The FDA Votes September 23rd... This Cancer Stock Could Go PARABOLIC

On February 3rd, the president signed a law telling Medicare to start paying for a blood test that screens for more than 50 kinds of cancer. 16 days later, on February 19th, that trial was supposed to prove that the test works. It didn't, and the stock got absolutely hammered, down 45% overnight. But on September the 23rd, which is roughly 3 weeks from today, a panel of FDA advisors will sit down at 9:00 in the morning and vote on whether to approve it. Anyway, today I'm going to show you what this law actually did. I'm going to give you the stock and explain the trial results in plain English. Then I'm going to break down how these FDA panel votes work so you know exactly what to expect the next morning. Make sure to subscribe to the channel because nothing is more news-driven than these medical stocks. And to make money, you have to be positioned before the news. Now, let's start with the law. You see, Medicare is a problem, not a political one. Kind of a plumbing problem. It can only pay for things that fit in a category Congress created. Mammogs have a category. Colonoscopies have a category. Paps have a category. A single blood test that screens for dozens of cancers at once, no category. So, even if the FDA approved one, tomorrow, Medicare has no legal box to put it in. And that is what got fixed on February 3rd. The Nancy Gardner Suil Act, named for the mother of the Alabama congresswoman who carried it. It passed inside a bipartisan spending package and virtually nobody covered it because Congress creates a new Medicare benefit category isn't exactly clickbait. But look what it does. Once the FDA approves one of these tests, Medicare can begin its coverage process. Not before FDA approval is the gate. So Congress built the road and they put a gate at the front of it. And on September the 23rd, the first test in history pulls up to that gate. And the test is called Gallery. The company is Grail, ticker G R A L. And here's what it does in plain English. Cancer cells shed little pieces of DNA into your bloodstream. Gallery takes one blood draw, reads that DNA, and looks for the signature that says there's a tumor somewhere in your body. If it finds one, it tries to tell your doctor where to go look. Now, right now, it costs $949 out of pocket and neither Medicare nor most insurance companies cover it. So, who's buying it? Well, the people who can write a check for $949. That's the whole market. But what if you put Medicare on top of that? Tens of millions of people, all of them in the age bracket where cancer screening matters most. That's the whole trade. That is why this panel meeting is so vitally important. So, what happened back on February 19th? Well, Grail had been running one of the largest cancer screening trials ever attempted with the National Health Service in Britain. And the goal is to screen a huge population and see if catching cancer early cuts down on how many people get diagnosed at stage three or stage four, the late stages, the ones that kill you. That was the end point. The thing the whole trial was built to prove and it missed. The reduction in combined lateage cancers was quote not statistically significant. Meaning the gap between the people who got the test and the people who didn't was small enough that it could have been chance. Now, and here's the important thing, it did not miss on everything. In a pre-specified group of 12 of the deadliest cancers, stage 4 diagnosis fell by more than 20%. Early stage detection went up. So, it's not that the test didn't work. The test found cancers, but it didn't find everything that it promised to. But Wall Street didn't get hung up on the nuance at 3 PM Central the afternoon it came out. News like this comes out, they sell immediately. The stock lost 45% of its value in after hours trading. The class action lawyers filed inside of a month. Now, before we get into how this vote works, listen, I want to remind you that $5 Black Ops special is still going on. It's not $5 a month. It is $5 for the whole year. We'll get together live every single week for an hour. you, me, the other members. I'm going to look at the stocks you want to review. I'll show you my favorites. I'll teach you the tactics for precision entries and exits, what to look for in a stock that's likely to make a big move higher. I'll go through the indicators that'll gauge the health of the market. We'll talk about portfolios. Nothing's off limits. One hour every week for an entire year, just five bucks. So, click the link in description to get signed up for that. I'll also throw in my weekly newsletter. is going to hit your inbox and a few other things as well. But the link is just tradewith Ross.com and you can get signed up again just five bucks. So stock down 45% overnight. Here's what happens after that. Believe it or not, it didn't stay dead. At the cancer conference in the spring, Grail put out the full data set, the stage 4 reduction, the early detection numbers. In August, they reported revenue was up 26% on more than 61,000 of these tests sold. Samsung invested $110 million into the company. Then the FDA put this panel meeting on the calendar. And shares have trickled up. They went from about $50 in February after they got hammered to around 80 bucks today. And that entire recovery happened while that primary endpoint was still a miss. So what actually happens when this panel meets on September 23rd? Because most people have never watched one of these. Now, despite the name, an FDA advisory panel is not the FDA. It is a room of outside experts who hear both sides of the story for a day and then they vote on a few questions. Is it safe? Does it work? Do the benefits outweigh the risks? Now, that vote is not legally binding, but the FDA usually follows it. So, the market is going to treat that vote as a decision. And here's the practical piece here. This voting happens at the end of the day after the market is closed. The reaction doesn't come during market hours. It comes overnight. The next morning, that stock's going to be either way up or way down. Okay? So, you were either positioned in the stock before it or you're just watching it the next morning. Now, let's take a live look uh at Grail Stock, Gr. So, here's where it was trading leading up to that February trial miss. Here's the massacre that took place the following day. It stayed there for about two months until some of that positive news come came out like I mentioned that oh they did prevent a lot of these deadly cancers. The revenue is going up. The FDA is going to review this and so the stock is kind of quietly grinded higher. So the market obviously realizes that was an overreaction but it's nowhere near its high. So you've still got a good roughly 50% upside back to the all-time highs of this stock. Now, even though this is a $3 billion company, as you can see, it is still a volatile stock because there's no real fundamentals, nothing underneath it to anchor the price. When you have a 52- week range from 30 to 118, well, that's just what a stock does when its whole value rides on a device trial and a vote that hasn't happened yet. So, big upside, but it cuts both ways. Now, if you're not comfortable with that, there's another way to play this, and that is the picks and shovels version. That is Aluminina, ticker ILMN. Aluminina builds the sequencing machines this whole field runs on. And they used to own Grail outright before regulators made them spin it off. So, if multi-cancer screening becomes a Medicare benefit, well, somebody's going to sell a lot more sequencing. That's good business. And they beat and raise their guidance over the summer. But look what this stock has already done. Let me show you this chart here. This is uh Aluminina. It's up a little bit, right? It's more than doubled in the last 12 months. It's it's sitting right near it 52- week high. Now, 20 analysts cover it and their price target is actually below where it currently trades. I'm not saying it can't go higher. I'm saying you're not early. This is not some undiscovered gem. You're going to get less volatility, but you're definitely late to the party. Now, when it comes to Grail, look, if that panel votes yes, this stock goes straight to new all-time highs because it is not just approving a test. It is opening up the entire Medicare market. If it votes no, look out below. I don't think it's going to go back to 40, but it's definitely going down. But what do you think? Do you think this is worth the risk, or is this one we should pass on? Let me know what you think. I'm always curious. 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