Mike Nolan spent a decade at Roche and a company it later acquired before joining Freenome in 2018 and becoming its CEO last year. Nolan has since drawn upon his ties with the pharma giant to bring it into the fold of investors in his new company, which has developed a liquid biopsy for early cancer detection based on its own multiomics platform.
Over the past month, Roche’s venture fund has multiplied its stake in Freenome, making a $290 million investment in the liquid biopsy developer on top of a $60 million share of Freenome’s $300 million Series D financing. Roche joined the Series D with investors that included Novartis, the philanthropic venture fund of the American Cancer Society, and numerous VC firms.
“We think the deal further validates the promise of blood-based early cancer screening, which could be the biggest diagnostics TAM [total addressable market] ever (~$50B),” Brandon Couillard, Senior Vice President and an equity analyst with Jefferies, wrote January 12 in a research note. “The timing is a bit odd,” he added, “given Freenome just closed a $300M Series D round last month.”
Roche’s stake in Freenome has grown to about $360 million including its involvement in earlier financing rounds, bringing Freenome to unicorn status with more than $1.1 billion in total capital raised. Roche first invested in Freenome during its $160 million Series B round in 2019, then returned a year later when Freenome completed its $270 million Series C.
Roche’s latest investment, Coiuillard speculated, could position it to someday acquire Freenome the way it expanded from investments to acquisitions of two other cancer-focused companies: Comprehensive genomic profiling (CGP) test developer Foundation Medicine (acquired for $1.9 million), and molecular diagnostics developer Foundation Medicines (in which Roche shelled out $2.4 billion to expand its majority stake into full ownership).
Couillard noted Nolan’s tenure at Roche and Foundation Medicine. At Roche Diagnostics and Roche Molecular Systems, he held several marketing and business development roles from 2002–2009, advancing to Senior Director, International Business.
After Roche, Nolan worked at Luminex (acquired last year by DiaSorin for approximately $1.8 billion), Life Technologies, and its $11.4 billion acquirer Thermo Fisher Scientific before joining Foundation Medicine in 2016 as senior vice president, global sales, advancing a year later to senior vice president, commercial operations. In that role, he led a cross-functional team to expand the use of next-generation sequencing technologies in cancer.
Nolan joined Freenome in 2018 as chief commercial officer, four years after the company was founded. He advanced a year later to chief business officer and became CEO in May 2021.
Beyond familiarity
“Freenome and Roche were in discussions before I joined almost four years ago,” Nolan told GEN Edge. “I think it helped a lot to have this familiarity and these strong relationships going back, but even more so, just the strength of what our company’s doing is I think really a driver.”
“I think they (Roche) look at us to see that we have this great progress and this bright future, with a lot of resolve and commitment to achieve everything we can for patients, and they want to put thrust behind that,” Nolan said. “It was just really important that anyone we would go out on this journey with is aligned philosophically with our mission, our mindset, and our vision. I think that’s the same for Roche. I think they’re very much in that same boat, and we’re just honored that they would choose us.”
He said Freenome’s progress in developing its cancer liquid biopsy, coupled with Roche’s expertise in detecting cancer via molecular diagnostics, as well as treating it via drugs, helped unite the companies and positions them for further success starting this year.
“The time was right for them and for us to say, coming off the strength of 2021, that this would be a good time to come together for this next phase, where we can integrate perhaps some of the Roche technologies into the multiomics platform, to add additional dimensions of orthogonality,” Nolan added.
Based in South San Francisco, CA, Freenome has developed a machine learning-enabled multiomics blood-based test for early detection of colorectal cancer (CRC) and advanced adenomas, considered to be clinically relevant precursors of CRC.
The multiomics platform is designed to detect key biological signals from a routine blood draw by integrating assays for cell-free DNA, methylation, and proteins with advanced computational biology and machine learning techniques. Rather than relying only on tumor-derived markers, which may miss early signs of cancer, the platform looks for both tumor- and immune and other non-tumor-derived signatures that enable the early detection of cancer.
The test is being studied for validation in PREEMPT CRC (NCT04369053), a prospective registrational study now in final stages of enrolling approximately 30,000 average-risk subjects (of which 25,000 have completed the study). The multi-center observational study is collecting blood samples from average-risk participants who undergo a routine screening colonoscopy.
