What changed in this filing

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Item 1A. Risk Factors

2025-08-13 compared with 2025-05-14 · 44 added, 50 removed, 126 unchanged (43% of the section changed)

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In addition, results from our ongoing or future studies may not support certain product launch opportunities.

For example, we have prepared two separate analyses of Galleri test performance results in the intervention arm from the prevalent screening round of the registrational NHS-Galleri trial.

GRAIL intends to submit data from the prevalent screening round of the NHS-Galleri trial as part of its evidence package for FDA premarket approval.

The prevalent screening round is the first round of blood draws (of the three total blood draw rounds in the trial) with one year of follow up.

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We believe the decision will include considerations such as NHS budget, political priorities, cost-effectiveness and implementation constraints in addition to an evaluation of the final results.

We reported results from the second analysis in May 2025, which we plan to submit together with data from the first 25,000 participants in the PATHFINDER 2 study and a bridging study (comparing the version of Galleri used in the NHS-Galleri trial and the updated version that we plan to submit to the FDA for premarket approval) as part of our premarket approval application in the first half of 2026.

We disclosed information from the prevalent screening round from the NHS-Galleri Trial.

e plan to submit the full prevalent screening analysis from NHS-Galleri, together with data from 25,000 participants in the PATHFINDER 2 study, and a bridging study (comparing the version of Galleri used in the NHS-Galleri and PATHFINDER 2 trial and the updated version that we plan to submit to the FDA for premarket approval) as part of our premarket approval application in the first half of 2026.

Various factors are likely to cause the final results to differ from a review of the first round results only.

For example, cancer screening trials designed to show clinical utility are commonly conducted over three years with an annual screening period, because data from the first screening round only can be influenced by the fact that screening detects many prevalent late-stage asymptomatic cancers

that have not yet been diagnosed.

For example, cancer screening trials designed to show clinical utility are commonly conducted over three years with an annual

screening period, because data from the first screening round only can be influenced by the fact that screening detects many prevalent late-stage asymptomatic cancers that have not yet been diagnosed.

It is possible that the final results will be unsuitable or unavailable, which could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our brand and reputation, our business, and our growth prospects.

Furthermore, other studies have been or may be conducted in populations (such as our SUMMIT study which was conducted in a population of tobacco users) or under other circumstances which make their results more complicated to interpret or result in data that is more difficult to compare.

In addition, as Galleri and our research-use-only offering are currently available to customers and others, any studies, including those conducted by third parties, that use our current or future products, or that examine elements of our methylation platform, may produce results that are inconsistent to evaluate independently or comparatively from our own studies.

In addition, as Galleri and our research-use-only offering are currently available to customers and others, any analyses or studies, including those conducted by third parties, that use our current or future products, or that examine elements of our methylation platform, may produce results that are inconsistent to evaluate independently or comparatively from our own studies.

If any such inconsistent results were to be produced, either before or after launch of a product or future product, our reputation, business, financial condition, results of operations, and growth prospects would suffer.

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We may also be required or decide voluntarily to seek clearance or approval from the FDA for future products.

However, the FDA recently finalized a regulation pursuant to which would subject LDTs to the FDA’s medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years.

On March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices, and remanded the matter to the FDA for further consideration.

The District Court’s decision remains subject to appeal and it remains uncertain whether such appeal will be sought and if it would be successful.

Accordingly, it is unclear whether or when the FDA may be able to implement the LDT Final Rule, or otherwise exercise enforcement authority with respect to LDTs.

If the LDT Final Rule were to be implemented consistent with the FDA’s previously stated plans, the phase-in of medical device requirements to LDTs, including the potential requirement for FDA marketing authorization, if it imposes new, different or earlier significant obligations, would be costly and time-consuming, and if we were to fail to comply with such requirements, or if we could not ultimately obtain marketing authorization for our LDTs where required, our business would be substantially harmed.

In 2024, the FDA finalized a regulation pursuant to which LDTs would be subject to the FDA’s medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years (the “LDT Final Rule”).

On March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices subject to the Federal Food, Drug, and Cosmetic Act (“FD&C Act”), and remanded the matter to the FDA for further consideration.

It remains uncertain what impact this ruling may have on the FDA’s authority to review marketing applications for LDTs or to take enforcement action against LDTs.

If FDA imposed new or different requirements for marketing applications of LDTs to be reviewable in light of the District Court’s decision, LDT manufacturers seeking FDA review may be required to establish that the test is a medical device subject to the FD&C Act, which could involve significant modification to test configurations, processes, or operations.

