Illustration by Viktoria Nikolova

Grail has big plans for its blood can­cer tests. The first step: Find­ing a new own­er

In March, Paul Schnei­der was di­ag­nosed with pan­cre­at­ic can­cer. The 77-year-old re­tired fire­fight­er was grate­ful to re­ceive the news.

He was symp­tom-free, and a blood test from the com­pa­ny Grail de­tect­ed the of­ten-in­cur­able dis­ease. Af­ter scans con­firmed the di­ag­no­sis, he un­der­went chemother­a­py that has kept the can­cer at bay.

“I’ve had friends get di­ag­nosed with pan­cre­at­ic can­cer and die in three months. So I’m very grate­ful to have caught this,” Schnei­der said.

But the pro­gram that found his dis­ease and test­ed 1,400 fire­fight­ers — a $1.17 mil­lion ef­fort from the San Fran­cis­co Fire­fight­ers Can­cer Pre­ven­tion Foun­da­tion — isn’t in the bud­get for fu­ture years. Grail’s test isn’t cov­ered by Medicare or by the vast ma­jor­i­ty of in­sur­ers. The com­pa­ny’s fu­ture — and ac­cess to peo­ple like Schnei­der — de­pends on win­ning over these pay­ers.

Grail hopes to ob­tain FDA ap­proval by 2027 and se­cure Medicare cov­er­age the fol­low­ing year, ac­cord­ing to an in­ter­nal com­pa­ny email re­viewed by End­points News.

Do­ing so would be piv­otal for the com­pa­ny, a pi­o­neer in an emerg­ing field that screens for mul­ti­ple can­cers in a blood sam­ple. Rev­enue this year from Grail’s $949 test is pro­ject­ed to climb to $90 mil­lion, but the com­pa­ny op­er­ates at a steep loss. And its deep-pock­et­ed own­er, Il­lu­mi­na, just an­nounced plans to sell or spin out the busi­ness af­ter US and Eu­ro­pean reg­u­la­tors chal­lenged the ill-fat­ed $8 bil­lion ac­qui­si­tion.

In a state­ment, Grail said that it has not pub­licly dis­closed any dates on FDA and Medicare re­view, and that the tim­ing of gov­ern­ment ac­tions is con­nect­ed to “ma­tur­ing” clin­i­cal tri­al da­ta.

But Grail isn’t wait­ing on a reg­u­la­to­ry sys­tem that’s still tak­ing shape, draw­ing both praise and calls for cau­tion. At stake is Il­lu­mi­na’s abil­i­ty to fetch a good price for the com­pa­ny — and Grail’s quest to go from niche prod­uct to main­stream test.

“That’s a very lim­it­ed op­por­tu­ni­ty, right? We think we can grow,” Grail pres­i­dent Josh Of­man told End­points. “But you know, un­til we get FDA ap­proval and broad re­im­burse­ment, it’s not go­ing to have the pub­lic health im­pact that we as­pire to have.”

Keep­ing cus­tomers

On­ly 14% of can­cers are di­ag­nosed via rec­om­mend­ed screen­ings. Most are found when symp­toms arise or in­ci­den­tal­ly dur­ing oth­er med­ical care, ac­cord­ing to the Na­tion­al Opin­ion Re­search Cen­ter at the Uni­ver­si­ty of Chica­go. Can­cers de­tect­ed in late stages typ­i­cal­ly have a worse prog­no­sis.

Tests like Grail’s, known broad­ly as mul­ti-can­cer ear­ly de­tec­tion tests, are meant to al­lay the prob­lem. Grail, the mar­ket leader, got an ear­ly jump over com­peti­tors like Freenome and Ex­act Sci­ences. Launched in 2021, more than 130,000 of Grail’s tests have been sold un­der a pro­vi­sion that doesn’t re­quire full reg­u­la­to­ry ap­proval.

Grail’s pre­scrip­tion-on­ly test, Gal­leri, picks up trace amounts of DNA shed by tu­mors and is de­signed to de­tect 50 can­cers. It has caught on with af­flu­ent con­sumers and life sci­ences com­pa­nies. But in many cas­es, Grail has strug­gled to at­tract or re­tain cus­tomers.

