US-based medical diagnostics technology Grail agreed to an $8bn acquisition by genomics technology producer Illumina, which had originally spun out the former, according to a regulatory filing on Sunday.
Grail will receive $3.5bn in cash and another $4.5bn in stock. The two companies have agreed a deadline of December 20 to close the transaction, following which Illumina will pay Grail $35m per month until the deal closes.
Grail and Illumina have also signed a $315m merger termination agreement. The deal remains subject to regulatory approval.
Spun off from Illumina in 2015, Grail is working on technology that combines gene sequencing with population-level clinical studies to detect cancer at an earlier stage, thereby increasing a patient’s odds of survival.
The company filed for an initial public offering earlier this month with a $100m placeholder amount. It had hired Morgan Stanley, Goldman Sachs, BofA Securities, Cowen and Evercore ISI as underwriters and planned to list on the Nasdaq Global Select Market.
The filing showed Illumina held a 14.6% stake in Grail. The corporate led Grail’s $390m series D round in May this year, when Public Sector Pension Investment Board, Canada Pension Plan Investment Board and Milky Way Investments Group also invested.
6 Dimensions Capital, an investment firm co-founded by pharmaceutical group WuXi AppTec, co-led a $300m series C round in mid-2018 together with Ally Bridge and Hillhouse Capital.
WuXi AppTec subsidiary WuXi NextCode also participated in the series C round, as did Blue Pool Capital, China Merchant Securities International, CRF Investment, HuangPu River Capital, ICBC International and Sequoia Capital China.
Internet groups Tencent and Amazon, medical device maker Varian Medical Systems, care provider Memorial Sloan Kettering Cancer Center and pharmaceutical firms Bristol-Myers Squibb, Celgene and Merck & Co all took part in a $1.2bn series B round in 2017.
The series B round also featured pharmaceutical firm Johnson & Johnson’s subsidiary Johnson & Johnson UK Treasury and pharmaceuticals supplier McKesson’s corporate venturing arm McKesson Ventures as well as Arch Venture Partners.
Grail closed a $125m series A round backed by Illumina, Arch Venture Partners, Sutter Hill Ventures, Bezos Expeditions and Bill Gates. Its investors also include GV, a subsidiary of internet technology group Alphabet, and Decheng Capital.