If we could not ultimately obtain marketing authorization for our Galleri test or other tests where required or appropriate, our business would be substantially harmed.

PMAs for tests that may be considered to fall within the court’s definition of laboratory developed tests, including those tests that are in the process of pursuing PMA approval, or if any changes or additional activities may need to be performed by GRAIL to support FDA review and PMA approval as a result of this ruling.

Moreover, FDA, other regulators, and notified bodies may require that we generate additional clinical data to support any clearance, approval, or certification we may seek, which could result in delays, increased costs, or other limitations or negative impacts on our ability to receive such clearance, approval, or certification, if at all, including narrowed indication or labeling than expected or desired.

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Product development involves a lengthy and complex process and we may be unable to commercialize, validate, or improve performance of any of our products on a timely basis, or at all.

For example, to the extent an enhanced version of an existing product is developed, we may be required to conduct a non-inferiority study involving such enhanced version as compared to the relevant then-current version of the test using data (for example, clinical data and/or real world evidence data obtained through Galleri’s commercial use as an LDT), or could be required to undertake other regulatory requirements if the enhanced version is not considered similar enough to the then- current version to conduct a non-inferiority study.

With respect to Galleri, we intend to conduct one or more bridging studies to measure and evaluate concordance, performance and safety of the subsequent, updated version of Galleri (for which we are submitting our PMA) using previously collected clinical study data and other

For example, to the extent an enhanced version of an existing product is developed, we may be required to conduct a non-inferiority study involving such

enhanced version as compared to the relevant then-current version of the test using data (for example, clinical data and/or real world evidence data obtained through Galleri’s commercial use as an LDT), or could be required to undertake other regulatory requirements if the enhanced version is not considered similar enough to the then- current version to conduct a non-inferiority study.

Any such bridging study will need to be agreed upon with regulatory authorities and may be unsuccessful or insufficient to support approval.

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Additionally, planned improvements to our products may cause unintentional technical, logistical or other issues.

For example, in late 2024, we began use of a new version of Galleri in commercial channels which incorporates significant automation and is intended to enable us to scale more efficiently with future demand.

In connection with implementation of this new version of Galleri, we have experienced increased turnaround times and order cancellations.

If we are unable to adequately prevent these issues from occurring, or to adequately identify and remedy these issues, we may experience reputational harm, lose customers, need to offer discounts, or suffer other negative consequences.

For example, in late 2024, we began use of a new version of Galleri, for which we are submitting our PMA, in commercial channels which incorporates significant automation and is intended to enable us to scale more efficiently with future demand.

In connection with implementation of this new version of Galleri, we have experienced and may continue to experience increased turnaround times, re-processing costs and sample failures.

If we are unable to adequately prevent these issues from occurring, or to adequately identify and remedy these issues, we may experience reputational harm, lose customers and revenue, need to offer discounts, require additional expenditures, delay our PMA application, or suffer other negative consequences.

Our failure to successfully develop new and/or improved products (including new versions of existing products) on a timely basis could have a material adverse effect on our results of operations and business.

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In May 2024, the NHS determined, based on data from an early analysis of Galleri test performance results in the intervention arm from the prevalent screening round of the NHS-Galleri trial, not to initiate an implementation pilot in England prior to the final trial results.

In May 2025, we disclosed information from a second analysis of the prevalent screening round.

We disclosed information from the prevalent screening round.

Various factors are likely to cause the final results to differ from the prevalent screening round results.

Further, it is possible that the early preliminary, interim or final data may not be as we expect, may be inconsistent with prior NHS-Galleri data, or with other studies we have conducted, or may be unsuitable to the NHS or FDA, any of which could have a significant adverse impact on the success of our commercial efforts for Galleri, our ability to achieve FDA authorization at all or within our anticipated timelines, our ability to achieve CMS or private payor reimbursement or coverage, our brand and reputation, our business, and our growth prospects.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, and our ability to receive regulatory clearance or approval or commercialize a particular product and our company in general.

impact the value of the particular program, and our ability to receive regulatory clearance or approval or commercialize a particular product and our company in general.

In addition, the information we choose to publicly disclose regarding a particular study or clinical study is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding our business.

If the data that we

report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to commercialize or obtain regulatory clearance or approval for our products may be harmed, which could harm our reputation, business, operating results, prospects or financial condition.

We face risks associated with tariffs and other trade restrictions, which may have a material adverse impact on our results of operations and financial condition.

