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United States securities and exchange commission logo
February 26, 2024
Robert Ragusa
Chief Executive Officer
GRAIL, LLC
1525 O Brien Drive
Menlo Park, California
Re: GRAIL, LLC
Amendment No. 1 to
Draft Registration
Statement on Form 10-12B
Submitted January
30, 2024
CIK No. 0001699031
Dear Robert Ragusa:
We have reviewed your amended draft registration statement and have
the following
comments.
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. Unless we note otherwise, any references to prior comments are
to comments in our
January 8, 2024 letter.
Amendment No. 1 to Draft Registration Statement on Form 10-12B
Summary, page 2
1. We note your revised
disclosure in response to previous comment 2 and re-issue the
comment in part. If
true, please clarify that Galleri's clinical validation is the view or
belief of management
based on the results of your clinical studies completed to date or
otherwise revise your
statement so that it is clear that the Galleri test has not been
approved by the FDA or
an equivalent foreign regulator.
2. We note your revised
disclosure in response to comment 3. Please address the following:
You disclose
that, based on data from your CCGA and PATHFINDER studies,
Robert Ragusa
FirstName LastNameRobert Ragusa
GRAIL, LLC
Comapany26,
February NameGRAIL,
2024 LLC
February
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Galleri "can predict with high accuracy (88%) the specific organ
or tissue type where
the cancer signal originated." Please revise your disclosure to
disclose the data
underlying your "88%" high accuracy rate, and briefly explain, as
you do on page
127, how this measure relates to the PPVs of 43% and 44% noted on
page 4 related to
the same studies.
You disclose that "[a]pproximately 67% of cancer deaths result
from cancers that
have no recommended screening guidelines, based on our own
estimates using 2022
American Cancer Society Facts and Figures." Please disclose the
relevant "facts and
figures" supporting your estimate. Make conforming changes
throughout your filing
where you cite to your estimates based on these facts and
figures, including the
description of your business on page 122 where you disclose that
"we estimate that
asymptomatic individuals undertaking a standard of care screening
test are many
times (2-24x depending on cancer type) more likely to have a
different type of cancer
than the cancer type for which they are being screened," and
"single-cancer screening
tests are also unlikely to be developed for detecting less common
cancers."
We note your disclosure that "we estimate that adding Galleri
to these five standard
of care single-cancer screening tests (breast, cervical,
colorectal, lung cancer, and
prostate) could detect many more cancers at an earlier stage and
potentially avert
approximately 100,000 deaths per year in the United States as
measured by five-year
survival." Please provide the basis for your statement.
You disclose that "a recent analysis published in Data in
September 2017 estimated
that diagnosing cancer early could result in an estimated $26
billion in annual cost-
savings in the United States." Please identify the article or
analysis. In addition, given
your characterization of this statistic as "recent," please
revise your disclosure to
provide a more current source or tell us why you are unable to do
so.
Your revised disclosure on page 5 includes a statement that
"Data published in The
Lancet Oncology showed that, in a symptomatic patient population,
our methylation
technology was able to detect many cancer types and identify
where the cancer signal
origin was located in the body with high accuracy (91%)." Please
disclose the source
of the data published in the Lancet and describe the data
supporting the 91% accuracy
rate.
Generally, where you reference an article or analyses in a
publication, please identify the
specific article or analyses. For example, we note your disclosures on
page 121
referencing "an article" in JAMA Oncology and "an article" in the
Journal of the National
Comprehensive Cancer Network.
3. We note your response and revised disclosure in response to previous
comment 8 and re-
issue the comment in part. In addition to providing your anticipated
timeline for launching
the DAC test, please also describe the status of your development
efforts. To the extent
Robert Ragusa
FirstName LastNameRobert Ragusa
GRAIL, LLC
Comapany26,
February NameGRAIL,
2024 LLC
February
Page 3 26, 2024 Page 3
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you believe your other products in development are not currently
material to your
business, please include a statement to this effect in your disclosure
or revise to remove
statements that such future products present significant market
opportunities.
4. Please briefly describe the difference between "PPV" and "modeled
PPV," as it relates to
your PATHFINDER and CCGA studies.
Risk Factors, page 30
5. We note the statements in your response to previous comment 10 that
"risks related to the
regulatory proceedings are fundamentally borne by Illumina" and that
"The Company
expects that future costs associated with regulatory proceedings will
be limited because
the Separation and Distribution is anticipated to expedite resolution
of these regulatory
proceedings and the Company does not anticipate being a separate party
to ongoing
regulatory proceedings after the spin-off transaction." To provide
investors with context
about the potential regulatory risks to GRAIL, please include
substantially similar
statements in the Information Statement when discussing the regulatory
proceedings.
