GRAIL, Inc. Common Stock 2026 Q2 Earnings Call

Thank you. Good afternoon, everybody. Thanks for joining us to review the results of the second quarter 2026 and discuss recent business updates. GRAIL continues to execute across our clinical and commercial priorities. We launched the Galleri test in 2021 after our approximate 6,000 participant Interventional PATHFINDER study, which was conducted under an FDA-approved investigational device exemption and read out and demonstrated strong performance and safety in a screening population. For several years, PATHFINDER was the only interventional study that clearly demonstrated the benefits and evaluated the potential harms of deploying an MCED test in the intended use population. Since then, we've read out two additional large studies. Our 35,000 participant PATHFINDER 2 study in North America and the groundbreaking 140,000 participant NHS-Galleri trial in England, which included three annual tests.

We recently presented detailed performance, safety, and clinical utility results from these studies at the 2026 American Society of Clinical Oncology annual meeting. They are currently under review for publication, further establishing Galleri as the only MCED with extensive clinical validation from interventional studies. These data in the asymptomatic screening population are critical for physicians and patients to understand test performance, as case-controlled studies can fail to replicate performance when tests are rolled out in an intended use population. We're extremely proud of the unparalleled performance demonstrated in these studies in the screening population. We're focused on driving to FDA approval and subsequent Medicare and commercial reimbursement. Galleri test performance is highly differentiated, with a false positive rate of less than 0.5%, resulting in at least three to six times fewer false positives than other MCED tests in development.

Related to that, in the second quarter, we completed the previously announced $110 million financing with Samsung. Alongside that closing, we began work with Samsung C&T Corporation on our strategic collaboration. As a reminder, we and Samsung C&T Corporation will work together to commercialize the Galleri test in South Korea, with the potential to expand into additional Asian markets, including Japan and Singapore. The $110 million investment in GRAIL represents a long-term investment to support our growth and international goals. We were very pleased to complete this financing. We look forward to moving forward with Samsung to introduce our MSIA technology to patients throughout Asia. In the U.S., we continue to see growing physician adoption of the Galleri test. We sold over 61,000 Galleri tests in the second quarter, a 35% increase in volume year-over-year.

Our technology at GRAIL was designed specifically for population scale MCED screening. Our extensive research, published in top-tier journals, concluded that methylation holds the highest biological information density, which is why GRAIL's proprietary methylation platform, the largest of its kind, is uniquely capable of delivering high accuracy detection and precise localization. We have published, to our knowledge, the largest head-to-head genomic feature comparison study in the entire field. We showed that combining other approaches considered did not improve performance over our proprietary methylation technology. Adding these other features only introduced additional complexity, cost, and biological noise. The field is increasingly moving to methylation as the technology of choice, further validating our approach. Today in the market with Galleri, we continue to expand access through new and existing partnerships. We are accelerating our international expansion activities.

Total Galleri screening revenue was $42.6 million, up 24% over the year prior. For the first half of 2026, we saw Galleri test revenue growth of 30% year-over-year to more than $80 million, and Galleri test volume growth of 42% to more than 117,000 tests. We announced early in 2026 the planned expansion of our field sales and medical teams based on the positive performance and clinical utility results observed in our PATHFINDER 2 and NHS-Galleri trials. This expansion was substantially complete at the end of the second quarter. New personnel have been onboarded and trained and are now in the field. Initial feedback from salesforce engagements with physicians since ASCO has been really positive. Last month, we announced a collaboration with Priority Health to enable its employer groups to add the Galleri test to their existing screening coverage.

Priority Health is a nationally recognized non-profit health plan with more than 1.4 million members in Michigan and nearby states. Priority Health launched coverage for Galleri within certain plans in 2025, and our collaboration announced in July marks a promising expansion of this partnership. Moving to our clinical evidence base. We recently shared strong clinical utility performance and safety results from our NHS-Galleri trial and PATHFINDER 2 studies at the recent ASCO annual meeting in May. Although the primary endpoint for the NHS-Galleri trial of a combined reduction of stage III and IV cancers was not met, we believe the other results of this study demonstrated very strong performance, safety, and utility. Across both studies, adding Galleri to standard of care increased the cancer detection rate by 4 to 6.5 times.

The Galleri test demonstrated very consistent performance, with a false positive rate of less than 0.5% and positive predictive values ranging from 50% to 60%. Galleri also demonstrated high accuracy in predicting cancer signal of origin, enabling efficient and patient-centered diagnostic evaluations. Today, standard of care screening finds only about 14% of cancers in the U.S. and about 6% of cancers in the U.K. By adding Galleri, we estimate that those figures can increase to 50% or more, and indeed in PATHFINDER 2, this number was 60%. This represents a substantial improvement that expands detection of clinically meaningful cancers that otherwise lack recommended screening. Across these two studies, approximately 40%-50% of the Galleri-detected cancers were found at stages I and II, and approximately 70% were found at stages I through III.

Remarkably, in the NHS-Galleri study, Galleri detected 366 stage I and II cancers, many more than the 290 cancers detected at any stage by the entirety of the U.K.'s standard of care screening program in the control arm. This is truly remarkable. The promise of multi-cancer early detection is not just in finding cancer, but in finding it early enough to open the door to curative treatment options for as many people as possible. What is clear across these groundbreaking trials is that the Galleri test detects a large number of asymptomatic cancers in stages I through III, the majority of which have the opportunity for curative intent treatments. Together, these findings underscore the consistency and actionability of the Galleri test results and demonstrate that adding Galleri to standard of care screening has the potential to improve the effectiveness and efficiency of our current national screening program.

This is critical for providers, regulators, and payers as they evaluate the clinical and economic value of Galleri alongside standard of care screening. These data support the potential of MSIA screening at population scale to identify cancers at earlier stages when treatments are more effective and are potentially curative. Turning now to our regulatory process. We submitted our pre-market approval application to the FDA in early 2026, and we remain in an ongoing iterative review process. We are very confident in the data package that's been submitted. Galleri's performance has been validated and replicated in multiple rigorous intended use population-level studies. We have consistently shown that Galleri can detect asymptomatic cancers well over and above the standard of care. The evidence clearly demonstrates that Galleri can be useful and safe when implemented at scale.

Our PMA for Galleri is focused on test performance and safety results from the first approximately 25,000 participants in the PATHFINDER 2 study with one year of follow-up, and the prevalent screening round for the first year of the NHS-Galleri trial. The submission also includes a bridging analysis to compare performance of the version of Galleri used in these clinical studies to the updated version that has been submitted to the FDA for pre-market approval. As Galleri is a first of its kind technology and multi-cancer early detection represents a potential paradigm shift in cancer screening, we do expect the FDA to convene an advisory committee for Galleri in the fall. The FDA will announce specific timing of an advisory committee. Turning now to the evolving market environment. As additional MCED tests have launched, a few things are very critical to mention.

Other MCED products have been introduced based only on observational case-controlled data and have yet to evaluate the benefits and harms in an actual screening population. First, that means it is unknown how the purported benefits of these tests shown in case control data will translate, if at all, into performance when deployed into an asymptomatic screening population. Without interventional studies, it's not clear whether the diagnostic pathways and procedures have been developed to support physicians and patients after a positive test. Second, MCED tests with high false positive rates may expose patients to significant risks of radiation exposure and invasive diagnostic tests, which carry potential for complications and increased morbidity. Until these tests have been robustly studied and validated in the intended use screening population, they represent an unknown benefit-risk profile and should be considered experimental screening tests at this stage.