If the data that we report differ from final results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to commercialize or obtain regulatory clearance or approval for our products may be harmed, which could harm our reputation, business, operating results, prospects or financial condition.

We face risks associated with tariffs and other trade and global macroeconomic restrictions, which may have a material adverse impact on our results of operations and financial condition.

Our business is subject to risks associated with conducting business internationally.

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• business interruptions resulting from geopolitical actions, including war and terrorism, such as recent conflicts in the Middle East, pandemics, or natural disasters more common in certain regions, including earthquakes, typhoons, floods, and fires;

• negative consequences to our relationships with our customers, partners, and other collaborators in the event of impact to suppliers or our business internationally due to restrictive actions by U.S.

governments or changes in U.S.

In addition, in recent years, U.S.

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Presidential administration, may impact our business or operations, and the uncertainty surrounding these matters might create difficulties in our efforts to partner with certain healthcare providers, suppliers, and insurance carriers.

The United States has recently imposed significant tariffs on imports from other countries, including a baseline tariff of 10% on imports into the United States and higher tariffs on multiple designated countries (including the EU Member States, China, Canada, and Mexico) at varying rates.

Such tariffs have prompted retaliatory measures from several countries, which may further escalate.

On April 9, 2025, the United States announced that the imposition of most "reciprocal" tariffs would be paused for 90 days pending negotiations with the relevant countries.

Discussions between the United States and various other countries remain ongoing as of the date of this Form 10-Q.

For example, the United States has signaled its intention to change U.S.

trade policy, including renegotiating or terminating existing trade agreements and leveraging tariffs.

In April 2025, the United States imposed additional tariffs on imports from China and announced reciprocal and sectorial tariffs on imports from other countries.

In July 2025, the United States announced that certain tariff rates, which were initially set to expire on July 9, 2025, will now expire on August 1, 2025 and new reciprocal tariff rates will take effect on August 1, 2025.

Should these tariffs be implemented and sustained for an extended period of time, they could increase our expenses, reduce our margins or increase our prices, make it difficult to obtain inputs we need for our products or have a material adverse effect on the broader economy.

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We have launched Galleri as an LDT in the United States.

The FDA recently finalized a regulation that has been successfully challenged in federal court, pursuant to which the FDA planned to subject LDTs to medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years.

Although a federal court recently vacated this rule, if the court decision is appealed and reversed, or if the FDA were to maintain authority over LDTs as medical devices and subject them to medical device requirements as the rule contemplates, it would be costly and time-consuming, and if we were to fail to comply with such requirements, including the potential requirement to obtain marketing authorization for our LDTs, our business will be substantially harmed.

In 2024, the FDA finalized a regulation that has been successfully challenged in federal court, pursuant to which the FDA planned to subject LDTs to medical device requirements through a phase-out of its historical policy of enforcement discretion over LDTs over a period of four years.

A federal court recently vacated this rule.

While we plan to complete our PMA submission seeking regulatory approval from the FDA for Galleri, we launched Galleri in the United States as an LDT.

LDTs are in vitro diagnostic (“IVD”) tests that are intended for clinical use and are designed, manufactured, and used within a single laboratory certified for high complexity testing under CLIA.

Although the FDA believes that LDTs are medical devices subject to its medical device authority, the FDA has historically exercised enforcement discretion and has not enforced certain otherwise applicable FDA requirements, including premarket review, with respect to LDTs, with certain exceptions such as in the case of tests for public health emergencies, where the tests are available directly to the consumer, where the tests represented a significant public health concern, or where the FDA has concerns that a company’s performance claims related to its tests are not sufficiently validated by clinical data.

The FDA has historically exercised enforcement discretion and has not enforced certain otherwise applicable FDA requirements, including premarket review, with respect to LDTs, with certain exceptions such as in the case of tests for public health emergencies, where the tests are available directly to the consumer, where the tests represented a significant public health concern, or where the FDA has concerns that a company’s performance claims related to its tests are not sufficiently validated by clinical data.

Even under that enforcement discretion policy, the FDA has issued warning letters to and safety communications about IVD device manufacturers for commercializing laboratory tests that were purported to be LDTs but that the FDA alleged failed to meet the definition of an LDT or otherwise were not subject to the FDA’s enforcement discretion policy.

Even for those LDTs that were subject to the historical enforcement discretion policy, the FDA has for a number of years stated its intention to modify this policy and impose applicable medical device requirements to LDTs more broadly.

