• by Bruce Carlson
  • May 2 2017


Liquid Biopsy Market: Investors Are Noticing

Liquid Biopsy Market: Investors Are Noticing


Interest is high in non-invasive methods to screen for cancer, commonly referred to as liquid biopsy.  While much of this interest is focused on blood-based cancer screening tests, other types of non-invasive screening tests are also attracting attention.  Kalorama Information's cfDNA Markets report covers cell-free DNA, the most successful technology behind the liquid biopsy concept. 

Anticipated Non-Invasive Liquid Biopsy Market Driving Financing

One example of this interest is Exact Sciences, which offers Cologuard, a DNA based colorectal cancer screening test that uses stool samples. In 2016, Exact Sciences generated $99.4 million in revenues, which was a 152% increase over 2015 revenues. Exact Sciences has given a guidance, reporting that the company anticipates revenue of $170-$180 million for 2017. Long term, analysts are optimistic about Exact Sciences. In late March 2017, Cowen and Company initiated coverage of Exact Sciences with an Outperform rating and a target price of $30 per share. For Cologuard, Cowen and Company is targeting $4 billion in a $15 billion market opportunity.  In April 2017, Leerink initiated coverage of Exact Sciences, also with a target price of $30 per share.

The large market opportunity for a successful cancer screening test has attracted completion. Illuima's, GRAILraised $900 million of a planned $1 billion, in the first close of a Series B financing round. GRAIL has reported that the company plans a second close with institutional investors to bring to total raised in the Series B round to over $1 billion. Meanwhile, GRAIL is making large investments to develop blood-based screening tests based on the company’s “high-intensity” sequencing approach.

In April 2017, GRAIL announced that it had started a second multi-center clinical study, called the STRIVE Study, to facilitate development of the company’s blood tests for early-stage cancer detection. The announcement reported that STRIVE is a longitudinal, prospective, observational study that will enroll up to 120,000 women at the time of their screening mammogram to train and validate a blood test to detect breast cancer.   Additionally, the study will be used to develop a pan-cancer test to detect multiple cancers at early stages.

The market is in its early stages, and includes numerous applications, and is therefore somewhat unpredictable. However, the demand for cfDNA analysis tools has risen significantly, broadly, and seems poised to continue for a variety of reasons. The use of NIPT has definitely reached a tipping point, providing an example of how the tools can move strongly into diagnostics. Cancer appears to be the next big promising area, with some companion diagnostics appearing, but there are numerous challenges that may or may not be surmounted in the longer term.

Cell-Free DNA Activities Provide Foundation for Liquid Biopsy Market

There has been some noticeable acceleration in the mergers, acquisitions, and equity investments in companies related to cfDNA. This could be the result of many factors, including the breadth of specializations involved, and not necessarily a sign of consolidation. Furthermore, applications keep expanding and large numbers of companies are entering the market due to the great potential, so the number of deals should go up proportionally. While the technology in its current state is clearly maturing, there is a high likelihood that within a few years a major innovation will significantly change the dynamics of the market and possibly also its competitive landscape.

Many of the deals are related to pragmatic short-term needs, filling gaps, cutting costs, and other common strategies in a consolidating market. However, many of the acquisitions are motivated by the hope that the acquired company can help to achieve that next big innovation, or at least maintain progress and weather the repercussions of the competitors’ innovations, rather than by the typical forces that drive mature markets’ consolidation. Some examples of the recent M&A and investment deals include:

