Hi, everyone. I'm Evie Kozlowski, the Life Science Tools and Diagnostics Analyst here at Goldman Sachs. I'm joined here by Aaron Freidin, the CFO of GRAIL. Thank you so much for joining us. Yeah, thanks for having us. Maybe to kick us off, start by helping investors get oriented with the story, a quick overview of how you're building out the multi-cancer early detection market and sort of what you're most focused on right now. Yeah, definitely. We're really excited about what we've built over the last 10 years. Multi-cancer early detection was just an idea. Now we've got a product on the market. We've got lots of interventional data. We've got RCT data that we released at ASCO, really showing that this technology works. Really the capability to pick up cell-free DNA circulating through the blood from tumors, at a very, very high specificity, low false positive rate, and then tell people where the cancer's coming from. We've always been built for population scale. We've got a lab in RTP that can run over a million samples with a low false positive rate and so on. We're now moving forward toward FDA approval and broad access. Really, really big milestones coming up that we're excited to achieve. Great. Last weekend, at ASCO, you mentioned, but you had the full data readout from NHS-Galleri Trial. Maybe talk through at a high level, sort of those results versus the original headline and how you think about that. Yeah, definitely. The full data readout is probably still coming. Okay. You got to think about it, that's 140,000 people over three years in a randomized control trial. What we covered at ASCO were really the primary endpoints and some of the secondary endpoints, and what we press released earlier. We're really excited that we showed a stage four reduction, essentially, between the control arm and the intervention arm. In the second year, it was more than 20%. The third year, it was more than 26%. That's a pretty massive decrease in stage four cancer, which is really metastatic cancer that you really don't treat with curative intent. It's more palliative care. The oncology community was actually very excited and supportive of the data that we presented. Clinical utility isn't just one thing, right? This isn't a stage three drug trial, where it didn't actually have a clinical outcome, and it hit some secondary endpoints that said the drug wasn't toxic. This is really the test of the implementation of an MCED test in 140,000 people in an RCT. Beyond the stage shift, we found more stage one and two cancers than the control arm. If you go a layer deeper, we actually found more stage one and two cancers in the screening arm, in the control arm, than total cancers found by screening in the control arm. That's a pretty dramatic story to talking about what the current standard of care screening is, which if you think about it, makes sense. Standard of care in the U.S. only finds about 14% of cancers. In PATHFINDER 2, we've found four times, or was it three to six times more cancers, depending on how you compare it to USPSTF or just standard of care. Other clinical utility endpoints, emergency room presentations, right? Big decrease there, more than 25%, and so on. This clinical utility package, this clinical utility story was pretty impressive. It'll support national coverage decisions, it'll support NHS decisions and so on going forward. Yeah. I think the other thing that was interesting that came out of the data was the stage three and four increase in the first year, then the subsequent declines in years two and three. Maybe talk through that. It kind of implies that with longer follow-up, you could potentially see that kind of decrease further over time. Maybe talk about sort of a potential extension of this date another 12 months and any implications there from the cost standpoint. Yeah, definitely. We are extending the look-at period by 12 months. There'll be no more Galleri tests, right? We're not going to be giving another test. What we'll do is we'll allow the data to mature in the control arm, essentially, because what you're doing with the Galleri test is you're finding cancer in people that you know don't have cancer. They're getting a test. It's not showing up clinically. Then in the original study analysis, we just cut that data off after 12 months. There are people in the control arm who have cancer that isn't being found because it hasn't presented clinically. After another 12 months go by, more of those cancers will show up. We believe that will happen because there's just far more cancers in the intervention arm than in the control arm. You'd expect those things to be balanced because it was an RCT where it was randomized and balanced between those two things. We would expect that to happen over that period of time. Also, you pointed out another really important part. That first year, you're essentially sweeping out all the cancer that's existing in the population in the screening arm. Those are a bunch of people who didn't know they had cancer. There wasn't another clinical way to find it and so on. When you look at the second and third year, those people have been swept out, and then that's where you see the reductions in stage four and also starting to see