Grail Q1 2025 Earnings Call Transcript

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May 13, 2025
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Operator

Good day, ladies and gentlemen, and welcome to the GRAIL First Quarter twenty twenty five Earnings Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that this conference call is being recorded. Grail Investor Relations, please begin.

Executive

Thanks, operator, and thanks, everyone, for joining us today. On today's call are Bob Bergusa, Grail's chief executive officer Aaron Frieden, chief financial officer doctor Joshua Offman, president Sr. Harpal Kumar, president, international business and biopharma and Andy Partridge, chief commercial officer. We'll be making forward looking statements on this call based on current expectations. It's our intent that all statements other than statements of historical fact made during today's call, including statements regarding our anticipated financial results and commercial activity, will be covered by the safe harbor provisions for forward looking statements contained in Section 27A of the Securities Act of 1933 as amended and Section 21 of the Securities Exchange Act of 1934 as amended.

Executive

Forward looking statements are subject to risks and uncertainties. Actual events or results may differ materially from those projected or discussed. All forward looking statements are based upon currently available information, and GRAIL assumes no obligation to update these statements. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to documents that Grail files with the SEC, including the risk factor section in Grail's most recent quarterly report on Form 10 Q. This call will also include a discussion of GAAP results and certain non GAAP financial measures, including adjusted gross profit or loss, which are adjusted to exclude certain specified items.

Executive

Our non GAAP financial measures are intended to supplement your understanding of Grail's financials. Reconciliations of the non GAAP measures to most directly comparable GAAP financial measures are available in the press release issued today, which is posted to our website. And with that, we turn to Bob.

Bob Ragusa
CEO & Board Member at GRAIL

Thank you. Good afternoon, everyone, and thank you for joining us to review first quarter results. We're making progress toward our vision of population scale, multi cancer early detection and remain focused on developing the market. We plan to continue advancing Gallery through several key clinical and regulatory milestones that will help unlock broad access while maintaining our disciplined cost management. We are very pleased this afternoon to share positive top line results from the prevalent round of screening in the 40,000 participant NHS Gallery trial.

Bob Ragusa
CEO & Board Member at GRAIL

NHS Gallery is one of our two registrational studies. And as Harpo will describe shortly, these results continued to demonstrate strong Gallery performance in detecting multiple types of cancers with very low false positive rates. I'll take a moment to review key achievements in the first quarter before turning it over to Harpal, then Josh will provide a medical and scientific update, and Aaron will cover the financials. We are building on our unique position as first mover in the multi cancer early detection field with the only commercially available clinically validated MCED test that has shown the ability to detect many types of cancer. GRAIL has sold more than 37,000 Gallery tests in the first quarter.

Bob Ragusa
CEO & Board Member at GRAIL

And as of March 31, more than 325,000 Gallery tests have been prescribed by more than 14,000 health care providers since we launched Gallery commercially in 2021. We continue to drive provider and patient awareness of the MCED opportunity and Gallery's ability to detect cancer early when it is more amenable to treatment. And importantly, we are generating real world evidence as our leading health systems and physician practices who have offered MCED as early gallery adopters. We are proud of the demonstrated impact gallery is having on patients' lives today, and I'm excited about our technology's potential to affect how and when we find cancer on broad scale. We have made significant investments over time to optimize our technology and laboratory infrastructure, and we began the rollout of an enhanced version of the gallery test in the fourth quarter of last year.

Bob Ragusa
CEO & Board Member at GRAIL

The workflow integrates a significant level of automation among other efficiencies to help support volume at scale and help achieve reductions in costs over time. Among recent business highlights, we announced yesterday a new partnership with athenahealth intended to further streamline the gallery test ordering process. Gallery's integration within athenahealth's EHR platform, athena coordinator core, can provide a more seamless ordering process for over a 60,000 US providers. Additionally, Gallery test results will be returned directly in the EHR. We remain on track for continued commercial growth in 2025 with expected volume growth from TRICARE coverage and Galleries integration with the Quest Diagnostics ordering system.