 
• Affymetrix acquired Eureka Genomics
• Agilent acquired a stake in Lasergen
• Becton Dickinson acquired Cellular Research and GenCell
• Bio-Rad acquired GnuBIO and 48% ownership stake in Lasergen
• Cancer Genetics acquired Response Genetics
• CareDx and Allenex AB merged
• DNA Electronics acquired nanoMR by way of merger
• Illumina acquired Conexio Genomics, GenoLogics Life Sciences Software, and Myraqa
• LabCorp acquired all outstanding stock in Sequenom
• Merck KGaA acquired Sigma-Aldrich and Biocartis
• Myriad Genetics acquired Sividon Diagnostics
• Qiagen acquired Enzymatics
• Roche acquired Ariosa Diagnostics, Bina Technologies, CAPP Medical, Foundation Medicine, Genia Technologies, Kapa Biosystems, Signature Diagnostics; and exclusive rights to AbVitro’s NGS sample prep technology
• Qiagen acquired MO BIO Laboratories
• Siemens Healthcare acquired NEO New Oncology
• Takara Bio and WaferGen Bio-Systems merged
• Thermo Fisher acquired Affymetrix and Alfa Aesar
• Transgenomic merged with Precipio Diagnostics

The increased use of companion diagnostics, particularly in oncology, indicates the further shift away from a “one-size-fits-all” approach to prescribing drugs. It has been slow, and some related applications of pharmacogenomics have stalled. In fact, the purist ideal of a drug being specific to its one target was historically promoted in theory but in practice, the reality was a “trial-and-error” approach; patients try different pills and dosages to see what worked best. Drugs also tend to have multiple targets and effects, and this led to the prescribing of off-label uses. In essence, there was a more loose and intelligent approach, while professing to adhere to more strict, rigid regulatory guidelines. The current emerging tools are allowing the pursuit of personalized medicine to be extended to go beyond simply confirming a disease, towards more prediction and monitoring of disease to help choose or change treatments.

The use of cfDNA testing will become established in more applications at a steady rate, despite many challenges and the possibility that some areas are unamenable. As NIPT provides a solid foundation, significant resources are now going into research on liquid biopsies. Diagnostic applications are gradually being approved, but it has only been a trickle compared to what is expected. There seems to be no question that major advances will occur, but the extent, timing and growth are subject to many variables. 

  • Technological advances, and decreasing cost, will allow the boundaries to continue to be pushed where needed, e.g. increasing coverage to address sensitivity.
  • NIPT will continue to maintain momentum, while oncology applications grow rapidly and eventually overtake NIPT revenues during the forecast period. Transplant diagnostics is currently much smaller but will also grow as the science is proven.
  • ddPCR and NGS will carve out their own areas where the advantages make them appropriate. Longer term, it is possible that one type of technology dominates large segments, depending on the types of tests, the numbers of genes and mutations, etc.
  • The dropping cost of sequencing will continue to result in growth in adoption and an increase in samples run; however, it is drawing more attention to the cost of upstream target enrichment and other ancillary products which may cause price pressure.
  • Continued NIH funding, broader adoption globally, increasing cancer rates, along with the sequencers’ improved cost/ performance will largely drive the high growth in the near term.
  • Demand will be driven for the foreseeable future by researchers with essentially endless numbers of samples to analyze, but will also remain a function of their research funding during the forecast period.
  • The endless samples are also constrained by the time and resources needed to perform data analysis; as the new technologies produce much more data and can run many more samples, researchers will need to adjust to managing and analyzing the results from all the increased capacity provided by new purchases. This will contribute to the slowing market at the end of the forecast period.
  • A Moore’s Law phenomenon is driving sequencers increasingly towards clinical diagnostics and other routine applications.  

Success of Sequencing Behind Liquid Biopsy Demand

 One of the major factors that has enabled progress in cfDNA testing has been the increasing performance and decreasing cost of NGS. For the discovery process, the use of NGS is vital. It remains to be seen whether NGS tends to be used in the final diagnostic tests, or whether they are mostly transitioned to dPCR or other techniques. It would be reasonable to expect a mix, due to the different types of cancers and the need for more information in some cases.

The price of sequencing has been falling constantly, akin to Moore’s Law with chips and transistors, and there is no reason to expect the similarities to end there. However, this applies mainly to the expensive high-end workhorse systems; the rate has slowed, and smaller systems cost significantly more per base. Theuse of cfDNA testing will become established in more applications at a steady rate, despite many challenges and the possibility that some areas are unamenable.  

