Good day, ladies and gentlemen. And welcome to the GRAIL First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that this conference call is being recorded. GRAIL Investor Relations, please begin.

Thank you. Good afternoon, everyone. And thank you for joining us to review first quarter results. We're making progress toward our vision of population scale, multi-cancer early detection and remain focused on developing the market. We plan to continue advancing Galleri through several key clinical and regulatory milestones that will help unlock broad access while maintaining our disciplined cost management. We are very pleased this afternoon to share positive top line results from the prevalent round of screening in the 140,000 participant NHS- Galleri trial. NHS- Galleri is one of our two registrational studies and as Harpal will describe shortly, these results continue to demonstrate strong Galleri performance in detecting multiple types of cancers with very low false positive rates. I'll take a moment to review key achievements in the first quarter before turning it over to Harpal. Then Josh will provide a medical and scientific update, and Aaron will cover the financials. We are building on our unique position as the first mover in the multi-cancer early detection field with the only commercially available clinically validated MCED test that has shown the ability to detect many types of cancer. GRAIL has sold more than 37,000 Galleri tests in the first quarter. And as of March 31st, more than 325,000 Galleri tests have been prescribed by more than 14,000 healthcare providers since we launched Galleri commercially in 2021. We continue to drive provider and patient awareness of the MCED opportunity and Galleri's ability to detect cancer early when it is more amenable to treatment. And importantly, we are generating real world evidence as our leading health systems and physician practices who have offered MCED as early Galleri adopters. We are proud of the demonstrated impact Galleri is having on patients' lives today, and I'm excited about our technology's potential to affect how and when we find cancer on broad scale. We have made significant investments over time to optimize our technology and laboratory infrastructure, and we began the rollout of an enhanced version of the Galleri test in the fourth quarter of last year. The workflow integrates a significant level of automation among other efficiencies to help support volume at scale and help achieve reductions in costs over time. Among recent business highlights, we announced yesterday a new partnership with Athena Health intended to further streamline the Galleri test ordering process. Galleri's inspiration within Athena Health's EHR platform, athenaCoordinator Core, can provide a more seamless ordering process for over 160,000 US providers. Additionally, Galleri test results will be returned directly in the EHR. We remain on track for continued commercial growth in 2025 with expected volume growth from TRICARE coverage and Galleri's integration with the Quest Diagnostics ordering system. Additionally, we have commercially launched in Israel in partnership with OncoTest, which has a strong record in genomic test distribution. We are pleased to see the initial test orders within that region. Finally, we are initiating a new educational campaign called Generation Possible. Generation Possible's goal is to build public awareness of multi-cancer early detection, and we have partnered with Kate Walsh as a spokesperson to help further the message. The campaign underscores, at the patient level, the importance of taking control over your health with the option to screen for many of the deadliest cancers before symptoms appear. More information about Generation Possible is available at genpossible.com. And with that, I'll turn it over to Harpal.

Thank you, Bob. I'm pleased to share high level Galleri test performance results from the intervention arm of the prevalent screening round of our 140,000 participant three year NHS Galleri registrational trial. The prevalent screening round was the first round of blood draws with one year of follow-up. We were pleased to see a substantially higher PPV than the 43% observed in the PATHFINDER study. We also saw specificity and cancer signal of origin or CSO consistent with PATHFINDER study, which was an interventional return of result study, evaluating the performance of Galleri. As a reminder, Galleri demonstrated specificity of 99.5% and a CSO accuracy of 88% in PATHFINDER. There were no serious safety concerns in the NHS Galleri prevalent screening round, also consistent with the PATHFINDER study. As Bob mentioned, the top line results from the prevalent screening round of the NHS Galleri trial are very encouraging. Results of all the three years of the trial are expected in mid 2026. These longitudinal results will be the first clinical utility results of their kind in the MCED field. The NHS Galleri trial was designed as three annual blood draws plus 12 months of follow-up in order to evaluate Galleri's ability to diagnose cancer at an earlier stage relative to standard of care. Cancer screening trials designed to show clinical utility are commonly conducted over three or more years using an annual screening interval. Because if screening is only conducted once, results can be influenced by the fact that the first screening round detects many prevalent late stage asymptomatic cancers that have not yet been diagnosed. This and other factors are likely to cause final results of the three year trial to differ from a review of the first round results. NHS Galleri is the largest and only randomized controlled trial of any MCED test, and the results thus far demonstrate strong Galleri performance. Together with England's NHS, we expect to publish detailed data from the ongoing NHS Galleri trial, including the primary endpoint of an absolute reduction in the number of stage three and four cancer diagnoses, as well as a number of test performance secondary endpoints, including episode sensitivity in mid 2026. And with that, I'll now hand over to Josh.

