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Exact Sciences, challenging Illumina, to buy cancer screening company Thrive

Exact Sciences said Tuesday it plans to buy fellow liquid biopsy developer Thrive Earlier Detection in a cash-and-stock deal worth up to $2.15 billion, sending its shares up by nearly 20%. Thrive’s main offering is a not-yet-marketed blood-based test that screens for 10 cancers. Called CancerSEEK, the test was developed by researchers at Johns Hopkins University and assessed in a 10,000-patient prospective study.

Thrive formally launched last year, raising $100 million in Series A funding. The startup added another $257 million in a Series B round this year.The acquisition comes five weeks after Illumina agreed to pay $8 billion to acquire Grail, which also develops blood tests to detect cancer.

It’s the second major acquisition for Exact Sciences since 2019: the diagnostics company bought cancer test maker Genomic Health for $2.8 billion last year.

Thrive has rapidly emerged as a major player in the development of liquid biopsy tests, a field that Exact Sciences is looking to expand into as it moves beyond its trademark Cologuard colorectal cancer test.

In 2018, researchers at Johns Hopkins University presented data on using CancerSEEK to detect proteins and mutations in DNA circulating outside of cells in the blood that are indicative of the presence of eight tumor types.

The promising results led in quick succession to the formation of Thrive, two mega-rounds, and now an acquisition by Exact Sciences. The cancer diagnostics company will pay $1.7 billion upon closing — 65% in stock, 35% in cash — with the potential for another $450 million in milestone payments.

Thrive attracted the buyout bid after validating its liquid biopsy in a prospective study that enrolled 10,000 women with no prior history of cancer in April.

Ninety-six participants developed cancers during the study. The liquid biopsy detected 26 of the cancers before other methods. Conventional screening such as mammograms picked up 24 of the cases, with the rest identified by symptoms or by other means. The results suggest the test may double the number of cancers identified through screening.

Notably, in two thirds of those participants, the liquid biopsy seemed to catch cancers early, before their disease had spread and metastasized.

The cases were idenfitied by an early version of CancerSEEK that analyzed 16 genes and nine proteins linked to multiple cancers. CancerSEEK detected cancers affecting 10 organs in the study. There are no standard-of-care screening tests for seven of those organs.

Exact Sciences has advanced its own multi-cancer liquid biopsy, leading to data last month that appeared to impress investors.

While Exact Sciences and Thrive are both working on tests that screen for cancers in blood samples, the diagnostics work in different ways, are at different points in development and may each perform better in different screening scenarios.

During a call with investors Tuesday, Exact Sciences CEO Kevin Conroy did not specify a timeline to market for a Thrive product. The executive also wouldn’t confirm whether Exact Sciences would launch CancerSeek as a lab-developed test — an approach that Grail has said it will take — or wait for a full FDA review.

Conroy said a multicancer screening test won’t replace a mammogram in detecting breast cancer, or a colonoscopy or Cologuard test in screening for colorectal cancer, largely because the sensitivity of a multicancer test won’t match that of more traditional methods.

Other companies are targeting the same cancer screening opportunity. Grail is aiming to get its multi-cancer screening test to market next year, and will now have Illumina’s support. Freenome and Natera are in the race, too.

When Illumina made its move for Grail, Cowen analysts predicted “a new era of consolidation in the space.” One month later, Exact Sciences has delivered on those expectations, handing a payday to Thrive investors such as Casdin Capital, Section 32 and Third Rock Ventures.

In addition to buying Thrive, Exact Sciences will pay $410 million to buy Base Genomics.