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Large deals represent renewed large interest There have been some notable deals in the early cancer diagnosis market particularlly Illumina ’ s reacquisition of Grail ( a previous Illumina spin out ) for $ 8bn . This deal may not complete due to EU competition laws , however it still shows the possible valuations with liquid biopsy tests despite Grail ’ s revenue of just $ 55m in 2022 . Thermo Fisher and Exact Sciences are 2 other notable players in early diagnosis market and it is likely to be one of these that gain a dominant market position in liquid biopsy markets .

Early diagnosis will continue to see large deals as the potential to replace screening tests could lead to large revenues

* Subject to EU Anti-competition laws . Source : goetzpartners Research , BioCentury Inc .

Key takeaways

Liquid biopsy is the future of cancer diagnosis

As testing targets become more heterogenous , the ability to combine these tests will be important

Screening and confirmation are expected to increasingly rely on liquid biopsies In the near term , we anticipate the launch of additional confirmatory tests for cancers with recognised pre-screens or risk factors . Liquid biopsies are already in use as companion diagnostic tools as explored later in this COMPASS Research Report . The development of screening tests utilising NGS and liquid biopsies are not yet ready for market , but with large-scale trial results coming within the next 2 years , this could stimulate widespread adoption . If results are successful in reducing metastatic disease and do not result in overdiagnosis , we expect a rush of larger players to enter the space given this technology will complement treatment portfolios . Given the enormous benefits of early diagnosis both in terms of saving lives and reducing the proportion of cancer patients requiring expensive and frequently unpleasant late-stage therapy , the move towards early diagnosis is inevitable and strongly depends on the development and implementation of the appropriate technology . However , this will require more innovation friendly regulations . While imaging will remain a significant component to enable localisation and removal of the cancerous cells , early diagnosis will be largely dependent on the further development of accurate non- or minimally invasive liquid biopsies . In the long term , we expect the emergence of a myriad of early detection tools that will be combined strategically to maximise clinical efficiency .

Multiparametric testing likely winners of early diagnosis market As the heterogeneity of potential targets for identifiable oncology biomarkers increase , it is of our opinion that companies using multiparametric tests to enhance the accuracy of screening programs should be the centre of investors ’ attention . Tests such as the Stockholm3 can be used in addition to PSA based screening and replace it should superiority be demonstrated . The PSA market alone is estimated to be worth $ 10bn worldwide . NICE estimated the price to be £ 350 per patient for the Stockholm3 test from A3P Biomedical and when applied in other health care systems resulted in lower costs for the economy due to decreased unnecessary biopsies . Companies such as Foundation Medicine and Exact Sciences that offer a full range of tests and techniques utilising multiparametric techniques are likely to consolidate their position in the early diagnosis market . It remains to be seen whether multicancer early detection tests are value for money for healthcare systems , however , if they reduce metastatic disease this is likely to be the highest growth area . Grail is uniquely positioned with their large evidence-based test with further clinical trials in place to explore their robustness .

Please see analyst certifications , important disclosure information , and information regarding the status of analysts on pages 91-94 of this research report .