GRAL - Earnings call transcript Q3 2024

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Operator

Good day, ladies and gentlemen, and welcome to the GRAIL Third Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that this conference call is being recorded. GRAIL Investor Relations, please begin.

Unknown Executive

Thank you, and thank you all for joining us today.

On the call are Bob Ragusa, our Chief Executive Officer; Aaron Freidin, our Chief Financial Officer; Dr. Joshua Ofman, our President; and sir Harpal Kumar, our President, International Business and BioPharma.

I'd statements remind on on underway, be that current get forward-looking making this we like everyone to we'll expectations. Before call based Section of as the today's Section as Securities intent of fact Exchange and our contained XX commercial our that in be statements XXA amended, provisions results than It's Act Act covered for will by statements all anticipated financial the made harbor Securities of including call, XXXX, statements during and activity statements safe XXXX, regarding of the other of historical forward-looking amended.

risks Forward-looking to to the in including statements All are on EBITDA, uncertainties. update differ, specified understand the the these available results call GAAP adjusted the information, profit uncertainties or subject from currently files are including or upon a discussion to results materially may statements. To could discussed. measures, certain better Risk documents results those and report based projected and cause loss and actual or certain quarterly and gross differ SEC, which we to risks GRAIL obligation events no that you are statements refer forward-looking Actual recent of and section items. with non-GAAP Factors Form also exclude most include financial GRAIL that adjusted will to adjusted XX-Q. This GRAIL's assumes

call financial directly issued to GAAP I'll understanding financials. release the to Reconciliations GRAIL's is comparable posted of are of the measures your measures with Our our supplement financial non-GAAP to to Bob. that, which non-GAAP most intended are available hand today, the website. And press measures in

Robert Ragusa

population more We an Galleri pleased for than XXX,XXX for environment. commercial tests more is are joining in that been with launch. GRAIL September are we growth. optimize the this impact the thank have Galleri technology the and the end third test. to the having of providers continues us the launch field, year, everyone, will year, lives. Galleri established is since by for patients' leader version of you proud and future and on and review to XX that for of health afternoon, demonstrated Through next to prescribed seeing of market the Galleri we XX,XXX than enable pre-reimbursement At in we care scale demand designed GRAIL the results remain quarter. infrastructure was laboratory this our Good Galleri

new over in at integrated the volume reductions a automation, level other enable scale have assay, we significant time. of costs among to efficiencies and With support

Research Park, Additionally, us facility growth. Triangle our large laboratory XXX,XXX enables substantially multiple from North to scale Carolina, of laboratory feet in capacity of square approximately years

We results continue demonstrating publications. In CCGA published PATHFINDER medical published performance a the September, to Precision in and cancer. in prostate leading studies from Galleri's present conferences JCO and Oncology renowned at sub analysis peer review our evidence

any the presented preferential results, X. To no study care indolent predictive Galleri's evidence not rate identified but of exasperate should to population Conference. it veterans of Freidin. veteran the cancers. study population quarter the a with screening, discuss regarding More because addition at detection when aggressive, early of findings cancer, over a of that in Aaron this paradigm October, cases and out cohort In of Financial detection real-world results for GRAIL's Officer, value standard approximately of Affairs cancer financial X.X%, deadly XX.X%. is of scale positive AACR For cancer, cancer, insulin aggressive stage of Department Chief and prostate diverse in detected data of Initial prostate had demonstrated Galleri overdiagnosis concern. clinically particular were at of of is shared necessary. These is X to most exposure, high-grade of the diagnostic and previously turn from March suggested usually with a study, a The significant of when evaluation where in additional the Galleri were among disease build indicative earlier cancers. In toxic showed overdiagnosis to Veteran important reflection from of analysis general, Cancer GRAIL at that symptom screening This designed were evaluated. than early sites I'll X,XXX U.S. participants, our detection cancer second signal half results early

Aaron Freidin

Thanks, everyone. our the pleased to Bob, afternoon, for and good present quarter. I'm results third