in stage three. Over more time, if we would've ran the study for another year, done another intervention, I think that type of data will be modeled, and we'll be looking at it here eventually. We're definitely going to be in probably the first part of next year, we'll have the follow-up on the additional 12 months, and we'll see what the numbers look like there. Okay. Maybe taking a step back from the primary endpoint, you still saw a 20% reduction in stage four. I guess, have you done any sort of analysis on how this could translate into cost savings for a single-payer system like NHS? The NHS will be doing a cost analysis. I think sometime in 2028 or 2029, they'll doing a mortality analysis, and so on. Yes, we will be looking at. Then, I think other single-payer systems will see a lot of value in that. CMS U.S. payers. We've got the REACH/Galleri-Medicare Study where we're doing something similar to the NHS, where it's a three-time point 50,000-person study in the Medicare population. They'll have data in the U.S. population when they do an NCD as well. We think all that put together will give them a very robust data package. Yeah. To make an NCD. The go, no-go decision on Galleri rollout in the U.K. was kind of contingent on these results, I guess. Any update on that and how you're thinking about driving scale there? They've just got access to the data. They've seen it, and they're excited by it. I think no government makes a decision very quickly. We've always expected that to happen over an extended period of time. There were multiple endpoints that they wanted to look at. One was the primary endpoint, but there were also others. We'll be working with them to see what the next steps are, and once we have an idea of what those are, we'll share that. Great. You also mentioned the 25% reduction in the emergency presentation. Maybe talk through how you think that will impact the decision from current physicians right now in their ordering practices. Any sort of demand you would expect on the back of some of this data. Yeah. One of the things that we heard loud and clear from ASCO and Physician Sense is they're looking for things to do to not treat people with palliative care and treat with curative intent. A reduction in emergency room presentation is very exciting to them. We'll see. We're training our sales force now. We've expanded our sales force. They're all getting trained on the ASCO data currently, and they'll go out and hit the streets. We'll see what the receptivity is like. Great. Actually, my next question was on the sales force. I guess, when would you expect maybe to see an influx in volumes on the back of this? Say, toward the Is that included in your current guide? Yes. Okay. Yeah. Our 22%-32% guide includes that. Great. I guess going to the FDA status, you completed the final module of the PMA in January. You have the Breakthrough Device designations, and I guess, timing should really be any day now, I guess. What are your conversations with the agency now and sort of if they'll convene an AdCom? Yeah, we've been working with the FDA for quite a while now as a Breakthrough Device. First MCED test that they're looking at. A lot of foundation building, a lot of understanding of the technology, and so on. They've looked at all of our studies that we've done to date under an IDE, which means they looked at the study, they looked at the SAP, they looked at the results. They're very familiar with our capabilities and the way we've built our studies. We've submitted our final module, the PMA, in January of 2026. We're in an iterative review process with them. They get lots of questions. We give lots of responses. To date, the clock hasn't stopped. This is an iterative review process. What we're waiting for now is to really understand if they're going to have an AdCom. We should find out here shortly. Some of their normal timelines are starting to run out if they're not going to have an AdCom. We're really excited and confident with our submission, and if there's an AdCom, let's have one. Yeah. If there's not, let's move forward. Yeah. On the AdCom, is there anything you think would be the sticking point for the panel or really the focus for them? Again, without an MCED test being looked at before, I'm not going to probably give you a satisfying answer. I'd say they did an MCED advisory panel in 2023. It was really about the space or the application of the technology, but it was not the types of questions you would expect on a specific data submission. If they have an AdCom, I'd expect the AdCom to be focused on the data submission, the data we submitted. I think it can be often challenging to keep AdCom members focused on that. Yeah. Our package doesn't include the clinical utility data from NHS. It's just the first year of data. I'm sure people will want to talk about years two and three. We'll see. Yeah. Again, I think either way, from their first advisory committee, we took all that feedback. We incorporated it in our PMA submission. We've incorporated their feedback in everything we've done to date. We feel good about where we're at. Great. Then how are you thinking about the initial label? Will it be broad in kind of asymptomatic adults 50+, or maybe more