SecProbe.io

United States securities and exchange commission logo
January 8, 2024
Robert Ragusa
Chief Executive Officer
GRAIL, Inc.
1525 O’Brien Drive
Menlo Park, California
Re:GRAIL, Inc.
Draft Registration Statement on Form 10-12B
Submitted December 11, 2023
CIK No. 0001699031
Dear Robert Ragusa:
            We have reviewed your draft registration statement and have the following comment(s).
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe a comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to this letter and your amended
draft registration statement or filed registration statement, we may have additional comments.
Draft Registration Statement on Form 10-12B Submitted December 11, 2023
Summary, page 2
1.We note that your summary appears to discuss primarily the positive aspects of your
business. The information statement summary should provide a brief, but balanced,
description of the key aspects of your business. Please revise the summary to also discuss
the following points as discussed in the Risk Factors and other sections of the Information
Statement:

•the fact that you do not currently have coverage and reimbursement from third-party
payors, either private or government, for Galleri;
•that Galleri has not been approved by the FDA or equivalent foreign regulators and
that the process of obtaining a PMA generally takes from one to three years, or even
longer, from the time the application is submitted to the FDA;

 FirstName LastNameRobert Ragusa
 Comapany NameGRAIL, Inc.
 January 8, 2024 Page 2
 FirstName LastNameRobert Ragusa
GRAIL, Inc.
January 8, 2024
Page 2
•that while you have a number of clinical studies underway designed to evaluate the
clinical validity of Galleri, your product is not yet, and may never be, listed in any
guideline recommendations, even if approved by the FDA;
•that upon closing of the Spin-Off, your obligation to pay to Illumina a high-single
digit royalty will resume, which was suspended while you were owned by Illumina
and that it may be difficult for you to offset the costs of this royalty; and
•quantify your net losses for the financial periods presented in the filing and your
accumulated deficit as of the most recent fiscal period presented in you filing.
2.Please clarify what it means for the Galleri test to be "clinically-validated" and who has
made this determination. In this regard, we note that you have not received FDA approval
for the Galleri test and your NHS Galleri and PATHFINDER 2 studies are still ongoing.
3.We note certain statements in your information statement that do not appear to be
attributed to the company or an outside source. Please provide support for these
statements or characterize the same as management's opinions or beliefs. For example, we
note, without limitation, your statements:

•on page 2 that "Galleri detects a shared cancer signal across more than 50 types of
cancer and can predict with high accuracy the specific organ or tissue type where the
cancer signal originated;"

•on pages 3 and 19 that you estimate "[a]pproximately 67% of cancer deaths result
from cancers that have no recommended screening guidelines;"
•on page 3 that "a recent analysis demonstrated that diagnosing cancer early could
result in an estimated $26 billion in annual cost-savings in the United States;"

•on page 3 that "Galleri predicts the tissue type or organ associated with the cancer
signal (the cancer signal origin) with high accuracy;"
•on page 3 that "Our clinical studies, including our early discovery work, have
demonstrated robust and reproducible test performance;"

•on page 3 that you are "an early leader in MCED testing;"

•on page 4 that your "targeted methylation approach can detect lower levels of cancer
signal in blood compared to the other approaches, enabling early cancer detection in
asymptomatic individuals more efficiently compared to whole-genome methylation;"

•on page 118 that "It is estimated that the global economic cost of cancer from 2020 to
2050 will be approximately $25 trillion;"
•on page 119 that "Treatment costs increase by stage across all cancers, and treating