and the in of of research biopharmaceutical non-GAAP measures million, large exclude EBITDA, or support accounting compared compared adjusted volume our a with the increase profit available with QX measures under quarter earnings for services revenue intangible XXXX primarily to between XXXX, our an related these on revenue. or the and adjusted and results and and therapy compared revenue $X.X scale to an of was historically Screening Development include was $XX.X quarter million as of the of $XX.X was Galleri third holidays. due We for margin position third quarter quarter, million with the an related million of been goodwill volume. million. with drivers XXXX clinical the of increased additionally has tests XX% improvement testing, sales services These QX $XX.X second negative which improvement as were as of XX% our as loss compared development representing and slowest third see XX% revenue the we or GAAP million, was the screening presentations million, QX second compared GRAIL. by an Galleri quarter conjunction the or our customers, quarter to pilot up in impacts $XXX.X revenue report the EBITDA as impacted our business. XX,XXX quarter carefully summer to as impairment. We gross of of press to $XXX.X to year. Net the of reconciliation profit XX% third acquisition ended Total development. We test of was release. Non-GAAP last adjusted consider we is quarter to demand calendar XXXX. and quarter of increase investors' which in were million, QX Primary encourage based for million of $XX.X XXXX, quarter enhance million same quarter to in investors of for XXXX, million compared sold $XX.X with the mix quarter clinical and results XXXX. QX supplemental provide and Adjusted strong $X.X a loss including to gross information of comprised a of and $XXX.X asset up Third in studies, financial revenue $X.X approximately Illumina's XXXX of understanding non-GAAP to services includes XX% in efficiencies the increased revenue continued cash for

quarter. to in cash second In burn We in expect we reductions guidance August, $XXX million from burn guidance we half with the to our million. lowered continue cash provided our $XXX last line

for approximately guided $XXX million. XXXX, full burn expected we year to be Additionally,

the first months, growth, Given narrowing our through be guidance for experience XX% sales to our and X when are XXXX. XX% for Galleri to compared we between XXXX

to runway reminder receive of after concluding quarter, we remarks. With into for we we spending in restructuring back profile, balance our turn provides the a moderately to the cash until Galleri XXXX, impact of expected plan broad Bob XXXX. I will revenue reimbursement. it As more our announced reduced for grow the last

Robert Ragusa

Thank you, Aaron.

broad company, Galleri. mission-driven are a use of we improving and focused are We enabling and care on cancer

approval for strategic are of Galleri our focused goals, Galleri. broad FDA and seeking We pursuing reimbursement on

milestones, terms to study, we and In in drive our research expect upcoming of Galleri-Medicare access the Galleri this commercial or enrollment year, and continue to REACH advance partnerships.

scale us efficiently to version transitioning a of will We Galleri, as new also increases. demand enable which to anticipate Galleri

results anticipate X in We results XXXX, NHS-Galleri studies that, are looking participants XXXX. With call the study study forward the to XX,XXX second turn expected readouts the to the and we'll in from the half our of from ahead. of over please Q&A. first go in Operator, the full the registrational and PATHFINDER

Operator

Guggenheim. question [Operator Subbu come Instructions] first with Our from will Nambi

Thomas

the it new regulatory after you comes What And to then GRAIL just It's walk strategy Thomas do the comes can into test. general, you for test that's of give envision progress next? especially decade how and you Subbu. to long on color in for a specifically, FDA more And the bit would of outlook reimbursement, front FDA on the your reimbursement? commercial Galleri CMS when some And in been the expect pathway? be A little pathway? regulatory made through journey, if

Robert Ragusa

Thanks for the question. A fair amount unpack there. to

pathway. So first FDA on I the guess, maybe focusing

now completed So registrational key the for in we're visits X our study July, studies.

people, So that. submission across half time XXXX. the people half PATHFINDER the X, and NHS-Galleri will PMA that clinical we XX,XXX use the data people, where study where and enrolled of for -- first to our XXX,XXX we've XXX,XXX That's enrolled first were the submit is in

advisory so at from we expect FDA. And an committee that, do the

for would that towards. is FDA line time time X-year a into about expect tentative we first XXXX from drive we're which us so half the line that, working And approval,

next till is And reduction. the As of mentioned automate with built things: question, comes fully X recognize one, also of scalability. gets assay Galleri for of has always that version looked the been nearly it the version so the test the assay, the And population in scale. really next we cost to assay, with X things the we great the itself that

cost longer cost fixed assay. variable from And So we leverage term, we get from then the assay. expect expect volume, reduction we near-term the as

where Means X, are the it, law an groups unusual the House large we're in of There end clearly, new year. looking rather Ways and that. this by encouraged had markup element In going through in bill. a Committee, we're pathway, so MSE it And We're had is reimbursement for by to and that unanimous that. then So transition a XX assay encouraged of we the Congress advocating the the the at vote now. for is very to and rare right the to on stakeholder CMS important that summer,

things One of not partisan is clear is that the cancer issue. that's a very

bipartisan, bicameral bill. the support we So have for

lack on support hopeful And to CMS and our authority that the -- year sponsors to and any MCED would that. the in really we are so the able difficult Congress of in networks But cover test. nature FDA bill for that by encouraged will bill. But the before approval, we're give the an just to that the get of it's timing we we're congress be the so, productivity have FDA-approved last pass, that or of plus and highly predict

I'll there's see So any follow-on. maybe there and stop if

Thomas

off Awesome. And that. more one building then just of

commercial everything efforts manage and How said You that just given do balance. you your that mentioned spend? you cash

