Grail stocks drop as cancer screening trial falls short of main goal

• The NHS trial of 142,000+ participants did not achieve statistical significance for reducing late-stage cancer diagnoses, though Grail noted 'a favorable trend was observed over time'
• Grail's FDA submission relies on data from a 25,000-participant U.S. study and first-year NHS results; analysts believe FDA approval is not at material risk but CMS Medicare coverage decisions remain uncertain
• A new law signed by President Trump allows Medicare coverage of multi-cancer detection tests starting in 2028, though CMS may prioritize U.S.-based study data over the NHS trial endpoints

Summary: Grail Cancer Screening Trial Falls Short

Key Development:

Grail announced its multi-cancer early detection test, Galleri, failed to meet the primary endpoint in a large-scale trial conducted through the UK's National Health Service. The study, involving over 142,000 participants aged 50-77, did not achieve statistically significant reduction in late-stage cancer diagnoses, though the company noted "a favorable trend was observed over time."

Regulatory Context:

The setback comes weeks after Grail filed for U.S. FDA premarket approval in late January. The application was based on data from a smaller U.S. trial of approximately 25,000 participants and first-year results from the three-year NHS trial. The larger UK trial was designed to help NHS determine whether to implement a national screening program in England.

Market Implications:

According to Canaccord Genuity analyst Kyle Mikson, FDA approval does not appear to be at material risk. However, uncertainty remains around Medicare coverage decisions by the Centers for Medicare and Medicaid Services (CMS). Mikson suggests CMS will likely prioritize U.S.-based study data over the specific NHS endpoints.

Policy Background:

Earlier in February, President Trump signed legislation enabling Medicare coverage for multi-cancer early detection tests starting in 2028, depending on patient age. The Galleri test is currently recommended for adults aged 50+ with elevated cancer risk.

Investment Consideration:

While regulatory approval may proceed, the trial results could impact commercialization strategy and insurance reimbursement decisions, particularly regarding the critical Medicare market for cancer screening products.