Thanks, Harpal. And hello, everybody. At GRAIL, we have implemented one of the largest clinical evidence programs in the MCED space with more than 385,000 participants overall. More than 21,000 participants were included in the studies to support the development and launch of Galleri and over 170,000 individuals are included in our registrational studies, which support our PMA submission to the FDA. Now let's be clear. Galleri is working in the real world. We are detecting clinically meaningful cancers and early stage cancers in asymptomatic adults. Our signal detection rate in commercial use is very much in line with what we expected based on our prior clinical studies. The majority of the early stage cancers Galleri has found are in cancer types where a recommended screening test does not even exist, thereby allowing patients an opportunity to access more effective and even curative treatments. Now we've described over time the key performance metrics, features, and capabilities for multi-cancer early detection tests, which importantly, are quite different from those for single cancer screenings. Positive predictive value, or PPV, is a key metric which discerns among positive test results how many are true positives. Specificity, critically important, defines the false positive rate. A very low false positive rate helps reduce unnecessary workups and their associated costs and contributes to driving a high positive predictive value. Our demonstrated specificity at 99.5% equates to a false positive rate of 0.5%. So just to remind you, a 1% reduction in specificity to 98.5% would triple the false positive rate. That is a 0.5% false positive rate would then become a 1.5% false positive rate, three times higher. So applying this to a real world population of a million people tested, instead of there being only 5,000 false positives, there would now be 15,000. Such a reduced specificity would be expected also to result in a positive predictive value about half of what we see at a specificity of 99.5%, holding all other metrics constant. Finally, one of the most important features of a multicancer early detection test is the ability to localize that cancer signal. In multicancer early detection, CSO capability or our cancer signal of origin prediction is the key to guiding physicians to an appropriate and efficient workup to diagnosis. We consistently hear from physicians in the field that this is a critical component of any multi-cancer screening test. Even an FDA advisory committee on multi-cancer detection in November 23 similarly emphasized the importance of a cancer signal of origin feature in any multi-cancer detection test. Our teams have continued to present evidence demonstrating Galleri's performance at renowned medical conferences. In April, at the AACR meeting, we showed a real world dataset on Galleri's test performance and implementation in over 100,000 individuals. Galleri indeed identified cancers across this large intended use population, including early stage cancers and cancers without recommended screening. Generally, the test performance in this real world setting remains consistent with what we've consistently observed in our prior clinical studies. Among other data, we also presented at AACR an analysis highlighting the importance of annual screening with an MCED test. Model data of post-test probabilities of cancers for individuals receiving MCED tests show that individuals receiving a negative MCED test and they have a reduced risk of late stage cancer diagnosis for one year after the blood draw and then this risk increases as the screening interval extends beyond one year. This study really supports the need for annual testing. Finally, I'd like to highlight that US health systems are now publishing their own experiences with Galleri performance and implementation. A paper authored by the Mayo Clinic and published recently in March in the Journal of Primary Care and Community Health showed that Galleri effectively detected cancers in an asymptomatic population within their healthcare system and had a 73% positive predictive value. In other words, 73% of those with a positive Galleri test yielded a confirmed new cancer diagnosis. Now the sample in this Mayo Clinic analysis was relatively small and had some different patient demographics compared to our prior trials. Importantly, this paper included the Mayo Clinic's standardized approach to pursue a diagnostic workup following a positive cancer signal and our signal of origin prediction. The outlined steps are informed by a multidisciplinary expert council convened by the Mayo Clinic. Then they reviewed our cancer signal of origin prediction and other data from our first PATHFINDER trial. These recommendations continue to be updated and they've really served as a centralized resource for the Mayo Clinic physicians. Now additional health systems and clinicians are beginning to publish their experience with Galleri. Upcoming ASCO 2025 presentations of note include the implementation and evaluation of multi-cancer early detection testing at the Dana-Farber Cancer Institute, a retrospective analysis of clinical outcomes and diagnostic pathways and an independent analysis by Alabama Cancer Care, titled a clinical review of a novel blood test use in rural Alabama for multi-cancer detection, analyzing methylation patterns of cell-free DNA and future strategies. Now looking forward, we anticipate performance data from the first 25,000 participants in our other registrational study PATHFINDER 2 later this year. We also plan to conduct a bridging study between the version of Galleri used in our registrational trials, NHS Galleri and PATHFINDER 2, to the updated version that we plan to submit to the FDA for premarket approval. We plan to submit data from the prevalent screening round of the NHS Galleri trial, the first 25,000 participants in the PATHFINDER 2 study and the bridging study as part of our premarket approval application in the first half of '26. I'll now hand it over to Aaron for a review of our financials.

