GRAIL Q2 2026 Earnings Call: Complete Transcript

On Wednesday, GRAIL (NASDAQ: GRAL ) discussed second-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 7 million, a 26% increase year-over-year, driven by a 35% increase in Galleri test volumes.

The company completed a $110 million financing round with Samsung, aimed at supporting international expansion, particularly in South Korea, Japan, and Singapore. GRAIL continues to pursue FDA approval for the Galleri test, expecting an advisory committee meeting in the fall, and aims for approval in early 2027. 5%, demonstrating significant improvements in early cancer detection. Management emphasized their competitive advantage due to extensive clinical validation and addressed potential noise in the market from competitors with unproven tests.

Full Transcript OPERATOR (Operator) Good day, ladies and gentlemen, and welcome to the GRAIL second quarter 2026 earnings call. At this time all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that this conference call is being recorded.

GRAIL Investor Relations, please begin. GRAIL Investor Relations Thank you, and thank you all for joining us today. On the call are Joshua Ofman, our Chief Executive Officer, Aaron Frieden, Chief Financial Officer, Sir Harpal Kumar, Chief Scientific Officer and President, Global Clinical and Medical Affairs, and Andy Partridge, Chief Growth Officer. I'll remind you that we'll be making forward-looking statements based on current expectations.

It's our intent that all statements other than statements of historical fact, including statements regarding our anticipated financial results and commercial activity, will be covered by the safe harbor provisions for forward-looking statements under federal securities laws. 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 the documents that GRAIL files with the Securities and Exchange Commission, including the risk factors section in GRAIL's most recent Annual Report on Form 10-K and the Quarterly Report on Form 10-Q we plan to file for the second quarter of 2026. This call will also include a discussion of GAAP results and certain non-GAAP financial measures, including adjusted gross profit and adjusted EBITDA, which excludes certain specified items. Our non-GAAP financial measures are intended to supplement your understanding of GRAIL's financials.

Reconciliations of the non-GAAP measures to the most directly comparable GAAP financial measures are available in the press release issued today, which is available on our website. With that, we turn to Josh. Joshua Ofman MD, MSHS — Chief Executive Officer Thank you. Good afternoon, everybody, and thanks for joining us to review the results of the second quarter 2026 and discuss recent business updates.

GRAIL continues to execute across our clinical and commercial priorities. We launched the Galleri test in 2021 after our approximately 6,000-participant interventional PATHFINDER study, which was conducted under an FDA-approved investigational device exemption and read out and demonstrated strong performance and safety in a screening population. For several years, PATHFINDER was the only interventional study that clearly demonstrated the benefits and evaluated the potential harms of deploying an MCED test in the intended-use population.

Since then, we've read out two additional large studies: our 35,000-participant PATHFINDER 2 study in North America and the groundbreaking 140,000-participant NHS-Galleri trial in England, which included three annual tests. We recently presented detailed performance, safety, and clinical utility results from these studies at the 2026 American Society of Clinical Oncology Annual Meeting, and they are currently under review for publication, further establishing Galleri as the only MCED with extensive clinical validation from interventional studies.

These data in the asymptomatic screening population are critical for physicians and patients to understand test performance, as case-controlled studies can fail to replicate performance when tests are rolled out in an intended-use population. We're extremely proud of the unparalleled performance demonstrated in these studies in the screening population, and we're focused on driving to FDA approval and subsequent Medicare and commercial reimbursement. 5%, resulting in at least three to six times fewer false positives than other MCED tests in development. Our technology at GRAIL was designed specifically for population-scale MCED screening.

Our extensive research, published in top-tier journals, concluded that methylation holds the highest biological information density, which is why GRAIL's proprietary methylation platform, the largest of its kind, is uniquely capable of delivering high-accuracy detection and precise localization. We have published, to our knowledge, the largest head-to-head genomic feature comparison study in the entire field, and we showed that combining other approaches considered did not improve performance over our proprietary methylation technology.

