This once-hot cancer-detection company's stock got cut in half after a failed trial

By Tomi Kilgore

Illumina's stock also took a hit, as the gene-sequencing company remains a major Grail shareholder

Grail's stock was the Nasdaq's biggest loser Friday, after a key trial of its Galleri early-detection cancer test failed to meet its primary endpoint.

Shares of Grail lost more than half their value on Friday, after a key trial of the company's cancer screener failed to meet its primary objective.

The stock's (GRAL) plunge reflected the disappointment investors were feeling, as high hopes for strong results had driven a near doubling in Grail's share price over the past year.

Late Thursday, Grail said a trial evaluating annual multicancer screening with its Galleri test in England's National Health Service over three years failed to meet its primary endpoint of statistically significant reduction in Stage III to Stage IV cancers.

The stock plummeted 50.6% to close Friday at $50.21, enough to make it the biggest loser on the Nasdaq COMP. Trading volume jumped to more than 15 million shares at closing, or roughly 20 times the full-day average. The selloff came after the stock had soared 93% in the 12 months through Thursday.

Grail's decline was also dragging down shares of gene-sequencing and life-science tools maker Illumina (ILMN), which remains a major Grail shareholder. Illumina's stock closed down 1.9%.

In a filing earlier this week, Illumina said it owned 1.3 million shares as of Feb. 17, or 3.2% of the Grail shares outstanding. That marked a sharp drop from the 2.5 million shares Illumina controlled as of Dec. 31, but still meant Illumina was Grail's seventh-largest shareholder, based on the latest ownership data from FactSet.

With Grail's stock losing $51.32 on the day, the value of Illumina's holding took a $66.8 million hit.

Illumina had acquired Grail in August 2021 in an $8 billion deal, then spun it off June 2024 amid heavy pushback from both regulators and activist investors. Illumina had retained an investment in Grail after the spinoff.

Despite the failure of the NHS-Galleri trial, Grail said it was still encouraged by the test results, as adding the Galleri test to the current standard screening showed a "clinically meaningful" reduction in Stage IV cancer diagnoses. An annual screening with the Galleri test, plus the standard screening, quadrupled the cancer-detection rate of several cancers compared with standard screening by itself, the company noted.

"The NHS-Galleri trial provides the strongest evidence to date that multicancer early detection can shift the stage at which cancers are detected at a population level," said Grail CEO Bob Ragusa.

Even after Friday's selloff, Grail shares have run up 267.6% since its first day of trading on June 12, 2024. Over the same time, Illumina shares have gained 11.6%, while the iShares Biotechnology ETF IBB, of which Grail's stock is a component, has advanced 26.5%.

-Tomi Kilgore

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02-20-26 1626ET