The San Fran­cis­co Fire­fight­ers Can­cer Pre­ven­tion Foun­da­tion foot­ed the $1.17 mil­lion bill to test Schnei­der and oth­ers. An­tho­ny Ste­fani, the pres­i­dent of the group, said it had hoped to im­ple­ment bian­nu­al screen­ing but doesn’t have the mon­ey. Amid cut­backs, it’s high­ly un­like­ly that fund­ing will come from the city of San Fran­cis­co, which con­trols the fire­fight­ing bud­get.

“I don’t think I could see this hap­pen­ing any­time soon,” Ste­fani said.

Gal­leri is cov­ered by small health plans like Point32Health. But Medicare and large in­sur­ers are wait­ing on reg­u­la­to­ry ap­proval and ad­di­tion­al da­ta be­fore mak­ing any de­ci­sions.

Pow­er­ful tool, or drain on the health sys­tem?  

Grail has lob­bied for a bill that would au­tho­rize Medicare to pay for the tests once reg­u­la­tors give the OK. The com­pa­ny’s 2027 time­line — con­sid­ered ag­gres­sive by some — may fu­el skep­tics who be­lieve Grail needs to slow down and more care­ful­ly val­i­date its tests be­fore a larg­er roll­out.

In a re­cent tri­al of 6,621 peo­ple, Grail’s test de­tect­ed a can­cer sig­nal in 92 pa­tients. Thir­ty-five were ul­ti­mate­ly di­ag­nosed with can­cer, but 57 had a false pos­i­tive, ac­cord­ing to a com­pa­ny-fund­ed study that was re­cent­ly pub­lished in The Lancet.

The need­less anx­i­ety of a false pos­i­tive was ex­pe­ri­enced by Jim Coyne, one of the San Fran­cis­co fire­fight­ers who was test­ed un­der the now-de­funct pro­gram. The test de­tect­ed mul­ti­ple myelo­ma, a rare blood can­cer. But af­ter more blood­work and a bone mar­row biop­sy, the re­tired fire­fight­er didn’t have can­cer af­ter all.

Still, on bal­ance, he’s in fa­vor of us­ing the tests, par­tic­u­lar­ly in fire­fight­ers who are es­pe­cial­ly vul­ner­a­ble to can­cer.

“For oth­ers, this could be im­por­tant,” Coyne said.

Oth­er pa­tients might not be as un­der­stand­ing, and the con­se­quences of a false pos­i­tive can be se­ri­ous. Grail crit­ics are con­cerned that too of­ten a can­cer sig­nal turns out to be noth­ing, lead­ing to in­va­sive pro­ce­dures, ap­pre­hen­sion and steep costs on an al­ready strained health­care sys­tem.

“The ex­cit­ing da­ta in these stud­ies should not out­shine more sober­ing con­cerns such as low sen­si­tiv­i­ty, over­lap with ex­ist­ing, proven ap­proach­es, and un­known mor­tal­i­ty ben­e­fit and cost-ef­fec­tive­ness,” wrote can­cer re­searchers Richard Lee and Hi­lary Rob­bins in an ed­i­to­r­i­al ac­com­pa­ny­ing the Lancet re­sults.

Grail notes that its test is in­tend­ed to com­ple­ment, not re­place, ex­ist­ing screen­ings. The com­pa­ny is work­ing to im­prove ac­cu­ra­cy. And pro­po­nents say the tests could be a pow­er­ful tool in the fight to slash can­cer deaths.

“It’s such a nov­el ap­proach,” said Whit­ney Jones, a for­mer se­nior med­ical di­rec­tor at Grail. “It’s tak­ing time for ex­perts to wrap their heads around it.”

Gau­tam Kol­lu, Grail’s chief com­mer­cial of­fi­cer from 2019 to 2021, said the com­pa­ny had a dif­fi­cult time find­ing a path for re­im­burse­ment dur­ing his tenure. But he’s en­cour­aged by re­cent de­vel­op­ments, in­clud­ing the launch of a study in the Medicare pop­u­la­tion.

“But a lot would need to fall in­to place for the 2027 time­line to hap­pen,” Kol­lu said.

No pred­i­cate

The FDA has nev­er be­fore ap­proved a test like Grail’s. Reg­u­la­tions are still a work in progress, in part be­cause the ben­e­fit-risk pro­file is much hard­er to cal­cu­late than for a sin­gle-can­cer test.

