GRAL - Earnings call transcript Q4 2024

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Operator

Good day, ladies and gentlemen, and welcome to the GRAIL Fourth 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. and our President; and International our BioPharma. Ofman, Harpal President, Kumar, Business Joshua

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

projected subject Forward-looking to statements events and forward-looking results available or are to based Actual upon those statements. and these uncertainties. obligation discussed. risks no statements GRAIL assumes currently All may are or information, update from differ materially

call actual we with Form the Better could of most results and uncertainties company's risks including a of items, specified on certain that related Illumina's include report recent cause XX-K. impacts to GAAP including which quarterly measures, and will acquisition SEC, the that differ, results adjusted section documents and Risk GRAIL. to report the understand in to upcoming the non-GAAP XX-Q Factors discussion financial GRAIL's adjusted to profit certain exclude on you GRAIL and the gross EBITDA, This adjusted also are Form including refer annual accounting files

non-GAAP of your GRAIL's understanding measures financials. to intended supplement Our financial are

is the press that, measures most release GAAP call website. And turn the with are in non-GAAP to posted the Reconciliations our measures financial to comparable Bob. to of issued today, which I'll available directly

Robert Ragusa

registrational Illumina XXXX. for third intended X study July, anticipated you X. we in thank for modular of studies, In from was the review runway significant joining as our XXXX and extend completion began and completed including milestones restructure past our and major a study year full of results final to capital quarters, publicly PATHFINDER visits for we approval everyone, we fourth FDA June. to a and year submission PMA separated transformative In the Galleri. and our GRAIL trading the the fourth NHS-Galleri quarter for afternoon, us implemented Good some for

addition, we In Galleri year-over-year XXX,XXX tests. XX% grew U.S. more selling revenue Galleri than

for the with pleased to commercial are Quest integration progress X,XXX patients more physicians easier Galleri kit. and to it nationwide into recent our system. test Galleri's excited test make a allows test to without Diagnostics the bring We This order integration XXX,XXX initiatives than are easy test, momentum for along and physicians ordering access at enables to including Quest to ordering locations needing

Dr. Ofman. discuss To GRAIL's hand it highlights, recent additional some President, over Josh to I'll

Joshua Ofman

Bob. Thanks,

population was Galleri infrastructure And enable to know, may future we've utilized be you all As our continued laboratory our enhance to scale. growth. to to designed technology this and

flow this version Xx Over the and the efficient enhanced run years, on the rolled to version enable XXXX, of an working samples which will lower panel end size, cell. every on at been to which past reduced and At scale. of updated allowing growth support we've Galleri, sequencing a number out, includes costs approximately us we of testing several

in Additionally, to the efficiency. able automated the numerous allowing is we've testing eliminate workflow greater been much fully meaning both integrated, for and now lab, steps manual

test see version approved support expanded the these expect of list volume added be our elevated and needed with XX offering not substantially we December our in the of began improvements years future of U.S. risk years. benefit We insurance to and has investment TRICARE for tests updates of we to any has implementation The the Military's older do to CapEx expected are a lab-developed additional that the program anticipate capacity, foreseeable pleased COGS this next really an of health will the as the or lab cancer. as who We're also scale. for Galleri several continue covered to patients test

after cancers determine Health both adults Defense since We're in Agency in we've requirements pleased XXXX. This effectiveness. test clinical implement addition currently identifying with reviewed the if the came Galleri meant it made offering. to We're carriers The to founded was really care GRAIL in working with asymptomatic Galleri TRICARE's is and safety deadly new today. progress TRICARE for this

and detection we our We how dramatically in in demonstrate to cancer for improve population. to cancer to the transform the completely screen rate continue scientific leadership field this emerging

families We Officer, FDA can modular over continue quarter our it looking to we're individuals and to to results, make detect help be their cancer I'll Financial Aaron and discuss when our fourth it To submission, Chief cured. to progress early financial forward hand GRAIL's continuing on Freidin.

Aaron Freidin

and Thanks, Total full were results quarter of to revenue $X.X revenue the I'm million strong Josh, for development and the $XX.X XXXX. compared of good to revenue revenue. and afternoon, present or our of is screening million, pleased up year $XX.X XXXX. services quarter million QX of for million results quarter of $X.X fourth as Fourth with XX% everyone. comprised

and research and XX% testing, services million, studies, revenue year clinical full up provide support therapy customers, revenue Development pilot XX% up XX% in growth. of Full services including year clinical include biopharmaceutical revenue with our XXXX full revenue revenue and over guidance fall was XXXX year in we $XXX.X narrowed development. from XX% comprised was of $XXX.X to to the XXXX. of in screening full line year million,

was million of Screening for also quarter more revenue in fourth XX% demand XXXX. with test throughout Galleri $XX in of fourth million, $XX.X than XX,XXX up the XXXX, tests from compared total continued service compared $X.X a 'XX increased quarter the the in tests approximately decrease Revenue Development the our was quarter of see X% quarter QX of of of on We million and primarily as year. volumes. the with development XXXX. of fourth XX% sold fourth decrease and a XXX,XXX based a sales revenue service as revenue, included