• Technological advances, and decreasing cost, will allow the boundaries to continue to be pushed where needed, e.g. increasing coverage to address sensitivity.
• NIPT will continue to maintain momentum, while oncology applications grow rapidly and eventually overtake NIPT revenues during the forecast period. Transplant diagnostics is currently much smaller but will also grow as the science is proven.
• ddPCR and NGS will carve out their own areas where the advantages make them appropriate. Longer term, it is possible that one type of technology dominates large segments, depending on the types of tests, the numbers of genes and mutations, etc.
• The dropping cost of sequencing will continue to result in growth in adoption and an increase in samples run; however, it is drawing more attention to the cost of upstream target enrichment and other ancillary products which may cause price pressure.
• Continued NIH funding, broader adoption globally, increasing cancer rates, along with the sequencers’ improved cost/ performance will largely drive the high growth in the near term.
• Demand will be driven for the foreseeable future by researchers with essentially endless numbers of samples to analyze, but will also remain a function of their research funding during the forecast period.

Cancer is a group of diseases characterized by excessive, uncontrolled growth of cells at various sites in the body. The disease is difficult to treat, and currently represents one of the top ten causes of death in all regions around the world. In the American, European and Western Pacific regions, cancer is the second leading cause of death, after cardiovascular disease. In the next few decades, the World Health Organization predicts that cancer will be an increasingly important cause of morbidity and mortality worldwide, posing a significant burden on patients and society as well. Primary tumors are rarely the determining survival factor in cancer patients, since such tumors can typically be removed effectively via surgery or chemo/radiation therapy. Rather, it is the development of metastasis initiated by circulating tumor cells that diminishes the chance of survival in the majority of patients. Due to its systemic nature, metastasis is more difficult to treat and contributes to more than 90% of cancer-associated mortality. Circulating tumor cells (CTCs) are believed to detach from primary or secondary tumors and enter the bloodstream, traveling to distant organs and forming new tumors. These cells that leave the primary tumor are able to colonize distant organs in the body and initiate the process of metastasis; however, their biology is still not entirely elucidated.

CTC Approaches to Liquid Biopsy


Circulating tumor cells (CTCs) are believed to detach from primary or secondary tumors and enter the bloodstream, traveling to distant organs and forming new tumors. These cells that leave the primary tumor are able to colonize distant organs in the body and initiate the process of metastasis; however, their biology is still not entirely elucidated.

Circulating tumor cells have tremendous utility in cancer research, aiding scientists in deciphering the complex biology of cancer metastasis. Besides the applications in cancer research, the detection and analysis of circulating tumor cells has enormous potential in the diagnosis and management of cancer, as current tools, such as tumor tissue biopsy or imaging technologies, have numerous limitations. Despite their potential, the detection and analysis of circulating tumor cells has been a challenging endeavor, and their significance in cancer not completely understood. Progress in the field of CTC-based cancer diagnostics and therapeutics has been thus far hampered by the rarity of these cells and the difficulty to isolate them from the patient’s blood. Nonetheless, in the past decade, numerous technological advances have contributed to a renewed interest in this field.

Potential applications of CTCs-based diagnostics include: the development of non-invasive assays for early detection of cancer; the development of prognostic tools for cancer survival, prediction and monitoring of response to therapies; the discovery of new drugs for cancer; and the improvement of the drug development process and clinical trials for cancer therapies. While current cancer diagnostic methods involve invasive tissue biopsies, the analysis of CTCs in peripheral blood can provide an alternative non-invasive method that can also be used more frequently and less expensively to monitor the disease evolution and the patients’ response to various therapies. Another clinical utility of CTCs involves their prognostic value in estimating the patients’ survival, and it is currently the most investigated application of CTCs. The enumeration of CTCs in the peripheral blood sample of metastatic cancer patients has been demonstrated in large clinical trials to be an independent prognostic factor to assess the progression-free and overall survival of metastatic breast, colorectal and prostate cancer patients. The CellSearch test marketed by Veridex (Johnson & Johnson) is currently the only FDA-approved CTCs assay for monitoring patients diagnosed with metastatic breast, colorectal and prostate cancer.