Ladies and gentlemen, thank you for standing by, and welcome to the conference call to discuss the definitive agreement for Illumina to acquire GRAIL. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Thank you. I'd now like to hand the conference over to your moderator for today, Jackie Ross, VP of Investor Relations.
Please go ahead.
Good morning, everyone, and thanks for joining us on such short notice to discuss the definitive agreement for Illumina to acquire GRAIL. If you've not had a chance to review today's release, it can be found in the Investor Relations section of our website at illumina.com. Participating for Illumina today will be Francis D'Souza, President and Chief Executive Officer and Sam Samad, Chief Financial Officer. We're also pleased to welcome Hans Bishop, Grails' Chief Executive Officer. Francis, Hans and Sam will share some prepared remarks and then we will open the call for some questions.
This call is being recorded and the audio portion will be archived in the Investors section of our website. Today's presentation contains estimates, projections and other forward looking statements. These statements are subject to risks and uncertainties. Actual events or results may differ materially from those projected or discussed. Please review the cautionary statement and other important information for investors and stockholders on Slide 2.
With that, I'll turn the call over to Francis.
Thanks, Jackie. Good morning, everyone, and thank you for joining us on such short notice. I'm excited to share that earlier this morning, we announced an agreement to acquire GRAYL and to work together to launch a new era in cancer detection. Before we start, I want to acknowledge the Gradle team for what they've accomplished. We spent out Gradle 4 years ago to focus on an ambitious goal, to revolutionize the way we detect cancer by developing a blood test that could find cancer earlier than is possible today.
Their innovation and results since then have exceeded even our lofty expectations, setting the stage for early cancer detection to likely be the largest genomic application over the next 15 years by far. This combination will be transformative for cancer detection. The acquisition will enable GRAIL to leverage Illumina's global commercial, clinical and operations capabilities, accelerating their mission and allowing us to impact more people faster than they might have done alone. Illumina's next generation sequencers will continue to support genomic medicine to become standard of care across clinical applications. And with this acquisition, we will accelerate and participate more fully and directly in the highest value clinical opportunity enabled by our technology.
Specifically, the acquisition positions Illumina to participate in what we expect will be a $75,000,000,000 market for NGS based oncology tests by 2,035, dollars 60,000,000,000 higher than our oncology TAM excluding GRAIL. Cancer is one of the greatest threats to human health. Despite the significant investments made and the important medical advancements achieved so far, when we diagnose cancer too late when it is metastatic, less than 20% of patients will survive more than 5 years. In contrast, if we diagnose cancer early, approximately 90% of patients are expected to survive beyond 5 years. About 71% of cancer related deaths are attributable to cancers with no recommended screening tests.
And with limited screening tests, cancer is more likely to be detected in the late stages and more often than not, too late. This is both a human tragedy and an enormous burden on the healthcare system. Each year, there are over 600,000 cancer related deaths in the U. S. And approximately 10,000,000 deaths worldwide, making it the 2nd leading cause of death.
We spend approximately 2 $50,000,000,000 per year on cancer in the U. S. And globally the annual economic impact is more than $1,200,000,000,000 And now for the first time, there is a technology platform that enables us to address this burden. Starting with GRAIL's multi cancer detection test, Galleri, which aims to reduce cancer tests by transforming how and when cancer is detected. GRAIL's technology characterizes the DNA that cancer cells shed into the blood, detecting unique signatures that identify both the presence and often the tissue of origin of the cancer.
Earlier this year, GRAIL shared positive results from its circulating cell free genome Atlas or CCGA study that has enrolled 15,000 participants. The study found that the first version of Galleri reported sensitivity of 44% for stage 1 through 3 tumors for 50 different cancers and 67% sensitivity for the 12 deadliest cancers. And in 93% of the positive results, the test correctly identified the tissue of origin, all with a specificity of greater than 99 and from a single blood draw. Arguably, one of the most important performance measures for doctors and payers is the positive predictive value or PPV, which is the percentage of positive tests that actually cancers. For Galleri, we predict a PPV of 43%.
This represents a very significant step forward compared to today's most commonly used screening tests, which often have a PPV in the range of 3% to 5%. The GRAYO team is preparing to launch GALLERY as a lab developed test for LDT in 2021. We believe that this is a remarkable advance in the ability to detect cancer earlier, which can transform cancer care and improve population health. As noted earlier, most cancers are currently diagnosed in late stages, as shown by the gray bars in the chart on the left half of slide 6. The limitations of current screening methods lead to only 31% of cancers being identified in stages 12 when they are the most treatable.
Based on GRAIL studies, this could increase to 82% with broad adoption of Galleri's blood test complementing today's recommended cancer screening. This matters because as we mentioned earlier, survival rates are directly correlated with how early cancer is detected. Broad adoption of Galleri could avert nearly 40% of the 5 year cancer mortality or around 100,000 deaths annually in the U. S.
