Illumina CEO Francis DeSouza. Photo credit: CDBeckwith, licensed under CC BY-SA 4.0

Genetic sequencing company Illumina is in discussions to acquire cancer detection upstart Grail on the heels of the company recently filing to go public, according to a report [paywall] from Bloomberg. According to Bloomberg, Illumina is targeting a deal where it could cough up over $8 billion for Grail, which as a private company has raised about $2 billion in funding but hasn’t yet established a solid revenue stream. Grail is currently still running clinical trials and research and development for a blood-based cancer detection test. According to Bloomberg, Illumina and Grail could reach a formal acquisition deal as soon as this week.

If such acquisition pulls through, it’ll mark Illumina’s largest ever and one of the largest in the biotechnology sector in general. Such an acquisition will also unite Grail with Illumina, which the cancer detection company actually spun out of five years ago. Being an Illumina spin-off, Grail has long been a partner to the company, with Illumina currently the sole supplier of the sequencers that Grail uses to run its genomic tests. Combining both companies will unite the testing and sequencing process under one house and bring a possibly hefty new revenue stream (blood-based cancer detection) under Illumina’s belt. 

Grail, which was founded in 2015, is currently solely focused on clinical trials and R&D, with no formal product or sales yet. The company has been spending sizeably, with $255 million in losses last year. Illumina acquiring Grail will mark the genetic sequencing company’s biggest bet yet on a technology that’s yet to be finalized. By comparison to the reported $8 billion acquisition price, Illumina has a market capitalization of over $40 billion and $3.5 billion in revenue last year, implying that the company may make use of its shares to fund a significant portion of a possible Grail acquisition.

Throughout its history, Illumina has acquired more than a dozen biotechnology companies and also backed many more, including Grail.  

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