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Liquid biopsy market landscape

High level overview and investable hypotheses
MA
Marta Andres-Terre

Key hypotheses: what makes a liquid biopsy company successful

Start with late-stage disease: in order to achieve commercial success in early stage screening and preventative diagnostics, technology needs to first be validated in late-stage disease. This builds clinical credibility and at the same time creates an extensive biobank that will drive R&D
Use novel analytes and a unique diagnostic workflow: using novel analytes (and owning IP) will create a deep moat for the company. A unique technology will create customer stickiness, making competition harder in the short term. Furthermore, it allows diagnostic companies to achieve drug-like economics
Do not replace clinical tools, augment their capabilities: diagnostic tests that require oncologists to change their workflow are rarely successful. Most clinicians will only adopt a test that augments their diagnostic ability and improves their decision making when it comes accurately treat patients
Establish robust biopharma partnerships from day zero: liquid biopsy companies can inform biopharma companies in many aspects of drug development (e.g., using biomarkers to gather real time data on the efficacy of a therapy).
To win the early stage screening battle, data is your best weapon: winners in the liquid biopsy space will need to present large prospective data sets to evaluate the quality of their approach as a screening tool. It looks like test sensitivity (at acceptable levels of specificity), clearly vary by cancer type and stage. Additionally, data will also inform the ability of the test to accurately detect tissue of origin, as well as accurately inform downstream protocols for handling a positive result and any incidental findings.

Technology Overview

The term liquid biopsy is used to describe tools that derive diagnostic information from a blood sample in contraposition to a traditional tissue biopsy sample. In oncology, liquid biopsy has opened several diagnostic opportunities as tumor analytes are shedded into different biological fluids from where they can be isolated and analyzed. Common fluids include blood, urine, saliva, cerebrospinal fluid (CSF), pleural effusion or bile.
Some of the most common analytes in liquid biopsy include circulating tumor cells (CTCs), circulating tumor DNA (ctDNA), circulating tumor RNA (ctRNA), proteins, metabolites, and exosomes.
Each type of analyte allows for measurement of different biomarkers, which in turn will define the range of clinical applications. Some of the most common biomarkers include somatic point mutations, deletions, amplifications, gene-fusions, DNA-methylated marks, tumor-specific miRNAs, proteins or metabolites. See table below for a list of current biological information extracted from each type of analyte.
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Screen Shot 2021-03-08 at 6.31.26 PM.png
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Source: Nature Reviews Genetics

cfDNA: the most common analyte for liquid biopsy

Both normal and tumor cells release small fragments of cfDNA into a patient’s bloodstream; a proportion of the cfDNA released contains circulating tumor DNA (ctDNA). Using a CGP approach, analysis of blood samples can be used to test for somatic alterations from ctDNA, potentially informing the use of evidence-based therapies when tissue biopsy is not ideal or possible. This approach is commonly referred to as liquid biopsy.
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Weaknesses / limitations of each liquid biopsy approach

Work in progress

Key technological challenges and open questions around the implementation of liquid biopsy tools

Winners in this space need to be actively addressing the following questions
Nucleic acid composition and origin: how does the plasma composition vary between healthy and cancer patients? What is the contribution of each tissue? Is there a “representation” bias for late stage tumors?
Cancer and tumor biology: how is the heterogeneity of cell populations in a tumor represented in the liquid biopsy sample? Can the liquid biopsy detect benign from malign tumors? Can it inform progression?
Confounding factors: can the liquid biopsy distinguish hematopoietic events from cancer?
Technical requirements: is there an enrichment step necessary to detect low-abundance analytes?
Multi-omics: can the liquid biopsy detect several analytes (e.g. mRNA, cfDNA, proteins...)?
Lack of clinical validation/utility: has the liquid biopsy assay been independently validated with a large number of clinical centers? Are there regulatory guidelines to ensure future application of the test at scale?