My apologies for the technical issues. We will pick up again from Slide 6. As noted earlier, most cancers are currently diagnosed in late stages, as shown by the gray bars in the chart on the left half of Slide 6. The limitations of current screening methods lead to only 31% of cancers being identified in Stages 12 when they are most treatable. Based on gradual studies, because as we mentioned earlier, survival rates are directly correlated with how early cancer is detected.
Broad adoption of Galleri could avert nearly 40% of the 5 year cancer mortality or around 100,000 deaths annually in the U. S. To put this in perspective, this roughly matches the number of deaths prevented by all current screening, testing, treatment and surgery standards combined. Once available, we are confident that GalliView will enable screening for more cancers than ever before. While screening has improved for some cancers, including lung, breast, colorectal and cervical, we know that roughly 6 in 10 cancers diagnosed from 12,000,000 cases and 5,000,000 deaths a year are associated with cancers with no recommended screening requirement.
Since Galleri will help discover cancer earlier, we believe that Galleri can help detect 3 times as many cancers when added to recommended single cancer screening. There is significant opportunity to improve outcomes for patients and the potential impact on families and communities highlights the importance of Credo's work. We will also be able to better meet the needs of healthcare providers and delivery systems. By improving the overall efficiency of cancer detection, payers will be able to realize the lower costs associated with the treatment of cancer at earlier stages. Based on GRAIL's estimates, the adoption of GALRY alongside existing screening guidelines could help reduce diagnostic workup costs by up to 65%.
These benefits are key drivers in the market potential, which we anticipate reflects an addressable market for NGS based oncology testing of $75,000,000,000 Today, we're seeing rapid adoption of NGS based therapy selection tests, many based on Illumina's technology. Over the next 15 years, we expect this market to grow with a CAGR of about 16% to $14,000,000,000 to an annual $7,000,000 test opportunity at approximate ASC of $1300 to $2,300 Iluvina participated in the therapy selection market with our TSO500 test currently available for research use only and making its way through regulatory approval for commercial launch in early 2022. As the reimbursement landscape continues to strengthen and drives utilization of therapy selection tests, we're seeing more companies working on monitoring tests that will assess the activity of a patient's cancer. This can optimize disease management and determine the effectiveness of cancer therapies for individual patients. These assays can also act as surveillance tests for cancer patients who have completed therapy and are in remission.
We expect this market to grow with a CAGR of about 27% to $15,000,000,000 in 2,035. The test opportunity here is expected to grow to about 20,000,000 tests per year with an expected ASP of $700,000 to $1,000 The cancer screening opportunity is significantly larger than therapy selection and monitoring combined. This market is expected to grow quickly to about 150,000,000 tests in 2,035, a 75% CAGR to approximately $46,000,000,000 This assumes an ASP that starts around $1200 and trends to about $300 in 2,035 as we scale and drive adoption with increasingly accessible pricing. With regards to the market for Galleries specifically, there is a sizable addressable market of over 100,000,000 people between the age of 50 to 79 in the U. S.
We believe approximately half of this addressable market is accessible with Galleri prior to reimbursement. The credit go to market strategy next year will consist of 3 core channels: health symptoms, self insured employers and concierge medicine. Given the cost improvement potential, we feel that health systems and self insured employers will recognize the compelling value propositions and drive adoption of the 1st multi cancer detection LDT available. There's also an opportunity in concierge medicine, segment that typically caters to health conscious members that like to be on the forefront of new medical technologies who could be early adopters of Galleri. We expect that GRAIL will launch Galleri in 2021.
We look forward to additional results next year from the CCGA sub study 3 and pathfinder to further support the clinical validation of GALERATE. Additionally, GRAYL will continue to work on its diagnostic aid for cancer test, or DACC, which is intended for symptomatic patients and has decided to speed up the time to diagnosis when cancer is suspected. And GRAYO also has a minimal residual disease or MRD test intended for patients who have been diagnosed and treated to detect persistent disease following definitive therapy. On that note, I'd like to invite Hem, the CEO of Grail, to say a few words.
Thank you, Francis. I'm excited to be here today. Let me start by recognizing the accomplishments of the GRAIL team. We're a mission driven company focused on detecting cancer early when it can be cured. And we believe our early cancer detection technology could substantially reduce the burden of cancer worldwide.
We've developed a new technology that preferentially targets the most informative regions of the genome and uses machine learning algorithms to detect the presence of cancer and identify the tumor's tissue of origin. We believe by joining forces with Illumina, we'll achieve scale faster, preventing more late stage cancer diagnosis. We are strongly positioned with our first 2 commercial product launches expected in 2021. And once our deal closes, we will be able to leverage the global scale and reach of Illumina through relationships and in country infrastructure to further our commercialization efforts. Simply put, Grails mission and focus will not change, but Illumina's international footprint and expertise across market access, regulatory, government affairs and manufacturing will accelerate our ability to realize our mission and goal to improve patient outcomes.
We've built a world class team of data and computer scientists at the forefront of applying AI to genomics and where better to further leverage those capabilities for the benefit
of human health than Afralimina.