Bob Ragusa
CEO & Board Member at GRAIL

Additionally, we have commercially launched in Israel in partnership with OncoTest, which has a strong record in genomic test distribution. We are pleased to see the initial test orders within that region. Finally, we are initiating a new educational campaign called Generation Possible. Generation Possible's goal is to build public awareness of multi cancer early detection, and we have partnered with Kate Walsh as a spokesperson to help further the message. The campaign underscores at the patient level the importance of taking control over your health with the option to screen for many of the deadliest cancers before symptoms appear.

Bob Ragusa
CEO & Board Member at GRAIL

More information about generation possible is available at genpossible.com. And with that, I'll turn it over to Harpala.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

Thank you, Bob. I'm pleased to share high level gallery test performance results from the intervention arm of the prevalent screening round of our 140,000 participant three year NHS gallery registrational trial. The prevalent screening round was the first round of blood draws with one year of follow-up. We were pleased to see a substantially higher PPV than 43% observed in the Pathfinder study. We also saw specificity and cancer signal of origin, or CSO, consistent with our Pathfinder study, which was an interventional return of results study evaluating the performance of Gallery.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

As a reminder, Gallery demonstrated specificity of 99.5% and a CSO accuracy of 88% in Pathfinder. There were no serious safety concerns in the NHS gallery prevalence screening round, also consistent with the Pathfinder study. As Bob mentioned, the top line results from the prevalence screening round of the NHS gallery trial are very encouraging. Results of all the three years of the trial are expected in mid-twenty twenty six. These longitudinal results will be the first clinical utility results of their kind in the MZED field.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

The NHS Gallery trial was designed as three annual blood draws plus twelve months of follow-up in order to evaluate Gallery's ability to diagnose cancer at an earlier stage relative to standard of care. Cancer screening trials designed to show clinical utility are commonly conducted over three or more years using an annual screening interval. Because if screening is only conducted once, results can be influenced by the fact that the first screening round detects many prevalent late stage asymptomatic cancers that have not yet been diagnosed. This and other factors are likely to cause final results of the three year trial to differ from a review of the first round results. NHS Gallery is the largest and only randomized controlled trial of any MSED test, and the results thus far demonstrate strong Gallery performance.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

Together with England's NHS, we expect to publish detailed data from the ongoing NHS Gallery trial, including the primary endpoint of an absolute reduction in the number of stage three and four cancer diagnoses, as well as a number of test performance secondary endpoints, including episode sensitivity, in mid-twenty twenty six. And with that, I will now hand over to Josh.

Joshua Ofman
Joshua Ofman
President at GRAIL

Thanks, Harpal, and hello, everybody. At GRAIL, we have implemented one of the largest clinical evidence programs in the NSAID space with more than 385,000 participants overall. More than 21,000 participants were included in the studies to support the development and launch of Gallery, and over a 70,000 individuals are included in our registrational studies which support our PMA submission to the FDA. Now let's be clear. Gallery is working in the real world.

Joshua Ofman
Joshua Ofman
President at GRAIL

We are detecting clinically meaningful cancers and early stage cancers in asymptomatic adults. Our signal detection rate in commercial use is very much in line with what we expected based on our prior clinical studies. The majority of the early stage cancers Gallery has found are in cancer types where a recommended screening test does not even exist, thereby allowing patients an opportunity to access more effective and even curative treatments. Now we've described over time the key performance metrics, features, and capabilities for multi cancer early detection tests, which importantly are quite different from those for single cancer screenings. Positive predictive value, or PPV, is a key metric which discerns among positive test results how many are true positives.

Joshua Ofman
Joshua Ofman
President at GRAIL

Specificity, critically important, defines the false positive rate. A very low false positive rate helps reduce unnecessary workups and their associated costs and contributes to driving a high positive predictive value. Our demonstrated specificity at 99.5% equates to a false positive rate of 0.5%. So just to remind you, a 1% reduction in specificity to 98.5% would triple the false positive rate. That is a point 5% false positive rate would then become a 1.5% false positive rate, three times higher.

