The Strategist

US biotech company Illumina buys cancer detection system developer Grail for $8B

09/22/2020 - 03:13

Illumina, a US biotechnology company, buys Grail, a cancer early detection system. The deal is worth $ 8 billion, with $ 3.5 billion to Grail shareholders to receive in cash, and the remaining $ 4.5 billion in Illumina shares.

Illumina, created back in 1998, specializes in products and services for genetic analysis, sequencing, etc. Grail was created by Illumina itself in 2016 as an independent company; among the startup investors are Amazon founder Jeff Bezos and Microsoft creator Bill Gates. 

Illumina itself remained the largest shareholder in Grail, with a 14.5% stake. Grail is developing a new method for detecting cancer diseases - the so-called liquid biopsy, which allows using a blood test in the early stages to identify several dozen types of cancer. These tests should be on the market next year.

Recently, in the context of the COVID-19 pandemic, the number of deals involving biotech companies has increased significantly. According to Dealogic, from the beginning of the year to the beginning of August, biotech companies raised $ 9.4 billion in IPOs, which is almost one and a half times more than in the entire 2018. This became a record for the amount of IPOs of such companies. 

Recent major deals in this area include the purchase of the American biotechnology company Momenta by Johnson & Johnson for $ 6.5 billion, as well as the acquisition of the American developer of drugs for the treatment of autoimmune diseases Principia Biopharma by the French pharmaceutical company Sanofi for $ 3.7 billion.