In the process, we've also established an impressive IP portfolio with more than 230 patents granted globally and another 170 pending patent applications. With 115,000 participants enrolled and another 30,000 planned, GRAIL has built one of the largest population scale clinical trial programs ever pursued in genomic GRAIL's genomic database continues to grow with each test, an additional clinical trial participant, and today stands at over 12.6 petabytes worth of genomic data. The comparison is 5 times larger than the cancer genome atlas. Illumina remains the most innovative company in sequencing and GRAIL's ability to keep pushing the boundaries what's possible to keep finding more and more cancers at earlier stages will be further strengthened as a result of this combination. Having spent time with Francis and the Illumina team, I'm confident we all share the same goal and we're committed to accelerating our mission and delivering on our promise faster than could be done alone.
We both believe this is a case where 1 plus 1 will equal well over 2. And with that, I'd like to hand the call back to Francis.
Thanks, Sam. I couldn't be more excited about the opportunity to work with the Grail team to accelerate adoption of their life saving products by leveraging our global commercial, clinical and operations capabilities. Our global commercial organization markets, sells and supports more than 6,600 customers in 115 countries, including a number of national population scale genomics programs powered by Illumina sequencing technology. Illumina first established our clinical lab in 2,009 and since then have added 2 more, including 1 in the U. K.
To support Genomics England and the NHS. These certified and accredited labs are staffed by more than 250 team members, including board certified pathologists, medical geneticists, genetic counselors and PhD scientists. Over the last 5 years, our labs have processed more than 17,000,000 arrays and almost 1,000,000 clinical samples. We've also expanded our clinical capabilities and built out world class market access, government affairs and regulatory functions. In addition, our clinical grade development and manufacturing teams deliver systems and kits registered for IVD use in more than 35 countries around the world.
And at the same time, we've been extending our reach into the clinical market through partnerships with leading clinical companies, including BMS, QIAGEN and Roche. As Illumina and GRAIL come together, we accelerate adoption of clinical NGS based testing. This will have a positive impact on our business. Over time, more of our revenue will reflect the clinical value of our NGS products and not only the underlying sequencing output. As a result, Illumina will play a direct role in accelerating the adoption of genomic medicine in addition to enabling it.
As we evolve, Lumenet remains committed to all of our customers and partners. We're dedicated to delivering the most innovative sequencing systems and consumables to our customers and partners. There is still so much important research to be done and we know this will be enabled in part by continued innovation in sequencing. And on the clinical side, our mission has always been improve human health by unlocking the power of the genome. We will continue to enable our clinical customers to scale as they too work towards the shared goal.
With that, let me hand things over to Sam for a quick review of financial terms and impact.
Thanks, Francis. As announced earlier today, we have agreed to acquire Grail for a total cash and stock consideration of $8,000,000,000 with additional payments linked to certain product sales over the 1st 12 years. This acquisition expands Illumina's market opportunity by more than $60,000,000,000 It allows us to participate in the clinical market more fully and will contribute to revenue growth starting modestly in 2021 and meaningfully accelerate over time. We expect close in the second half of twenty twenty one, and we will share more detailed expectations about revenue growth and impact on EPS when that happens. Cash into stock consideration is $8,000,000,000 Since Illumina currently owns 12% of Grail's equity on a fully diluted basis, the purchase price was approximately $7,000,000,000 to Grail's other shareholders.
As part of the transaction, Alumina will pay Braille shareholders approximately $4,000,000,000 in common stock, which is subject to a collar. The number of shares issued is based on the penetration volume weighted average price of alumina common stock 10 days prior to close. Moreover, the stock consideration collar ensures the final number of shares that Grail shareholders receive is derived from a price that will be within a share price band of $2.95 $3.99 The remaining $3,100,000,000 cash consideration is expected to be funded with balance sheet cash and up to an additional $1,000,000,000 raised either through equity or debt. We have a $1,000,000 fully committed bridge fund with Goldman Sachs to ensure funding availability. The last component of the deal includes contingent payment rights to Grail shareholders based on Grail related revenues for a 12 year period.
Specifically, a 2.5 percent payment right is applied to the first $1,000,000,000 of revenue each year, and all revenue above that would be subject to a 9% payment price to Grail shareholders. With that, back to Brent.
Thank you, Sam. When we created GRAIL in 2016, we knew that its mission was a moon shot, but an important one, one that would have significant ramifications for the detection of cancer as successful, positively impacting millions of lives and opening a massive market opportunity. We wanted to see the technology progress as fast as possible, create the largest clinical trials and into patients in years, not decades. It was clear that the best way to do this and capitalize the effort was as a separate company with this singular focus and an extraordinary team that could execute quickly. Illumina set it up for success by seeding it with technology and some of our best and brightest.