specific to cancer types or maybe even a risk-adjusted scale? I think if you look at what we've put together from a data package perspective, it's all asymptomatic people with no suspicion of cancer between the ages of 50 and 80. Having a label different than that would be hard to understand. I could see the label not including every cancer we find because if the FDA says, "Well, you only found two of this cancer, and you found 20 of these," we'll give you the 20 and not the two, or however they end up doing that. At the end of the day, we've been reassured that we'll be able to return all results. Whether it's in the label or whether it's on the second page, a physician, a clinician, a patient, will be able to actually act on the report. As far as where you could restrict would be by age. Maybe 50- 80 is all of our data, and maybe somebody says, "Well, but 60- 80, it's higher use or higher utilization." That's generally not an FDA call. That would be more of a payer call. Okay. The thing that we're most assured by is that we'll be able to return all results. If we can do that, I think it's an easy clinical commercial story. Yeah. That was my next question, was sort of if it is a more restricted label, what are the economics? It seems like not much has changed. Right. Yeah. I think payers, once we get to those conversations, may have different views. At the end of the day, if the test works at finding cancer that you have, whether it's 47 cancers are in the label. We found over 150 different types of cancer at this point across our studies. You don't know what cancer the person has. Yeah. What are you going to not pay for or not treat one that's just rarer? Yeah. Something like anal cancer is very, very rare. You'd have to have a study of more than a million people to get 20 cases. Wow. You're never going to do that. We'll see how it ends up. Yeah. If it were to be screening a narrow population, like high-risk individuals. I guess, how would you think about your ability to scale and get the unit economics necessary if it's a narrower patient population? The thing I always have to remember at GRAIL and dealing with this population, it's 100 million people in the U.S. Right now, we did 56,000 tests last quarter. We're in a very low penetration into that population, and that's even before you go globally. We've got a lab that can do more than 1 million tests. We're going to be able to get to our 50%-60% margins, at lower ASPs closer to what CMS would reimburse the test for per the legislation once we get to scale on the system we have. Yeah. I think we can get to the unit economics without reimbursement. We get there faster with it. Given the international opportunity and this growing self-pay market, we'll see. Yeah. Actually, I wanted to ask about that. Reimbursement, maybe walk us through some of the moving pieces there. How critical is it to the business model? You kind of answered it, but is the self-pay market enough to drive profitability with scale over time? I don't think any screening company has really demonstrated profitability. Sometimes even with broad reimbursement. We do know that we're different than a lot of them. This is just a blood test that happens annually. The cost to sell, we believe is going to be more efficient and more effective than other screening tests that aren't blood-based or taken annually. Well, the other side of that equation is, who does cholesterol testing? Is it going to be that? Yeah. Right? Is it just going to be an automatic every year because there's 70 million people that show up to get a physical every year? Is it just another checkbox? Maybe eventually. How that happens, what we have to invest in in building awareness to get to that level, those are the things that are stopping me from saying, "We'll be profitable by blah," type of date, right? Yeah. All I know is we've got over $800 million in the bank, and we've got the capital to really invest in more faster if we're seeing an inflection, if we're seeing demand get out ahead of our capabilities. That'd really be from a Salesforce perspective, because we've got the lab. Yeah. Then you mentioned your strategy outside the U.S. I guess, any timelines you could provide on getting reimbursement there? We talked a little bit about the NHS. You're also working with Samsung. I guess how difficult is it to get coverage in other markets? Are there any major differences in how we should think about getting coverage internationally versus domestically? A lot of international markets will, one, look to the FDA, right? They don't just rubber-stamp what the FDA does. Having FDA approval is a faster path, a smaller implementation study to do. We think once the FDA approval, that'll open up more of those markets. You would likely have to see some sort of, depending on the geography, a partnership. Like Samsung in Korea. If that goes well, it expands into Japan. Then some sort of geographic clinical study. Small. We're not talking about anything near what we did at the NHS or even with PATHFINDER Study, because those are really robust, strong data sets. We do have several countries knocking on the door asking us to look at that type of an implementation. It makes sense to tie it all around getting