By Bill Alpert

Grail's highflying stock got cut in half last Friday.

The diagnostics company's stock climbed fivefold last year, in part on expectations for a U.K. national study of Grail's blood test that detects dozens of cancers before they are symptomatic. Annual screenings of 140,000 older Brits was hoped to reduce the number of late-stage cancers appearing in the group, after three years.

It didn't, and that news last week took Grail shares down from $101 to $50, in a day.

After five days of elevated turnover, by Thursday investors seem to have finished their rethinking on the stock. Trading volume returned to an average level and the shares ended the day almost 12% higher, at $58.10.

The disappointment in the U.K. had forced investors and analysts to reassess their sales outlook for the multi-cancer blood screens pioneered by Grail, and now emulated by rivals like Guardant Health. Projections for a $60 billion annual market in such tests drove Abbott Laboratories to pay $21 billion in cash for Exact Sciences, in an acquisition approved by shareholders on the very day of Grail's stock crash.

But few analysts with Buy ratings on Grail at $100 have changed their views, after the selloff. They think wider use of cancer blood screens is inevitable -- just somewhat further off now. They are probably right.

Grail's Galleri test looks for telltale bits of DNA shed into the bloodstream by cancer cells. Galleri tells you if it found something, and by sequencing the DNA it can suggests where doctors should look for the lurking cancer.

Grail and its fans had hoped the study by Britain's National Health Service would show that detecting cancers early, when they s treatable, would leave fewer late-stage cancers (known as Stage III and Stage IV cancers) in a population -- saving jobs, lives and medical expenses. Grail thinks there were fewer Stage IV cancers, but the Stage III cases didn't drop as expected.

Success in the study might have persuaded the NHS to start a national screening program. Grail still hopes it will. A success would also have provided evidence for coverage in the U.S. by Medicare and commercial health insurers.

Grail also hopes that detailed analysis of the NHS results will show useful reductions in some Stage IV cancers. It will report those details later this year, perhaps at the meeting of the American Society of Clinical Oncology at the end of May.

Meanwhile, the U.S. Food and Drug Administration will continue its review of the marketing application Grail completed in January. The agency can take up to a year, but is likely to approve the test. That approval is a needed step, before widespread insurance coverage of Galleri -- which costs $950 out-of-pocket now.

Before last week's bad news, investors had been valuing the far-from-profitable Grail at nearly $5 billion. At today's humbler price, they can afford to be more patient.

Write to Bill Alpert at william.alpert@barrons.com

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February 26, 2026 17:00 ET (22:00 GMT)

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