4 years later, Graylus has proven the skeptics strong and is now at the pre commercial stage. It was a big bet and it paid off. Over the last 4.5 years, Grail has raised almost $2,000,000,000 to fund its mission. During the same period, Illumina generated about $4,000,000,000 in EBITDA. GRAIL's mission is no longer a moonshot, and we believe it is poised to transform cancer detection.
Our mission at Illumina is to improve human health by unlocking the power of the genome. This hasn't changed in over the last 22 years. We began our journey by launching our microarray based services and products. Our breakthrough arrays offered higher throughput, lower cost, more flexibility and higher quality than existing technologies, and we became the leading microarray vendor by 2,006, more than doubling revenues from the previous year. While we enjoyed the success, we saw the opportunity to take the next step forward towards our mission through sequencing.
Arrays aren't going away and in 2020, we still have an array business. But we saw the potential for enormous and very elastic research market fired by high quality, lower cost sequencing. So in 2006, we acquired Celexa, a sequencing technology company with no revenue for $600,000,000 a 3rd of our market gap at the time. The market was initially skeptical, but we began the raise to the $1,000 genome. And over the last 14 years, the vision has proved right.
We reduced the cost of high quality sequencing of a genome from $150,000 in $2,007 to $600 today, enabling groundbreaking genomic discoveries, including circulating fetal DNA in maternal blood and the impact of rare variants on cancer therapy response. By 2014, when we delivered the Embassy's first $1,000 genome, our research sequencing business was thriving. And once again, we sensed we were entering a new era of genomics entering the clinic. In 2013, we acquired Verinata, a provider of non invasive prenatal testing. In December 2013, we received the first ever FDA authorization for a next generation sequencer.
We embarked on our own multiyear clinical transformation, building out the capabilities I referenced earlier. Today, our clinical business, therapy selection in oncology, NIPT and genetic disease testing account for half of our sequencing consumable revenues. We're now entering the next phase of genomics, sequencing is the standard of care. Early cancer detection represents the largest genomics application by far, we believe, over the next decade. Because cancer screening impacts a very large part of the population, it ushers in an era where regular genomic testing is the norm for a population.
We accelerate this vision by acquiring GRAIL. Before we open up to Q and A, I want to summarize a few things. First, excluding GRAIL for a moment, we remain confident in our business and excited by the opportunity ahead. We expect to continue as a leading innovator in sequencing, supporting both research and clinical customers. GRAIL is not replacing anything.
And as such the acquisition will be additive to Illumina's opportunity and growth. We consider early cancer detection to be one of the largest clinical opportunities of the next 15 years, and we believe we will accelerate global adoption by participating more directly. 2nd, this acquisition is consistent with our strategy to extend into the clinical market, the fastest growing opportunity in sequencing. We will continue to deliver sequencing systems and consumables and remain committed to the relentless pursuit of sequencing innovation to democratize access and realize the potential of this technology to positively impact human health. 3rd, we spun out grants 4 years ago on a moonshot mission.
The terrific progress they've made has derisked the mission over time. Now that they stand poised to bring products to market in 2021, we believe this is the right time to bring the GRAIL team into Illumina so that we can help to commercialize and accelerate adoption. In closing, our mission to improve human health by unlocking the power of the genome and GRAIL's mission to detect cancer early when it can be cured could not be more consistent. We look forward to accelerating the age of genomic medicine together. With that, I'll invite the operator to begin the Q and A.
Certainly. Doug Schenkel with Cowen, your line is open.
Good morning. So Grail is clearly a really exciting and promising asset and you did a great job this morning outlining a lot of that and you were very comprehensive in explaining why you want to do this deal. I'm actually hoping that you could address how you got comfortable overcoming some of the reasons not to do the deal. These include 3 things that would be really helpful for you to address. The first is the challenge of competing with customers, which has been an issue for you in the past and something you talked about avoiding.
So I'm first off wondering how you expect to manage that and why the change, why the pivot there? 2nd, the dilution associated with this deal, which could create a potential internal P and L conflict when it comes to incentive structure, not to mention an issue with investor valuation methodologies. I think this is part of the reason your stock got hit so much last week in anticipation of this announcement. So how do you handle potential P and L conflict internally and externally moving forward? And then 3rd, the lack of clear clinical operating synergies and how you plan to succeed as a clinical development company in a way that you haven't in the past.
We know that Illumina is great at certain things, especially developing leading genetic tools platforms and having an amazing commercial team in place to support not just the placement of these platforms, but how users use them. That said, while you've been great as an arms dealer to clinical customers, your track record isn't as strong when it comes to developing and selling assays and getting them through regulatory and reimbursement pathways. So what are the clinical synergies and how do you quantify them? Again, 1, how do you manage competing with customers? 2, how do you manage the P and L conflict internally and externally?
And third, why should we get excited about this given the lack of clear clinical operating synergies? Thank you.
Sure. Thank you, Doug. So let's go through each of those. The first one is how do we manage the challenge of competing with our customers. And our strategy there continues to be that in the vast majority of applications in the markets that we serve, we will look to our customers and our partners to develop the applications in our sequencers and consumables.