Market Map

TAM for recurrence detection and cancer screening US markets ~$33Bn in 2021, CAGR ~25% from 2021-2027
Use cases of liquid biopsy can be categorized into screening, monitoring, prognostics, and therapeutic development
Note: market map only focused on cancer/oncology applications of liquid biopsy. Other adjacent areas (e.g. liver disease) were left out on purpose
What to watch for: main players
0
Company
Market Cap / Valuation ($Bn)
Stock Price ($)
Test / Application
Analyte
Method
Sensitivity / Specificity
Use Case
Pricing ($ / test)
1
Guardant Health (GH)
13.73
136.28
G360 / Dx for CRC
cfDNA (plasma)
NGS
85 / 99
Screening / Tx Development
3500
2
Exact Sciences (EXAS)
21.5
123.96
Cologuard (CRC)
stool DNA (sDNA)
allele-specific real-time PCR
92.3 / 89
Screening / Monitoring
479
3
Roche (Foundation) (RO, SWX)
CHF 269.57
CHF 317.20
Foundation One Liquid CDx (pan-cancer)
cfDNA (plasma)
NGS
98 / 100
Prognostic / Tx Development
5800
4
Natera (NTRA)
8.55
98.71
Signatera RUO (MRD for NSCLC)
cfDNA (plasma)
Multiplex qPCR NGS
93 / 90
Monitoring
149
5
Invitae (NVTAE)
7.6
38.66
Invitae cancer panel (for Breast / CRC, hereditary risk)
genomic DNA (blood)
NGS
100
Screening
250-350
6
Illumina (Grail) (ILMN)
58.28
399.45
Galleri (pan-cancer)
cfDNA (plasma)
targeted methylation NGS
54.7 / 99
Screening
600-1000
7
Freenome (Series C)
1.12
-
CRC
cfDNA, cfRNA (mostly from immune cells, blood)
NGS
94 /94
Screening
Pre-commercial
8
Acuamark Dx (Series A)
0.04
-
CRC / Pan-cancer
cfDNA (plasma)
qPCR
97 / 99
Screening
Pre-commercial
9
Tailor Bio (Series A)
0.01
-
Ovarian / Pan-cancer
Tissue Biopsy
NGS
92 / 85
Screening / Prognostics
Pre-commercial
There are no rows in this table
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When to listen: catalysts
0
Company
Catalyst (not exhaustive)
When
Where
1
Guardant Health
LUNAR 1-2 readout
late 2022
Conference
2
Exact Sciences
Results of Oncotype-IQ study
mid 2022
Conference
3
Roche (Foundation)
Commercial uptake after launch (earnings call)
mid 2021
Earnings call
4
Natera
Additional MRD results for 50+ indications
throughout 2021
Conference
5
Invitae
ArcherDx Test FDA Approval
mid-2021 for Class II
Conference / Earnings call
6
Illumina (Grail)
6.6k clinical trial study readout for MRD
mid-2022
Conference
7
Freenome
FDA approval
early 2023
Announcement after board meeting
8
Acuamark Dx
Private (Series A)
TBD
TBD
9
Tailor Bio
Private (Seed)
TBD
TBD
There are no rows in this table
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Relevant conferences in 2021
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image.png
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Source: JPM Market Analysis

Public companies to know

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Guardant Health (GH)
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GH uses cfDNA as their analyte, and they started with late-stage cancers as their beachhead, expanding to earlier-stage tumors as they continued to gather data from patients. Their assay includes somatic, epigenomic and fragmentomic markers. The test is focused on the colorectal cancer screening market, with potential to expand to breast, lung, prostate, and ovarian cancers.
Note: it’s important to observe that GH’s test does not try to replace an existing test that drives revenue to a physician, instead they focused on tumors that were difficult to access by existing tools. As a result, since launching, G360 has had over 100K tests ordered from over 6K oncologists and across over 50 clinical trials.

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Roche (Foundation Medicine)
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⁠

In August 2020, FoundationOne Liquid CDx became an FDA-approved ctDNA-based CGP assay (liquid biopsy). Intended to be used as a companion diagnostic to identify patients who may benefit from treatment with targeted therapies. FoundationOne Liquid CDx utilizes circulating cfDNA isolated from plasma derived from peripheral whole blood of cancer patients. The test is currently an FDA-approved companion diagnostic for 7 drug therapies in 4 cancer types

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Natera (NTRA)
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NTRA originally launched in the reproductive health testing market, and has successfully commercialized tests in that space. They have recently expanded their pipeline to include liquid biopsy products using ctDNA as their analyte. However, they are solely focused on monitoring patients with metastasis being treated with immunotherapies (treatment monitoring and recurrence detection (MRD)).

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Invitae (NVTA)
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NVTA’s goal is to bring comprehensive genetic information into mainstream medicine, and as such they have put a lot of emphasis into bringing genetic tests directly to consumer. They acquired
ArcherDx
⁠
in summer 2020, which allowed them to add the identification of hereditary genetic mutations to their genomics panel.

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Illumina (ILMN)
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ILMN entered the liquid biopsy market by announcing the acquisition of
Grail
⁠
in September 2020. Grail has developed a pan-cancer diagnostic tool (product is called Galleri) that uses targeted methylation biomarkers found in cfDNA, using those signatures to map tumor cells to a specific tissue of origin. Their most recent publication shows that Grail’s technology can detect more than 50 different cancer types across all stages. It has a false-positive rate of less than 1% and that in positive results, it is 93% accurate.
Grail has been successful at obtaining FDA clearance and establishing MRD partnerships, recently announcing partnerships with AMGN, AZ, and BMY. It’s important to note that the fast turnaround of their test is a competitive advantage against companies like NTRA (this is due to their unique analyte; targeted methylation does not require upfront tissue sample or panel customization)

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Exact Sciences (EXAS)
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EXAS is a diagnostics company focused entirely on cancer. Their main product is a non-invasive stool-based DNA (“sDNA”) screening test that utilizes a multi-target approach to detect DNA and hemoglobin biomarkers associated with colorectal cancer and pre-cancer. Approved by the FDA in 2014, EXAS test was the first and only FDA-approved sDNA non-invasive colorectal cancer screening test.
EXAS recently acquired
Thrive
⁠
in order to add a blood-based multi-cancer screening test to their product offering. Thrive, has conducted a 10,000-patient, prospective, interventional study in a real-world clinical setting. They use a genetic mutation and protein biomarker approach, and have achieved promising results detecting 10 different types of cancer, including seven with no recommended screening guidelines.
Furthermore, EXAS also acquired
Base Genomics
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, an epigenetics company working to set a new standard in DNA methylation analysis, one of the most promising approaches to detecting cancer in its earliest stages.