Joshua Ofman
Joshua Ofman
President at GRAIL

So applying this to a real world population of a million people tested, instead of there being only 5,000 false positives, there would now be 15,000. Such a reduced specificity would be expected also to result in a positive predictive value about half of what we see at a specificity of 99.5%, holding all other metrics constant. Finally, one of the most important features of a multi cancer early detection test is the ability to localize that cancer signal. In multi cancer early detection, CSO capability, or our cancer signal of origin prediction, is the key to guiding physicians to an appropriate and efficient workup to diagnosis. We consistently hear from physicians in the field that this is a critical component of any multi cancer screening test.

Joshua Ofman
Joshua Ofman
President at GRAIL

Even an FDA advisory committee on multi cancer detection in November 23 similarly emphasized the importance of a cancer signal of origin feature in any multi cancer detection test. Our teams have continued to present evidence demonstrating Gallery's performance at renowned medical conferences. In April at the AACR meeting, we shared a real world dataset on Gallery's test performance and implementation in over a hundred thousand individuals. Gallery indeed identified cancers across this large intended use population, including early stage cancers and cancers without recommended screening. Generally, the test performance in this real world setting remain consistent with what we've consistently observed in our prior clinical studies.

Joshua Ofman
Joshua Ofman
President at GRAIL

Among other data, we also presented at AACR an analysis highlighting the importance of annual screening with an M SEAD test. Model data of post test probabilities of cancers for individuals receiving M SEAD tests showed that individuals receiving a negative MZED test and they have a reduced risk of late stage cancer diagnosis for one year after the blood draw. And then this risk increases as the screening interval extends beyond one year. This study really supports the need for annual testing. Finally, I'd like to highlight that US health systems are now publishing their own experiences with gallery performance and implementation.

Joshua Ofman
Joshua Ofman
President at GRAIL

A paper authored by the Mayo Clinic and published recently in March in the Journal of Primary Care and Community Health showed that Gallery effectively detected cancers in an asymptomatic population within their health care system and had a seventy three percent positive predictive value. In other words, seventy three percent of those with a positive Gallery test yielded a confirmed new cancer diagnosis. Now the sample in this Mayo Clinic analysis was relatively small and had some different patient demographics compared to our prior trials. Importantly, this paper included the Mayo Clinic's standardized approach to pursue a diagnostic workup following a positive cancer signal and our signal of origin prediction. The outlined steps are informed by a multidisciplinary expert council convened by the Mayo Clinic.

Joshua Ofman
Joshua Ofman
President at GRAIL

Then they reviewed our cancer signal of origin prediction and other data from our first Pathfinder trial. These recommendations continue to be updated, and they've really served as a centralized resource for the Mayo Clinic physicians. Now additional health systems and clinicians are beginning to publish their experience with Gallery. Upcoming ASCO twenty twenty five presentations of note include the implementation and evaluation of multi cancer early detection testing at the Dana Farber Cancer Institute, a retrospective analysis of clinical outcomes and diagnostic pathways, and an independent analysis by Alabama Cancer Care titled A Clinical Review of a Novel Blood Test Use in Rural Alabama for Analyzing Methylation Patterns of Cell Free DNA and Future Strategies. Now looking forward, we anticipate performance data from the first twenty five thousand participants in our other registrational study, PATHFINDER two, later this year.