an FDA approval to speed up that process when it happens, also the dissemination of the NHS data. We'll really be growing more focused internationally once those things are broadly out. When we think about CMS coverage, what aspects of the NHS-Galleri Trial test or trial do you think best convey the clinical utility? The stage reduction. Stage four reduction, for sure. The three and four starts to reduce after the second and third year. The significant increase in stage one and two cancers found. Stage one and two cancers, you treat those, and they're generally treated with surgery, radiation, and so on. The decrease in the emergency room presentation, and so on. Those are the things that I think are really going to drive CMS, that they're going to look at as saying when they make their coverage decision. Mm-hmm. Yeah. Then, I guess, we've seen some early adopters in the private space for the Galleri test in terms of payers. After the ASCO data, did that change any of the conversations with some of those private players, either small ones or even larger ones, as we wait for FDA or CMS? Is the NHS data just enough to start pilot programs there? The commercial payers in the U.S. have been pretty clear that you've got to have an FDA approval. With FDA and approval, with the ASCO data, then those conversations will start to happen. At the same time, Medicare will be moving along. We know payers like to also follow Medicare. We'll also be leading into the USPSTF path. Who knows where this possible rapid development goes. Yeah. You mentioned the MCED Act. I guess there's a lot of legislative considerations, also the rapid pathway which you mentioned. Maybe talk through the puts and takes of these and how we should think about them when we're thinking about the timing of coverage. Yeah. Coverage is generally a long process, as we all know. I think there's an overwhelming sense, especially after ASCO and now that we're on this FDA path, that it's a when, not if, now for an MCED. They will be covered eventually. How we get there, I think there's multiple paths and there's probably multiple timelines. Something like rapid happens, getting to reimbursement will be faster than if you have to get to USPSTF. No one's really even sure what USPSTF is going to look like. Yeah. In a year or two, or now. I think it's important, though, for the business, given that we've built this large self-pay market, we lean into that, and then these international opportunities are kind of disconnected, other than from the FDA approval standpoint, to further ramp into a more profitable company. Yeah. Say FDA approval takes longer than what you expect. Could you move into some of these international markets without that, or would you really need to see the FDA approval first? We're in international markets now. Yeah. Through distributor models, which are kind of building in Canada and Israel, some other countries, kind of like the way we started in the U.S., where they've got their concierge or their medical tourism. They've got wealthy individuals who can pay for the test. We're leaning into that. We're taking advantage of that, where these distributors have sold these tests before. We can really do it in a capital-efficient way, where we basically are just running the test and they're managing everything else. We'll continue to do those. When you step back and you're going into, are you in millions of people doing that? Probably by the time we will have FDA approval before we're getting to the millions of people through that type of test deployment. Yeah. Touching on some of the self-pay, it's obviously the majority of your tests right now. Maybe walk through the various channels and where you're finding particular success there. Mm-hmm. Physicians offices, not just concierge doctors, but just. We see continued drive there, continued growth there. That's really where our sales reps are focused. It's not a strategy of blanketing the whole U.S. with reps. We're really focused in metropolitan areas or where we're finding success. There's a lot of white space out there because we were the only people educating and building awareness up until a couple of quarters ago, and it's an expensive proposition. Now there's more awareness being built, we've just expanded our sales force by about 30 territories, we'll continue to grow there, really driven by PCPs. The other trend in healthcare is the consumerization of healthcare and some of these digital health platforms. Function Health has been a partner for a couple of years now, and they're a great partner. They continue to drive growth. We've recently announced with Hims and Hers, Whoop, and others. We'll see how that translates. It's a new thing for us. Those launches are built into our guide as it is. Each of them have a captive audience of potentially millions of people who are health seekers. One of the biggest hardest of sells is finding patients who want that. We'll see how that goes. I think the digital health channel is a potentially large opportunity to expand the self-pay market. Maybe talk about some of these direct-to-consumer marketing plans. How are you balancing this spend in your P&L planning? Mm-hmm. These digital health partners are a very