To this end, on May 6, 2024, the FDA issued the LDT Final Rule in an effort to clarify the FDA’s historical view that LDTs are medical devices subject to the requirements applicable to other IVDs, and to phase out its enforcement discretion policy over a period of four years from issuance of the LDT Final Rule, which would involve a phase-in of medical device requirements to these products over this time period.

If implemented, the LDT Final Rule would subject our products currently marketed as LDTs and any future products that we may market as LDTs in the future to the FDA’s standard regulatory requirements applicable to medical devices in accordance with this phase-in period, including the potential requirement for FDA premarket review and marketing authorization.

Specifically, in connection with the LDT Final Rule, the FDA sought to establish certain new, targeted enforcement discretion policies, including, among others, for LDTs marketed as of the date of publication of the LDT Final Rule (May 6, 2024), as well as for LDTs that have received approval from New York State’s Clinical Laboratory Evaluation Program (“NY CLEP”).

Specifically, if the LDT Final Rule were implemented, the FDA planned to exercise enforcement discretion and not enforce certain medical device requirements (including the requirements for marketing authorization and compliance with certain elements of the Quality System Regulation (“QSR”)) with respect to LDTs that were marketed as of the date of the LDT Final Rule’s publication, although such products would still by required to comply with certain other FDA requirements, such as registration and listing, relevant portions of the QSR, medical device reporting, labeling, and corrections and removals reporting.

However, where these tests are modified in certain ways from the version of the test marketed as of the LDT Final Rule’s publication date, this enforcement discretion policy, if implemented, would no longer apply and the FDA would enforce all applicable FDA requirements (including premarket review and marketing authorization requirements) consistent with the stated phase-in policy.

In addition, for LDTs that received approval from NY CLEP, the FDA planned not to enforce marketing authorization requirements when these requirements were phased in more generally at either three and a half or four years following the date of publication of the LDT Final Rule.

However, these tests would still be subject to the remaining medical device requirements, including registration and listing, medical device reporting, and quality system requirements, at the time that such requirements were phased in more generally.

Even for those LDTs that were subject to the historical enforcement discretion policy, the FDA for a number of years stated its intention to modify this policy and impose applicable medical device requirements to LDTs more broadly.

However, on March 31, 2025, the United States District Court for the Eastern District of Texas vacated the LDT Final Rule, reasoning that LDTs are not medical devices, and remanded the matter to the FDA for further consideration (the “LDT Final Rule Decision”).

The District Court’s decision remains subject to appeal and it remains uncertain whether such appeal will be sought and if it would be successful.

Accordingly, it is unclear whether or when the FDA may be able to implement the LDT Final Rule, or otherwise exercise its medical device authority with respect to LDTs.

This uncertainty could adversely affect the FDA’s ability to apply and enforce its medical device requirements with respect to diagnostic tests more broadly, including any LDTs for which we were to have obtained a PMA.

Such uncertainty, and the final resolution of the litigation over the LDT Final Rule, could have a material adverse effect on our business and operations.

In light of the uncertainty regarding the future status and potential implementation of the LDT Final Rule, the associated planned new enforcement discretion policies, and the FDA’s actions in response the District Court’s

decision as it relates to LDTs, we do not know when or if our LDTs could become or will remain subject to, FDA medical device requirements, including the requirement to seek and obtain marketing authorization, at the time that such medical device requirements may be phased in, if at all.

If we were unable to comply with medical device requirements applicable to our LDTs, if and when they become applicable, we could be required to cease marketing any products that we market as LDTs.

Further, if the FDA decides to no longer review voluntary marketing authorizations for LDTs in response to the LDT Final Rule Decision, and we decide to pursue a PMA for Galleri or any of our future LDT products, we may be required to make changes to our PMA application, our laboratory testing or other elements of our test platform, or otherwise take actions to allow the FDA to treat Galleri or future LDT products as medical devices, notwithstanding the LDT Final Rule Decision.

The decision was not appealed.

Further, if the FDA is unable to review LDTs, we may be required to make changes to our PMA application, our laboratory testing or other elements of our test platform, or otherwise take actions to allow the FDA to treat Galleri or future tests as medical devices, notwithstanding the LDT Final Rule Decision.

These changes could require us to change the PMA application we have begun, which could delay our PMA application or any potential approval, require additional expenditures, require additional development and validation on the changes we may decide to make and could subject us to additional regulation by the FDA.

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In addition, further efforts by the FDA or Congress to impose more regulation on LDTs could create a negative public perception about the validity, safety, effectiveness, or performance of LDTs, including our products, that could adversely affect patient, provider, and customer perception about, and confidence in, our products.

