The “Stage One” Cancer Detection Revolution

The three most feared words in modern medicine are, without a doubt, “You have cancer.”

Cancer is one of the biggest killers of all ages worldwide. The U.S. alone sees almost 2 million new cases annually. But seniors are the most affected. Cancer is caused by mutations in our cells that cause them to replicate incorrectly and then refuse to die. The older you are, the more mutagenic factors you’ll have been exposed to.

People age 65 to 74 account for 30% of all new cancer diagnoses. The 75-and-up age cohort accounts for 27%. Unfortunately, many cancers aren’t caught until it’s too late to do anything about them. See, the survival rates of every cancer are much higher if it’s caught in stages 1 or 2, while it’s still isolated to one organ or a small section of the body. However, once it metastasizes and spreads to other organs in stages 3 and 4, there isn’t much that can be done.

Take breast cancer, for instance. It’s the most common type of cancer, with almost 380,000 cases expected annually. It’s one of the biggest killers of women. If it’s caught while it’s still localized, then the survival rate is 99%. If it’s caught later, once it’s spread, the survival rate drops to 32%.

Prostate cancer is a similar story. It’s another very common cancer, not far behind breast cancer, with about 313,000 cases expected annually. It’s one of the biggest killers of men. If you catch it while it’s local to the prostate, your survival rate is 99%. Catch it too late and the survival rate falls to 37%.

Finally, lung cancer is one of the most common cancer varieties that isn’t sex-specific, with 234,000 cases expected annually. But it’s much less survivable than either breast or prostate cancer. If it’s caught in Stage 1, your chances of survival are 65%. If it’s not caught until Stage 4, the chances of survival drop to 5%.

Together, lung, breast, prostate, and colorectal cancers make up 50% of all new diagnoses, and lung cancer alone is responsible for 20% of all cancer deaths in the United States.

I could list all the different types of cancer and your odds of survival, but I think these examples make my point. Caught early, most cancers are survivable. Caught too late, the chance for survival drops dramatically.

But there are limitations on current screening technologies, and many cancers don’t cause symptoms until stages 3 or 4 when it’s far too late to do anything about them.

For example, by the time most brain cancers begin showing symptoms, it’s already far too late. Meningioma is the most common cancerous brain tumor, and it tends to grow so slowly that it goes unnoticed until it starts damaging healthy tissues around it. And by then it’s difficult to remove and may have spread. And even if you catch most brain cancers as soon as possible, the survival rate is only about 35% at best.

Thankfully, Congress is currently reviewing H.R. 2407, a new Medicare bill that will give senior citizens access to a revolutionary blood test that can detect cancer as early as STAGE 1.

Giving seniors a 300%… 900%… or even 1,400% better chance of defeating cancer.

When the news of this Medicare surprise hits the mainstream media… I believe it could become the most talked-about cancer breakthrough of our lifetime.

Forcing the stock to storm up the charts.

Until now, there hasn’t been a way to screen for multiple cancers easily…

However, one company has developed a solution to the problem of catching cancer too late. It’s called the Galleri test, and it’s being developed by Grail Inc. (Nasdaq: GRAL).

The Quest for the Holy Grail

Grail’s name is an obvious allusion to its goal.

Just as King Arthur and his Knights of the Round Table quested for the Holy Grail, the cup Christ drank from at the Last Supper, Grail is searching for medicine’s “Holy Grail,” a solution to cancer.

Based in Menlo Park, California, Grail is a spinoff of Illumina Inc., and its main claim to fame is the Galleri test. I won’t beat around the bush. Galleri is one of the biggest leaps humanity has made in the fight against cancer in a long time.

It’s a blood test designed for use in people age 50 and up who show no symptoms of any cancers. The way it works is rather simple, even if it doesn’t sound like it at first.

From a simple blood draw, Galleri can screen for 50 different types of cancer, many of which have no other options for routine screening. It does this by reading the methylation patterns of cell-free DNA and looking for a biological “fingerprint” of cancer.

See, all the 28 (female) to 36 (male) trillion cells that make up the human body, whether they’re cancerous or not, shed fragments of stray DNA into the bloodstream. DNA methylation is a normal process that regulates gene expression.

The methylation patterns on cell-free DNA can be read and interpreted by an AI algorithm Grail has developed. If the algorithm then identifies a cancer’s signal, it can determine where it originated from based on the methylation pattern and direct a doctor to what body part is most likely afflicted.

Grail has been collecting data on these methylation patterns to create a database of the fingerprints, so to speak, of various cancers. Think of it as the Equifax of cancer data. Galleri is being used to create what’s believed to be the largest DNA database in the world, and it’s one that has the potential to transform how we fight cancer.