efficient way for us to sell and grow, right? It's their marketing dollars. Again, we're running the test. They've got the captive patient and so on. It's definitely an area that we would continue to lean into given how capital efficient it is. On the other spectrum, you can have self-insured employers that can be a little bit more costly to sell tests into because they've got benefits managers you've got to manage. They've got to get the test out to their people. Usually have to do blood draw events to get a bolus of people because people are at work. They don't want to go to a doctor's office, so you just bring the phlebotomy to them. Then you've got PCPs who are somewhere in between. You've got those that are like Eric Sue or Catherine Friederich, who were on our advisory panel. Dr. Sue was on the ASCO Investor Day, where they're prescribing the test to just about everybody in their office. Yeah. That's an easier one. Yeah. There's others that are more dabblers, where you've got to talk to them more often. Yeah. That is something I wanted to touch on. How do you think about same-store sales within some of the brick-and-mortar physicians driving that? What would it take to get a doctor to order this test more often? I think like any other adoption curve- Yeah. There's going to be those true believers, right? Who are going to be early adopters. Then the more milestones we achieve to de-risk, I think, the decision of a physician to prescribe the test, more will adopt. FDA approval, that'll likely open up a whole another group of physicians. It's interesting because one out of 100 people, they're going to find a cancer in. That's just the incidence of cancer. We do know that when they find a cancer, and they find a cancer early, they become believers, and they prescribe more. If it takes you 100 to find a cancer, there's a lot of time in there to actually not think this works. Yeah. We've got a lot of programs around putting physicians together to talk to each other who find cancers, and what do they do with it, and so on. And I think you're also seeing through Farber and Mayo, some of these other well-respected oncology centers, they're creating their own MCED clinics where they're publishing on their own data. They've got PPVs of 70%-80% because they're looking for the cancer until they find it. We find test cancer molecularly, and imaging isn't perfect. Is it really a false positive or is it just a later positive? Yeah. Kind of the same question for patients. At $900 a test, do you see patients coming back for repeat testing or is it typically a one-time thing for them? No, this last quarter, I think more than 30% of the tests have been repeat tests in the last 18 months. You would take the test annually, I never take my physical exactly 12 months after. We use 18 months, just comparatively, like Cologuard, I think their retest rate is just around 30% for a fully reimbursed FDA approved test after 10 years. I think it really speaks. Cologuard's a great test. It speaks more toward the form factor of a blood-based test. Yeah. The ability to pick up cancers, not a cancer. Yeah, definitely. You also have the Epic integration. Maybe if we look at past integrations like Quest Diagnostics and athenahealth, how much volume uplift did you get from these within ordering physicians? Should we expect a similar uplift in Epic Systems Corporation? We're excited about Epic Systems Corporation. Yeah. We're in the middle of that implementation process. I'd expect that to go live by the end of the quarter, by the end of the year. I wouldn't expect there to be a significant impact this year. But I think as you're talking about early adopters and how do we expand access, this makes the physicians who are bought in very easy to order. I don't think we're at a point because it's not an FDA approved test that is fully reimbursed, that just having Epic Systems Corporation is going to make a physician go from, "I'm not going to order this" to order it. I think physicians are a little bit more thoughtful than just having an easy button. But I think once we have crossed that threshold of FDA approval and so on, then it just becomes much easier to order. We've seen definitely good uptake from Quest Diagnostics and athenahealth. Epic Systems Corporation's a completely bigger and different beast. Yeah. We're excited to see where that goes. Awesome. Maybe turning to competition. The MCED market obviously has a really large patient population. How are you thinking about increasing competition in the MCED space with more launches and then also maybe single cancer screening and just talk through what you're seeing there? Yeah. We've been the only people in the space for a while, we welcome others into it. There's over 100 million people. This doesn't need to be a winner-take-all market. We're very proud of where we're at, though, in that position, being the market leader. We're also the only company that has interventional data, clinical data. We're the only company that has data in the intended use population, which is asymptomatic people. We're the only company that has randomized controlled data. We're the only company that showed a stage four shift. Our data package is just so much higher quality and built