$XX.X goodwill as with quarter Net million, of million was XXXX. and asset Non-GAAP impairments. to improvement year was an driven loss primarily Net $XX.X QX compared as was the as XX% profit loss Net compared the million $X or full QX quarter loss for $XXX XXXX year by intangible full of XX% XX% of increase of or fourth adjusted increase the million, was gross to compared XXXX. an billion, an XXXX. for $X.X for

million, profit XXXX an million increase $XX non-GAAP of mix year fourth as was drivers Adjusted an negative XX% XXXX. as or Primary compared million margin of of $XX.X efficiencies $XXX.X and $XX.X scale with volume. EBITDA an a or adjusted of $XXX.X increased cash year to million. XXXX was year XX% negative the million, of million, $XX.X QX million improvement compared quarter to Adjusted XXXX. gross of was as revenue Galleri $XX.X year the full full position with compared were related ended representing improvement EBITDA the Full We of increased to X% full the for or year for XXXX.

$XXX burn in In and of in more projected growth In XXXX, we our efficiently than more We profile. guided expect burn and we XXXX. made here, million, year our decrease January, to a spending that reduce XXXX. XX% are strides significant XXXX cash plan we on reducing the to continue cash burn to full focused we for of than be no driving

for of and runway As of completion remarks. shared concluding extends us our we've enabling it our studies Bob readouts cash such as achieve registrational submission. XXXX, turn PMA to our before, into I'll major to milestones back modular

Robert Ragusa

Thank you, the separation from public Aaron. a we last as great Illumina in year, made June progress have company. Since of

with we completed to major version the and in efficiency idea drive our we of us detection initiative towards multi-cancer new to for a care. a Galleri, momentum believe financial We we test, strong for standard seeing are recently are strong scalability. position of an as have the a new continue are launch and from seen early growth We becoming pleased preparing improved cost the

as are our of with FDA forward XXXX. registrational modular studies and half to in NHS are PATHFINDER from looking in well stages data PMA X submission of readouts the collection as the of completion the first and the Galleri studies We final our for

mission We our their commitment dedication our incredible to early and for cancer detect when are to employees grateful to cured. be can it

over Q&A. please the to go Operator, call now turn ahead. We'll

Operator

Instructions] from The question Doug [Operator is first Schenkel Wolfe at Research.

Douglas Schenkel

-- think And out of I I'll I throw have Okay. there way. just the just get and and them I'll out to,

new suggest Josh test little COGS a it's more how flexible essentially will, would allows think to I in elasticity regarding in I'm detail Galleri, of test share a importantly, more actually maybe be in early And able if per seeing be will standpoint. just the the lower from to lower on the you question pricing going, to more you First, you actual the you're anything if wondering demand. result pricing true for terms the that

bill if you our there. what reintroduced a -- might I'm hearing So in in is topic elasticity events And more to question current can essentially weeks the of and how you're wondering the that house in low market. come whether evidence allows the the could of pricing and how really a is a you go, anything change understanding couple that was about it seeing much you're that COGS what of MCED this ago. terms share question any then second and of on next

Joshua Ofman

Great.

Robert Ragusa

take let me go X. and it first, Josh, over I'll

Joshua Ofman

Bob. ahead, Go

Robert Ragusa

Yes.

I the So questions. appreciate

So focused prepared in samples on the on remarks, -- tests, more the we're number more panel. the as put his samples able Xx new to Josh a of version of mentioned due significantly the to

have near-term we clearly, a reduction variable reduction So COGS. in in

look get terms of the structure any meet, really scalability of out price order the to to we'll and to population to. in need longer scale cost think and platform the long-term we be this build In on and we we'll margins that kind pricing able elasticity, term at

build. to cost won't the automation until see Josh really for time period we so a And of that volumes the referred leverage fixed on

done we So haven't it. elasticity testing the with

to long structure need to add that on and -- And to really the a cost term. any the Josh, will we'll us we know proofing future pieces scalability so and that? it's get over

Joshua Ofman

we'll early days. take No, -- able volumes to be that just of And increase, advantage it's as but that today. be scalability, not we'll

Robert Ragusa

The legislation.

the that been have very advocating encouraged So stakeholder by the groups the this for reintroduction, local. strong in we momentum, by remained remain

the have for to We support continue bicameral bill. bipartisan

be the momentum But for it. really good for add? vehicle have I level say looking other no color forward. can move don't you real lot change So of again, you I to the to would of And right if Josh, able a support know it any in

Joshua Ofman

that's in or bill pending bipartisan it's any it's considered. -- the seriously got been think that will We're And of the that introduced. right. reconciliation I support X get first we're either moving No, great hopeful bicameral, vehicles, it

Operator

The is next Stanley. from Savant question Tejas Morgan from

Unknown Analyst

quarter. the on Congratulations Tejas. for on Jason is This

starting Quest the mid-January. with guide? just collaboration share on news, what's XXXX pre-announcement if your embedded was similar on maybe recent regarding off can So in in similarly, incorporated confirm those your the they note mid-January of this in collaboration incorporated XXXX sources guide from you this do represent TRICARE Diagnostics, Or upside? and And your

