The American Society of Clinical Oncology (ASCO) just held their annual gathering in Chicago. The event coincided with some interesting new developments in the field of early cancer detection, as well as news of significant new investments in the oncology space.
This VC Views article was guest authored by Ward Capoen from V-Bio Ventures.
A lot of advances have been made in treating advanced cancer patients in the past few years. However, it is easy to forget that this multi-billion-dollar segment represents only a small fraction of the actual cancer treatment landscape. About 75% of diagnosed patients first undergo a combination of surgery, radiotherapy and chemotherapy; for many, these treatments lead to remission with no need for further therapy.
In most cases, the headline-grabbing drugs are targeting recurrent or metastatic cancer. However, despite the great strides that have been made in advanced cancer treatments, survival probabilities are still much greater if the tumour is detected early and can be eradicated before it spreads.
With the advent of next-generation sequencing technologies and a better understanding of what drives cancer formation, oncology is trending towards early detection. The goal is to catch the cancer before the disease can get out of control, so as to greatly increase chances for survival.
Catching cancer in the bloodstream
To achieve this early detection, most companies use circulating tumour DNA (ctDNA): DNA that is shed by tumours and appears in the blood where it can be detected using advanced analytical methods.
An added bonus of this technique, albeit a cynical one, is that the total addressable market for the method is huge: there are far more “healthy” people in the world than people already diagnosed with cancer. And if there is one thing big investors like, it’s large addressable markets.
Oncology is trending towards early detection. The goal is to catch the cancer before the disease can get out of control, so as to greatly increase chances for survival. - Ward Capoen, V-Bio Ventures
We already wrote an article last year about Grail, the cancer-detecting unicorn that raised $1.6 billion in venture financing from tech legends Jeff Bezos and Bill Gates, as well as numerous tech and life sciences VCs. Grail’s technology measures changes in methylation on circulating tumour DNA to detect cancers early in their formation. Data show that they can diagnose between 59%-86% of early stage cancers, depending on the tumour type, and can even predict the organ affected.
Another oncology behemoth is Guardant Health: a now public unicorn with a whopping $7.5 billion valuation. This company uses digital sequencing to test up to 500 cancer-related genes using circulating tumour DNA. Their test is currently marketed towards diagnosing advanced cancers, but they are industriously working on tests to monitor cancer survivors. The ultimate aim for Guardant, as with Grail, is being able to test healthy people and detect cancers before they spread.
New kid on the block
You may think the players in this field had already soaked up all the funding, but you’d be wrong: a new company has recently emerged with a meaty $110 million in initial financing. Thrive Early Detection was launched with backing of Third Rock Ventures and friends, including the venture arms of some insurance companies (a sign of things to come in the insurance world perhaps?).
A combination of new insights, datamining and artificial intelligence, and access to next-gen sequencing technology has set the scene...VCs can’t get on the ‘early cancer detection’ bandwagon fast enough. - Ward Capoen, V-Bio Ventures
The company has already shown that their test, called CancerSEEK, is able to find about 70% of early-stage tumours in a select number of cancer types. The test, developed at Johns Hopkins University, uses a machine learning algorithm that combines the detection of mutations in 16 genes with changes in 8 protein markers, to form a predictive signature for early cancers. Thrive is now planning to set up a 10 000-patient prospective study to validate the test.
The powers-that-be have clearly judged that the time is ripe for preventative cancer screening. A combination of new insights, datamining and artificial intelligence, and access to next-gen sequencing technology has set the scene. Coupled with the high human cost of tardy interventions, VCs can’t get on the ‘early cancer detection’ bandwagon fast enough.
Is screening worth the cost?
The potential of early cancer detection is promising, but are we there yet? It is still hard to know, as large prospective studies are still underway, and many questions remain. Currently, the jury’s still out on whether screening for early intervention is actually worth it. Mammography screening for breast cancer and PSA testing for prostate cancer are, at best, marginally effective, and even these results depend on the study and the age of the patient.
There is clearly a race to be the first to take the plunge and ride the biggest wave to success. It is a classic Silicon Valley-style approach, but it has not always worked out well for investors. - Ward Capoen, V-Bio Ventures
Will things be different for this new type of cancer detection? It is hard to say without trial data. Many of the tumours detected using circulating tumour DNA would never have resulted in death anyways, not to mention that a significant number of tumours would also still be missed using this technique (up to 50% in some current tests).
Finally, and perhaps most importantly, if you were to test hundreds of millions of individuals, even with a specificity of 99% (as is the case for CancerSEEK), millions of people would be falsely diagnosed with cancer. The impact of these false diagnoses would of course lead to untold anxiety, overtreatment and mayhem. A complex, multi-parametric health economics study will be required to establish if the benefits of detecting and curing some cancers earlier outweigh the costs of testing the general population.
The ultimate gamble
The business model may be clashing with reality. Silicon Valley investors are funding companies with monster valuations, assuming that the markets are infinite and sales astronomical. If it turns out that it is in fact better to not screen too early (eg. if it is only economical to screen people over a certain age or with certain risk factors), and the market is smaller than expected, these investors stand to lose fortunes.
There is clearly a race to be the first to take the plunge and ride the biggest wave to success. It is a classic Silicon Valley-style approach, but it has not always worked out well for investors (eg. think Uber, Lyft, WeWork, Theranos, etc.). It remains to be seen how this particular gamble will play out. The bets have been placed and the board is set; we will be waiting with bated breath to see how the play resolves.