Grail Enacts Restructuring Plan, Cuts 350 Employees

Grail, which was first spun out from Illumina in 2016, reintegrated in 2021 for $8 billion, and finally forced to once again separate after regulators decided the acquisition would stifle competition in the liquid biopsy market, is once again in the spotlight: But this time for layoffs.

In its Q224 SEC report, the company announced a restructuring plan that includes reducing existing headcount and planned hires for 2024 by about 30%. This will account for 350 employees plus the loss of planned hires. Expected to take place in the third and fourth quarters, Grail will pay from $18 million to $23 million in the third quarter for severance and other termination-related costs.

The restructuring will reduce overall spend and focus resources on the company’s core multi-cancer early detection (MCED) initiatives, “including progress toward completion of our registrational studies and our premarket approval application submission,” of its Galleri test, according to the press release. This will preserve cash as Grail continues to work towards Galleri’s FDA approval.

The Galleri laboratory developed test, used to detect a shared cancer signal across more than 50 types of cancer, was launched in 2021 and has sold more than 215,000 commercial tests. However, some experts remain uncertain about the role of multi-cancer screenings in patient care.

Additionally, Grail plans to streamline its commercial sales force and reduce its management layers and medical affairs teams. “As a result, we are streamlining our commercial sales forces and focusing its field-based activities on the current customers expected to be more productive and high priority opportunities,” according to a company filing. “We are maintaining sales force coverage for the majority of our current Galleri volume and active prescribers. As part of this approach, we are also streamlining investments in its enterprise business, which includes our employer and life insurance businesses. Reductions in the commercial organization include management layers and commercial roles without sales responsibilities. In addition to reductions in the commercial organization, we are making reductions in medical affairs teams involved with US Galleri provider engagement.”

Outside of Galleri, R&D investments are also getting significantly slashed.

The company said it is “substantially decreasing investment in research and development activities related to our product programs beyond Galleri, including our diagnostic aid for cancer and minimal residual disease programs. In addition, we are making reductions in general and administrative expenses to reflect the focus on the MCED opportunity,” according to the filing. “We plan to continue to invest in our biopharmaceutical partnerships and work with our partners to leverage our proprietary methylation technology in precision oncology applications.”

The headcount reductions are expected to save the company about $120 million annually, with approximately $27 million in savings, net of severance and benefits, in 2024.