GRAIL, Inc. Q4 FY2025 earnings call

2025 was a year of significant commercial growth for GRAIL. U.S. Galleri test volume grew 36% to over 185,000 and revenue grew 26% in 2025. Prescriber base is approximately 17,000 providers, up 30% from prior year. Sold almost 0.5 million Galleri tests from launch through December 31. Completed PMA submission with the FDA. The Nancy Gardner Sewell Medicare Multi-Cancer Early Detection Screening Coverage Act became federal law. Shared top line results from NHS-Galleri trial, which showed substantial reduction in Stage IV cancer diagnosis, increased Stage I and II detection of deadly cancers and a fourfold higher cancer detection rate, though did not meet primary endpoint of statistically significant reduction in combined Stage III and IV. Anticipate presenting full data from NHS-Galleri and PATHFINDER 2 in mid-2026. Moving forward with planned expansion of field sales and medical team. Focused on expanding awareness of multi-cancer early detection and Galleri's performance and capability differentiation. Results from NHS-Galleri trial show potential for more patients to receive curative treatment.

Fourth quarter 2025 revenue was $43.6 million, up $5.3 million or 14% from Q4 2024. Total revenue for the quarter included $42.3 million of screening revenue and $1.3 million of development services revenue. Full year 2025 total revenue was $147.2 million, up 17% from 2024. Full year 2025 revenue included $138.6 million of screening revenue, up 28% from 2024. U.S. Galleri revenue in 2025 was $136.8 million, up 26% from 2024. Development services revenue in 2025 was $8.6 million, a decrease of 49% from 2024. Fourth quarter screening revenue was $42.3 million, up 34% from Q4 2024. Fourth quarter development service revenue was $1.3 million. Non-GAAP adjusted gross profit for Q4 2025 was $23.1 million, up 29% from Q4 2024. Full year non-GAAP adjusted gross profit was $73.6 million, up 27% from 2024. Adjusted EBITDA for Q4 2025 was a negative $71.8 million, an improvement of $12.2 million from Q4 2024. Adjusted EBITDA for full year 2025 was a negative $320.6 million, an improvement of $163 million from 2024.

Reiterating guidance shared in January of Galleri sales growth of 22% to 32% and cash burn for the full year of 2026 to be no more than $300 million. Royalty payments to Illumina are suspended until December of 2026; when resumed, expect to pay in the high single digits on net sales generated by products in oncology. Anticipate royalty payments to impact gross margins beginning in 2027.

Forward-looking statements are subject to risks and uncertainties. Actual events or results may differ materially from those projected. Risks and uncertainties include those related to the FDA approval process, potential impact of not meeting primary endpoints on market perception and adoption, and uncertainties in clinical trial results and their impact on commercialization and coverage. Also, risks associated with the suspension and resumption of royalty payments to Illumina and their potential impact on gross margins.

Q: Can you confirm that you don't expect the FDA approval decision to be impacted by the miss of the stage shift endpoint?

A: Yes. The FDA will look at the effectiveness and safety of the submission, considering data from PATHFINDER 2 and the prevalent round of NHS-Galleri.

Q: Is there any read-through from missing the NHS-Galleri stage shift endpoint to the Medicare REACH study?

A: The primary endpoint of the REACH study is a Stage IV reduction, which was strongly observed in the NHS-Galleri trial. The study is properly powered.

Q: How does the results impact your strategy to expand Galleri to other countries?

A: Strong reduction in Stage IV cancer, fourfold improvement in cancer detection rate, increase in Stage I and II cancers, and reduction in emergency presentation are important data for expanding to other countries.

Q: Has the probability of FDA approval changed as a result of the NHS-Galleri readout?

A: Everything the FDA has learned focuses on clinical performance and safety, and the data set submitted includes relevant studies.

Q: Are there examples of a diagnostic being reimbursed after missing a primary endpoint?

A: It's extremely rare for a diagnostic to go through a randomized controlled trial like NHS-Galleri, which is a large and rigorous trial.

Q: What is the goal of extending the trial follow-up by 6 to 12 months?

A: To get more mature data, particularly to better compare the control arm data as cancers detected in the intervention arm may pull forward from the future.

Q: How do you think Medicare would look at the NHS trial?

A: Medicare will initiate a national coverage analysis and evaluate a robust package of data including registrational trials, NHS-Galleri results, and real-world evidence.

Q: Can you go to the FDA and narrow or adjust the label?

A: We don't think this finding impacts the approvability, and we'll work through labeling with the agency.

Q: Are your thoughts on guideline inclusion unchanged?

A: We think FDA approval is the most critical milestone, followed by CMS coverage analysis, with USPSTF evaluation being supplemental.