Grail's shares fall in Nasdaq debut after spin-off from Illumina

FILE PHOTO: The offices of gene sequencing company Illumina Inc are shown in San Diego, California

(Reuters) -Shares of Grail fell as much as 13.7% in their market debut on Tuesday after being spun out of gene-sequencing company Illumina.

The stock traded as low as $15.84 after opening at $18.35, and was last at $16. It has been halted thrice already for volatility.

As an independent company, Grail is betting on commercial partnerships with health systems, employers and life insurance companies of its flagship cancer-detection test to power its near-term growth.

Grail CEO Bob Ragusa told Reuters on Monday the company's blood test, called Galleri, can detect many types of cancers early, including 80% of those that are not currently screened for but cause cancer deaths.

However, some groups including the American Cancer Society want proof that Grail's test prevents cancer deaths, something the company's studies are not designed to prove.

Priced at $949, Galleri is a lab-developed test that is currently only sold in the United States.

In December, Illumina said it will divest Grail after the companies ran afoul of U.S. and European antitrust enforcers for more than two years and faced fierce opposition from activist investor Carl Icahn.

The antitrust scrutiny was over concerns Illumina would stop Grail's rivals from accessing its technology to develop competing blood-based early cancer detection tests.

As part of the spin-off, Illumina has provided Grail with funding to pursue its long-term strategy and will hold a minority stake of 14.5% in the company.

San Diego-based Illumina's shareholders received one share of Grail for every six shares of Illumina stock they owned as of June 13.

Illumina founded the company and spun it off in 2016. Grail went on to raise funding from investors such as Bill Gates and Jeff Bezos.

It re-acquired Grail in 2021 for $7.1 billion to enter the cancer early-detection market.

(Reporting by Pratik Jain and Arasu Kannagi Basil in Bengaluru; Editing by Devika Syamnath)