Joshua Ofman
Joshua Ofman
President at GRAIL

We also plan to conduct a bridging study between the version of Gallery used in our registrational trials, NHS Gallery and PATHFINDER II, to the updated version that we plan to submit to the FDA for premarket approval. We plan to submit data from the prevalence screening round of the NHS gallery trial, the first twenty five thousand participants in the PATHFINDER two study, and the bridging study as part of our premarket approval application in the first half of twenty six. I'll now hand it over to Aaron for a review of our financials.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

Thanks, Josh, and good afternoon, everyone. I'm pleased to present our results for the first quarter. First quarter results were strong with revenue of $31,800,000 up 5,100,000 or 19% as compared to the first quarter of twenty twenty four. Total revenue for the quarter is comprised of $29,100,000 of screening revenue and and $2,700,000 of development service revenue. Development services revenue includes services we provide to biopharmaceutical and clinical customers, including support of clinical studies, pilot testing, research and therapy development.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

We see continued demand for our gallery test and sold more than 37,000 tests in the first quarter, a period we have observed historically to be softer relative to the fourth quarter. Repeat test volumes have moved higher over time, including in early twenty twenty five. More than 20% of gallery volume today is repeat testing. Screening revenue of $29,100,000 in the first quarter was up 24% as compared with the first quarter of twenty twenty four. U.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

S. Gallery revenue was $28,700,000 up 22% compared to the first quarter last year, and we are on track relative to full year guidance we shared in January of U. S. Gallery revenue growth of 20% to 30%. We do not expect major impacts from tariffs on our current business as our laboratory is located in The U.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

S. And a significant majority of our suppliers are located in and manufactured in The U. S. Net loss for the quarter was $106,200,000 an improvement of 51% as compared to the first quarter of twenty twenty four and included amortization of intangible assets of $34,600,000 and stock based compensation of $16,200,000 Non GAAP adjusted gross profit for the first quarter of twenty twenty five was $14,300,000 an increase of $2,300,000 or 19% as compared to the first quarter of twenty twenty four. We ended the quarter with a cash position of $677,900,000 In January, we guided that we expect cash burn for the full year 2025 to be no more than $320,000,000 This represents a decrease of more than 40% compared to 2024.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

Our cash runway extends into 2028, enabling us to achieve major planned clinical and regulatory milestones. I'll turn it back to Bob for concluding remarks.

Bob Ragusa
CEO & Board Member at GRAIL

Thank you, Aaron. To close, we remain encouraged by the demand we are seeing today while we advance towards major milestones, seeking FDA approval of Gallery and pursuing broad reimbursement. We are very pleased to have taken additional strides in early twenty twenty five, including executing on the transition to the enhanced, more scalable version of Gallery, achieving TRICARE coverage, and enabling easier access to Gallery ordering through Quest Diagnostics and Athenahealth. Looking ahead, we expect to share interim data from PATHFINDER two study in late twenty twenty five. That dataset will include the first twenty five thousand of the 35,000 participants enrolled.

Bob Ragusa
CEO & Board Member at GRAIL

In 2026, key milestones include the completion of our modular PMA submission to the FDA in the first half and final results from our 140,000 participant NHS gallery study. With that, we'll turn the call over to Q and A. Operator, please go ahead.

Operator

Thank you. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a prompt to unmute. As a reminder, we are allowing analysts one question and one related follow-up today.

Operator

We will wait one moment to allow the queue to form. Our first question will come from Subbu Nambe with Guggenheim Partners. Please unmute your audio and ask your question.

Subbu Nambi
Managing Director at Guggenheim Securities

Hey, guys. Thank you for taking my question. My first question is back in December, the new version of Gallery was starting to be offered with expected short term variable cost improvement. Can you quantify what those were in the quarter? And what should we expect sequentially for the year?

Bob Ragusa
CEO & Board Member at GRAIL

Aaron, do you want to take that one?

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

Yeah. So thank you.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

Thanks for

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

the question. Yeah. So as you said, we we did launch at

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

the end of last year. You know, this year, for the first quarter, we've we're on that new version, and we'd expect to see margins continue to improve over the rest of the year as we increase scale and and just work through the the launch transition that we're that we're going through this quarter. You'll you'll as you said, you'll see those variable COGS improvements come over time as we as we move everything over to that the the new version completely.

