Grail Analyst Sees Massive Market Potential with Valuation Headwinds

RBC Capital Markets initiated coverage on Grail Inc. (NASDAQ:GRAL) on Thursday, citing a substantial market opportunity for multi-cancer early detection (MCED) tests. Analyst Dan Leonard wrote, “GRAIL is a pure play.”

Upcoming Catalyst

The company’s Galleri screening tool identifies specific methylation patterns shared across various forms of cancer.

Its primary goal is to catch the disease long before physical symptoms arise, offering a vital tool for malignancies that currently lack standard screening protocols.

The upcoming FDA adcom on 23 September for the Galleri test is a compelling catalyst.

RBC expects Galleri will be well received at adcom and could gain FDA approval in late 2026/early 2027.

Analyst Outlook And Clinical Performance

Analyst Leonard wrote on Thursday, “We’re generally positive on the size of Galleri’s market opportunity, its clinical data relative to the lack of alternative screening methods in many cancers, and the upcoming catalyst path.”

RBC noted that Galleri’s clinical performance is encouraging and is stronger today than at the time of the failed Illumina Inc. (NASDAQ:ILMN) acquisition.

RBC Capital initiated coverage with a Sector Perform rating and a price forecast of $84.

Global Addressable Market Opportunity

The analyst notes that at the current valuation, concerns remain about the slope of the adoption curve, the depth of cash burn, and the gap between today’s reimbursement environment and the one that unlocks the addressable market.

While the ultimate addressable population will depend on where medical guidelines and payers set eligibility, RBC envisions an annual testing opportunity exceeding 100 million in the U.S. and 300 million in major global markets at its most expansive.

The company announced a collaboration with Epic in April to integrate the Galleri multi-cancer early detection test into one of the nation’s most widely used electronic health record platforms.

This integration will let about 450 health systems access Galleri test results in their existing patient portals, enhancing early cancer detection and improving patient outcomes.

GRAL Price Action: Grail shares were up 0.21% to $80.12 at the time of publication on Friday, according to Benzinga Pro data.

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