Financial Performance - GRAIL incurred net losses of $125.7 million and $891.4 million for the three months ended September 30, 2024 and October 1, 2023, respectively, and $1.9 billion and $1.3 billion for the nine months ended September 30, 2024 and October 1, 2023, respectively[133]. - Adjusted EBITDA for the three months ended September 30, 2024 was $(108.2) million, compared to $(126.1) million for the same period in 2023[133]. - The company recorded a net loss of $891,448,000 for the three months ended September 30, 2024, compared to a net loss of $1,278,158,000 for the same period in 2023[170]. - Total revenue for the three months ended September 30, 2024, was $28,652,000, representing a 38% increase from $20,722,000 for the same period in 2023[172]. - Total revenue for the nine months ended September 30, 2024, was $87,343,000, representing a 39% increase from $62,779,000 for the same period in 2023[184]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $(399.5) million, slightly improved from $(400.4) million for the same period in 2023[206]. - The company incurred net losses of $9.7 billion since the acquisition of GRAIL, which includes significant charges for impairment of goodwill and intangible assets[211]. Revenue and Sales - Screening revenue increased by $8,629,000, or 52%, primarily due to a 57% increase in Galleri sales volume, despite a 3% decrease in average selling price[172]. - Screening revenue increased by $24,732,000, or 47%, primarily due to a rise in Galleri sales volume, which was consistent in average selling price (ASP) period over period[184]. - The company recognizes revenue from cancer screening testing services at the point when test results are delivered to the ordering physician[223]. Restructuring and Cost Management - GRAIL's restructuring plan aims to reduce headcount by approximately 30%, including 350 full-time employees, which is expected to save about $120 million annually[140]. - The company expects to incur restructuring charges of approximately $19.0 million to $23.0 million through the fourth quarter of 2024[141]. - Sales and marketing expenses are expected to decrease immediately following the implementation of the Restructuring Plan and to continue decreasing as a percentage of revenue over the next three years[162]. - The company expects research and development expenses to decrease over the next three years as it reduces investment in product programs beyond Galleri[161]. Cash and Funding - As of September 30, 2024, the company's cash and cash equivalents totaled $853.6 million, following a cash contribution of $932.3 million from Illumina[210]. - The company received $1.2 billion in funding from Illumina during the nine months ended September 30, 2024, a significant increase from $378.0 million in the same period in 2023[217]. - Net cash used by operating activities for the nine months ended September 30, 2024, was $(483.7) million, compared to $(466.9) million for the same period in 2023[213]. - The company may need to raise additional financing in the future to fund operations, which could result in dilution for existing stockholders[212]. Research and Development - The company plans to continue investing in biopharmaceutical partnerships and leverage proprietary methylation technology in precision oncology applications[139]. - The company has invested heavily in clinical studies, including the NHS-Galleri Trial, which is expected to provide results in 2026 and could facilitate adoption in other single-payer systems globally[153]. - Research and development expenses rose by $19,393,000, or 8%, driven by increased laboratory supplies and compensation expenses[188]. - The company accrues for estimated costs of research and development activities based on the estimated amount of services provided, which are significant components of its R&D expenses[228]. Regulatory and Market Position - GRAIL's Galleri test is not yet approved by the U.S. Food and Drug Administration but is clinically validated based on studies involving over 21,000 participants[132]. - The company plans to complete a PMA submission with the FDA in the first half of 2026, which is subject to various risks and could take several years to obtain approval[148]. - The company is actively working with the FDA to determine the necessary data for PMA submission, which may change over time, complicating the approval process[148]. - Galleri is currently available as a laboratory developed test in the United States, with private reimbursement established from several self-insured employers and health plans, but lacks broader coverage from government healthcare programs like Medicare[148]. Goodwill and Impairment - The company recognized a goodwill impairment charge of $718,466,000 in the third quarter of 2023, which was not present in the current quarter[180]. - The company recorded a goodwill impairment charge of $888,900,000, reflecting a significant decrease in the fair value of GRAIL[192]. - Goodwill represents the costs in excess of the fair value of net assets of GRAIL acquired by Illumina in August 2021[232]. - The company tests goodwill and indefinite-lived intangible assets for impairment annually or more frequently if circumstances change[233]. International Expansion - The company is focused on international expansion, particularly in the United Kingdom, and is evaluating additional select geographies for future growth[149]. - The company aims to leverage its scalable infrastructure to meet increasing demand and improve margins over time[154].
Grail, Inc.(GRAL) - 2024 Q3 - Quarterly Report