Subbu Nambi
Managing Director at Guggenheim Securities

Got it. And then when setting guidance, you said you considered Quest and said legislation and TRICARE approval. How have those played out to your expectations in one q? And then is there any upside from here more than what you expected?

Bob Ragusa
CEO & Board Member at GRAIL

Yeah. So, you know, early days on, you know, both both Quest as well as TRICARE. So we, you know, we are seeing improved ordering from, you know, from plus providers that are going through the Quest portal. So that's that's very encouraging. But, again, early days on that.

Bob Ragusa
CEO & Board Member at GRAIL

And on TRICARE, we're working through the contracting process. So we're, you know, we're in coverage with TRICARE, but working through the, you know, the coverage process process with the various contractors there. So more to come on that later in the year.

Subbu Nambi
Managing Director at Guggenheim Securities

Got it. Thank you, guys.

Operator

Our next question will come from Tejas Savant with Morgan Stanley. Please go ahead.

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

Hey, guys. Can you hear me okay?

Bob Ragusa
CEO & Board Member at GRAIL

Yeah. Yes.

Bob Ragusa
CEO & Board Member at GRAIL

Perfect.

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

So maybe just one on the cash burn in the quarter. I guess, can you help us just think about, you know, the burn trajectory over the course of the next, you know, between now and year end? How you're tracking towards that sort of $320,000,000 or less in born target that you guys had? And then second, on on sort of a related note, you've got a couple of, you know, other MSAT launches coming up here, including one from, you know, an established brand in single cancer screening.

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

So how are you thinking about your OpEx levels, which you've done a good job sort of controlling so as to keep the burn down? Do you need to sort of, you know, think about reaccelerating it a little bit as as some of those other offerings make make it to market here?

Bob Ragusa
CEO & Board Member at GRAIL

Yeah. Maybe, Aaron, you wanna take the cash burn one first?

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

Yeah. Tejas, yeah, on on the cash burn, so, you know, q one, I think we burned just under 90,000,000. First quarter is, you know, the period that we pay out our annual bonus from the prior year, which is something, of course, it's not gonna repeat in the in the future quarters. Then also as as as we talked about margins just in the last question, as as we grow more and as margins improve, you know, the the cash burn will will will be in the $320,000,000 range that we gave.

Bob Ragusa
CEO & Board Member at GRAIL

Got it.

Bob Ragusa
CEO & Board Member at GRAIL

And then

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

Yeah. Go ahead.

Bob Ragusa
CEO & Board Member at GRAIL

And then on

Bob Ragusa
CEO & Board Member at GRAIL

the OpEx and competitors, you know, so it's good actually to see, you know, others investing in multicancer early detection as we've I think we've noted on this call where we've been doing all the heavy lifting in terms of really educating the field, developing the market. You know, we've made unprecedented investments, though, to set a very high bar for the field and, you know, demonstrated really strong specifications based on that. And so, you know, we'll we'll have to take a look and see, you know, you know, from the announcements what actually transpires in terms of actual competitive, you know, approaches to see if that's gonna have any OpEx any OpEx impacts on us. So right now, I would say it's it's not clear that we have OpEx impacts from those launches, but, you know, something we'll monitor over the next couple of quarters.

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

Got it. Fair enough. And then couple of quick cleanups on the data side, guys. So, you know, the intervention arm from the NHS gallery, that that data that you just shared, how should we be thinking about the read across from that your you know, next year's final NHS gallery readout, like, particularly in terms of that higher PPV you highlighted? And can you put a finer point on when in the second half of of the year we can expect Pathfinder two data?

Bob Ragusa
CEO & Board Member at GRAIL

Yeah. So, you know, on the second question, you know, we're looking to mid mid next year to have the readout on the on the full three year study.

