Shares of GRAIL, Inc. (GRAL), the cancer-detection company spun off from Illumina in 2024, are trading near $108 after an advisory panel to the U.S. Food and Drug Administration (FDA) backed the company's Galleri multicancer blood test this week. The stock climbed 36% over the past week, with most of that move coming in the two trading sessions ahead of Wednesday's hearing.

The Molecular and Clinical Genetics Devices Panel convened Wednesday to review Galleri. Members voted 7-2, with one abstention, that the test's benefits outweigh its risks. The panel was unanimous on safety, voting 10-0, while the vote on effectiveness was closer at 6-4.

Trading in Grail stock was halted for the entire day while the panel met. Shares had already climbed sharply after favorable briefing documents were posted online Monday, setting the stage for the week's rally.

Full FDA approval is not guaranteed, but it looks likely based on how the hearing went, and analysts expect a decision within the next few months. The FDA typically weighs advisory panel input closely, though the agency is not bound by the panel's recommendations.

What Galleri Does

Galleri screens a blood sample for DNA fragments that carry the signature of cancer cells. The test tells a patient whether a cancer signal has been detected anywhere in the body, and then estimates where in the body that signal is coming from.

Clinical trials found that Galleri can pick up cancers that have no standard screening test, including ovarian and pancreatic cancer. The test rarely delivers a false positive, but it only catches cancer about half the time when cancer is actually present. That detection rate compares favorably with tools such as the mammogram, the standard screening method for breast cancer. Because a negative result does not rule out cancer, Grail wants patients to keep using existing single-cancer screens alongside Galleri, not instead of them.

One trial result complicates the picture. The NHS-Galleri study in Britain did not prove that screening actually cut the number of Stage IV cancers found a year later. Some panel members said that gap left them uncertain whether Galleri saves lives. Many screening tools now in wide use, including colonoscopies, were adopted before long-term survival data confirmed their benefit.

Sales Outlook and Analyst Reaction

Grail already sells Galleri for $950, but insurance rarely covers it. The company logged about $150 million in sales last year, and this year's total is projected at $180 million.

Mizuho analyst Bradley Bowers expects a bigger jump in sales once approval lands. He pointed to other cancer-screening products, including Cologuard and Guardant Health's Shield test, which both saw sales double during their launch years.

Congress has already passed a law requiring Medicare to consider covering tests like Galleri once the FDA signs off. UBS analyst Doug Schenkel estimates that Medicare coverage starting in 2029 could add roughly $300 million to Grail's sales the following year, pushing the total toward $1 billion.

Canaccord Genuity reiterated its Buy rating on Grail Wednesday and raised its price target, calling the hearing better than expected. The firm views the panel's benefits-versus-risks vote as a strong signal for eventual approval.

Grail is now valued at $4.3 billion, roughly 19 times next year's expected sales. That valuation already prices in a good chance of approval. Data from InvestingPro shows the stock trading above the platform's fair value estimate, and an RSI reading points to overbought conditions after the.

Grail is not expected to turn a profit this year. In its most recent quarter, the company reported revenue of $44.7 million, ahead of the $43.2 million analysts expected, alongside a per-share loss of $2.56.

Canaccord is hosting a webcast Friday with two cancer-screening experts to walk through the panel's findings and discuss what comes next.