And that's going to be true for the vast majority of applications. What we've said, however, is that for a very small set of applications where we felt the market was large and we felt that there was a differentiated offering that we could put into the market, then we would enter that market directly. In those markets, we still enable our customers and partners to create competing offerings. So we continue to support everybody. But we said in the very large markets where we felt we had a differentiated capability to bring into the market, we would enter those.
And you've seen us do that, for example, in the NIPG space, where we brought innovations and intellectual property into that market and have put together an end to end solution. You saw us do that in the large cancer panels like the 500 gene panel, TSO500. And now you're seeing us do that here. In this case, we feel that the criteria we use have been met. This is a very large application for us.
We think that over the next 15 years, it could potentially be the largest genomics application in the market in terms of addressable market size. And the GRAYL team has put together a very differentiated offering. There's a lot of innovation, a lot of IP that was created. Hans talked about the 2 30 applications that have patents that have been granted and 170 more that have been filed. And so there's a very differentiated offering.
And in this case, with Grails pioneering the market, they're sort of leading the way in creating that market. And so as we looked at the market, we felt it meets the criteria for one of the very small set of markets that we would get into directly. We're going to continue though to enable our customers and partners to create their own offerings in this market too. So that's how we thought about that question. The next question is around dilution and how we got comfortable with that and how we're going to manage P and L conflict.
And so the thinking here is that we're going to manage GRAIL as a separate division. And we're going to report really transparent about the P and L of Grail, and we had to manage that differently and separately from the P and L for the rest of the business. And we understand the profile of what it will take to get Grille successful in the market going forward. And so we'll be kind of be very transparent about what that looks like. We expect that to be dilutive for the next few years.
But then because of the size of the opportunity, we expect it to be highly accretive as we start to scale the offering in the later years. And again, we'll be very transparent about sharing what that looks like. Long term, we have high confidence in the P and L attractiveness of this business, but we do know it takes investment in the 1st few years. The next question was about clinical synergies. So what are the synergies that GRAIL can enjoy coming into Illumina?
And as you know, we've been building out our clinical capabilities since 2013. And so today, for example, we have a number of places where we think GRAIL could benefit as soon as they come in. Some things we talked about in the call, one for example, is that we're engaged with over 50 population sequencing efforts around the world. Today, we're talking to them about oncology therapy selection, genetic disease diagnosis. We think it's a very natural add to expand the conversation to include cancer screening and priority for disease detection.
We think that'd be
very valuable in the conversations we're in. And so we'll be able to immediately scale up the number of conversations that Drala is having around the world. We talked about our clinical labs. We have among the largest clinical genomics labs in the world. We have 2 in the U.
S, 1 in the U. K. Those labs have already processed over 1,000,000 clinical samples and built the workflows and expertise necessary to do that. And then we've also built the regulatory capabilities, the market access capabilities, the in country surveillance capabilities to support clinical offerings around the world. Today, we have IVDs that are cleared in 35 countries around the world, leveraging relationships we've built with the regulatory bodies in those countries as well as having in market surveillance capabilities in those countries.
And you can see that playing out in the success of products that we've bought on the market like our VERISIQ NIPT product, which is CE IVD Mart doing really well in EMEA. So those are some of the clinical capabilities that frankly we spent the last 5 plus years building that GRAIL plugs into immediately.
Your next question comes from Tycho Peterson with JPMorgan. Your line is open.
Hey, thanks. A couple of quick ones. So your stock lost $20,000,000,000 in market cap last week as Doug alluded to. Did that influence your thinking? And what is it that you think the Street doesn't fully understand here, especially given this is a pretty significant, I think about a $4,000,000 step up since the last round GRAIL did in May?
And why is buying it all now the right approach, given that you could have taken your equity stake up higher maybe to 40%, 50%, help the IPO and then had a call option to buy it later? So that's the first question. 2nd on margins, can you give us a sense of where COGS can go? We know you have off the shelf technology for $100 genome. So how much of this is about driving down COGS quickly?
And where do you think they can go? And then how much do you think Greal needs to spend on R and D and the sales force ramp to really scale up? 3rd, Francis, you talked about confidence in the core business. I think one of the things investors are going to worry about is concerns about growth in the core business or maybe you're doing this deal to diversify and cover up a continued slowdown. So can you maybe talk to what you think about the core business for next year a little bit more quantitatively?
And then lastly, either for Francis or Hans, why is the 44% sensitivity for a screening test of clinical value, especially at the price points being talked about? Thank you.
Thank you, Srecko. All right. A lot of ground to cover. So I'm going to start by talking about your first question, which is the why now question. And then Sam, I'm going to turn it over to you to talk about the margins question.
And then I'll come back and talk about our core business. And then I'll look to you, Hans, maybe also to comment a little bit around the screenshots and the clinical value. So let's start. So why now? And was there any sort of reaction in our mind you're asking around the stock drop that has passed through?
