Grail After the Disaster...Is This the End?
The NHS-Galleri miss was a serious setback. Is it time to sell? Will consumers save the day?
Grail’s rollercoaster backstory
Grail is a cancer-screening biotech spun out of Illumina in June 2024. Its flagship product, Galleri, is one of the first multi-cancer early detection (MCED) blood tests. The pitch is straightforward: one blood draw that can detect multiple types of cancers. Ideally, this technology can catch tumors earlier, when treatment is typically more effective and less costly.
When Grail first began trading after the spin, the stock was around ~$12/share. Over the last year, even without profitability, the company built real commercial momentum—volumes grew, margins improved, and the stock ran to roughly ~$100/share at its peak. Grail also raised a $325M private placement (PIPE) that included Samsung, Hims & Hers, and several life sciences investors.
Then came today. Shares fell to around ~$50 after topline results from the NHS-Galleri study in England were released. As the price action suggested, the market considered it a major setback for Galleri’s path to broad adoption. Is it time to run for the exit? Or is there more to the story?
The NHS-Galleri topline is a disappointment
The clean “win” investors wanted didn’t happen: the trial did not meet its primary endpoint—showing that using Galleri at scale leads to fewer people being diagnosed only after cancer has already reached a late stage (Stage III–IV) compared with usual screening alone. In short, the study didn’t deliver the clear population-level evidence that Galleri meaningfully shifts diagnosis earlier in a way payers can bank on.
That miss matters because it undercuts the core “clinical utility + cost-effectiveness” thesis for MCED. The bet is that earlier detection means simpler treatment and lower total cost of care. If a large randomized trial can’t cleanly show fewer late-stage cancers, payers have an obvious reason to be cautious: the test can add costs (more testing and follow-up) without reliably producing the downstream savings and outcome improvements needed to justify broad coverage.
If payers won’t reimburse Galleri, is it game over?
Lack of coverage would clearly cap the ceiling for Galleri. But it doesn’t necessarily kill the business, because Galleri is increasingly being commercialized as a consumer-centric product in the US, funded primarily by cash pay, especially among higher-income consumers. We’ve already seen consumers step in where coverage is patchy, with GLP-1s via DTC channels and telehealth being the most visible example. The same consumer behavior is starting to show up in proactive screening: if someone wants an MCED test and has the means, the buyer can simply be the individual.
That’s why Grail’s distribution strategy matters. Galleri is now being sold through consumer-friendly on-ramps like Hims & Hers, Function Health, and Everlywell. Among these, Hims & Hers is the clearest scale signal because it’s a large consumer health platform that can turn screening into a productized, repeatable experience.
And the early numbers suggest this strategy can work. In Q4 2025, Grail reported it sold more than 185,000 Galleri tests in 2025, grew U.S. Galleri revenue 26% YoY to $136.8M, and EBITDA is getting close to breakeven—despite operating with no Medicare/Medicaid or commercial insurance coverage. If Grail can keep expanding through consumer channels, it can remain viable even if broad reimbursement takes longer—or never fully materializes.
It’s also reasonable for insurers and providers to stay skeptical of MCED until the evidence is overwhelming. But investors should run the counterfactual: what does Grail look like if broad reimbursement stays limited? The NHS-Galleri headline makes that scenario feel more plausible, but it’s not automatically a disaster if consumer demand continues to do more of the work.
Buy the dip? Not so fast
It depends on how you value Grail. The company still has no positive gross profit, EBIT, EBITDA, or even adjusted EBITDA, so there’s no earnings anchor. The balance sheet doesn’t help much either: most of Grail’s ~$2.2B book value comes from ~$1.8B of intangible assets (developed technology, trademark, and R&D). That looks overvalued vs. its cancer diagnostics peers (Exact Sciences: $920M, Guardant Health: $5M, Natera: $0), especially given Grail is effectively a one-product company today. At ~$50/share (~$2B market cap), Grail is still about 5x tangible book value and 13x sales… not exactly screaming cheap.
It’s unlikely to go bust in the next few years, but I don’t see enough margin of safety (at $50/share) to call this a no-brainer buy. If your cost basis is less than $20/share, best to sit tight and see where it goes.
When I was a boy, there was a popular saying: ‘Don’t just sit there; do something.’ But for investing, I’d invert it: ‘Don’t just do something; sit there.’
Howard Marks
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