Adding these other features only introduced additional complexity, cost, and biological noise, and the field is increasingly moving to methylation as the technology of choice, further validating our approach. Today in the market with Galleri, we continue to expand access through new and existing partnerships, and we are accelerating our international expansion activities related to that. In the second quarter, we completed the previously announced $110 million financing with Samsung. Alongside that closing, we began work with Samsung C&T Corporation on our strategic collaboration.

As a reminder, we and Samsung C&T Corporation will work together to commercialize the Galleri test in South Korea, with the potential to expand into additional Asian markets including Japan and Singapore. The $110 million investment in GRAIL represents a long-term investment to support our growth and international goals. We were very pleased to complete this financing, and we look forward to moving forward with Samsung to introduce our MCED technology to patients throughout Asia. , we continue to see growing physician adoption of the Galleri test.

We sold over 61,000 Galleri tests in the second quarter, a 35% increase in volume year over year. 6 million, up 24% over the year prior. For the first half of 2026, we saw Galleri test revenue growth of 30% year over year to more than $80 million and Galleri test volume growth of 42% to more than 117,000 tests. We announced early in 2026 the planned expansion of our field sales and medical teams based on the positive performance and clinical utility results observed in our PATHFINDER 2 and NHS-Galleri trials.

This expansion was substantially complete at the end of the second quarter. New personnel have been onboarded and trained and are now in the field, and initial feedback from Salesforce engagements with physicians since ASCO has been really positive. Last month, we announced a collaboration with Priority Health to enable its employer groups to add the Galleri test to their existing screening coverage. 4 million members in Michigan and nearby states.

Priority Health launched coverage for Galleri within certain plans in 2025, and our collaboration announced in July marks a promising expansion of this partnership. Moving to our clinical evidence base, we recently shared strong clinical utility, performance, and safety results from our NHS-Galleri trial and PATHFINDER 2 studies at the recent ASCO Annual Meeting in May. Although the primary endpoint for the NHS-Galleri trial of a combined reduction of stage 3 and 4 cancers was not met, we believe the other results of this study demonstrated very strong performance, safety, and utility across both studies. 5 times.

5% and positive predictive values ranging from 50% to 60%. Galleri also demonstrated high accuracy in predicting cancer signal of origin, enabling efficient and patient-centered diagnostic evaluations. S. K.

By adding Galleri, we estimate that those figures can increase to 50% or more, and indeed in PATHFINDER 2 this number was 60%. This represents a substantial improvement that expands detection of clinically meaningful cancers that otherwise lack recommended screening. Across these two studies, approximately 40% to 50% of the Galleri-detected cancers were found at stages 1 and 2, and approximately 70% were found at stages 1 through 3. 's standard-of-care screening program in the control arm.

This is truly remarkable. The promise of multi-cancer early detection is not just in finding cancer, but in finding it early enough to open the door to curative treatment options for as many people as possible. What is clear across these groundbreaking trials is that the Galleri test detects a large number of asymptomatic cancers in stages 1 through 3, the majority of which have the opportunity for curative-intent treatments.

Together, these findings underscore the consistency and actionability of the Galleri test results and demonstrate that adding Galleri to standard-of-care screening has the potential to improve the effectiveness and efficiency of our current national screening program. This is critical for providers, regulators, and payers as they evaluate the clinical and economic value of Galleri alongside standard-of-care screening. These data support the potential of MCED screening at population scale to identify cancers at earlier stages, when treatments are more effective and are potentially curative.

Turning now to our regulatory process, we submitted our premarket approval application to the FDA in early '26, and we remain in an ongoing iterative review process. We are very confident in the data package that's been submitted. Galleri's performance has been validated and replicated in multiple rigorous intended-use, population-level studies. We have consistently shown that Galleri can detect asymptomatic cancers well over and above the standard of care, and the evidence clearly demonstrates that Galleri can be useful and safe when implemented at scale.

Our PMA for Galleri is focused on test performance and safety results from the first approximately 25,000 participants in the PATHFINDER 2 study with one year of follow-up, and the prevalence screening round, or the first year, of the NHS-Galleri trial. The submission also includes a bridging analysis to compare performance of the version of Galleri used in these clinical studies to the updated version that has been submitted to the FDA for premarket approval.