 FirstName LastNameRobert Ragusa
 Comapany NameGRAIL, Inc.
 January 8, 2024 Page 3
 FirstName LastNameRobert Ragusa
GRAIL, Inc.
January 8, 2024
Page 3
cancers that are in more advanced stages can be up to two to four times more costly
than treating cancers at earlier stages;" and
•on page 119 that "less common cancers . . . account for a majority of all cancer
deaths."
4.As a related matter, we note your disclosure that "Galleri detects a shared cancer signal
across more than 50 types of cancer and can predict with high accuracy the specific organ
or tissue type where the cancer signal originated, all from a simple blood draw." Please
revise these and all similar statements in your registration statement to eliminate
conclusions, predictions, or opinions that your product is effective or accurate, whether
implicitly or impliedly. We do not object to the presentation of objective data without
efficacy or accuracy determinations.
5.We note your statement that "[w]e seek to use data from the NHS-Galleri Trial, together
with data from our PATHFINDER 2 study, as well as supplemental data from other
clinical studies, to support our planned PMA submission for Galleri in the United States."
Here or elsewhere in the Information Statement, please explain why you intend to use data
from the NHS-Galleri Trial and PATHFINDER 2 study to support your PMA submission
rather than relying on data from other studies such as PATHFINDER or CCGA.
6.We note your reference on page 2 to Grade A, B, and C recommendations. Please revise
your disclosure to define and describe the significance of these grades. In addition, please
clarify your reference to "these five standard of care single-cancer screening tests." Make
conforming changes throughout your filing.
7.At the first instance, please define the following terms or provide a cross reference to their
definition elsewhere in the filing: methylation, targeted methylation, highly informative
and low-noise methylation regions, interrogating mutations, chromosomal alterations,
fragment lengths, and other genomic features, and describe their relevance to your
statements about your product. As a related matter, we note your disclosure that "[i]n
our head-to-head analyses, methylation exhibited stronger performance when compared to
interrogating mutations, chromosomal alterations, fragment lengths, and other genomic
features, either alone or in combination." Please revise your disclosure to briefly describe
how you measure "performance," and include the relevant data from your head-to-head
analyses supporting your belief that targeted methylation exhibited "stronger"
performance when compared to other features. Make conforming changes throughout your
filing.
8.You disclose that you are developing your diagnostic aid for cancer ("DAC") test to
accelerate diagnostic resolution for patients with non-specific signs and symptoms, but
with a clinical suspicion of cancer. Please revise your disclosure to describe the status of
your development efforts and your expected timeline for the development and
commercialization of your DAC test. As a related matter, we note your reference to "other
future products in development." Please identify any other products in development and

 FirstName LastNameRobert Ragusa
 Comapany NameGRAIL, Inc.
 January 8, 2024 Page 4
 FirstName LastNameRobert Ragusa
GRAIL, Inc.
January 8, 2024
Page 4
their relevant status.
Reasons for the Spin-Off, page 11
9.We note your disclosure that the Illumina Board also considered a number of potentially
negative factors in evaluating the Spin-Off. Please revise your disclosure in this section to
briefly describe these negative factors.
Risk Factors, page 28
10.Please revise your risk factor disclosures to include risks related to the regulatory
proceedings described on page 96 in the Background of your spin-off transaction and on
page F-35 in note 12 to your financial statements, including but not limited to any
significant costs incurred or expected to be incurred related to GRAIL's intervention in the
proceedings, risks related to the completion of the Separation and Distribution pursuant to
the legal proceedings, reputational risk due to news media reports on the relevant
regulatory intervention, and any other material risks.
Risks Relating to Our Business and Industry
We may be unable to develop and commercialize new products, including enhanced versions of
current products., page 39
11.We note your statement that you "continue to expand [y]our research and development
efforts to use [y]our proprietary methylation platform and [y]our large clinical and
genomic datasets to develop enhanced versions of [y]our products and future products."
Please briefly explain what changes or improvements you expect to make to the enhanced
versions of your current products and if you believe these changes will impact your ability
to rely on previously-collected data on earlier versions of your products in connection
with your submission for marketing authorization (or certification) of your products.
Risks Relating to Regulation and Legal Compliance
Our multi-cancer detection tests are a new approach to cancer screening, which present a number
of novel and complex issues. . ., page 59
12.We note your statement that "As part of our ongoing discussions with the FDA regarding
the data that will be needed to support a PMA for a multi-cancer detection test based on a
proposed intended use, the FDA has provided feedback regarding how it plans to assess
the safety and effectiveness of our new version of Galleri based on potential intended use
statements." Please briefly describe the feedback received from the FDA and clarify what
you mean by the new version of Galleri.
Risks Related to Intellectual Property
If we are unable to obtain and maintain intellectual property protection for our technology. . .,
page 75
13.We note your statement here that "eight of our in-licensed European patents and one of