Thanks, Josh. And good afternoon, everyone. I'm pleased to present our results for the first quarter. First quarter results were strong with revenue of $31.8 million, up $5.1 million or 19% as compared to the first quarter of 2024. Total revenue for the quarter is comprised of $29.1 million of screening revenue and $2.7 million of development service revenue. Development services revenue includes services we provide to biopharmaceutical and clinical customers, including support of clinical studies, pilot testing, research, and therapy development. We see continued demand for our Galleri test and sold more than 37,000 tests in the first quarter, a period we have observed historically to be softer relative to the fourth quarter. Repeat test volumes have moved higher over time, including in early 2025. More than 20% of Galleri volume today is repeat testing. Screening revenue of $29.1 million in the first quarter was up 24% as compared with the first quarter of 2024. US Galleri revenue was $28.7 million, up 22% compared to the first quarter last year, and we are on track relative to full year guidance we shared in January of US Galleri revenue growth of 20% to 30%. We do not expect major impacts from tariffs on our current business as our laboratory is located in the US and a significant majority of our suppliers are located in and manufactured in the US. Net loss for the quarter was $106.2 million, an improvement of 51% as compared to the first quarter of 2024 and included amortization of intangible assets of $34.6 million and stock-based compensation of $16.2 million. Non-GAAP adjusted gross profit for the first quarter of 2025 was $14.3 million, an increase of $2.3 million or 19% as compared to the first quarter of 2024. We ended the quarter with a cash position of $677.9 million. In January, we guided that we expect cash burn for the full year 2025 to be no more than $320 million. This represents a decrease of more than 40% compared to 2024. Our cash runway extends into 2028, enabling us to achieve major planned clinical and regulatory milestones. I'll turn it back to Bob for concluding remarks.

Thank you, Aaron. To close, we remain encouraged by the demand we are seeing today while we advance towards major milestones, seeking FDA approval of Galleri and pursuing broad reimbursement. We are very pleased to have taken additional strides in early 2025, including executing on the transition to the enhanced, more scalable version of Galleri, achieving TRICARE coverage and enabling easier access to Galleri ordering through Quest Diagnostics and Athena Health. Looking ahead, we expect to share interim data from the PATHFINDER 2 study in late 2025. That data set will include the first 25,000 of the 35,000 participants enrolled. In 2026, key milestones include the completion of our modular PMA submission to the FDA in the first half and final results from our 140,000 participant NHS Galleri study. With that, we'll turn the call over to Q&A. Operator, please go ahead.

Our first question will come from Subbu Nabi with Guggenheim Partners.

My first question is, back in December, the new version of Galleri was starting to be offered with expected short term variable cost improvement. Can you quantify what those were in the quarter and what should we expect sequentially for the year?

Subbu, as you said, we did launch at the end of last year. This year, for the first quarter, we're on that new version and we'd expect to see margins continue to improve over the rest of the year as we increase scale and just work through the launch transition that we're going through this quarter. As you said, you'll see those variable COGS improvements come over time as we move everything over to that new version completely.

And then when setting guidance, you said you considered Quest and said legislation and TRICARE approval. How have those played out to your expectations in 1Q and then is there any upside from here more than what you expected?

So early days on both Quest as well as TRICARE. So we are seeing improved ordering from Quest providers that are going through the Quest portal. So that's very encouraging. But again, early days on that. And on TRICARE, we're working through the contracting process. So we're in coverage with TRICARE but working through the coverage process with the various contractors there. So more to come on that later in the year.

