Grail Plants a Seed in RTP, Pledges $100M Investment in New Site

Xconomy Raleigh-Durham — 

Grail, a clinical-stage company developing cancer tests intended to detect early signs of the disease from a small blood sample, has agreed to invest $100 million in a new outpost planned for Research Triangle Park, NC.

The new Grail site will have a laboratory and warehouse space, Gov. Roy Cooper announced Tuesday after an agreement was reached regarding an incentives package from the state. Menlo Park, CA-based Grail says the planned building will house a commercial laboratory focused on processing test samples.

“Expanding to a second site in North Carolina allows us to scale our operations, which will enable us to deliver our test broadly to patients while allowing us to continuously develop innovative new products,” company spokeswoman Kelsey Grossman said in an email.

Blood tests are already available for detecting cancer. Such tests help doctors match a therapy to a patient’s particular cancer, or monitor for recurrence of the disease. But Grail and a growing number of other diagnostics startups are vying to expand these “liquid biopsies” to healthy people. The goal is to diagnose cancer in people before they show symptoms, enabling earlier intervention and potentially better patient outcomes. The experimental tests of Grail, a spinout of DNA sequencing giant Illumina (NASDASQ: ILMN), accomplish this by detecting fragments of DNA shed by tumors.

Similar tests are in development from other startups backed by hundreds of millions of dollars in venture capital, such as Cambridge, MA-based Thrive Earlier Detection and Freenome of South San Francisco. Guardant Health (NASDAQ: GH) of Redwood City, CA, is also developing early cancer detection tests in addition to the tests it currently sells to help doctors make treatment decisions.

Grail has raised more than $2 billion from a lineup of investors that spans the globe. Its most recent financing was a $390 million Series D round earlier this month. The company has poured a lot that money into clinical trials enrolling tens of thousands of patients. One of the studies is evaluating the ability of its tests to detect genomic signs of cancer in the blood of people who have cancer as well as those who do not. That study is currently following up with participants to collect outcome data. A second study is evaluating Grail’s tests in patients who do not have a cancer diagnosis. Half of those participants will be those considered at high risk of cancer. That study is still enrolling patients.

North Carolina’s recruitment pitch to Grail included a Job Development Investment Grant, an economic incentive that the state’s Department of Commerce offers to woo businesses. In order to qualify for a grant, a company must agree to meet job creation and investment targets over a specified period of time. In Grail’s case, the company could receive up to $5.2 million if it creates 398 jobs and invests $100 million in the site in the next 12 years. State officials have said that the economic impact, in the form of taxes paid and money spent locally, more than outweighs the dollar amounts of these grants. The state calculates that Grail’s economic impact will be $1.2 billion over the course of the 12 years.

In addition to its California headquarters, Grail has sites in Washington, DC, and the UK. Three years ago, it merged with diagnostics startup Cirina, which was based in Hong Kong and also had an office in San Francisco.

Diagnostics companies of all sizes and specialties dot North Carolina, most of them located in the Research Triangle region. The North Carolina Biotechnology Center counts more than 70 diagnostics companies in and around RTP, including France-based bioMerieux, which maintains its North American headquarters in Durham, NC, and Becton Dickinson (NYSE: BDX) of Franklin Lakes, NJ, which has research operations in RTP. Diagnostics startups in the region include Trana Discovery and Advanced Animal Diagnostics.

Image: iStock/SeanPavonePhoto