(Photo by Stephen Babcock)
Thrive Earlier Detection, a company that spun out of Johns Hopkins to commercialize a blood test for cancer, is set to be acquired by molecular diagnostics company Exact Sciences.
The cash and stock deal could be worth up to $2.15 billion, with $1.7 billion paid at an expected closing in the first quarter of 2021, and additional payments of $450 million if milestones related to the product are met.
Founded out of the Bert Vogelstein Laboratory at Johns Hopkins’ medical campus in East Baltimore, Thrive is developing CancerSEEK, a test for cancer that is designed to detect multiple forms of cancer at early stages. The test is a liquid biopsy, meaning that only a blood sample is required. Company leaders have said they want it to become a part of routine medical care.
“The need to detect the deadliest cancers at earlier, more treatable stages is urgent,” Kevin Conroy, the CEO of Madison, Wisconsin-based Exact Sciences said in a conference call to discuss the acquisition. “We believe multi-cancer screening will have a powerful impact on outcomes.”
The acquisition deal marks the latest eye-catching dollar figure for Thrive, which raised $257 million in a funding round announced in July, and $110 million as it launched about a year prior to that. Those funding rounds included multiple Baltimore-based investors. The most recent funding round included participation from Catalio Capital Management, the biomedical investment firm that spun out of Camden Partners earlier this year, as well as Brown Advisory and funds managed by T. Rowe Price.
“Today marks a major milestone in taking the vision of Thrive’s founders a step closer to reality,” said George Petrocheilos, cofounder of Catalio Capital Management. “At Catalio we have partnered with Drs. Bert Vogelstein, Nick Papadopoulos and Dr. Ken Kinzler from the very beginning,” he said, referring to the scientists who founded the company.
Exact Sciences participated in both of those funding rounds, as well. In making the decision to acquire the company, Conroy said Exact Sciences saw promise in combining the two companies’ R&D teams, as well as adding the sales team and other infrastructure that the larger Exact Sciences can offer.
“We believe that this combined team can transform the future of cancer diagnostics,” said Conroy, adding that the total addressable market is $25 billion.
Exact Sciences, which developed two cancer diagnostics of its own, is also planning to add its expertise to the test itself. Conroy said the company was “impressed” by the results, released in April, of an initial study for CancerSEEK conducted by Thrive. Going forward, it plans to add specificity to the test through a process called DNA methylation, then pursue a study to validate the test and seek approval from the U.S. Food and Drug Administration. “With Thrive, Exact Sciences will gain additional scientific capabilities necessary to bring tests to patients at every step of their cancer journey.”
Thrive was based in Cambridge, Massachusetts, but has maintained a large R&D operation in East Baltimore near Johns Hopkins Hospital. That presence in JHU’s building at 1812 Ashland has grown to more than 40 employees, and it will remain in place. The company is hiring for product development and lab operations roles for the location.
Exact Sciences also said it plans continue Thrive’s partnership with Johns Hopkins going forward. Along with cancer researchers, the company worked with Johns Hopkins Tech Ventures (JHTV), the university’s commercialization office that manages tech transfer and seeks to galvanize entrepreneurship. The acquisition was big news at the office on Tuesday.
“It is not every day you wake up an acquisition of one of our companies for more than $2B,” said Christy Wyskiel, senior advisor to Johns Hopkins President Ron Daniels on innovation and entrepreneurship and head of JHTV.
She noted that the technology moved quickly in development since key research findings signaling its promise were published in the journal Science in 2018.
“In the last two years, this went from research finding and patent filing to the cornerstone technology of a major biotechnology deal,” Wyskiel said. “By partnering with world-class investors, and now an industry leader in the integration of cancer screening into medical care, we are one step closer to realizing the dream of Bert Vogelstein’s lab. My team is honored to have played a role in facilitating the translation of a technology with such promise for patients.”
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