traces its roots to gene sequencing giant Illumina (NASDAQ: ILMN), which spun out the company in 2016. Its early detection test, dubbed Galleri, was designed designed to screen asymptomatic people older than 50. Galleri is currently being evaluated in multiple clinical trials enrolling tens of thousands of patients. The company says in the IPO filing that it is ramping up for a planned commercial launch of Galleri in 2021 as a laboratory developed test (LDT).

Though diagnostic tests are technically medical devices, the LDT classification has historically had less regulatory oversight. This route offers Grail a faster path to the market than submitting the test to the FDA for regulatory clearance like a traditional medical device. Grail is also developing a diagnostic aid for cancer test, which is designed to produce to a faster answer when there is clinical suspicion of cancer. The company says it plans to commercialize this diagnostic aid as an LDT.

According to Grail, the most pressing cancer diagnostic need is identifying the cancers that currently have no screening tests. The company says an earlier version of Galleri identified more than 50 types of cancers, 45 of which lack recommended screening tests. Grail says its diagnostic can complement the screenings recommended by the United States Preventive Services Task Force, an independent panel of health experts that makes evidence-based recommendations about preventive services.

The testing of blood samples to find the early indicators of cancer, also called “liquid biopsy,” is a field that is growing in investor interest. Last month, Freenome of South San Francisco raised $270 million to fund clinical testing of its technology. The Series C round of financing brought its funding total haul to about $500 million. In July, Cambridge, MA-based Thrive Earlier Detection closed a $257 million Series B financing for a large clinical trial intended to produce the data that would support a regulatory submission to the FDA.

Since its formation, Grail has raised about $2 billion, most recently a $390 million Series D round of financing in May. The company has put some of that cash to work with expansion plans that include a new site in Research Triangle Park, NC, that will process test samples. Illumina is Grail’s largest shareholder with a 14.6 percent stake, according to the filing. Arch Venture Partners owns 9.5 percent of Grail; Johnson & Johnson (NYSE: [[ticker:JNJ]) owns 7.6 percent. As of June 30, Grail reported having $685.6 million in cash, which the company estimates will be enough to support the company for the next 12 months.

Grail says it will use the IPO proceeds to fund the ongoing clinical trials and to support commercialization of Galleri and the diagnostic aid for cancer. In addition, the cash will fund new clinical studies to validate the company’s technology and support efforts to win insurance reimbursement for its products. The filing also leaves the door open for acquisitions, though it adds that there are no such deals currently on the table. In 2017, Grail acquired Cirina, a Hong Kong-based company that developed diagnostic tests that detect bits of fetal DNA that circulate in a pregnant mother’s blood. Financial terms weren’t disclosed at the time of that deal, but Grail’s IPO filing shows that it paid Decheng Capital, the venture capital firm that backed Cirina, $97.9 million, a combination of cash and shares in the company.

Despite the recent declines in the stock market, the window for IPOs remains wide open—particularly for companies developing products for human health. Four other life science companies have filed paperwork with securities regulators in the past week. Here’s a brief look at their plans.

Orphazyme, a Copenhagen-based biotech that is already publicly traded in Denmark, filed to list American depositary shares in the US. The late clinical-stage company, which develops drugs for rare neurodegenerative diseases, set a preliminary $115 million goal for its IPO and has applied for a Nasdaq listing under the stock symbol “ORPH.”

Lead Orphazyme drug candidate is a potential treatment for Neimann-Pick disease type C (NPC), an inherited disorder that renders the body unable to transport fats into cells. That fat builds up elsewhere in the body, including the brain, leading to damage. The drug is a small molecule designed to cross the blood-brain barrier and selectively amplify the role of endogenous heat shock proteins, which the company describes as “molecular chaperones” critical to a cell’s response to stress, protein misfolding, protein aggregation, and lysosomal dysfunction. In Phase 2/3 testing, the company observed evidence of a slowing in the progression of NPC.

A rolling FDA submission for lead product candidate arimoclomol was completed in July, according to the filing. The company expects to apply for approval in Europe in the second half of this year. Orphazyme believes its drug also has the potential to address other disorders. Pivotal clinical trials are underway in amyotrophic lateral sclerosis and sporadic inclusion body myositis. The company also plans a pivotal study in Gaucher disease. Orphazyme plans apply the cash raised from stock offering to toward the regulatory approval process of its drug, as well as commercialization—if it’s approved for treating NPC. The proceeds will also fund clinical development of the drug in other rare neurodegenerative disorders.

PMV Pharmaceuticals is planning to go public to support the development of targeted cancer therapies addressing mutations of p53, a tumor suppressor protein. Mutations can cause the loss of this protein’s tumor-suppressing functions. Cranbury, NJ-based PMV is developing small molecules intended to … Next Page »

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