So the reason for why now and frankly, we took a longer term view, so the events of last week didn't really impact our why now decision. And I'll talk about that a little bit. The reason for why now is, frankly, the terrific progress that the GRAIL team has made over the last few years and where they stand right now. When we spun out GRAIL 4 years ago, you remember how this idea got started, right? So we were processing samples for NIPT in our clinical labs.
And although we were seeing normal fetal DNA, we noticed abnormalities in the mother's DNA. And so we reported that to the doctor. And in all of those cases, it turned out that the mother had cancer and didn't know about it. And so we incubated so there was an idea that you could get signals for cancer in the blood. And we incubated that idea with our team for a couple of years to feel like there was something there.
But there was a lot of unknowns. It was unclear whether there was enough signal to detect early stage cancer. It was unclear whether you could just detect only certain types of cancer. It was unclear if the approach we were thinking about was the right approach. And so what we wanted was to create a company that was going after this moonshot mission that could be focused on that, move quickly on that, but we also wanted to know maybe other approaches in the market would be more fruitful.
The team has done a fantastic job over the last 4 years and sort of derisked a lot of the questions. The technology they've put together, team they've assembled and then probably most importantly, the results they're demonstrating from their large scale clinical studies have put to bed a lot of the questions that we had. The Galleri results I talked about based on the CCGA samples show that they are able to identify over 50 types of cancer, that they have a specificity that means the false of 99% is a false positive rate of less than 1%. So they won't flood health care systems with false positives. And they have high sensitivity, especially for the deadliest cancers.
And so they stand today on the precipice of commercializing a product next year. And so now it makes a lot of sense for us to acquire them. And so why acquire them, you asked. Why not just increase our investment? And the reason to acquire them is because we have very clear line of sight as to how we can accelerate the plan that they are on today.
And we can only do that if they're part of Illumina, plugging them into our commercial conversations with population sequencing efforts, for example, standing them up in our clinical labs around the world rather than wait for them to build up their own clinical labs, plugging into our regulatory expertise in countries around the world. All of those things are things that we can do if they're particles of enough that frankly we wouldn't be able to do as well even if we were a 30%, forty percent owner off of Grail. And so they are they talk about launching the product next year, so they're close to commercialization. So it's exactly the right time, we felt, where there is a product, the value has been demonstrated and they're ready to scale and that's where we can help from an operational perspective, from a clinical perspective, from a commercial perspective. In terms of the stock drop, we've seen before, and I mentioned this in my prepared remarks, that look, this is a big step.
I understand that. This is also a big amount. I understand that. And we've had this happen to us before when we were in the array business and we wanted to get into sequencing and we announced that we were acquiring Celexa to get into the sequencing business. Our stock dropped that day too.
And it took a while for us to work with the market to explain where we were going and why we thought that was a big opportunity. And of course, today, that's been enormously successful story and sequencing is the vast majority of our revenues. And so we anticipated that there'd be work for us to do in explaining this step and explaining the opportunity and explaining why GRAIL and why GRAIL and Illumina. And that's the work we have in front of us. But we're very confident that it's the right next step in terms of fulfilling our mission.
With that, I'm going to turn it over, Sam, to you to talk about margins and the questions that Tycho has.
Yes. So I'll tackle a couple of things here. Margins and I think you had a question on operating expenses as well, Tycho. So from an overall COGS standpoint, the COGS will initially start out obviously much higher than our average COGS driven by the fact that volumes are ramping up. So initially, you're going to see a higher COGS profile for the business.
As the volumes start ramping up though and 2.5 to 3 years post launch of Galleri, the COGS start to get to a level which is commensurate with our overall services business and slightly below our overall COGS profile. And obviously, as we introduce more innovations and lower the cost of sequencing to your question, the cost will benefit from that as well, just like all of our customers will benefit from that. In terms of operating expenses, if you look at what Grail invested last year or this year, I should say, for the first month, it was roughly $135,000,000 If you extrapolate that for the full year, let's say, it's exactly double that, it's about $270,000,000 for the full year. As we look forward, obviously that number is going to grow because we're going to be ramping and launching products. We're going to be accelerating the commercialization efforts and building out a sales force.
And there's going to be continuing R and D as well. So OpEx, especially in 3 years, is going to be have impact on dilution P and L. But let me remind you of the just the attractiveness of this opportunity longer term and eventually as the volume scale, the opportunity is significant on the top line. And even though it requires investment in terms of commercial efforts in R and D, we will definitely, after a few years, start to see accretion on P and L.
And then maybe Hans, can you comment on the clinical value and the questions around the screening test and where we are?
Sure. So as you noted, Tycho, the sensitivity for breakthrough performance. Francis touched on the fact that when we pre specified a basket of 12 cancers, we have sensitivity of just under 70%. And those 12 cancers, by the way, account for about 2 thirds of mortality. What you're observing is when you start looking for more cancers in those 12 and you start adding in cancers where the test has lower sensitivity, the sensitivity does drop.
