Grail (GRAL +3.20%) has soared 80% over the past month. That's an incredible gain in a market that's climbed under 1% over that period as measured by the broader S&P 500 index. So what's happening?
Well, Grail makes a multicancer early-detection test called Galleri that screens for a signal in the blood shared by more than 50 types of cancer. Cancers growing in the human body shed their DNA into the bloodstream, and the Galleri test can detect that DNA very early on -- often early enough for effective treatment.
If that sounds like an incredible innovation in the world of cancer detection, that's because it is. But investors need to know if the test works and if Grail has the funds to effectively market and sell it.
NASDAQ: GRAL
Key Data Points
A major partnership
Two developments over the past week suggest both of those assumptions are becoming reality.
On Oct. 16, the company announced a strategic collaboration with Korean giant Samsung Electronics to bring the Galleri test to key Asian markets. The two companies will partner to commercialize the test in South Korea and then extend it into other countries, including Japan and Singapore.
In addition, Samsung will invest $110 million into Grail in exchange for common stock priced at $70.05 a share (Grail shares trade at around $92 as I write this), and the two companies will explore other potential ventures, including genomic-lifestyle clinical research and the integration of Grail's technologies into Samsung's health data platform.
That news sent Grail's stock up 14.5% in a day.
A day later, Grail announced that a major study of Galleri's effectiveness among adults 50 and older found that, when added to recommended screenings for breast, cervical, colorectal, and lung cancers, the test boosted the cancer detection rate more than sevenfold. And more than half of the detected cancers were found in early stages, when they are more treatable or curable.
The news pushed Grail shares 18% higher on Monday, Oct. 20.
Source: Getty Images.
Additional funding sources
In addition, this week Grail announced a private placement deal with several institutional investors for $325 million.
The two injections of capital -- from Samsung and from the private placement -- are very welcome news for Grail and its investors, as the company is not yet profitable. That's a common trait among biotech start-ups. While revenue rose 11% in Q2 to $35.5 million, the company posted a net loss of $114.5 million and expects to burn $31 million in cash this year on further research, testing, and marketing.
Furthermore, Grail's test has not yet been approved by the U.S. Food and Drug Administration (FDA), so it can't yet be covered by insurance here, which severely limits its appeal and overall sales. The test currently costs $950 in the U.S. The company is currently working toward FDA approval, as well as the ability to be covered by Medicare, the largest payer for healthcare in the U.S. More test results are required, and the company expects to submit for FDA pre-market approval in the first half of 2026.
Sales of Galleri can't really gain scale until the FDA grants approval to the Galleri test, which is not guaranteed. Fortunately for Grail investors, the recent study results suggest that approval is becoming more likely.
And the partnership with Samsung, combined with new funding sources, also add fuel to the Grail fire.
Despite decades of progress in fighting it, cancer remains deadly. It is the second-leading cause of death in the United States, behind only heart disease.
Surviving cancer is highly dependent on catching it early enough. Early detection and screening are two of the most powerful tools against the disease. They lead to higher survival rates, less invasive treatments, fewer side effects, and a higher quality of life for cancer patients.
If Grail can provide that early detection, it's good news for everyone.