Topline readout by 2023
“We’re going to have topline readout toward the end of this year or early 2023,” Nolan said. “We think we’ll wrap it up this quarter. We’re getting very close.”
Freenome has articulated a commitment to advancing health equity by including in PREEMPT CRC patients from groups historically underrepresented in clinical trials—“we’re at or near U.S. Census levels across a range of communities,” Nolan said.
In October 2021, researchers from Freenome and Morehouse School of Medicine, an historically black college and university (HBCU), presented data at the American College of Gastroenterology (ACG) annual meeting showing that the rate of African American (AA) enrollment in PREEMPT CRC from Morehouse was 79.5% AA and 9.1% Caucasian, compared with 11.5% AA and 82.8% Caucasian at other sites.
At ACG, Freenome also presented findings showing additional challenges to CRC screening. One study using Freenome’s CRC-MAPS™ model showed that improved all-adenoma and each size-specific adenoma sensitivity, led to a higher number of colonoscopies expected or “burden,” and increases in both CRC incidence reduction (IR) and mortality reduction (MR): “This may be an acceptable tradeoff depending on resource capacity and patient willingness to complete follow-up and surveillance colonoscopies.”
However, CRC-MAPS also showed that improvements to specificity led to both IR and MR increases with a lower colonoscopy burden: “This is an acceptable outcome since the slight increase in benefits comes with substantially fewer colonoscopies.”
Also at ACG, Freenome presented data showing that adults ages 40-64 reported lower adherence (43%) to CRC screening compared to older adults (57%). The most common barriers for the younger adults included patient-level factors, such as education and socioeconomic status, and provider-level factors, like the absence of a regular care provider.
CRC became Freenome’s first cancer indication for its test, Nolan said, because the healthcare system has already reached consensus on which patients should undergo screening, as well as ordering and reimbursement for such tests
Pursuing clinical impact, revenue
“We wanted to be certain that we’re doing everything we could to accelerate our time to clinical impact, and also quite frankly, time to clinical revenue,” Nolan said. “A lot of companies will develop a test and deliver high value in clinical care, but then struggle to get paid. What’s nice about colorectal cancer and advanced adenomas is, those clinical pathways are well established and the reimbursement medical policy frameworks are also well established and the need for it is as well established.”
The National Colorectal Cancer Roundtable, co-founded and co‐supported by the American Cancer Society (ACS) and the Centers for Disease Control and Prevention (CDC), set a goal in 2014 of screening 80% of adults for CRC by 2018. However, a study published last year found only 67% of patients current with CRC screening. ACS revised its guidelines last year by lowering from 50 to 45 the recommended age for starting CRC screenings.
ACS’ BrightEdge donor-funded, philanthropic venture capital fund was among investors in Freenome’s Series B and C financings, and has observer status on the company’s board.
In 2020, Freenome published data showing its test to have detected CRC at early stages (I and II) with a sensitivity of 94% and specificity of 94%. Freenome is one of two liquid biopsy developers—the other is Guardant Health—that have read out 90%+ sensitivity and specificity overall in CRC data presentations over the past two years, Souda, reported in a January 4 research note.
Last year, Guardant presented data at ACG showing overall sensitivity of 96% in detecting CRC and 94% specificity.
“Degradation from those levels is generally expected when the pivotal trials read out, but magnitude remains hard to assess,” Souda cautioned. Noting that the Centers for Medicare and Medicaid Services (CMS) requires at least 74% sensitivity at 90% specificity for reimbursement through a National Coverage Determination, he added: “Any data improvement above this bar should only drive increasing penetration in the market.”
Lunar ECLIPSE
Guardant is expected mid-year to read out data from its ECLIPSE (Evaluation of ctDNA LUNAR Assay In an Average Patient Screening Encounter) trial (NCT04136002). ECLIPSE is designed to assess Guardant’s blood-based, circulating tumor DNA LUNAR-2 test, designed to detect CRC in U.S. adults ages 45-84 who are at average risk, including groups historically underrepresented in clinical research.
Last month, Guardant said ECLIPSE reached its target enrollment of 12,750 patients—a population size intended to support a premarket approval submission to the FDA later this year. Guardant also presented data at ACG showing that LUNAR-2, developed to screen average-risk patients for CRC, showed optimized sensitivity and specificity in identifying patients with early-stage CRC.