Our next question will come from Tejas Savant with Morgan Stanley.

So maybe just one on the cash burn in the quarter. I guess, can you help us just think about the burn trajectory over the course of the next between now and year end, how you're tracking towards that sort $320 million or less in burn target that you guys had? And then second, on a related note, you've got a couple of other MCED launches coming up here, including one from an established brand in single cancer screening. So how are you thinking about your OpEx levels, which you've done a good job sort of controlling, so as to keep the burn down? Do you need to sort of think about reaccelerating it a little bit as some of those other offerings make it to market here?

In the first quarter, we incurred just under $90 million in cash burn. This period includes our annual bonus payouts from the previous year, which won't happen in future quarters. As we continue to grow and improve our margins, the cash burn should align with the $320 million range we've mentioned. Regarding operating expenses and competitors, it's encouraging to see others investing in multi-cancer early detection. We have been the ones doing the significant groundwork in educating the market and developing it. We've made unprecedented investments to set a high standard for the industry and demonstrate excellent specifications. We'll need to observe how the competitive landscape evolves and whether these new launches impact our operating expenses. At this point, it seems there aren't any immediate OpEx impacts from these new entries, but we will keep an eye on it over the next couple of quarters.

And then a couple of quick cleanups on the data side guys. So the intervention arm from the NHS Galleri that data that you just shared. How should we be thinking about the read across from that your next year's final NHS Galleri readout like particularly in terms of that higher PPV you highlighted? And can you put a finer point on when in the second half of the year we can expect PATHFINDER 2 data?

So on the second question, we're looking to mid next year to have the readout on full three year study. We also have Harpal on the call today. So Harpal may be answering the first part of that question.

So look, it's important just to reiterate that the results we've shared today are from the first screening round only. And as we've tried to describe, it's really important that the first round of a screening program, what you typically see is that you are finding a lot of prevalent cancers in the population that have not yet been diagnosed. They are asymptomatic but they can often be very late stage. And so as we go through to the second and third rounds and those prevalent cancers in the population have already been diagnosed, we would expect to see some differences in the second and third round as indeed has other screening programs in the past. But we're not in a position today to be able to predict what those results will be, but we will have those results in mid '26.

Our next question will come from Doug Schenkel with Wolfe Research.

I want to discuss two topics: the BMJ publication and your cash management strategy, which is clearly a priority for many of us. First, regarding the BMJ publication, you indicated that annual MCED screening has a greater anticipated impact on stage shift and mortality reduction compared to biannual testing. Considering that and your expectation that ASPs would fall in the 500 to 550 range based on draft MCED legislation, I have two questions. Do you think the ASP would remain unchanged regardless of the testing interval? In other words, if testing becomes more frequent, would the ASP need to decrease? Secondly, when evaluating the cost to the healthcare system, if Galleri were to be widely adopted at that price point, how would you assess the cost associated with detecting one cancer, including follow-up procedures and a small number of false positives? Would there be any concerns regarding health economics in that scenario, especially for an annual test?

So I think, as you noted, we have a lot of data now to suggest that based on cancer biology, Galleri should be administered on an annual basis, if we want to find early stage asymptomatic cancer based on the rates with which cancers are progressing given everything we know on the biology of circulating DNA now. So we think that's the right way to go. And all of our pricing strategies and everything we've projected about ASP are based on annual testing. So it's really too early to speculate on what would happen if we tested more frequently than that. From the health economic perspective, Doug, it's a great question. We know that with annual testing, even if population scale at the prices that are in the market today, let alone the lower ASPs that you're commenting on, this is a highly cost-effective intervention. And compared to what we're spending today to diagnose a cancer, given everything that's going on with the false positive rates of current single cancer screening, the cost to diagnose a cancer with an MCED added to standard of care screening come down substantially. And the numbers needed to screen are much lower than what we've seen traditionally with some of the single cancer screening tests. So even today, the health economic data are very compelling from an efficiency and cost-effectiveness perspective. There obviously is a budgetary impact to payers by screening the population for any disease, but it's a high-value investment.

