Dive Brief:
- Grail said it will lay off about 350 employees in a restructuring that comes less than two months after the maker of a cancer blood test separated from Illumina. The job cuts represent 25% of its workforce as of June 30.
- The standalone company will reprioritize its resources to focus on the Galleri multi-cancer early detection (MCED) test and reduce overall spending, Grail said Tuesday in a securities filing. The strategy shift comes as Grail works to complete registrational studies and a premarket approval application submission for Galleri with the Food and Drug Administration.
- Grail also reported a second-quarter net loss of $1.6 billion, compared with $193 million in the year-ago period, and revenue of nearly $32 million, a 43% increase year over year.
Dive Insight:
Grail launched Galleri as a laboratory developed test in the U.S. in mid-2021 and has sold more than 215,000 commercial tests, according to the company. The Galleri test has shown it can detect a shared cancer signal across more than 50 types of cancer. Yet oncologists and other physicians are still uncertain about the role multi-cancer screenings should play in patient care.
Illumina, which first spun off Grail in 2016 and then paid $8 billion in 2021 to buy it back, was forced by regulators to separate the business again due to concerns the acquisition would stifle competition in the liquid biopsy market.
Grail is now focused on preserving cash as it works to obtain FDA approval for Galleri.
“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,” CEO Bob Ragusa said in a statement.
The headcount reduction will affect 30% of its workforce when planned 2024 hires are factored in, Grail said. The restructuring will take place in the third and fourth quarters, resulting in a charge of from $18 million to $23 million in the third quarter for severance and other termination-related costs.
Grail plans to streamline its commercial sales force and reduce its management layers and medical affairs teams. The company will “substantially” decrease investment in research and development for product programs beyond Galleri, including diagnostic aid for cancer and minimal residual disease. Grail will continue to invest in its biopharmaceutical partnerships.
The restructuring plan is expected to extend the company’s cash runway from the second half of 2026 into 2028, Grail said.