Bob Ragusa
CEO & Board Member at GRAIL

We

Bob Ragusa
CEO & Board Member at GRAIL

also have Hartpal on the call today, so Hartpal may be answering the first part of that question.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

Yeah. Sure. Thank you for the question. So, look, the it's important just to reiterate that the results we've shared today are from the first screening round only. And as we've as we've tried to describe, it's really important that that, you know, the first round of a screening program, what you typically see is that you are finding a lot of prevalent cancers in the population that that have not yet been not yet been diagnosed.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

They are asymptomatic, but they can often be very late stage. And so as we go through to the second and third rounds and and those, you know, those prevalent cancers in the population have already been diagnosed, you know, we would expect to see some some differences in in in the second and third round as indeed has other other screening programs in the in the past. But we're not, you know, we're not we're not in a position today to be able to predict what those results will be, but we will have those results in mid twenty six.

Tejas Savant
Tejas Savant
Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley

Fair enough. Thanks, guys. Appreciate it.

Operator

Our next question will come from Doug Schenkel with Wolfe Research. Please go ahead.

Doug Schenkel
Managing Director at Wolfe Research LLC

Hey. Good afternoon, everybody. Thank you for taking my questions. I wanna talk about two things, things, the BMJ publication, and then I want to talk about your cash management strategy, which is obviously top of mind for a lot of us. So starting on the BMJ publication, know, as you talked about in your prepared remarks, you demonstrated that annual MCED screening shows a higher projected impact on stage shift and mortality reduction relative to biennial testing.

Doug Schenkel
Managing Director at Wolfe Research LLC

So keeping that in mind and then also the fact that you've indicated that based on draft MCED legislation that you would assume that ASPs would land in the 500 to five fifty level. My questions are, do you believe that the ASP would be unaffected by testing interval? Meaning, there's more frequent testing, does the ASP need to come down? And then the second part of the question is, when you think about the cost of the system, if there was broad adoption of Gallery at that pricing level, how and then you think about by extension how much it would cost to find, you know, a single cancer. If we think about the cost for cancer detected, including subsequent workups and, you know, even a small number of false positives, would there be any concern in that scenario about the health economics, especially, again, for an annual test?

Bob Ragusa
CEO & Board Member at GRAIL

Josh, you want to take that one?

Joshua Ofman
Joshua Ofman
President at GRAIL

Sure. Sure. So I think, as you noted, you know, we have a lot of data now to suggest that based on cancer biology, galleries should be administered on an annual basis if we want to find early stage asymptomatic cancer based on the rates with which cancers are progressing, given everything we know on the biology of circulating DNA now. So we think that's the right way to go, and all of our pricing strategies and everything we've projected about ASP are based on annual testing. So it's it's, you know, really too early to speculate on what would happen if we tested more frequently than that.

Joshua Ofman
Joshua Ofman
President at GRAIL

From the health economic perspective, Doug, it's a it's a great question. We know that with annual testing, even if population scale, at the prices that are in the market today, let alone the the lower ASPs that you're commenting on, this is a highly cost effective intervention. And compared to what we're spending today to diagnose a cancer, given everything that's going on with the false positive rates of current single cancer screening, that the cost to diagnose a cancer with an MCED added to standard of care screening come down substantially. And the numbers needed to screen are much lower than what we've seen traditionally with some of the single cancer screening tests. So even today, the health economic data are very compelling from an efficiency and cost effectiveness perspective.

Joshua Ofman
Joshua Ofman
President at GRAIL

There obviously is a budgetary impact to payers by screening the population for any disease, but it's high value investment.

Doug Schenkel
Managing Director at Wolfe Research LLC

Okay. Thank you for that. Good good food for thought. So the second topic is on cash management. And, you know, just keeping in mind your stock, at least last I checked, is up, you know, about a 40% year to date.

Doug Schenkel
Managing Director at Wolfe Research LLC

There are obviously questions about your ability to fund operations through the period where you would plausibly get FDA approval and CMS reimbursement. Reimbursement. And, again, acknowledging you guys are doing a good job, you know, moving towards, you know, trying to extend the runway as long as possible. There are still concerns you can get there, you know, especially given where we are with the MCED bill and, you know, the path to FDA reimbursement and the our approval and CMS reimbursement. So in a best case, recognizing those developments are several years away and also recognizing the n h a NHS gallery readout, which is pretty critical, doesn't read out until next year.

