Veracyte (Nasdaq: VCYT) announced it has reached a definitive agreement to acquire C2i Genomics, expanding its diagnostics platform to include whole-genome minimal residual disease (MRD) detection capabilities from cell-free DNA (cfDNA) in liquid biopsies. C2i’s MRD solution requires less than a tube of blood (as little as 3–4 mL blood or 1–2 mL plasma), can go from sample to result in just two weeks, and delivers improved performance compared to imaging and other molecular tests.
Under the terms of the agreement, Veracyte will pay $70 million in shares at closing and up to an additional $25 million based on the achievement of future milestones over the next two years, payable in Veracyte shares or cash at Veracyte’s election.
AI-powered cancer readouts
The MRD testing that C2i offers uses artificial intelligence (AI) to create circulating tumor DNA signatures by comparing the genomics of the patient’s tumor and blood, disposing of the need for bespoke biomarker panels.
“We don’t have to create a special panel to find a [circulating tumor DNA] signature in the blood,” said Marc Stapley, CEO of Veracyte. “When the patient comes back, and we take a blood draw, we run whole genome [sequencing] again, and we’re looking for that circulating tumor DNA signature in the cfDNA.”
While Veracyte has been working with machine learning and AI for many years and developing its own algorithms, notably for a noninvasive nasal swab test for lung cancer, acquiring C2i also expands its AI capabilities. Veracyte believes that C2i’s AI capabilities and its own prognostic and diagnostic tests will enable the company to track a tumor’s progression as it evolves from early diagnosis through patient treatment and follow-up.
“We’ve done a great job… in the risk prediction, prognosis, and diagnosis space, and [we’re] moving into the prediction of outcomes from the therapy space,” Stapley said. “But when treated with either therapy or surgery, we haven’t had much to offer that patient and continue to track that patient through their care journey. We’re acquiring C2i to launch clinical tests in that back part of the care continuum.”
Veracyte’s first application of C2i Genomics’ technology will be a muscle-invasive bladder cancer MRD test, which Stapley told GEN Edge that Veracyte aims to launch in the first half of 2026.
“[The launch is] largely driven by two things,” said Stapley. “One, the incredible work that C2i has done in looking at the bladder space, publishing data on that, and demonstrating the [MRD] test in the bladder. Two, there’s a clear path to reimbursement in a bladder cancer indication.”
Feeding the data flywheel
Stapley said that in the cancer diagnostics industry, the path to get a robust diagnostic test launched and paid for is a lot more than just creating an asset; doing so takes a lot of data.
“The evidence development part is so important,” said Stapley. “This is why we’re acquiring a whole genome company. It’s also why we do whole transcriptome [sequencing]. Beyond just what we need for an individual patient test, we recognize the value of having that broad look at clinical and genomic data. More data leads to more insights.”
This additional data is foundational to setting off a cycle of acquiring proof that the test has a clinical benefit, which can expand the adoption of the test and, thus, the acquisition of even more data.
“What we learn from doing this and being successful in the markets in which we already have a channel will be extensible and repeatable across other indications,” said Stapley.
Building momentum for this flywheel is at the core of Veracyte’s goal to take bigger and bigger bites of the MRD pie, which is expected to exceed $4 billion by 2032.