A month after Illumina's big Grail buyout, Exact Sciences scoops up liquid biopsy rival Thrive for a relative bargain
Illumina is going to have a lot of work to do to prove Grail was worth those $8 billion.
Today, Exact Sciences announced that it will acquire Thrive, Grail’s chief rival among the early cancer detection startups, for a sizeable but relatively moderate $2.15 billion. The yawning gap in part reflects the vast differences in capital that have been invested to date in each company. But both have gone toe-to-toe over the last year and a half, with Grail having published data in over 50 cancers but Thrive recently beating them to a key test for liquid biopsy companies.
Investors greeted the Thrive buyout with more enthusiasm than they did the Grail buyout. While Illumina lost $8 billion in market cap after news of a likely Grail buyout broke, Exact shares have surged 18% — $19 — this morning.
The two liquid biopsy companies have now sold for a combined $10 billion in a little over a month. The collective bet reflects a deep faith in corners of the diagnostic and sequencing worlds in the power of a technology now years in the making.
The field has moved forward substantially since both companies launched. In April, Thrive published results in Science that showed for the first time that a blood test could help doctors detect and treat multiple types of cancer in otherwise healthy people, hitting a long-awaited milestone for a scientifically challenging field, where the most vociferous backers think it can eventually save lives and remake oncology.
Still, although they’ve been discussed in the same breath for years, both Grail and Thrive have tried to downplay the rivalry. Both have pointed out that they will need to secure insurance coverage and reimbursement for a field that does not yet exist. Having multiple tests on the market could aid in that fight. If one test fails, it could significantly hamper the effort.
Exact Sciences makes for a more likely buyer than Illumina. The diagnostic company is best known for Cologuard, their stool-based test for colorectal cancer, and they’ve been aggressive over the last year, acquiring Genomic Health for $2.6 billion and signing advanced marketing agreements with Pfizer. The company envisions Thrive’s eventual market as worth over $25 billion.
“The acquisition of Thrive is a giant leap toward ensuring blood-based, multi-cancer screening becomes a reality and eventually, the standard of care,” CEO Kevin Conroy said in a statement. “We couldn’t be more excited that Exact Sciences will be at the forefront of this incredible opportunity to serve patients.”
The deal is worth $1.7 billion in upfront, paid in 65% Exact stock and 35% cash. Another $415 million is available through incentives.