NEW YORK – Cancer early detection firm Grail said on Tuesday afternoon that it plans to reduce its existing headcount and planned hires for 2024 by approximately 30 percent as part of a restructuring that will also decrease its investment in product programs beyond its Galleri test.
The firm will also reduce the size of its commercial organization to focus its field-based activities on the most productive provider territories and will streamline its investment in its enterprise business, which includes marketing testing to employers and life insurance businesses. Moreover, it will cut general and administrative costs to focus on multi-cancer early detection but will continue to invest in its biopharmaceutical partnerships.
During a call with investors and analysts, Grail CEO Bob Ragusa said that the shift in focus will also pull away from the company’s efforts to adapt its technology for minimal residual disease testing and as a cancer diagnostic aid.
The cost cutting measures will save the firm $27 million in 2024, net of severance and benefits costs, and reduce cash burn in 2025 to $325 million. Grail expects its cash will now last into 2028.
Reporting its financial results for the first time since spinning off from Illumina in late June, Grail said its revenues increased 43 percent year over year in Q2.
"In the second quarter of 2024, Grail continued to deliver US commercial growth, and as of June 30, we have sold more than 215,000 Galleri tests," Ragusa said in a statement. "We have an unprecedented opportunity to establish a new standard of care by adding Galleri to existing single-cancer screenings, and to establish and maintain the market leading position in multi-cancer detection."
Ragusa said that the newly announced cost-cutting move is based on a recognition that reaching certain milestones, particularly US Food and Drug Administration approval and broader reimbursement, will be critical for the company’s success.
“We did a very careful review of what it takes to get there and we're quite comfortable that we have the resources aligned to be able to go down that pathway successfully,” Ragusa said. “We're staying consistent on our timeline and we're staying consistent in the effort that we're applying to that area.”
Ragusa reiterated that Grail recently completed final study visits for the 140,000 participants in the Galleri study it has been conducting in collaboration with the UK’s National Health Service. The company also recently completed its enrollment of 35,000 participants in the PATHFINDER 2 study.
“We expect to submit our PMA with the clinical data from these 2 trials and other supplemental data in the first half of 2026,” Ragusa said.
According to Ragusa, Galleri tests have been prescribed by more than 11,000 health care providers as of June 30 of this year.
For the three months ended June 30, Grail posted $32.0 million in revenues, up from $22.4 million during the same quarter last year, when it was still part of Illumina.
Screening revenue totaled $28.2 million, up from $20.0 million, while development services revenue was $3.8 million, up from $2.4 million.
Net loss for the quarter was $1.59 billion, or $51.06 per share, and included $1.42 billion in goodwill and intangible impairment. By comparison, net loss totaled $193.0 million, or $6.22 per share, in Q2 of 2023.
R&D costs increased 6 percent in Q2 to $94.2 million from $88.7 million in the year-ago quarter while SG&A expenses rose 19 percent to $108.3 million from $91.3 million.
Grail ended the quarter with $958.8 million in cash and cash equivalents and $3.9 million in restricted cash.