The second topic is cash management, and I want to highlight that your stock has increased about 140% year-to-date. There are questions about your ability to fund operations while you await FDA approval and CMS reimbursement. While it's clear you are working hard to extend your runway, concerns remain about reaching these goals, especially considering the current status of the MCED bill and the timeline for FDA approval and CMS reimbursement. In the best-case scenario, these developments are still several years away, and with the NHS Galleri readout, which is critical, not expected until next year, your cash position will likely drop to below half of its current level, making things a bit tight. Given all these factors, what was the reasoning at the board level for not raising funds to reduce risk? It seems like doing so would have been a prudent choice, allowing you to pursue opportunities more aggressively and making the NHS readout next year less of a binary situation. So, simply put, what is the thinking behind this decision? What are we missing?

Doug, it's a good question, something we've obviously thought about. As we've said in previous discussions, we think that getting through some of these milestones derisks the business and creates value for us. And so in the calculus, we were looking at getting through some of these major milestones and knowing that we have the cash runway to get through those was kind of the deciding factor towards waiting until things to play out a little bit. Obviously, the stock, as you mentioned, stock's up a bit. That obviously pushes more in the favor of being able to do something. But we still feel we have substantial cash runway and we have relatively near term milestones that will be value creating. Aaron, anything on that?

I mean, I would just add. I mean, we're less than a year out from our spin as well. We've got just about $700 million on our balance sheet. So Doug, I think it's something that we're going to continue to look at and work about work on and think about with our board. So it's on our minds but we're in a good position now in our view.

Our final question will come from Kyle Mikson with Canaccord.

Regarding the NHS, the data and partnership in the study are evolving. How are the latest discussions with NHS progressing? What do you anticipate their actions will be regarding the Galleri commercialization in the country following the complete readout in 2026? Additionally, for Harpal, did you analyze the PPV for the subset you provided? Is that a modeled figure or an actual metric? I would like to understand how to interpret this number and how much earlier it is compared to PATHFINDER, for instance.

So let me quickly take the second question first. So when we say the PPV was substantially higher in the first round, that's a concrete number. We're not sharing what that number is but we can say it's substantially higher than the 43% that we saw in PATHFINDER. So it's not a modeled number. With respect to the conversations with the NHS, I mean, just to say that we're in constant dialogue with the NHS and with the national screening committee in the UK and with the government in the UK, they are clear that they want to wait to see final results from all three rounds of the study before they will make a decision as to if and when to roll out a screening program in the UK or in England particularly. So I can't give you anything more concrete than that at this point other than to say we're in constant dialogue.

Harpal, maybe go through a little bit of the why not reveal the numbers right now.

So I mean, it's important to sort of reiterate that that the NHS Galleri trial was designed as a three year screening study. In other words, we do three rounds of screening. And that's very common in screening trials and in studies of screening because for the reasons that I stated earlier on the call, if you only look at one round of screening then what you'll typically find in that first round is a lot of prevalent asymptomatic cancers in the population, which can often be late stage but haven't yet been diagnosed. By going to a second and third round, you start to see what the impact of a, if you like, a more established or steady state screening program might be. And so it's really important that we safeguard those upcoming readouts and the integrity of the trial as a whole. It's also really important that we safeguard the interest of the participants taking part in the trial. And so for all of those reasons, we're not sharing more detailed information at this stage but we are now getting closer to having the final results middle of next year and we look forward to sharing all of those both with all of you but also with the NHS at that time.

And on the topic of repeat testing, it sounds like that metric remained stable, I think I heard 20% continues. So when you think about repeat testing, what's an acceptable number at this point, do you like 20%? How do you improve the stickiness and that recurring kind of revenue stream? And then how does movement in that number affect your modeling of ASP and customer acquisition cost over the medium term?

We are very pleased with achieving over 20%. Considering that we are generally not a reimbursed test, this performance compares very favorably to reimbursed tests in the market. We anticipate being able to continue growing this percentage, but we need some additional time to determine the direction it will take. From a customer acquisition cost perspective, having that repeat base at such a significant level certainly benefits our model, and we are incorporating this factor into our planning.

Thank you. There are no further questions at this time. I will now turn the call back to GRAIL for closing remarks.

So thank you, everyone, for joining today's call.

Ladies and gentlemen, this concludes the call. You may now disconnect.