Moreover, the FDA may assert that we are improperly marketing our tests as LDTs, or if FDA succeeds in maintaining asserted authority over LDTs as medical devices, the FDA may assert we do not comply with applicable medical device requirements, and in such cases may take enforcement action against us and/or require us to seek premarket review and obtain marketing authorizations, which may require that we cease marketing any LDT products until such marketing authorizations are obtained or the relevant applications are submitted.

There can be no assurance that we will be able to obtain any required marketing authorization for our LDTs or that any labeling claims will be consistent with the claims we have made or intend to make for such products when launched as LDTs, or that such claims would be adequate to support continued adoption of and reimbursement for our products.

In the event we are required to seek FDA marketing authorization for any current or planned LDTs, the FDA may request that we provide additional analyses and information beyond that which we intend to produce based on the designs of our current and planned clinical studies, or that we modify or narrow our intended use or product claims.

Moreover, the FDA may assert that we are improperly marketing our tests, including Galleri, as LDTs and may assert we do not comply with applicable medical device requirements, and in such cases may take enforcement action against us and/or require us to seek premarket review and obtain marketing authorizations, which may require that we cease marketing any LDT products until such marketing authorizations are obtained or the relevant applications are submitted.

There can be no assurance that we will be able to obtain any required marketing authorization for our tests or that any labeling claims will be consistent with the claims we have made or intend to make for such products when launched as LDTs, or that such claims would be adequate to support continued adoption of and reimbursement for our products.

In the event we are required to seek FDA marketing authorization for any current or planned products, the FDA may request that we provide additional analyses and information beyond that which we intend to produce based on the designs of our current and planned clinical studies, or that we modify or narrow our intended use or product claims.

It is possible that the FDA, among other things, could disagree with our interpretation of data we have relied on to support our LDT launches for our intended uses.

If we are required to provide additional analyses or additional data or perform additional clinical studies beyond those we currently contemplate to support the intended uses of our products or future products, our planned commercial launches may be delayed and we may be required to cease commercialization of any products we currently market as LDTs.

A delay in the launch of our products or new versions of existing products, or significantly narrowing their intended uses, could negatively impact our financial condition and results of operations.

A delay in the launch of our products or new versions of existing products,

or significantly narrowing their intended uses, could negatively impact our financial condition and results of operations.

In addition, Congress has, for over the past decade, considered a number of proposals, which if enacted, would subject LDTs to additional regulatory requirements.

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Any such legislation could substantially alter our commercial offering and marketing of LDTs and negatively impact our financial condition and results of operations.

If the LDT Final Rule is successfully challenged, abandoned or delayed, the regulatory environment around LDTs could be significantly relaxed, which could increase competition and reduce the effectiveness of our regulatory and reimbursement strategy.

If the LDT Final Rule Decision is not appealed, or if the LDT Final Rule Decision is appealed but the decision is affirmed, or if the FDA otherwise does not have authority to regulate LDTs as medical devices, there could be significant impacts to us and our industry, and our ability to compete could be impaired.

Additionally, as a result of the District Court decision the regulatory environment around LDTs could be significantly relaxed, which could increase competition and reduce the effectiveness of our regulatory and reimbursement strategy.

If the FDA does not have authority to regulate LDTs as medical devices, there could be significant impacts to us and our industry, and our ability to compete could be impaired.

We have invested significantly in pursuing a PMA for Galleri, including conducting our NHS-Galleri and PATHFINDER 2 studies to support our PMA.

We believe PMA approval for Galleri, if obtained, could bolster our position in the MCED market, and increase or accelerate provider and patient adoption, commercial and government reimbursement and coverage, and international opportunities.

In the event the FDA is not able to implement the LDT Final Rule, or otherwise exercise its medical device authority with respect to LDTs, our competitors or potential competitors in the MCED market may face less stringent regulatory requirements to enter the market or to continue to market their tests and we may face increased competition in our industry, and adapting to the new regulatory and competitive environment could be difficult, costly and time-consuming.

In the event the FDA is not able to exercise its medical device authority with respect to LDTs, our competitors or potential competitors in the MCED market may face less stringent regulatory requirements to enter the market or to continue to market their tests and we may face increased competition in our industry, and adapting to the new regulatory and competitive environment could be difficult, costly and time-consuming.

If we are not able to adapt to the changed regulatory environment and increased competition, our business and prospects could be materially impacted.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors