Internet and technology group Alphabet’s GV subsidiary took part in a $300m series D round for US-based cancer detection technology developer Freenome on Tuesday, further expanding a thriving life sciences portfolio.
Perceptive Advisors and RA Capital Management co-led the round, which included care providers Kaiser Permanente and Intermountain Healthcare (through Intermountain Ventures), pharmaceutical firms Novartis and Roche – the latter through its Roche Venture Fund – and investment and financial services group Fidelity.
Andreessen Horowitz’s Life Sciences Growth Fund, the American Cancer Society’s BrightEdge Ventures vehicle, Artis Ventures, Bain Capital Life Sciences, Catalio Capital Management, Cormorant Capital, DCVC, Farallon Capital Management, Polaris Partners, Ridgeback Capital Management and Janus Henderson Investors also took part.
The investors were filled out by Rock Springs Capital, Sands Capital, Section 32, Soleus Capital Management, ArrowMark Partners, Byers Capital, Eventide Asset Management, HBM Healthcare Investments, Logos Capital, Pura Vida Investments, Suvretta Capital Management, funds and accounts advised by T Rowe Price, and unnamed other funds.
Freenome’s machine learning-equipped multiomics technology allows cancer to be detected from routine blood draws through the decoding of cell-free biomarker patterns, meaning it can be detected earlier when there is a greater chance of successfully treating the disease.
The cash will be used to advance work on the company’s colorectal cancer screening test while expanding its multiomics platform to additional forms of cancer. The round boosted its overall funding to over $800m.
GV was Freenome’s first corporate investor, having participated in a $72m series A round which closed in 2017, subsequently returning for each round since, and it forms part of one of corporate venturing’s most substantial biotech portfolios.
The unit’s life sciences team, currently co-led by general partners Krishna Yeshwant and David Schenkein, has invested in more than 100 companies and scored 39 exits, according to its website.
Some of GV’s most notable exits in the space in 2021 are genetic testing service 23andme, health insurance provider Clover Health and clinical trials technology developer Science 37, all listing through reverse mergers, at a joint valuation of $8.3bn.
Another digital health insurer, Oscar, raised $1.4bn in its March initial public offering after stem cell therapy developer Sana Biotechnology had floated in a $588m IPO the previous month. Grail – the creator of another early cancer detection system – agreed to an $8bn acquisition by Illumina in September 2020 that is yet to close.
However, there is a note of caution to be struck in that several of GV’s publicly listed portfolio companies have seen their share price fall after a heady 2020; notably One Medical and Editas Medicine, both of which have shares currently at about a third of their January peak.
GV is nevertheless continuing to go strong on life sciences investments, and its largest deals in recent months include a $200m series B round for gene-editing technology developer Prime Medicine in July and a $265m series B round for immunotherapy developer Sonoma Biotherapeutics in August.
The unit’s three biggest deals in the past year or so however indicate where it may be looking to next. It backed a $750m series B round for Resilience in November 2020, a $500m series B round for EQRx in January 2021 and a $400m series C for Insitro two months later.
Although the companies operate in different areas, their business models all utilise edge technology. EQRx and Resilience are using advanced technology to cut pharmaceutical manufacturing costs while Insitro is applying machine learning technology to the drug design process.
The approach makes strategic sense for GV, which can access its parent company’s artificial intelligence resources to help portfolio companies as well as those of Verily, the life sciences technology subsidiary of Alphabet and an existing Freenome investor in its own right.
GV has been a significant investor in drug and diagnostics developers, but the place where drug development and manufacturing intersect with other technologies may end up being where it stakes a firmer claim in the long term.
