GRAIL shares jump 15% after FDA panel backs Galleri cancer blood test

What happened

A panel of outside experts advising the US Food and Drug Administration voted that the benefits of GRAIL, Inc.'s Galleri blood test outweigh its risks, according to Reuters, STAT News, NBC News and a press release issued by the company. Reuters described the efficacy portion of the vote as a narrow endorsement.

GRAIL publishes Galleri as a screening test intended to look for signs of many kinds of cancer from a single blood draw. NBC News reported that the test does not diagnose cancer. STAT News and NBC News both reported that the FDA is not obligated to follow the advice of its advisory panels.

GRAIL said in its press release that it believes the panel's recommendations reaffirm a high evidence bar the company has set for a multi-cancer early detection test. GRAIL did not say in that release when it expects the FDA to act on the application.

Shares of GRAIL closed at $125.21, up 15.38% from the prior close of $108.52, according to the price data accompanying this report. The same data show the stock had been trading lower before the panel's vote.

Advice, not a decision

The vote is advisory. STAT News reported that the FDA is not obliged to follow the advice of such panels. The distinction matters: an advisory committee recommendation is a step in the review process, not an approval, and the agency makes the final call on whether a test can be marketed and for whom.

What this means

An FDA advisory committee, sometimes called an adcomm, is a group of outside physicians and scientists the agency convenes when a product raises questions it wants independent expertise on. The committee votes on questions the FDA puts to it — here, whether the benefits of the test outweigh its risks, and how well the test works. Adcomm votes are not binding, but they are closely watched because they are the last public look at a product before the agency decides.

GRAIL is a commercial-stage healthcare company based in Menlo Park, California, according to its stock listing description, focused on detecting cancer early. Its Galleri test sits in a category called multi-cancer early detection, or MCED: a blood test meant to screen for signals of many cancers at once, rather than testing for one cancer at a time as mammography or colonoscopy do.

The Galleri test does not diagnose cancer. A positive result indicates that a cancer signal may be present and is intended to be followed by imaging or other diagnostic work to find where the cancer is, which is why the panel weighed questions about how well the test distinguishes among cancer types.

The sources do not explain what comes next in the review, and GRAIL's press release does not state a date for an FDA decision or say whether trial results would be published or discussed further.