Daily Business Report-Jan. 11, 2016
The Illumina campus
Illumina Spending $100 Million
To Develop Universal Cancer Test
Gene sequencing company Illumina is going after the next big advance in cancer detection, working to develop a universal blood test to identify early-stage cancers in people with no symptoms of the disease.
On Sunday, San Diego-based Illumina said it would form a new company, called Grail, with more than $100 million in Series A financing. Illumina will be the majority owner. Key investors include technology giants Bill Gates, founder of Microsoft, and Jeff Bezos, founder of Amazon.com, as well as backing from ARCH Venture Partners and Sutter Hill Ventures.
Grail’s test will use Illumina’s DNA sequencing technology to scan for bits of cancer genes originating in tumors and circulating in the bloodstream. The hope is to detect many types of newly forming cancers, which could be treated at an earlier stage to increase the chances of survival.
Cowan & Co. estimates that use of DNA blood tests for cancer screening will exceed $10 billion a year by the end of the decade. Several companies are developing liquid biopsies, mostly for use with patients already diagnosed with cancer.
Experts say it will take huge clinical trials to provide the kind of evidence necessary to make DNA blood tests part of routine cancer screening. Direct-to-consumer testing company Pathway Genomics, also based in San Diego, last year launched a DNA blood test for healthy people without having conducted such trials. Illumina, a much bigger player, intends to provide that evidence.
Illumina Chief Executive Jay Flatley, who will serve as chairman of Grail, said work on the new test began some 18 months ago.
“We’ve made tremendous progress, which gives us the confidence that we can get to the endpoint that we expect,” Flatley said in an interview.
He believes it will take at least an additional year of research and development to refine the test. Grail will then conduct clinical trials of the test on as many as 300,000 human genomes, which could take another two years.
Illumina aims to have its test on the market by 2019 and hopes the cost of DNA sequencing will have dropped enough to price the cancer screening test around $500 each, low enough to make it widely accessible, Flatley said.
PiperJaffray analysts estimated that as many as 38 companies are developing cancer blood tests using DNA sequencing, but most of these so-called “liquid biopsies” use the tests in patients already diagnosed with cancer to see how they are responding to treatment or to check for mutations or drug resistance.
Critics said there is not enough evidence yet that a blood test can screen for cancer in healthy people. Pathway Genomics’ screening test claiming to detect 10 cancers in healthy people drew the ire of the U.S, Food and Drug Administration last year, which sent the company a letter saying the test “had not received adequate clinical validation and may harm the public health.”
Flatley said Grail will consult early on with the FDA to see what evidence the agency needs for the test and will likely seek its approval. He said the company has not yet decided whether the test will be offered directly to consumers, but it is possible.
Illumina’s investment will result in a hit to earnings, but Flatley would not say how much at this point. “The actual economics of Grail will be fully disclosed in our financials,” he said.
Carlsbad’s Palomar Corporate
Center Sells for $11 Million
The 46,892-square-foot Palomar Corporate Center in Carlsbad has been sold for $11 million to Los Angeles-based Roll Global. The seller was Del Mar-based CM Management Services.
The building at 2052 Corte del Nogal is fully leased through March 2025 to TEN, The Enthusiast Network, a publisher of such brands as Motor Trend, Automobile Magazine, Surfer, Transworld, Hot Rod and Grind TV. TEN is the largest action sports media platform in the world with more than 50 publications, 60 websites and more than 1,000 branded products.
“This is a stabilized asset with 10 years of income that includes fixed annual increases,” said Aric Starck of Cushman & Wakefield. who represented the seller. “The lease is structured as triple-net and requires that the tenant incur all building operating costs including property taxes, insurance and maintenance.”
Scripps Climate Scientist Recognized for
Pioneering Work by Spanish Foundation
The BBVA Foundation announced Friday that it bestowed its Frontiers of Knowledge Award in the Climate Change category to Veerabhadran Ramanathan, a professor of climate and atmospheric sciences at Scripps Institution of Oceanography at the University of California San Diego.
The foundation honored Ramanathan for discovering that human-produced gases and pollutants other than CO2 have a huge power to alter the Earth’s climate, and that by acting on them it is possible to make a short-term dent on the rate of global warming.
Ramanathan’s work “has inspired him to propose and test practical actions to mitigate climate change in a way that also improves air quality and human health, especially in more impoverished regions of the world,” in the words of the jury, which also highlighted the centrality of the scientist’s contributions in “assessing the strategies being proposed to meet the goals of the Paris Agreement.”
The citation also commends Ramanathan’s “vision and dedication” in “communicating the risks posed by climate change and air pollution,” which has commanded the attention of world leaders and helped “shape public awareness.” Ramanathan is a member of the Pontifical Academy of Sciences, and in recent years has played a key role in advising Pope Francis and other religious leaders on climate-change-related matters. Additionally he recently spearheaded a report and chaired a summit devoted to the University of California’s Carbon Neutrality Initiative, in which the university system has pledged to substantially eliminate its contribution to global warming.
The BBVA Foundation, created by Spanish financial group BBVA, established its Frontiers of Knowledge Awards in 2008 to recognize the authors of outstanding contributions and radical advances in a broad range of scientific, technological and artistic areas that address central challenges, such as climate change and development cooperation, deserving of greater social visibility and recognition.
UC San Diego Health and Sharp HealthCare
In Joint Liver Transplantation Program
UC San Diego Health and Sharp HealthCare have formed a joint program to enhance liver transplantation services in San Diego by combining resources, collaborating on research and expanding specialized liver care.
The alliance is expected to strengthen clinical services for patients with end-stage liver disease while reducing costs. The new arrangement expands a similar existing partnership that centralizes bone marrow transplantation services in the region.
UC San Diego Health and Sharp HealthCare executives said the decision to collaborate is a prudent one, given the resources required for liver transplantation and the volume of patients in the community in need of such advanced liver care services.
“Our expert multidisciplinary liver transplant team is known for its ability to handle the most complicated, high-risk cases,” said Patty Maysent, interim CEO, UC San Diego Health. “We now look forward to collaborating with Sharp HealthCare to increase the efficiency and cost effectiveness of the program and, most importantly, provide more end-stage liver disease patients in San Diego with the continuity of care they need.”
“We at Sharp HealthCare are excited about the establishment of the joint liver transplant program with UC San Diego Health,” said Dan Gross, executive vice president of hospital operations at Sharp HealthCare. “This endeavor follows our highly successful joint bone marrow transplant program. Preventing program duplication while meeting community health care needs and driving down health care costs is rewarding.”
Maysent said the patient survival rate in the UC San Diego Health liver transplant program consistently places it amongst the top programs of its kind in California. The program is also one of few to perform liver transplants using organs from living donors.