But here's what matters. Even though the sensitivity drops, as you expand the absolute number of cancers you look for, the total number of cancers you detect goes up. So a test looking for 50 cancers at 44% sensitivity in aggregate detects many more cancers than a test looking for 12 cancers at a 67% sensitivity. And when you think about medical need, we all have 70% of deaths in this country from cancer occur in cancers where there is no screening, this test will detect the vast majority of those. So that's why it's the right thing to have a test that can really detect the maximum number of cancers possible.
Great. Thank you, Hans. And then your last question, Tycho, was is this move any reflection of how we think about the core market? And is that what's driving this? And I'd say not at all.
We remain confident in our core market. Obviously, this year, in the last couple of quarters, we've seen a slowdown because of people's shows running in place as a result of the pandemic. But we thought we've talked about how that's slowly been building since the end of of Q1. And next year, certainly, as we start to see a number of initiatives kick back up, we feel very good about where we are with the core business. We talked about the population efforts that All of Us is going to be starting in the back half of this year in the U.
S, but we'll be ramping up next year. Similarly, the UK Biobank project has been going. It paused for a little bit, but it's starting to scale up again. And then the NHS effort, which this year has been sidelined to focus on COVID, is going to be kicking back up next year. So we are optimistic about where population sequencing efforts are going to be starting into next year.
We're seeing good news in terms of guideline changes for NIPT and continued growth in NIPT around the world. We're seeing continued adoption of our TSO500 product. We expect that to continue to drive growth. And then obviously, we launched the NextSeq 2000 this year. And so we expect to continue to see that upgrade cycle play out certainly as we get into next year.
This move is really about our strategy. And our strategy has been and guided by our mission to improve human health by unlocking the power of the genome. Our strategy is to provide sequencers and consumables to a broad array of markets and then to pick very specific solution ourselves. We want to pick the largest market opportunities where we can provide a differentiated offering. And frankly, if you look at that criteria, there probably is no other criteria, no other space that meets that criteria as well as early cancer detection.
It's the largest of the genomic applications that we can imagine over the next 15 years, and GRAIL has built a very innovation rich portfolio with good IP around it. And so we will have a differentiated offering in that market. And so the price again, the strategy is horizontally provide sequencers and consume everywhere and then be very searchable. And that's very common for platform companies. Certainly, if you look at technology, whether it's Apple or Amazon or Microsoft, they provide the platform, but then there are specific applications that they provide directly themselves, typically the largest application.
And having an application actually gives you access to insights that have you create a better platform too. So having specific applications also helps you have the best platforms in the market. So with that, we'll go to the next question.
Derek De Bruin with Bank of America. Your line is open.
Hi, good morning. Good morning.
So a couple of questions. I guess the first one, how much of Illumina's revenues in 2019 and estimated revenues for 2020 were tied to sales to GRAIL, number 1? Number 2, a number of questions from investors this morning, just wanting to get some better clarity on the EPS dilution. Is a 20% to 30% EPS dilution a reasonable number for investors to sort of do their models? And number 3, what do you expect from the PATHFINDER trial readouts?
And what would be a good readout to enable the LVT launch? And just some initial thoughts on the early commercialization efforts and what conversations Grail has had with potential self insured employers and sort of the other members that you talked about? Thank you.
Sure. So three questions. I'll take the first one around Grail revenue to Illumina in the last couple of years. Maybe Sam, you can talk about EPS solutions and then Hans, you can answer the question around the Pathfinder read average. So first one is sort of short.
In 2019 2020, Grille was a very, very, very small part of our overall revenue. In fact, I typically look at our top 20 customers on a daily and weekly basis. I don't think I ever saw them in either of those 2 years on those lists. So it's a very small part of our revenue for 2019 or 2020. Sam, maybe EPS?
Yes. So as I talked about earlier, the ramp of OpEx in the full year post close of the deal that there would be EPS dilution of somewhere in the $3.25 to 3.75 dollars
range. And then, Hans, could you talk a little bit about CashFinder and the upcoming readout and place that in context a little bit?
Sure. And for folks that aren't familiar, Pathfinder is a 6,000 patient clinical trial that's enrolling as we speak. It's a return of results study. So patients in this trial getting the GRAIL test, when the test detects a cancer, they're getting worked up and obviously the results return to them. So our expectation is that that real world trial will confirm the performance we've seen in other studies that we've reported to
you and covered on the
call this morning. The other thing that this study is very important for is it will help us understand the service components of the test that we'll provide to help make sure that the workup process post a positive test is simple and good to use for primary care doctors. Thank
you. All right. Next question?
Patrick Donnelly with Citi. Your line is open.
Great. Thanks, guys. Maybe just a follow-up on Derek there, just given the dilution number, a little bit bigger than we were modeling as the news came out last week. Sam, can you just talk about maybe the OpEx trajectory over the next 12 months again to get to that $350,000,000 to $375,000,000 number you noted? Should we expect that number to really take a big jump up from what we saw on the S-one from the Grail OpEx numbers?