And, Galleri’s usefulness aside, the DNA database Grail has created is unmatched and could stand to be a massive revenue stream for the company moving forward. A few years ago, 23andMe, which has a much smaller database than Grail, landed a $300 million deal with GlaxoSmithKline. Imagine what Grail’s database is capable of…

But I digress. Back to the quest…

Galleri has achieved 99.5% specificity. That means it’s very good at telling when people don’t have cancer signals in their blood. False positives are highly unlikely. The test doubles the number of cancers that can be screened for when added to routine testing, leading to cancers being caught earlier and better outcomes for patients.

The Galleri test has been in development for a long time, since before Grail even existed. The discovery of methylated cell DNA was in 2015, and Grail was founded in response the following year. After several years of development and a partnership with Britain’s NHS in 2020, Galleri was launched in 2021. So the test has been on the market for a few years now…

Yet, despite its efficacy, the test is still not covered by most types of insurance and costs $949, which is a steep asking price. However, that might all change soon with a bill that was introduced into Congress back in 2021.

If passed, H.R. 2407 would have Galleri covered by Medicare. If that bill passes, Galleri is primed to capitalize fully as the leading provider of methylation cancer detection tests. I foresee gains of 5,000% or more, because Grail isn’t some flash-in-the-pan pharma startup with no revenue and loads of debt. It’s a star very much on the rise…

The Riches of Camelot

Most biotech startups have no revenue and are underwater in debt. That’s not the case with Grail. First, the company has a cash position of $763.47 million and a debt-to-equity ratio of 0, meaning debt is not a problem for Grail.

Moving to revenue, the company jumps from strength to strength. In the latest quarter, Q4 2024, revenues surged 26.1% to $38.2 million, the latest of six quarters of incredible year-over-year growth going back to October 2023.

On the whole, 2024 saw Grail’s revenue surge 34.9% to $125.6 million. And over the past three years, revenue has surged higher and higher at a compound annual growth rate of 104.8%. Grail is growing fast and picking up momentum.

What we have with Grail is a rapidly growing company with a potentially lifesaving solution to one of medicine’s biggest challenges, a positive cash position, and no debt to speak of. It seems like the exact sort of thing Grail’s founder would have wanted it to become.

Though he’s no longer with the company, Grail’s founding CEO, Jeff Huber, set the company up for success. He was the rare leader who had mastered both data analysis and healthcare breakthroughs.

The mission was personal for him. Huber lost his wife to colon cancer that her doctors thought was just menopause… until it had spread to her liver and lymph nodes.

Huber’s successor, Bob Ragusa, has continued the company’s mission, which is already paying off in a big way. But the catalyst for more growth here is obvious. If H.R. 2407 passes and Galleri is covered under Medicare, you can bet thousands of lives will be saved and Grail’s share prices will skyrocket.

Galleri will help doctors catch cancer early in hundreds of thousands of seniors each year and cause survival rates to spike dramatically.

If Medicare covers the full $949 cost of Galleri, not only will it become more accessible, but Medicare alone could represent as much as a $61.6 billion annual market. And Grail has applied for over 400 patents to protect its novel cancer test…

The Cup of a Carpenter

Grail meets all five of the criteria I look for when evaluating a microcap.

First, it’s pioneering a breakthrough technology that could fundamentally change the way we live. This one is obvious: Galleri is the biggest advancement in cancer treatment we’ve seen in decades.

Second, it has visionary leaders at the helm. Though Jeff Huber isn’t running the show anymore, Bob Ragusa is determined to continue his mission. Check.

Third, its technology is locked down with ironclad patents that give it control over its market. Grail holds 174 patents to keep its test dominant in the cancer testing market and has applied for over 400.

Fourth, I need to see evidence the company is on track for hundreds of millions – or billions – of dollars in future revenue. Grail is already raking in money hand over fist, and once the Medicare market is open to Galleri, I expect that to accelerate.

Finally, there needs to be a clear catalyst on the horizon that could send shares soaring in the coming months. This one is clear: Medicare coverage for Galleri would see Grail experience a moonshot gain in short order…

I’ve seen this happen time and time again with biotechs. Glaukos soared 190% in eight years. Celgene grew 395% in four years. And Intuitive Surgical went on a 309% ride within just 18 months.

If you choose wisely and join in on the quest for medicine’s holy grail, you could be richer than a king in a few short years, no green giants or wizards required.

Action to Take: Buy Grail Inc. (Nasdaq: GRAL) at market.