A host of first-time investors joined a $160 million series B round for machine learning-powered cancer diagnostics company Freenome, bringing a diverse set of connections as the company maps out its go-to-market strategy and goals for becoming a public company. The funds arrive as Freenome prepares to test its approach in a pivotal study to screen for colorectal cancer.
The group includes strategic investor Roche Venture Fund, whose specific role in the syndicate will become clearer after an upcoming announcement, CEO Gabe Otte told BioCentury.
Freenome Inc. (South San Francisco, Calif.) is developing screening tests for early cancer that use machine-learning technology to analyze blood draws for both tumor and immune signatures. If the company’s planned pivotal study in CRC is successful, the company intends to seek the diagnostic’s review by both FDA and CMS under their parallel review program.
While the start-up’s series A investor group included a handful of firms that specialize in investing at the intersection of life sciences and computing technology, the new group includes a broader range of investor types. Leading the round were new backer RA Capital and existing investor Polaris Partners; also investing for the first time were Perceptive Advisors, affiliates of T. Rowe Price, Kaiser Permanente Ventures, the American Cancer Society’s BrightEdge Ventures, and Chinese firm CEC Capital, as well as the Roche fund.
Returning investors included Andreessen Horowitz, GV, Data Collective Venture Capital, Section 32 and Verily Life Sciences.
“There is a very important reason and intention behind each one” of the new investors’ inclusion, Otte told BioCentury. For example, he said Kaiser Permanente has been “prolific in its passion for patient care, specifically preventative care,” and has stated its mission to eradicate CRC over the next decade. The ACS, meanwhile, sets patient guidelines for cancer screening.
Otte declined to say specifically how the venture arm of Roche (SIX:ROG; OTCQX:RHHBY) will influence Freenome’s path. He said Freenome’s technology is complementary to the approach of diagnostics company Foundation Medicine Inc., which Roche has acquired, adding that biopharmas have increasingly emphasized cancer detection in the earlier, adjuvant settings in which Freenome specializes rather than Foundation’s tumor profiling later in the disease’s progress.
Andreessen Horowitz’s Vijay Pande said the crossover investors “prepare Freenome for its future as a public company,” although he said another private round is still possible. Otte said Freenome is “actively exploring” a potential listing, although it has no concrete plans to do so at present.
Freenome upsized the round substantially, Otte said, although he declined to be more specific.
To gain approval, Freenome will have to conduct a trial with more than 10,000 patients. Test results from apparently healthy patients over age 45 will be compared with subsequent colonoscopies. “The clinical utility is pretty clear, you detect early and the next step is an interventional colonoscopy,” Otte said.
In an October 2018 presentation at the American College of Gastroenterology meeting, Freenome showed that an earlier version of its test led to cancer detection with 82% sensitivity at 85% specificity. Otte said that test did not use all the analytes that are now in its platform, and said newer data are due by early next year from another prospective study.
Otte said the company’s approach has been shown to work in other cancers, although he wouldn’t be more specific. He said CRC offered the best balance of clinical impact and reimbursement potential.
“We think the process is repeatable, and Freenome can become the leader in multi-analyte testing,” Pande said, adding that while pan-cancer tests have generated a lot of excitement, the CRC screen is more likely to have a clear path to reimbursement.
Otte also said the platform has additional uses, which are likely to come to light soon. “There is a viability to the multi-omics platform in applications beyond cancer screening,” he said, declining to provide details.
Other well-funded companies including Grail Inc. (Menlo Park, Calif.) and recently launched Thrive Earlier Detection Corp. (Cambridge, Mass.) are taking multicancer approaches to screening. To differentiate itself, Freenome has been “very thoughtful about its go-to-market strategy” by choosing CRC first, with “not only high accuracy but high actionability” for its tests, Pande said.