Grail (GRAL 4.32%) stock came under even more pressure today, declining by more than 16% by 12:40 a.m. The move comes as the market continues to digest the unpalatable news that hit the market on Friday. The news wasn't good, but there is a pathway to recovery, however tenuous it might appear now.
What happened to Grail stock recently
I discussed the game-changing event on Friday. Simply put, the company's trial of its Galleri multi-cancer early detection (MCED) with England's National Health Service (NHS) failed to meet its primary endpoint of demonstrating a "statistically significant Stage III-IV reduction" in cancer detection rates.
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Explaining the NHS-Galleri trial
The Galleri test isn't actually reducing cancer rates on its own. Instead, the reasoning is that a population of 142,000 people aged 50-77 will naturally develop cancers. The expectation was that testing with Galleri would yield more early detections, thereby reducing later-stage detections as the detected individuals began treatment.
The major benefit would be earlier detection and treatment for a population using Galleri. Unfortunately, the trial did not demonstrate a statistically significant reduction in Stage III and Stage IV combined. That will make it hard for healthcare insurers to pay for the test.
NASDAQ: GRAL
Key Data Points
A pathway to recovery
That said, management noted that "there was a higher than anticipated incidence of Stage III cancers in the NHS-Galleri trial. In both the US and the NHS data, the time to diagnostic resolution appears to improve over time as physicians gain experience with the Galleri test and diagnostic workup."
Grail plans to extend the trial's follow-up period by up to a year. Assuming the Galleri MCED test is working as expected, then the treatment of the Stage III patients will result in relatively fewer Stage IV detections in the data. Moreover, Stage III detections could also be relatively lower as better detection in Stage I and Stage II also helps.
This optimistic assumption rests on the idea that the issue lies in the trial design, not the Galleri test. Time will tell, but right now it looks like a long shot.