Robert Ragusa

take want that? you to do Aaron,

Aaron Freidin

Yes. definitely. Yes,

Patients very, to to on. coverage. very kit these So to we're available go on Quest to to as said, excited excited a is and Josh to directly implement test blood both Quest payers both won't working their system. for and Josh and And the TRICARE, with their the be TRICARE. about really opportunities drawn as need make elaborated going take through order so

now, Galleri we next several opportunities As 'XX U.S. no the guidance change there's as to goes, far right things contemplated year. our And and guidance. for

Unknown Analyst

on then, question Got guess, And on the up MCED just legislation. Doug's following it. I

I align in which recent And more Senate, a had from beginning screen share December stool XXXX. how with February bill the time I a then related test. beginning line also for these bill a XXXX. in mentioned in thoughts reimbursement February the reimbursement believe was believe mentioned bill Could And there you on then on So in reimbursement lines that note, in expectations? multi-target

for potential expectations? that does rate So tests also MCED your reimbursement align with

Robert Ragusa

Yes.

in currently December of time negotiated of in was forth. beginning was just So then resetting and on in first terms the the kind piece position. line, the of there And what the kind back to back what's piece

it similar for of the bill. back The reintroduced, So market as the gets starting as well, it's into current the for pricing kind stool-based is beginning referenced to position that testing. in

Aaron Freidin

to that So seems accurate. be

saying tie conversation population were to new version sorry, Just COGS back margins. in just on -- back this contemplation We to it tie and the we've implemented of scale. to

in pricing that that we've So contemplated endeavor.

Operator

The from next Subbu Nabi is from question Partners. Guggenheim

Unknown Analyst

Subbu. on Thomas for It's

maybe sort any looks color of say, acknowledging Just to would you're for, you expectations? readout you call for what then it, to on it if early what maybe obviously, Curious PATHFINDER to looking endpoints When playing start, out X X. know that like wasn't success -- for And on study. as guys Any well? days. it's

Robert Ragusa

you And one? to Josh, that on want jump do in

Joshua Ofman

Sure.

remember, you where with of the elevated we're the single-arm in U.S. of XX trial and X is over the as study, So interventional performance a an risk evaluating U.S. population PATHFINDER age cancer. for Galleri adult really safety

main workups And the the safety traditional similar performance, of with the values. whether screening. to to specificity as in going study of measures PATHFINDER get very continue measures be the of endpoints really, standard of was So obviously, traditional on are And test evaluation, workups then the individuals what safety diagnostic predictive well. complications their associated X and that's to care issue, all sensitivity, that

final our half XXXX. the read we modular out, will study FDA be to first the submission so and And it of of will in part that

your probably question. And so guess I that answers

Unknown Analyst

And follow-up Great. That's cash. just a on then on helpful. note X separate

out you any new can on call, the impacts you but longer-term there? As XXXX, closed color

Aaron Freidin

Yes. and $XX we coming we years last from at The year, with No, as over cash runway completed decreasing million what cash no we burn there. gives Pryor. communicated change to us last JPMorgan the year restructuring get before

Operator

is final from Kyle Mikson the from Canaccord. And question

Unknown Analyst

Kyle for on Alex is Mikson. This

obviously, and of the lot major to company's topic noted you a that been We'd spending a in call. uncertainty. answer discussion of as like earlier has to continues profile. there Obviously, So the which legislature, be burn

your FDA total meaningfully burn? elongated shortened, are approval your how this ultimately could if and impact So or either lines time submission cash

Aaron Freidin

Yes.

the for PMA FDA XXXX. first submission cash So -- half see we are and into plans runway our currently,

there half we've time to delay want And first here sitting line. if we cushion our believe cover add. any anything guys happen. though, to that built you So flexibility in sort Josh, Bob, some some of XXXX with to were Today, confidently else

Robert Ragusa

runway Aaron in part some to Yes. XXXX. us flexibility. the to as to buffer. level of mentioned, -- We the drive cash of into built some No, choosing restructure It I and was do have think we wanted just our give

believe we So that's in. built

Unknown Analyst

Got follow-up. it. X And quick

results all AI up, forces Larry January XXXX, any a noted detection Oracle Open in early to forces and in funding So SoftBank I was towards I AI time. impacted and President of could going lot and essentially Ellison XQ far. of AI cancer announced kind curious team Trump if news joint launch actually thus Stargate, joint over at of this

Robert Ragusa

Yes.

the press see It application that's -- opportunity. So to there. see more killer as we we'll the longer-term think about that don't But QX forefront impact, a kind called it's great see was anything in think the great -- in cancer in terms that was to conference. of of I killer for AI out

Operator

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

Robert Ragusa

thank you, So joining for call everyone, today. the

Operator

this gentlemen, concludes call. Ladies and the

You disconnect. now may

GRAIL (GRAL) 20 Feb 252024 Q4 Earnings call transcript