• Revenue: $28.7 million, up 38% compared to Q3 2023.
• Screening Revenue: $25.4 million, up 52% compared to Q3 2023.
• Development Services Revenue: $3.3 million.
• Net Loss: $125.7 million, improved by 86% compared to Q2 2023.
• Non-GAAP Adjusted Gross Profit: $11.8 million, up 68% compared to Q3 2023.
• Adjusted EBITDA: Negative $108.2 million, improved by 14% compared to Q3 2023.
• Cash Position: $853.6 million at the end of the quarter.
• Galleri Test Sales: Approximately 32,600 tests sold in Q3 2024.
• Cash Burn Guidance: Lowered from $250 million to $220 million for the second half of 2024.
• Galleri Sales Growth Guidance for 2024: Expected between 40% and 50% compared to 2023.

• Warning! GuruFocus has detected 3 Warning Sign with GRAL.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GRAIL Inc (NASDAQ:GRAL) reported strong third-quarter revenue of $28.7 million, marking a 38% increase compared to Q3 2023.
• The company sold approximately 32,600 Galleri tests in Q3, despite it being historically the slowest quarter due to summer holidays.
• Screening revenue increased by 52% year-over-year, driven by higher sales volume.
• GRAIL Inc (NASDAQ:GRAL) is set to launch a new version of the Galleri test with significant automation, aiming to reduce costs and support scalability.
• The company has a strong cash position of $853.6 million, providing a financial runway into 2028.

Negative Points

• GRAIL Inc (NASDAQ:GRAL) reported a net loss of $125.7 million for the quarter, despite an improvement compared to the previous year.
• The company is still operating in a pre-reimbursement environment, which affects its financial performance.
• There is uncertainty regarding the timing of FDA approval and CMS reimbursement for the Galleri test.
• The market for multi-cancer early detection (MCED) tests is still nascent, requiring significant efforts to build awareness among physicians and patients.
• Cost reductions from the new version of the Galleri test will take time to materialize, as they depend on achieving higher volumes.

Q & A Highlights

Q: Can you provide an update on the progress of Galleri's FDA regulatory pathway and the outlook for reimbursement? A: Robert Ragusa, CEO: We completed study visits for our key registrational studies, PATHFINDER 2 and NHS-Galleri, with a total of 175,000 participants. We plan to submit for PMA in the first half of 2026, expecting FDA approval by the first half of 2027. We are hopeful that the MSE law will pass before FDA approval, allowing CMS to cover an FDA-approved MCED test.

Q: How are you managing commercial efforts given your cash balance and spending? A: Robert Ragusa, CEO: We restructured in August to focus on getting Galleri FDA approved and reimbursed. We aim to make commercial efforts more cost-neutral, with test margins covering commercial expenses. We've concentrated efforts on the most productive areas to extend our cash runway into 2028.

Q: What are your plans to build the MCED market before reimbursement? A: Robert Ragusa, CEO: We are building the ecosystem by integrating Galleri into standard practices and ensuring providers and health systems are comfortable with the test. We are also preparing our laboratory for high-volume operations to handle increased demand post-reimbursement.

Q: Will there be any performance differences in the new version of Galleri? A: Robert Ragusa, CEO: We expect minor improvements in performance, but the main focus is on scalability and cost reduction. We are discussing appropriate bridging studies with the FDA for the new assay version.

Q: How should we think about cash burn phasing through 2025? A: Aaron Freidin, CFO: We expect cash burn to decrease as revenues grow and investments in PMA submission and the new test version roll off. The impact on costs will begin with variable cost reductions, but full benefits will be realized with increased volume.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.