Canaccord has increased its price target on Grail (GRAL, Financial) from $32 to $43, maintaining a Buy rating on the stock. This adjustment follows a robust first-quarter update, which has reinforced the firm's optimistic outlook on Grail's prospects. The company is expected to benefit from upcoming catalysts, particularly its leading position in multi-cancer early detection (MCED). Canaccord remains positive on Grail's potential for continued growth and innovation in this emerging field.
GRAL Key Business Developments
Release Date: May 13, 2025
- Revenue: $31.8 million, up 19% compared to Q1 2024.
- Screening Revenue: $29.1 million, up 24% compared to Q1 2024.
- Development Service Revenue: $2.7 million.
- US Galleri Revenue: $28.7 million, up 22% compared to Q1 2024.
- Net Loss: $106.2 million, an improvement of 51% compared to Q1 2024.
- Non-GAAP Adjusted Gross Profit: $14.3 million, up 19% compared to Q1 2024.
- Cash Position: $677.9 million at the end of the quarter.
- Galleri Tests Sold: More than 37,000 tests in Q1 2025.
- Repeat Testing: More than 20% of Galleri volume is repeat testing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GRAIL Inc (GRAL, Financial) reported a strong first quarter with revenue of $31.8 million, marking a 19% increase compared to the first quarter of 2024.
- The Galleri test demonstrated a specificity of 99.5%, equating to a low false positive rate of 0.5%, which is crucial for reducing unnecessary workups and costs.
- The NHS Galleri trial, the largest randomized control trial of any MCED test, showed encouraging top-line results from its first screening round.
- GRAIL Inc (GRAL) has a substantial cash position of $677.9 million, with a cash runway extending into 2028, allowing them to achieve major planned clinical and regulatory milestones.
- The company has achieved Tricare coverage and has made Galleri more accessible through partnerships with Quest Diagnostics and Athena Health.
Negative Points
- GRAIL Inc (GRAL) reported a net loss of $106.2 million for the quarter, despite an improvement of 51% compared to the first quarter of 2024.
- The company is facing competition from other upcoming MCED launches, which could impact their operational expenses and market position.
- There are concerns about the health economics of the Galleri test, particularly regarding the cost-effectiveness of annual testing at the current ASP levels.
- The NHS Galleri trial results are not expected until mid-2026, which delays potential commercialization decisions in the UK.
- Despite a strong cash position, there are concerns about the company's ability to fund operations through the period leading up to FDA approval and CMS reimbursement.