And then maybe just quickly after that, you guys were obviously participating with some upside from Grail with the royalty as a customer, etcetera. So can you just expand a little more, Francis, on I guess why you guys want to bring it in house and also give the royalty almost back to them with the 9% over $1,000,000,000 maybe just kind of flush that out a little bit? Thanks, guys.
Yes. So I can start on the OpEx trajectory and maybe expanding on the dilution to some extent. And I'll remind everybody that we will be providing more refined financial estimates as we get closer to the close of the acquisition. So at this point, we're giving directional numbers just to give you a sense of what you're expecting in your models. But to answer your question around the OpEx investment, Patrick, yes, obviously, there will be an increase from what you saw in the S-one and what you saw last year or this year sorry, I saying last year, but what you saw this year in terms of investment by GRAIL.
The investment has been focused on R and D. And as I said, the investment that was disclosed was $135,000,000 So if you expect that that's going to be a full year worth of investment that's closer to $270,000,000 But as we look forward, kind of the Galleria launches, there's going to be investments around a number of factors. It's going to be R and D, it's going to be commercial, it's going to be market access, government affairs, G and A to support the business. There are a number of factors that drive that OpEx in the 1st few years. And until the reps start to scale, that's going to be significantly dilutive to the number that I mentioned earlier, which is the $3.25 to $3.75 in the 1st full year post launch.
So I think I would also though mention that with a $6,000,000,000 TAM that's gotten added to our business, the revenue opportunity is quite attractive as we look at the long term.
Yes. And then, Scott, let me pick up on your question around royalties. So as you pointed out, the arrangement we have pre acquisition with Grail, obviously, that they buy precursors and consumables from us, but we also get a royalty on the GRAIL revenue. And as we thought through sort of we modeled what that looks like over the next 15 years, it's clear to us that we participate more fully. So we get more revenue, more margin dollars in if we acquired Grail.
So just financially, this is a much better way of capturing the value in the market than continuing to be a supplier to Grail with the royalty. And as Sam pointed out, this is a $60,000,000,000 market opportunity. We are able to sort of capture the value better than the current agreement. In terms of the royalty back to Grail shareholders, and just as a point there, as you heard in the prepared remarks, we are 12% currently of Grails shareholding. So the royalty, you've got to adjust it to the 12 percent that we own ourselves.
And the thinking here was, look, we as we were working with the Grail investors, this is one area where clearly they see the opportunity in front of them and there was a gap in how we get it out and we were a little bit more conservative. And so this was a nice way to sort of bridge that to say, look, we're going to make sure that we participate. If the opportunity is much bigger than we think, then everybody wins. Otherwise, we all share if it's a little bit less than we thought. And so this was a way to structure it over the next 12 years where we could align on benefiting if the market ends up being much bigger than we thought.
Steve Bintchanger with Wolfe Research. Your line is open.
Hi, good morning. Thanks for the time. I'll ask just 2. 1, I actually want to follow-up on a point that Tycho raised, and it's about how you want to articulate right now what you think about the core business. I appreciate the points that all of us, Biobank, NHS, all coming on next year.
I'm a wait to see the pipeline, but I wonder would you be comfortable taking a view that the core business, the ExGrail business is a double digit grower as far as you can see out into the future? And then my second one is, as you think about the landscape of providers out 5 or 10 years ago from now rather 5 or 10 years from now, what does it look like in terms of how many different cancer detection assays you think are out there. Having Illumina involved in this particular way, it means that there's going to be 1, obviously, very large scale player the way is to come at this particular market. Can you talk about how you see that looking? And what is the importance of the rather substantial IP portfolio that you had flagged Francis and Hans as you think about what that landscape looks like?
Thank you very much.
Thank you, Steve. So a couple of questions. One is how do we think about the core business? And the second one is how do we think the landscape for cancer detection assays will play out? Will there be a significant single winner?
Or will there be multiple players? So let me go through the first one. The absolutely, I'm comfortable saying that we expect our core business over a multiyear period to generate double digit growth. We are still, as we said, in the very early stages of understanding from a research perspective even how genomics translates into health and disease. But from a clinical perspective, we're also in the very early stages of penetrating some of the markets we talked about, like oncology therapy selection and genetic disease testing.
Genetic disease testing were less than 1% penetrated. So I am comfortable that over a multiyear period, you should be seeing double digit growth from the core business. And that the acquisition of Gral is intended to accelerate that even further, but even without it, it's a double digit grower. In terms of how we expect the cancer detection market to play out, this is a very, very large market. We talked about a $60,000,000,000 market.
And so we expect that there will be multiple approaches for this market. Some will focus on single cancers or small set of cancers, some will be pan cancer. And frankly, that's how we've modeled sort of the revenues for us, as we expect there to be multiple players trying multiple approaches, serving different segments of the market. And again, with a market this big and this important, we expect it to play out that way. And this is all
the time we have for questions. The Illumina team thanks you all for your participation in today's conference. This concludes today's call. You may now disconnect.