Risks Relating to Our Business and Industry
We may be unable to develop and commercialize new products, including enhanced
versions of
current products., page 41
6. We note the statements including in your response letter in response
to previous comment
11. Please include similar disclosure in the Information Statement
when discussing
potential enhanced versions 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 61
7. We note the statements included in your response to previous comment
12. Please include
similar disclosure in the Information Statement when discussing your
FDA submissions
and FDA approval of your products. In this regard, we note that a
portion of the risk factor
addresses the risk that "it is difficult to predict what information
[you] will need to submit
to obtain approval of a PMA from the FDA for a proposed intended use."
The additional
details in your response letter provide helpful context in evaluating
this risk. Given the
potential importance of FDA approval of your products, this additional
information should
be included in your disclosure.
Reasons for the Spin-Off, page 99
8. We note your response to comment 16, including that "outside advisors
provided
information and analyses to assist the Illumina Board, and the
committee thereof,
understand the range of potential divestment transactions, including
regarding their
respective structures, timing and process and legal considerations."
Given that the
information and analyses of the outside advisors appears to have aided
the Illumina board
Robert Ragusa
FirstName LastNameRobert Ragusa
GRAIL, LLC
Comapany26,
February NameGRAIL,
2024 LLC
February
Page 4 26, 2024 Page 4
FirstName LastName
in its consideration of strategic alternatives and ultimate
determination to effect the spin-
off, please provide a more detailed legal analysis describing why the
reports and
recommendations provided by these outside advisors were not material
to the board's
decision. Alternatively, please revise your disclosure to 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 101
9. We note your revised disclosure and response to comment 17. We are
considering your
response and may have further comment. We will advise you once we have
completed our
consideration of this issue.
Galleri Standard of Care Performance, page 127
10. We note your response to comment 23 and your revised disclosure in the
footnotes to the
graphic on page 127. Given your disclosure that your graphic presents
the PPVs and
number of false positives associated with the "current" standard of
care screening tests,
please provide more current sources for your disclosure about the
relevant data in the
table, or tell us why you are unable to do so. In this regard, we note
that some of the
sources in your footnotes are greater than five years old, and were
published as early as
2009.
Our Clinical Studies, page 138
11. We note your response to comment 26, and your revised disclosure
throughout this
section listing "the name of certain larger partners involved in each
of [y]our studies."
Please expand your disclosure to include a brief description of the
material terms of such
collaborations, including whether you have funded or are funding any
studies and research
and if any compensation was involved.
Intellectual Property, page 151
12. We note your revised disclosure in response to comment 30. To the
extent any individual
patents in the patent families discussed are material to your
business, please expand your
disclosure to discuss the type of patent protection that the relevant
issued
patent(s) provide, the jurisdictions where the patent(s) have been
issued, and the relevant
expiration dates. In addition, given the extent of the disclosure
related to your patent
families, please consider providing the disclosure in tabular form by
patent family.
License Agreements with the Chinese University of Hong Kong, page 153
13. We note your response to previous comment 31 noting that the Company
is currently
paying royalties to CUHK on net sales across your Galleri, precision
oncology and DAC
products. Please reference the royalty payable to CUHK where you
discuss the payment
of other royalties in the Summary and Risk Factor sections or explain
to us why you do
Robert Ragusa
GRAIL, LLC
February 26, 2024
Page 5
not view this payment obligation as material.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Non-GAAP Financial Measures
Adjusted EBITDA, page 184
14. We reference prior comment 32 in our letter dated January 8, 2024. Please
further
elaborate on the nature and terms of the retention bonuses provided in
connection with the
acquisition by Illumina, including a discussion of the term of the
retention commitment,
any additional services required to be provided by the employees above
and beyond their
normal employment and compared to employees in similar roles and
responsibilities, and
how the retention bonuses were calculated. Please note that under
Question 100.01 of the
Non-GAAP Financial Measures Compliance & Disclosure Interpretations, it
is generally
not appropriate to adjust GAAP measures for costs that relate to revenue
generating
activities.
Management, page 193
15. Please revise to provide all of the information required by Item 401(e)
of Regulation S-K.
For example, revise to describe the business experience, principal
occupations and
employment of your officers over the last five years, including the dates
and duration of
employment.
Please contact Kristin Lochhead at 202-551-3664 or Terence O'Brien at
202-551-3355 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Conlon Danberg at 202-551-4466 or Katherine Bagley at 202-551-2545 with
any other
questions.
Sincerely,
FirstName LastNameRobert Ragusa Division of
Corporation Finance
Office of Industrial
Applications and
Comapany NameGRAIL, LLC
Services
February 26, 2024 Page 5
cc: Ross McAloon, Esq.
FirstName LastName