Freenome Tacks on $270M to Advance Blood Tests to Find Cancer Early

Xconomy San Francisco — 

The ability to detect early signs of cancer in a patient’s blood could improve prognoses by helping doctors treat the disease before symptoms arise. Freenome, one of the companies racing to commercialize the first such screening test, on Wednesday announced it raised $270 million—money it plans to accelerate a clinical study of an experimental screening product designed to detect signs of colorectal cancer. The company also plans to explore which cancers it will target next.

Investors have pumped millions this year into companies competing to commercialize a liquid biopsy cancer diagnostic, a test that can find early signs of cancer from a blood draw. Freenome’s financing, announced Wednesday, comes less than a month after Thrive Earlier Detection of Cambridge, MA, raised $257 million. Menlo Park, CA-based Grail, another liquid biopsy competitor, added $390 million in June.

Thrive and Grail are each developing a test that screens for evidence of a wide range of cancers. Freenome, in contrast, is starting with one: colorectal cancer, the fourth most common cancer diagnosed among US adults and the second leading cause of cancer deaths.

“We decided, let’s use the same technological platform … but let’s be intentional about which indications we go after based on whether it’s actually going to be helpful for that patient or not,” CEO Gabe Otte said. “A lot of the multicancer types of approaches sometimes can lead to more questions and more anxiety and more concern for the patients and the clinicians then the answers.”

In addition to its strategy to first go after one cancer type rather than many, Otte says Freenome is also looking to differentiate itself through the way in which it searches for early evidence of disease. Like other tests in development, Freenome’s test looks for what’s known as cell-free nucleic acids, or cfNA, shed by tumor cells. But in addition to detecting those cells, Freenome also seeks out evidence of immune activity.

“The immune cells that are trying to attack the early-stage tumor, failing to kill the tumor and dying, spew out their DNA, RNA, and proteins, which we can collect from blood and figure out whether your immune system is fighting a tumor at that moment in time as a proxy for the presence or absence of a tumor,” Otte said. “And because many more immune cells are turning over than tumor cells in early stage, we can achieve greater sensitivity in early stage than anyone else can do.”

Screening tests for colorectal cancer already exist. The American Cancer Society recommends most people undergo periodical screenings via a stool test or colonoscopy starting at age 45. However, patient adherence is an issue—and those who are good candidates for such screening would be more likely to follow through if directed to get a blood draw, Otte says.

“We know that early detection saves lives, because these tests have been around and the people who do those tests are saved,” he said. “The downside is the traditional ways of doing colorectal cancer screening, the majority of people don’t want to do or can’t do.”

The company in January revealed results of a study for colorectal adenocarcinoma that demonstrated a sensitivity of 94 percent and specificity of 94 percent for early-stage forms of the disease—data the company is hoping to validate in the registrational trial now underway. Previously the startup said it would complete the study, which launched in late May and aims to enroll 14,000 patients, by the end of 2021. The COVID-19 pandemic could delay that timeline, however.

“Things are changing on almost a week-to-week basis in terms of which clinics are open and which clinics are not,” Otte said.

Freenome’s latest financing, a Series C round, brings the total it has raised since inception in 2014 to more than $500 million. Its newest cash is earmarked to advance the 150-person company’s efforts to use its platform to design more blood tests for specific cancers, Otte said. Thrive, which launched last year, has so far raised $367 million—money it told Xconomy it plans to use to test its pan-cancer diagnostic, called CancerSEEK, in a registrational trial. Grail, an Illumina (NASDAQ: ILMN) spinout, has brought in more than $1.9 billion since its start in 2015.

Bain Capital Life Sciences, a new investor, led the Series C round for Freenome alongside an earlier investor, Perceptive Advisors. Additional new investors, including Fidelity Management & Research Company, Janus Henderson Investors, Farallon Capital Management, Rock Springs Capital, Cormorant Asset Management, EcoR1 Capital, Catalio Capital Management, and the Colorectal Cancer Alliance, also participated, as did earlier investors RA Capital Management, funds and accounts advised by T. Rowe Price Associates, American Cancer Society’s BrightEdge Ventures, Sands Capital, Andreessen Horowitz, DCVC, GV (formerly Google Ventures), Kaiser Permanente Ventures, Novartis (NYSE: NVS), Polaris Ventures, Roche’s venture capital arm, Soleus Capital, and former GV head Bill Maris’s Section 32. Perceptive managing director Ellen Hukkelhoven joins Freenome’s board of directors as part of the deal.

Freenome and Thrive share a number of investors: Section 32 led Thrive’s Series B round of funding a little more than a year ago, while Bain, Perceptive, Janus Henderson, Rock Springs, Sands, and funds and accounts advised by T. Rowe Price participated in its Series A financing.

Otte declined to say whether the involvement of crossover investors—firms that invest primarily in public companies and in private companies looking to go public—in the round indicate the company’s intent to IPO soon.

“This is a sizable financing that gives us the capital we need to execute on our growth plans,” he said. “We feel this is a very strong syndicate of investors, and we believe a strong syndicate like this will be valuable to us in whatever future paths we take to finance our business.”

Image: iStock/Dmitry Belyaev

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