Grail’s stock crashed after Galleri’s NHS England trial missed its primary endpoint.
But it’s still generating plenty of revenue without an FDA approval.
Grail (NASDAQ: GRAL), which was spun off from Illumina (NASDAQ: ILMN) in 2024, reached a record high of $116.06 on Jan. 22. But today, the cancer test developer's stock trades at just under $70. Is it a buy, sell, or hold at these levels?
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Grail's Galleri blood test aims to detect signals from dozens of cancers before any symptoms appear. That seems like a game changer for the oncology market, but its stock plunged in February after its largest NHS England trial failed to meet its primary endpoint. That trial was considered a crucial stepping stone toward an FDA approval in the U.S. -- which would clear the way for private insurance and Medicare plans to cover its tests.
However, Grail already sells Galleri on a cash-only basis (for $749 to $949) to independent customers, select employers, hospital pilots, and telehealth programs. Its NHS England trial also wasn't a complete failure: Galleri's users in the trial still had fewer Stage IV cancers detected, and it achieved earlier (Stage I and II) detection of the deadliest cancers.
Even without a near-term FDA approval, analysts expect Grail's revenue to grow from $147 million in 2025 to $281 million in 2028. It won't generate a profit anytime soon, and its stock isn't cheap at 17 times this year's sales, but an FDA approval could help it crush those estimates. Therefore, I think it's smarter to buy and hold Grail at under $70 than to hastily sell it.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Illumina. The Motley Fool recommends Grail. The Motley Fool has a disclosure policy.