Doug Schenkel
Managing Director at Wolfe Research LLC

And at that point, your cash position's gonna be, you know, below half of what it is today. You know, things start to get a little bit tight. So what what was the calculus given all all of these facts at the board level behind not raising money to derisk the outlook? It seems like that would have been a very prudent move to allow you to, you know, maybe play offense a little more aggressively and to make the n h I NHS readout, like, next year less binary. So, you know, simply put, what what's the thinking here?

Doug Schenkel
Managing Director at Wolfe Research LLC

What's the rationale, to not take some steps? What what are we missing?

Bob Ragusa
CEO & Board Member at GRAIL

Yeah. Doug, it's a good question. You know, it's something we've obviously thought about. You know, we you know, as we've said in, you know, previous discussions, we think that getting through some of these milestones derisks the business, and and creates value for us. And so, you know, in the calculus, we we're looking at, you know, getting through some of these major milestones and knowing that we have the cash runway to get through those was kind of the deciding factor towards, you know, waiting until things play out a little bit.

Bob Ragusa
CEO & Board Member at GRAIL

You know, obviously the stock as you mentioned stocks up a bit that obviously pushes more in the favor of being able to do something, but we still feel we have, you know, substantial cash runway and and we have, you know, relatively near term milestones that we'll be value creating.

Bob Ragusa
CEO & Board Member at GRAIL

Aaron, anything Yeah.

Aaron Freidin
Aaron Freidin
Chief Financial Officer at GRAIL

I mean, I would just add, I mean, we're we're less than a year out from our spin as well. We've got just about $700,000,000 on our balance sheet. So, you know, Doug, I think it's something that we're, you know, we're going to continue to look at and work about work on and think about with our board. So it is it's on our minds, but we're we're in a good position now in in our view.

Doug Schenkel
Managing Director at Wolfe Research LLC

Okay. Thanks, guys.

Operator

Our final question will come from Kyle Mixon with Canaccord. Please go ahead.

Kyle Mikson
Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets

Thanks, guys, for the questions. Just on NHS first, just given the data here and the in the study, you know, keep progressing, How are the recent conversations with NHS going? And and do you you know, what do you accept they're gonna do, I guess, with calorie commercialization in the country following the full readout in 2026? And then secondly, for maybe Harpal, like, the PPD for the the subset here that you provided, that, like, a modeled number, or is that, like, a concrete metric? I just wanna kind of understand if it's like, how the number should be used and if it's I'm sure, like, how much early higher it is compared to, like, Pathfinder, for example.

Kyle Mikson
Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets

Thanks.

Bob Ragusa
CEO & Board Member at GRAIL

Paul, do you wanna

Bob Ragusa
CEO & Board Member at GRAIL

take Yeah.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

Sure. Thanks, Bob. So let me let me quickly take the second question first. So so when we say the PPV was substantially higher in the first round, that's a concrete number.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

We're not sharing what that number is, but we we, you know, we can say it's substantially higher than the 43% that we saw in Pathfinder. So it's not a modeled number. With respect to the conversations with the NHS, I mean, just to say that we're in constant dialogue with the NHS and with the National Screening Committee in The UK and with the government in The UK, they are clear that they want to wait to see final results from all three rounds of the study before they will make a decision as to if and when to to roll out a a screening program in The UK or in England particularly. So so I can't give you anything more concrete than that at this point other than to say we're in constant dialogue.