 FirstName LastNameRobert Ragusa
 Comapany NameGRAIL, Inc.
 January 8, 2024 Page 5
 FirstName LastNameRobert Ragusa
GRAIL, Inc.
January 8, 2024
Page 5
our owned European patents have been subject to oppositions in Europe, as described
below." However, we also note your statement on page 79 that you "faced three
oppositions in Europe with respect to European patent number EP 3 363 901 B1 in-
licensed from the Fred Hutchinson Cancer Center, European patent number EP 3 354 747
B1 in-licensed from The Chinese University of Hong Kong, and European patent number
EP 3 478 856 B1 assigned to GRAIL, LLC," and your statement on page 147 that you "are
currently facing oppositions from anonymous challengers against two of our in-
licensed European patents and one of our owned patents." Please clarify if you received
opposition to European patents other than EP 3 363 901 B1, EP 3 354 747 B1 and EP 3
478 856 B1.
Cautionary Statement Concerning Forward-Looking Statements, page 95
14.We note your statements that "neither we nor any other person assumes responsibility for
the accuracy and completeness of any of these forward-looking statements" and "you are
cautioned not to place undue reliance on such forward-looking statements as predictions
of future performance or otherwise." Please revise these statements to remove any
implication that investors are not entitled to rely on disclosure in your registration
statement.
The Spin-Off
Background, page 96
15.Please revise your disclosure describing the background of the spin-off transaction in this
section to include a discussion of the regulatory proceedings initiated by the US Federal
Trade Commission on March 30, 2021, described in Note 12 to your financial statements
on page F-35 of your filing. In your discussion, please clarify whether and to what extent
you expect the divestment of GRAIL, including Illumina's retention of the 14.5%
ownership interest in GRAIL, to impact these proceedings.
Reasons for the Spin-Off, page 97
16.You disclose that "[i]n connection with the EC Divestment Decision and with the goal of
enhancing stockholder value, the Illumina Board conducted a process through which it
considered a range of potential divestment transactions," and "[a]s part of this evaluation,
Illumina retained outside advisors, and the Illumina Board considered a number of factors
. . . ." To the extent that the board's decision to effect a spin-off was based in material part
on the analysis or recommendation of these outside advisors, please identify the
outside advisors and discuss the nature of the reports and recommendations provided by
them to the Illumina board.
Reasons for Illumina's Retention of up to 14.5% of GRAIL Common Stock, page 99
17.Please revise your disclosure to provide additional detail regarding the reasons for
Illumina's retention of up to 14.5% of GRAIL common stock, including what is meant by

 FirstName LastNameRobert Ragusa
 Comapany NameGRAIL, Inc.
 January 8, 2024 Page 6
 FirstName LastNameRobert Ragusa
GRAIL, Inc.
January 8, 2024
Page 6
"investment purposes," and advise us of any specific plans Illumina currently has to
dispose of such shares. Disclose whether there is any minimum period of time following
the distribution during which Illumina will refrain from distributing its retained shares. In
this regard, while your disclosure indicates that there is a maximum period of five years
following the distribution to consummate a disposition of the retained equity, your
disclosure does not address whether there are any active plans to dispose of such equity
shortly after the distribution.
Business, page 113
18.Revise your disclosure to clarify whether cancer may be "cured" and if so, please provide
a basis for your assertion that early detection results in discovering cancer "when it can be
cured." Alternatively, please delete this statement.
19.You disclose that "key results from our interventional PATHFINDER study were
generally consistent with data from our case-control CCGA study, which is evidence
supporting the generalizability and robustness of Galleri." Please revise your disclosure to
expand upon the key results to which you refer, describe what is meant by "generally
consistent," and describe the significance of the "generalizability and robustness" of
Galleri.
20.You disclose that your targeted methylation approach can detect lower levels of cancer
signal in blood compared to other approaches. Please clarify the "other approaches" to
which you refer.
Galleri Performance, page 123
21.We note your disclosure in the footnotes to your table that your false positive rate was
based on participants with cancer status assessment at the end of your study. To provide
investors with additional context needed to understand your data, please clarify the
percentage of your study participants who received cancer status assessment at the end of
your study, including whether any participants received a positive result without a status
assessment, and therefore could be omitted from your false positive rate.
Our Products: Galleri and Beyond
Backed by robust analytical and clinical performance, page 124
22.We note your statement that you "established clinical validation using a locked assay and
classifier in case-controlled and intended-use populations." Please expand on this
statement to explain what locked assay and classifier and case-controlled mean in this
context.
Galleri and standard of care performance, page 124
23.You disclose that your graphic presents the PPV and number of false positives associated
with the current standard of care screen