Robert Ragusa

Yes.

at things really So and unreimbursed in spend did focused really as recognized organization I you commercial, and of think moderating that, if that of we drive that And that know results. as getting an across in in into we've of reimbursed. an early-stage order drive see, Star investment extend North looked the in sales Galleri August, our looked can sales -- it's XXXX. in approved that, at we invest and rapidly. In the to there We can on this August our restructuring Within amount the our quarter's in test we the the commercial. out cash we investment one from is we runway FDA

right drive least cover that runway. to cash what they're so the commercial And generated looking expenses. can to we're margin to that be the neutral we're commercial selling really And cover so is tests the the prioritizing side, now, cost by on that at do that the more --

-- so lot we've We were a it's So works moderate more and what doesn't about a approach. work. learned --

from on our areas able pull the back of been we've So the to other areas. most and efforts commercial concentrate productive some

that even is And but we moderated we as the learn go more to think continue at so pace, we'll expectation. a

Operator

from come Our with will next Savant Stanley. question Tejas Morgan

Jason

This Tejas. is on for Jason

the the for have a technology So is market market. very be to to right nascent, GRAIL for patients. in first MCED is both now you build mover the and going and awareness physicians Obviously,

reimbursement reimbursement? to next FDA about years or establishing X with approval before you or X build away, take, the market you plans year in potential So have can MCED in talk give any the

Robert Ragusa

Sure.

couple So going of years, ecosystem near last to it's over looked -- build works. out to into really the going both future, while over -- we're we've look to the the how

know test, to commercial it of is experience want the their and very integrate to to with operate standard get systems, And part here providers, -- so to really wanting drive how we comfortable test health with practices. the into how the what

And successful very so at it. we've aspect that of been

timely what from And the understand sure able very in so what our And to and with resonates we then laboratory tests making of manner. with how in patients continue we that describe providers, deliver very will to on practical a high-quality test. push standpoint, is terms a resonates

So designed ecosystem operate important. Because, the test just this we a population scale whole volumes. high again, exercising kind is and that's at of very very is expect so been to

next at stage exponentially, that. prepared to get be reasonably to when upgrading will we're reimbursement, broad already the we'll up volumes of for high go while we so And volumes, and need the

Jason

differences main follow-up mentioned performance a anticipate a as if the studies to And version? that confirm can then X of you've for scalable of any Can of the a version to Galleri, what with compared you as submission? current produce And the Bert version additionally, respect part the might you PMAs on you version studies test. you you're X it. Got confirm do major submitting goals

Robert Ragusa

Yes.

we in the would main as scalability and minor So some test. we the significant not mentioned, performance performance cost. improvements end-user expect while the expect we actual we in -- a are, The of from difference drivers here perspective,

we'll version. studies discussions the on, the to as perspective, if they -- for an next deployment. similar the from studies both with assay in the NHS, go appropriate the current in we bridging them we're in FDA have later of full-scale the On the terms version forward want discussions move of And with on from

Operator

comes last with ISI. question Kumar Evercore Our Vijay from

Mackenzie

This is Mackenzie on for Vijay.

on question that this Or across that the XXXX? thinking burn. expect sequentially phasing I that's the year? How improve quarters? spread going but to through be throughout something we number, should another to you us about cash be is a you Just evenly gave of do know

Robert Ragusa

want do Aaron, you to?

Aaron Freidin

question. Great Yes.

in revenues been that version to the some in getting subsequent continue test grow So the we've investments the roll PMA submission, talking getting off. we'd of expect about, decrease programs cash burn as of to years to we and next to

Mackenzie

reduce you ramp. bit but COGS, this the to version Great. for then to it Okay. it's supposed talked is helpful. time in to that That's little I sounds of Galleri, a your And of going like about know take new

rate So to how there? run long the what And should that how normalized expect take? sort we we be thinking about margin on will ramp COGS can of a front

Aaron Freidin

Yes.

with be from be perspective. program throughput. the to Part cost bring and right variable So hard the a on going test an But for timing -- that impact of the to the was increase there'll the of a to it's begin predict driver then front. now to down main

this with, we get test that. transition as sight give to So cost we're more that but begin that volume that of run today. for to we'll the the won't test, That's able we until at at there'll the be it test more something the some realize we to pickup into than quarters, to end following of be benefits year, significantly of entire of line

Operator

back questions at will remarks. There now turn GRAIL are time. to no call for closing further I the this

Robert Ragusa

want thank call. everyone I to for today's joining

Operator

Ladies concludes and gentlemen, this the call.

You may now disconnect.

GRAIL (GRAL) 12 Nov 242024 Q3 Earnings call transcript