in the intended use population versus case-controlled study that we think we're pretty differentiated there. People building awareness, people educating on MCED, we more than welcome that. We're really comfortable with where we're at, we're continually looking at what is new, what could we do differently? How are we going to improve the test? We've already done it once. We reduced our cost pretty significantly with the same performance. We've shown that we can take the data in our system and our commercial data and make the test better, we're going to continue to do that. I think we've ran close to a million total samples now between clinical and commercial studies. We like where we're at. Yeah. Do you think that that data differentiation is something that a lot of the self-pay kind of consumers will understand as they look to who their provider's going to be? That is a great question. I think the more awareness we build and the more we are successful in showing physicians and explaining the difference, I think that kind of gets you there. We'll see how many tests somebody like a digital health partner offers. Are they going to offer five MCED tests? Are they going to offer one? We'll see how that all rolls out. Okay. As you guys all know, you're investors in this space, and you're an analyst in the space. People like to compare all sorts of data that probably isn't comparable. It can cause confusion. At the end of the day, we've got RCT data. Yeah. That shows clinical utility. Everybody kind of understands that. Yeah. Maybe touching on the financials a bit, and on profitability, I guess, how do you think about the OpEx line items moving forward? You recently hired more reps, you completed the NHS study. Kind of maybe the moving pieces there. Yeah. I think we'll burn about $300 million this year, no more than that, and we see cash into 2030. The growth, the increase in margins, growth in revenue, will start to contribute to the bottom line. Sales and marketing will be the area that we do invest in. The R&D different than we are now. The majority of the costs from in prior years, the testing. That's the most expensive part of it. This is just pretty affordable follow-up type stuff. Okay. Our innovation and R&D programs we continue to invest in, but they're not 70,000-person clinical trials. Yeah. Absolutely. You mentioned the cash runway into 2030. I guess, maybe talk us through the bridge to EBITDA breakeven eventually. What revenue scale would be required to get you there? We haven't gotten- Yeah. That specific yet. We've got a lab that's capable of doing more than 1 million tests, and with all those variables we talked about earlier about how efficient that can be, how efficiently you can sell will drive whether you get there or not. I also think that what happens internationally, because selling in the U.S. is a lot more expensive than selling internationally. If something were to happen with the NHS or any other single-payer system, that's not a sales force. They send out text messages, and people show up to the doctor. Our gross margins will be less because the test price will be less, but the cost to sell is close to zero, and so our operating margins would be pretty healthy. I hate to not answer your question directly, but I just know it'll end up being wrong. Yeah. There's a lot of variables. No, this is fine. I guess thinking about your revenue guide for the year, the 22%-32% for Galleri, you grew 37% in Q1. I guess how should we think about the cadence throughout the year and why the implied step down? Yeah. We will be looking at guidance again. We'll see how this quarter goes. We have ASCO data going out, salesforce expansion, and so on. We'll see how those things, this transition period works. We were excited by the growth in Q1. Q2 volumes were already higher than Q1's from last year, the growth is going to be a little bit different. We still believe we're in that 22%-30% range. We, of course, will look at our guidances as we go through the quarter. Okay, great. The upside downside levers there, Salesforce sounds like on the upside. downside? Like any there is upside if it all goes well. There's downside if it doesn't. Yeah. There's disruption from your existing territories and so on. Is that transitory? Is it permanent? Those are the types of things that you figure out. Yeah. I guess we just have a couple of minutes left. What do you feel is the most underappreciated part of the GRAIL story? What are you most looking forward to in the few years ahead? Yeah. I think we spent a lot of time talking about NHS-Galleri Trial, right? Clinical utility. Some of the big criticisms we get are, "It's not ready for prime time." I go, "I don't know. We just showed a pretty substantial stage four shift in a two-year period, in an RCT." I think these other people have said you could add up the last 15 years of therapeutic innovation, it's nowhere near that. This is ready now, and it's saving lives now. We're very proud of the data we have. We've been very transparent with it. We're excited to see where it goes. The biggest takeaway I have is this test is saving lives today and saving thousands of lives. Great. All right. We'll leave it at that. Thank you so much. Thank you.