False Positives and Real Questions: What the Short on Grail Gets Right (and Wrong)
Background: Earlier this month, Ningi Research released a short report on Grail (GRAL), calling into question just about everything: Galleri’s clinical utility, its regulatory viability, and its commercial path. Some of the claims were overstated, some were fair, and some were genuinely useful. After working through the clinical data, expert commentary, and my own scenario models, I wanted to write a follow-up to clarify where my thesis has changed, and where it holds up.
Quick Take: Ningi's Claims vs. My View
🟢 PPV is overstated: Valid. The 43% PPV from PATHFINDER 1 reflects an enriched population. Real-world PPV in average-risk groups is likely closer to 5–10%.
🟡 Galleri does not detect 50+ cancers: Partially valid. Technically accurate, but most clinical value comes from the top 10–20 cancers where test performance is strongest. Unclear how this impacts Galleri's commercial value, if at all.
🔴 FDA approval is unlikely: Disagree. Based on the data and Grail's reported FDA feedback, approval odds remain high.
🔴 Lack of reimbursement: Misleading. Galleri isn’t FDA approved yet—no test is reimbursed pre-approval. This is standard, not a red flag.
🔴 Grail has cultural issues: Unverifiable and anecdotal. These claims don’t materially impact the regulatory or clinical outlook.
🟡 No mortality data = No clinical utility: Somewhat misguided. While this has been a point of contention voiced by some oncologists, it’s not the benchmark FDA, CMS, or NHS use to evaluate early cancer screening. Stage shift and cost-effectiveness are the operative endpoints.
PPV, Specificity, and the Real-World Picture
Ningi is right to push on Galleri’s positive predictive value (PPV). The widely quoted 43% PPV came from the PATHFINDER 1 study, which included many high-risk participants. That matters: in a general population, where cancer prevalence is lower, the test’s PPV likely drops to the high single digits (5-8%). It’s still strong—comparable to or better than fecal immunochemical test (FIT), mammography, and low-dose CT (LDCT) on a per-cancer basis—but not 10x better, and certainly not immune to false positives. I continue to view 43% PPV as a high watermark, but one that must be caveated. In practice, Galleri’s real-world utility will depend on how clinicians handle the 5–10% of patients who receive a false signal. This is where protocols and physician education matter.
What hasn’t changed is Galleri’s specificity. At ~99.5%, it has one of the lowest false positive rates of any screening tool, and that’s a legitimate strength. It means fewer follow-up scans, fewer unnecessary procedures, and less friction to adoption. Importantly, Grail's management has repeatedly emphasized that Galleri is a rule-in test (low false-positives), not rule-out (low false-negatives).
Sensitivity, Breadth, and What “50+ Cancers” Really Means
Galleri does not detect all cancers equally well. Sensitivity varies by cancer type and stage. It performs best in the deadliest cancers: pancreatic, liver, ovarian, head and neck, esophageal. It performs modestly in breast and lung, and poorly in prostate and thyroid. That’s not surprising—these more indolent tumors shed less DNA into the bloodstream, especially early on. The "50+ cancer" number is technically true, but clinically misleading. The real story is Galleri’s strength in detecting ~10–20 high-lethality cancers that currently have no other approved screening tools.
Should we discount the "50+ cancers" headline? Yes. Does that mean the product is dead in the water? Very unlikely. The value in Galleri isn’t that it’s perfectly comprehensive—it’s that it addresses the biggest unmet need in oncology screening. These are the cancers that kill people because we don’t find them until it’s too late. If Galleri can catch just a subset of those earlier, it moves the needle.
Regulatory Outlook: Prior Thesis Holds Up Here
I remain highly confident that Galleri will be approved under the FDA’s PMA pathway, barring any major public policy disruptions. Why? Because Galleri has shown a consistent analytical profile across studies (CCGA, PATHFINDER 1), and because the FDA’s reported feedback—as paraphrased by Grail management—has been straightforward: replicate your test performance in a larger, non-enriched cohort. That’s what PATHFINDER 2 and the NHS-Galleri trials aim to do.
The exact label is harder to predict. It may end up narrower than the "50+" banner, but even a label focused on the top 10–15 cancers would capture most of the clinical and economic value. These cancers are the ones driving mortality and cost, and where payers will likely be most receptive.
Aside from directional "guesses", I think it is a complete waste of time to speculate further on what the label will or won't include. There is no historical precedence in MCED.
Reimbursement: The Real Bottleneck
My thesis around reimbursement hasn’t fundamentally changed since Ningi’s report. This remains the most complex part of underwriting Grail’s long-term value. I agree with Ningi that it will be an uphill battle—not just to convince payers, but also physicians and guideline bodies—to adopt a new paradigm of cancer screening. Mass screening with an MCED followed by site-specific diagnostic workups is a major shift, and it will take time for the oncology community to adapt.
Reimbursement is critical to Galleri’s success. Based on published cost-effectiveness analyses, I believe Medicare and NHS will ultimately find the test acceptable around the $500/test range. But this is not a foregone conclusion. We’ll need to see how the Medicare and NHS outcome studies land. In the meantime, I continue to model a slower uptake curve, reflecting these structural frictions and the likely phased rollout via targeted coverage policies (e.g. age 65+, high-risk cohorts).
What has changed:
I expect Galleri’s PPV in general population studies like PATHFINDER 2 to come in around 5–10%, not the 40%+ seen in enriched cohorts like PATHFINDER 1.
There’s a real risk the FDA label includes only the top 10–12 cancers Galleri detects best. But the economics don’t hinge on detecting 50. Galleri’s value lies in population-level impact. Dropping low-sensitivity cancers may actually improve trust and cost-effectiveness by reducing false leads and unnecessary workups.
What has not changed:
FDA approval is still the base case.
Galleri’s value is strongest in high-mortality, unscreened cancers, and those account for the majority of cancer deaths.
With PPV and specificity this strong, the signal-to-noise ratio is good enough for clinical adoption in a focused segment.
Cost-effectiveness modeling still supports $500–800 pricing for seniors—even if real-world validation is ongoing.
A Word on Speculation
Some of the claims in Ningi’s report veer into the speculative. Allegations about company culture or internal morale are anecdotal at best and hard to independently verify. More to the point, they don’t impact the test’s clinical utility or regulatory odds. Similarly, the point that Galleri isn’t reimbursed yet is irrelevant—it’s not FDA approved, so of course (almost) no payer covers it yet. This isn’t a hidden red flag, it’s how the regulatory timeline works.
Bottomline
The Ningi short report helped sharpen my thinking. It drew clearer lines between narrative and evidence, and forced me to better distinguish what’s speculative versus what’s grounded in data. Some of their critiques were fair, particularly around adoption friction and over-reliance on enriched trial data. But others—like Galleri not being reimbursed yet—missed the mark entirely. I continue to see Grail as a compelling investment opportunity. The science is credible, and the probability of FDA approval is very high. What remains uncertain is the commercial arc: how quickly physicians adopt it, how CMS and NHS decide to pay for it, and how the broader oncology community embraces a new screening paradigm. This won’t be quick. It will require patient capital, steady execution, and a long view.
Note: I'll likely follow up with a part 2 to walk through the modeling and valuation to make this story more comprehensive.
Source:
https://www.medrxiv.org/content/10.1101/2024.02.14.24302576v1
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