As for advanced adenoma, more recently on January 11, a poster released in advance of this week’s ASCO Gastrointestinal Cancers Symposium presented Freenome data from an early CRC screening liquid biopsy dataset of 522 patients in the 3,275-patient AI-EMERGE® trial (NCT03688906) showing precancerous advanced adenoma sensitivity of 41% at 90% specificity using its multiomics approach.
Souda cautioned that while the study was not powered enough or large scale (>10,000 patients) enough to provide conclusive evidence, “it does directionally suggest that advanced adenomas (AA) can be detected via liquid biopsy—something not observed in CRC screening LBx [liquid biopsy] studies so far.”
Souda contrasted Freenome’s data with that of Exact Sciences’ Cologuard 2.0 (stool), which has generated detection rates of 65% at 92% specificity. He said he saw no impact to Exact Sciences or Guardant from Freenome’s AA data.
“Ultimately we believe CRC detection at high sensitivity and 90% or better specificity across stages (S1-S4) remains paramount for CRC screening LBx studies and AA detection would be a bonus,” Souda wrote. “As a result, the abstract should be viewed as another step in the overall evolution of the liquid biopsy market with participating companies attempting to improve performance of their respective screening assays and deliver more value to the patients and healthcare system.”
CRC is the first of several cancers for which Freenome aims to screen via its test. Next month, Nolan said, Freenome plans to launch some of its planned additional multi-cancer clinical studies focused on more tailored series or baskets of screening tests, based on an individual’s risk. Other multi-cancer tests are ongoing or will be launched later in the first half.
The studies will be named after loved ones of Freenome employees who succumbed to cancer.
“That just reminds us of why we’re here in a very patient-centric, mission-driven manner,” Nolan said. “We have a swagger for the patient and that’s why we’re here. This is really difficult challenging work and that’s why we’re here.”
Interest in other cancers
Freenome plans to extend its multiomics platform by developing tests for other cancer types. While those have not yet been disclosed, Freenome has signaled interest in cancers beyond CRC.
At the American Association of Cancer Research (AACR) Special Conference on Pancreatic Cancer in September 2021, researchers from Freenome and University of Pittsburgh Medical Center presented data showing the promising potential of extending Freenome’s multiomics approach into pancreatic cancer, using biomarkers already embedded in the existing platform. Across all stages studied, Freenome’s approach achieved a sensitivity of 93% at a nominal specificity of 96%. At an identical specificity, the sensitivity of methylation or CA19-9 alone was 74% and 87%, respectively. In stages II, III and IV, the multiomics approach achieved a sensitivity of 82%, 89%, and 100%, respectively.
Another cancer of interest to Freenome is breast cancer. Last month, Freenome launched a multiomics and radiomic breast cancer diagnostics collaboration of undisclosed value with Siemens Healthineers designed to augment existing imaging technologies by identifying markers for early breast cancer detection through blood that are complementary to those identified using current imaging. The companies aim to connecting imaging and clinical data with molecular data to identify those new markers of breast cancer.
Freenome has also worked with Novartis—an investor in its Series C and D rounds—to study lung cancer, and has also begun exploring a presence in prostate cancer.
“We’re really doing our best to understand prostate cancer as an example to see where we can play a significant role,” Nolan said, adding: “We take a first-things-first approach: We need to advance the multiomics platform in colorectal cancer and advanced adenoma first.”
Nolan joined Freenome four years after it was founded by Riley Ennis (now the company’s Chief Operating Officer); Gabe Otte, Nolan’s predecessor as CEO (now a Partner at Healthcare Co-op, which advises and invests in healthcare startups); and Charles Roberts, MBChB, who oversees Freenome’s efforts to build and manage corporate partnerships, institutional, and clinical collaborations as Chief Growth Officer.
Freenome expects its headcount to keep growing. Since the pandemic started two years ago, Freenome’s staff has grown from 100 to more than 300. “We’re looking to be around just under 500 by the end of this year,” Nolan said.
At the start of COVID-19, all but two members of Freenome’s workforce were based in the Bay Area. The company has since added people from across and outside the U.S.: “We’ve demonstrated that we can maintain that connectivity together with one another and have also expanded our access to different talent pools.”
“For instance, computational biologists and software engineers, for us it doesn’t really matter so much where they live,” Nolan said. “Some of them live in small towns in rural America, and that’s great with us.”