Private companies to know

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Freenome
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(San Francisco, CA)

Freenome looks for two major types of biomarkers in the blood: cfDNA from the tumor, as well as inflammatory markers. It uses machine learning to integrate multiple signals and determine the risk profile of a sample. They focus in colorectal cancer, and has demonstrated a sensitivity of 94%, and specificity of 94% for early-stage colorectal cancer overall.
How is Freenome a threat: no other incumbent has managed to integrate immune signaling data into their liquid biopsy analysis. By using multi-omics rather than looking for just genetic material derived from tumors, Freenome could detect cancer earlier than traditional tests that are more invasive and can miss early signs of the disease. The incumbent companies that would be most affected would be EXAS and GH, and we could expect EXAS trying to acquire Freenome in 2021/22.
When does Freenome become a threat: Freenome is currently conducting its 14k patient validation study for CRC screening and FDA approval. The trial will include asymptomatic, average-risk patients ranging in age between 45 and 85 undergoing a screening colonoscopies. They are not expected to obtain FDA clearance until 2023, but we should stay tuned through 2022 for preliminary results from the validation trial.

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Tailor Bio
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(Cambridge, UK)

Tailor Bio uses a novel computational approach to detect and measure chromosomal deletions. This is a very common type of mutation (it occurs in 30% of all cancers), but has been neglected by the industry giants due to the technical difficulties associated with accurate measurement and mapping.
How is Tailor Bio a threat: leveraging chromosomal instabilities as their analyte grants Tailor access to a unique, significantly large pool of cancer patients that cannot be screened with any other method. Due to the large chromosomal changes associated with this type of mutation, they can detect them with low-coverage sequencing (bringing down the cost)
When does Tailor Bio become a threat: they are early on their development process, but have recently signed a partnership with the NHS to conduct a validation study in ovarian cancer. We should not expect them to become a threat for the next 2-3 years.

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Acuamark Dx
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(Boston, MA)

Acuamark has identified a proprietary panel of genes to be used as biomarkers for colorectal cancer, and uses a double-step qPCR method to measure their expression levels in plasma cfDNA. Their qPCR-based approach makes Acuamark’s technology extremely low-cost, and reduces the turnaround time, which makes it attractive as a mass-screening tool (much easier to scale / make available to general population).
How is Acuamark a threat: the low-cost of the test, significantly shorter turnaround time (hours vs days), as well as the kit-based commercialization strategy, could allow for quick scaling and expansion
When does Acuamark become a threat: they have not conducted their validation studies yet, which will be crucial to assess the viability of Acuamark’s test as an early-stage screening tool. We do not expect Acuamark to pose a threat for the coming 2-3 years, though once the technology has been significantly de-risked, we could see incumbents such as EXAS trying to acquire Acuamark’s qPCR-based approach as a filtering step prior to conducting sequencing on patient samples

Appendix

High level market overview

Most companies in the liquid biopsy space focus on treatment selection and cancer monitoring, and they do so by selling
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image.png
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Source: Decibio

Summary of terms

Epigenetic: a biochemical change in the genome, such as DNA methylation or histone modification, that does not alter the DNA sequence but may affect gene activity and expression
Extracellular vesicles (EVs): Generic term for vesicles, including exosomes, microvesicles or apoptotic bodies, that are secreted from all cells and carry complex cargoes such as proteins, lipids and nucleic acids across biological membranes.
Exosomes: cell-derived vesicles likely present in all body fluids, which contain nucleic acids, lipids and metabolites and are involved in intercellular signaling and communication
Druggable targets: somatic mutations involved in cancer development and progression that can be exploited with a therapeutic intent
Circulating tumor cells (CTCs): cells that have been shed into the vasculature or lymphatics from a primary tumor and/or metastasis and are carried around the body in the blood circulation
Circulating cell- free DNA (cfDNA): DNA circulating in the bloodstream that is not associated with cells
Circulating tumor DNA (ctDNA): tumor-derived, cell-free DNA that is thought to be representative of the entire tumor genome
Circulating cell-free RNA(cfRNA): circulating gene transcripts (mRNA and non-coding RNAs) that are partly protected from degradation by their packaging into exosomes

Key hypotheses: what makes a liquid biopsy company successful
Technology Overview
cfDNA: the most common analyte for liquid biopsy
Weaknesses / limitations of each liquid biopsy approach
Key technological challenges and open questions around the implementation of liquid biopsy tools
Market Map
What to watch for: main players
When to listen: catalysts
Public companies to know
Guardant Health (GH)
Roche (Foundation Medicine)
Natera (NTRA)
Invitae (NVTA)
Illumina (ILMN)
Exact Sciences (EXAS)
Private companies to know
Freenome (San Francisco, CA)
Tailor Bio (Cambridge, UK)
Acuamark Dx (Boston, MA)
Appendix
High level market overview
Summary of terms
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