Bob Ragusa
CEO & Board Member at GRAIL

Hey, Arpal, maybe go through a little bit of why not reveal the the numbers right now.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

Yeah. Sure. So, I mean, it's important to just to reiterate that that the NHS gallery trial was designed as a three year screening study. In other words, we do three rounds of screening, and that's very common in screening trials and in and in studies of screening because for the reasons that I stated earlier on the call, if you only look at one round of screening, then what you'll typically find in that first round is a lot of prevalent asymptomatic cancers in the population, which can often be late stage but haven't yet been diagnosed. By going to a second and third round, you start to see what the impact of a, if you like, a more established or steady state screening program might be.

Harpal Kumar
Harpal Kumar
President Biopharma Business & Europe at Illumina

And so it's really important that we safeguard those upcoming readouts and the integrity of the trial as a whole. It's also really important that we safeguard the interests of the participants taking part in the trial. And so for the for all of those reasons, we're not sharing more detailed information at this stage, but we are now getting closer to having the final results middle of next year. And we look forward to sharing all of those both with all of you, but also with the NHS at that time.

Kyle Mikson
Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets

Great. That was super helpful. And on the on the topic of repeat testing, it sounds like that metric remains stable. I think I heard twenty percent continues. So, you know, when you think about repeat testing, what's an acceptable number at this point?

Kyle Mikson
Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets

Do you know? Do you like 20%? How do you improve the stickiness and that recurring kind of revenue stream? And then how does movement in that number affect your your modeling of, like, ASP and customer acquisition cost over the medium term?

Bob Ragusa
CEO & Board Member at GRAIL

Yes. So first of all, we're very pleased with above 20%. Given that we're generally not a reimbursed test, we think it compares very favorably to reimbursed tests in the market. So the the 20% mark, we expect to continue to be able to grow that, but, you know, we we need a little more time under our belts to figure out exactly where that's gonna go. From a you know, clearly, from a customer acquisition cost, that that certainly helps the model being able to have that repeat base at at that significant level.

Bob Ragusa
CEO & Board Member at GRAIL

So that is something where where we are factoring in into our modeling.

Kyle Mikson
Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets

Great. Thanks a

Bob Ragusa
CEO & Board Member at GRAIL

And E and E.

Operator

Thank you. There are no further questions at this time. I will now turn the call back to Grail for closing remarks.

Bob Ragusa
CEO & Board Member at GRAIL

So thank you everyone for joining today's call.

Operator

Ladies and gentlemen, this concludes the call. You may now disconnect.

Executives
Analysts
    • Executive
    • Bob Ragusa
      CEO & Board Member at GRAIL
    • Harpal Kumar
      President Biopharma Business & Europe at Illumina
    • Subbu Nambi
      Managing Director at Guggenheim Securities
    • Tejas Savant
      Executive Director & Senior Healthcare Equity Analyst at Morgan Stanley
    • Doug Schenkel
      Managing Director at Wolfe Research LLC
    • Kyle Mikson
      Managing Director & Senior Research Analyst at Canaccord Genuity - Global Capital Markets
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Key Takeaways

  • Positive top-line results from the prevalent round of the 140,000-participant NHS GRAIL trial showed a substantially higher PPV than the 43% seen in Pathfinder, with 99.5% specificity, 88% cancer signal of origin accuracy and no serious safety concerns; full three-year data are expected in mid-2026.
  • GRAIL sold over 37,000 Galleri tests in Q1 (bringing total prescriptions to more than 325,000 since 2021) and expanded access through partnerships with athenahealth, Quest Diagnostics, TRICARE coverage and a launch in Israel.
  • Launched “Generation Possible,” an educational campaign featuring spokesperson Kate Walsh, to raise public awareness of multi-cancer early detection and the benefits of annual screening.
  • Q1 revenue was $31.8 million (up 19% YoY), net loss improved 51% to $106.2 million, non-GAAP gross profit reached $14.3 million, and the company projects a cash runway into 2028 with full-year burn under $320 million.
  • On track for a modular PMA submission to the FDA in H1 2026—combining NHS trial results, data from 25,000 PATHFINDER II participants and a bridging study—with interim PATHFINDER II data expected in late 2025.
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