“There’s no pred­i­cate here, right? There’s no guid­ance doc­u­ment. There’s noth­ing that you’re go­ing to be able to get your hands on that’s go­ing to tell you, ‘Oh, this is the end­point that they’re go­ing to look at that’s go­ing to de­fine whether they’re gonna ap­prove it,’” Of­man said.

Last month, ten­sion over how fast reg­u­la­tors should act burst open at an FDA ad­vi­so­ry meet­ing on how to de­sign tri­als for mul­ti-can­cer de­tec­tion tests, and whether tri­als should be re­quired to gath­er da­ta on whether they cut deaths, a mea­sure known as a mor­tal­i­ty end­point.

“The com­pa­nies need to have their feet held to the fire and re­al­ly have mor­tal­i­ty end­points. And I rec­og­nize that that slows progress. But we’ve seen too many things that have gone out the door with­out true val­i­da­tion,” Philip Cas­tle, can­cer pre­ven­tion di­rec­tor at the Na­tion­al Can­cer In­sti­tute, ar­gued dur­ing the meet­ing.

Pa­tients spoke at the FDA ses­sion as well. One of them, a man named Roger Royse, urged the FDA not to go too slow. Royse took a Grail test and was di­ag­nosed with pan­cre­at­ic can­cer, which typ­i­cal­ly re­sults in quick death in part be­cause of how late it’s of­ten de­tect­ed. For him, it was caught ear­ly enough to sur­gi­cal­ly re­move.

“With­out mul­ti-can­cer ear­ly de­tec­tion, I would be dead now,” Royse said.

Grail has a 140,000-per­son tri­al in the UK, but the study won’t di­rect­ly an­a­lyze whether Gal­leri lessens mor­tal­i­ty. Wait­ing for par­tic­i­pant deaths in dozens of can­cers would take a decade or longer to read out re­sults, the com­pa­ny ar­gues.

In that area, the FDA may be on the com­pa­ny’s side. Tim­o­thy Sten­zel, FDA di­rec­tor of the of­fice of in vit­ro di­ag­nos­tics, said dur­ing the meet­ing that the agency hasn’t re­quired mor­tal­i­ty da­ta from ear­li­er stud­ies and it wouldn’t make sense to start now. He re­it­er­at­ed the po­si­tion af­ter prob­ing ques­tions from Cas­tle.

Yet it’s un­clear if the agency will go for Grail’s clin­i­cal tri­al de­signs: mod­el mor­tal­i­ty and look for a re­duc­tion in late-stage dis­ease.

“There will still be the ques­tion of what end­points are ap­pro­pri­ate, but Tim Sten­zel’s po­si­tion elim­i­nates the end­point that would have been hard­est to meet,” at­tor­ney Jeff Gibbs said.

In re­sponse to a re­quest for com­ment from End­points, an FDA spokesper­son said Sten­zel was un­avail­able.

The com­pa­ny’s ag­gres­sive push for FDA ap­proval has drawn both con­cern and ad­mi­ra­tion, some­times from the same per­son.

“Maybe we’ve been too cau­tious. We haven’t searched for ef­fi­cien­cies that will short­en the pipeline,” said Ruth Et­zioni, a bio­sta­tis­ti­cian at Fred Hutch Can­cer Cen­ter. “Yet it’s a good sci­en­tif­ic ques­tion to ask: When is it OK to short­cut?”

A fu­ture with­out Il­lu­mi­na 

Reg­u­la­to­ry ap­proval would be key for un­lock­ing what Il­lu­mi­na called a $50 bil­lion mar­ket up­on buy­ing the com­pa­ny in 2021. But af­ter los­ing a lengthy an­titrust bat­tle, Il­lu­mi­na said last week that it would di­vest Grail.

Any new own­er of Grail will have to take on a busi­ness that, for now, is far from prof­itable. Grail has rou­tine­ly missed or come in at the low end of Il­lu­mi­na sales pro­jec­tions for the busi­ness, and the com­pa­ny post­ed a $155 mil­lion non-GAAP op­er­at­ing loss in the third quar­ter.

Be­fore the di­vesti­ture was an­nounced, Of­man said Grail will suc­ceed un­der var­i­ous sce­nar­ios, in­clud­ing new own­er­ship.

“We have a great op­por­tu­ni­ty to achieve our goals, our busi­ness plans, our long-range plan, and our as­pi­ra­tions to make a dra­mat­ic im­prove­ment in pub­lic health,” Of­man said.