TLDR
- An FDA advisory panel voted 7-2 that the benefits of Grail’s Galleri cancer test outweigh the risks.
- The panel was unanimous that Galleri is safe and voted 6-4 that it is effective.
- Grail stock climbed 36% over the past week to trade near $108.
- Canaccord Genuity reiterated a Buy rating and raised its price target following the vote.
- Full FDA approval could arrive within the next few months.
Grail (GRAL) stock is trading near $108 after an FDA advisory panel backed its Galleri multicancer blood test this week. The stock jumped 36% over the past week, most of that move coming in the two days before Wednesday’s hearing.
The Molecular and Clinical Genetics Devices Panel met Wednesday to review Galleri. Members voted 7-2, with one abstention, that the test’s benefits outweigh its risks.
The panel was unanimous on safety, voting 10-0. On effectiveness, the vote was closer at 6-4.
Trading in Grail stock was halted for the entire day while the panel met. Shares had already climbed sharply after favorable briefing documents were posted online Monday.
Full FDA approval isn’t guaranteed, but it looks likely based on how the hearing went. Analysts expect a decision within the next few months.
What Galleri Does
Galleri screens a blood sample for DNA fragments that carry the signature of cancer cells. It tells a patient whether it has found a cancer signal anywhere in the body, then estimates where that signal is coming from.
Clinical trials found Galleri can pick up cancers that have no standard screening test, including ovarian and pancreatic cancer. The test rarely delivers a false positive, but it only catches cancer about half the time when cancer is actually present.
That detection rate compares favorably with tools like the mammogram. Grail wants patients to keep using existing single-cancer screens alongside Galleri, not instead of them.
One trial result complicates the picture. The NHS-Galleri study in Britain did not prove that screening actually cut the number of Stage IV cancers found a year later.
Some panel members said that gap left them uncertain whether Galleri saves lives. Many screening tools now in wide use, including colonoscopies, were adopted before long-term survival data confirmed their benefit.
Sales Outlook and Analyst Reaction
Grail already sells Galleri for $950, but insurance rarely covers it. The company logged about $150 million in sales last year, and this year’s total is projected at $180 million.
Mizuho analyst Bradley Bowers expects a bigger jump once approval lands. He pointed to other cancer-screening products, including Cologuard and Guardant Health’s Shield test, which both saw sales double during their launch years.
Congress has already passed a law requiring Medicare to consider covering tests like Galleri once the FDA signs off. UBS analyst Doug Schenkel estimates Medicare coverage starting in 2029 could add roughly $300 million to Grail’s sales the following year, pushing the total toward $1 billion.
Canaccord Genuity reiterated its Buy rating on Grail Wednesday and called the hearing better than expected. The firm views the panel’s vote on benefits versus risks as a strong signal for eventual approval.
Grail is now valued at $4.3 billion, roughly 19 times next year’s expected sales. That valuation already prices in a good chance of approval.
Data from InvestingPro shows the stock trading above the platform’s fair value estimate, and an RSI reading points to overbought conditions after the rally. Grail is not expected to turn a profit this year.
In its most recent quarter, Grail reported revenue of $44.7 million, ahead of the $43.2 million analysts expected, alongside a per-share loss of $2.56. Canaccord is hosting a webcast Friday with two cancer screening experts to walk through the panel’s findings and what comes next.
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