As Galleri is a first-of-its-kind technology, and multi-cancer early detection represents a potential paradigm shift in cancer screening, we do expect the FDA to convene an advisory committee for Galleri in the fall. The FDA will announce specific timing of an advisory committee. Turning now to the evolving market environment, as additional MCED tests have launched, a few things are very critical to mention. Other MCED products have been introduced based only on observational case-control data and have yet to evaluate the benefits and harms in an actual screening population.

First, that means it is unknown how the purported benefits of these tests shown in case-control data will translate, if at all, into performance when deployed into an asymptomatic screening population; and, without interventional studies, it's not clear whether the diagnostic pathways and procedures have been developed to support physicians and patients after a positive test. Second, MCED tests with high false positive rates may expose patients to significant risks of radiation exposure and invasive diagnostic tests, which carry potential for complications and increased morbidity.

Until these tests have been robustly studied and validated in the intended-use screening population, they represent an unknown benefit-risk profile and should be considered experimental screening tests at this stage. When we launched Galleri, we deliberately chose to do so only after reporting results from a prospective interventional study under an FDA-approved investigational device exemption in the screening population. We believe that patients deserve, and the field demands, this level of robust evidence because the true litmus test of test performance—both benefits and harms—is demonstration in interventional clinical studies in the actual intended-use population.

Now, why do I say this? This is because case-controlled data will not always replicate in interventional studies. For example, after very strong performance for the CancerSEEK assay was observed in a case-controlled study published in a top-tier journal, Science, the Detect-A study failed to replicate performance and safety in an interventional study, and as you know, this test is currently not available or on the market. Beyond study rigor, Galleri test characteristics stand apart in the field.

Based on data from observational case-controlled studies, experimental MCED tests are operating at a three to five times higher false positive rate. They detect a smaller number of cancer types, and some have no ability to predict a cancer signal origin, which we believe is necessary for safety and performance of any MCED test. In a field where hope and hype can easily collide, GRAIL is defined by rigorous science and validated by the most extensive evidence base. We believe we chose the right biological signature of cancer after unbiased comparisons.

We have built the most advanced proprietary technology to interpret that signal, and we have proved its performance in the real world on an unprecedented scale. I'll now hand off to Aaron for a review of our second quarter financials. Aaron Frieden (Chief Financial Officer) Thanks, Josh, and good afternoon, everyone. 1 million, or 26%, as compared to the second quarter of 2025.

6 million of screening revenue and $2 million of development services revenue. Screening revenue was up 24% as compared with the second quarter 2025 with test volumes of more than 61,000, an increase of 35% over the second quarter of 2025. 2 million, a decrease of 3% as compared to the second quarter of 2025. 4 million, or 34%, as compared with the second quarter of 2025.

Primary drivers of the increased gross margin were improved fixed cost leverage from higher volumes and a decrease in sample reprocessing costs, partially offset by a decrease in ASP. 9 million, or 15%, as compared to the second quarter of 2025. 6 million, which includes the $110 million strategic investment by Samsung, which closed in June. Our cash balance today provides us with financial flexibility as we advance key priorities, including securing regulatory approval and reimbursement for Galleri in the United States.

Back to you, Josh. Joshua Ofman MD, MSHS — Chief Executive Officer Thank you, Aaron. We're really pleased with the continued growth for Galleri and the progress we're making towards FDA approval and broad-based access, and we anticipate continued progress over the next year. With ASCO behind us, our expanded field teams are now fully equipped to educate clinicians about our groundbreaking trial results and continue market development, and initial feedback from the field has been really positive.

We look forward to potential FDA approval of Galleri, expanding distributor partnerships internationally, progressing R&D on Galleri improvements and cost of goods reduction, and publication of the NHS Galleri and PATHFINDER 2 studies, as well as additional analyses from our extensive clinical program. Operator, we can now go to Q&A. OPERATOR (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. We'll wait one moment to allow the queue to form.

Our first question will come from Subu Nambi with Guggenheim. Please unmute your line and ask your question.