Earnings call transcript Q2 2023

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Operator

Hello, everyone, and welcome to the Guardant Health Second Quarter 2023 Earnings Call. My name is Emily, and I'll be coordinating your call today. [Operator Instructions]. I'll now turn the call over to Investor Relations. Please go ahead. you. Thank

Carrie Mendivil

Health for Guardant June quarter financial XXXX. XX, released today, the results ended Earlier

from Helmy Officer. Garden AmirAli today me Joining are and Bell, Talasaz, Eltoukhy, Mike Chief Financial Co-CEO; and Co-CEO;

you also materially Before I'd results could will will forward-looking This material a laws. within we statements cause risks differ or of anticipated. non-GAAP securities this meaning call items. federal statements like remind actual make of begin, the from These discussion call, those that include measures, to to and management to are which during events exclude involve that uncertainties specified certain financial adjusted

The today Additional material our of turn call Form whether future well live obligation over and regarding events and forward-looking measures as GAAP or as other of to as as that, well to XX-K statements, broadcast. financial Helmy. SEC. the filings otherwise. to in call intention reconciliation issued to are revise projections any available the information press With update Guardant as I'd and directly no information, financial the disclaims accurate comparable risks in only information most like in with uncertainties because Guardant the this or release or is conference

Helmy Eltoukhy

on financials end for to more for and Mike results afternoon, remainder progress the start a selection and for therapy will XXXX earnings in second MRD. on our XXXX. off then joining the look call I and and thank I our finally, outlook at Good of detailed Carrie. AmirAli the will an line update turn our quarter Thanks, into over provide will our with our for you second detail more top quarter call go today

curative up cancer our we powerful with we provided longer In story. are call our X. live by from data start all Slide and blood of mission stages will At on line this XXXX, as which with tests. on Starting revealed a XX priority, lives diagnosis margins removed nodes. woman as sharing had healthier lymph disease no the patients colonoscopy patient surgery, well help across intent the cancer a then with to X our on a focused singularly of Guardant, reception. In She nodes evidence XX-year-old removed the that in colorectal stage indicated lymph September negative had of colon cancer. Pathology

our consecutive this risk evidence to was setting. of and chose and no disease. our information, The in was This the was chemotherapy. earlier low results. normal test. decision CEA patient to limits. story showed surgery, to patients and At a for has still test oncologists then, and a CEA X negative. fortunately With not here as order but a oncologists ctDNA next post put were highlights chemotherapy. Since requested had of check-in, in cancer of X-month administer cTDNA oncologist that reveal the her showing showing today, determined oncologists her X The within checkup she drawn to provide journey a there normal her And At be reveal tests doubled, on the months adjuvant result, MRD meaningful back her her positive support a results power test follow-up is recurrence Guardant she

of opportunities out lead impact From which will believe screening, multibillion can in the us therapy foundation the this our magnitude dollar biopsy patients care. when cancer is in of strong a in step liquid patient we leader change pipeline and foundation, we have MRD Guardant industry selection, lives. giving building in a to are we

selection revenue was to quarter. in million. increased that we XX% business, we Precision really growing early more am by are in pleased innings ahead. strong This of our still progress XX% much uptake had line on therapy the very great that growth Turning its to growth $XXX.X We robust which illustrates with in Oncology top performance another the Slide by with I driven continue X. revenue, the to quarter make

Turning surpassing combined the quarter. volume tests, from the XX% growth our second during oncology commercial growth quarter strong reached XX,XXX X. by delivered Clinical products, supported from prior test to year across tests increase strong key Indeed, robust driven Slide a XX,XXX was the our quarter. an platform. Clinical of during team contributions by

biopharma, delivered we year-over-year. tests, increasing XX% X,XXX For

X. Slide to Turning

at Looking for more selection clinical our the closely therapy growth drivers volume.

of test. patients saw our and a we AI In tailwinds aided of year by continued the from Galaxy tissue powered in rapid recent growth approval turnaround Suite. by benefit performance fueled to GuardantXXX beginning CDx ESRX for breast, GuardantXXX strong with the at our continue strength We the high with positive and mutation

non-small reminder, As the starting digital cell advanced our Suite to net XX% AI pathology portfolio to partnership for tests than in Galaxy CDLX introduced in applications analytics cancer. detection by of cancer a with more biomarker tissue some lung we with enhance Garden the improve of

we do greater and growth saw continued again Reveal year-over-year. MRD, well, of volume XXX% For to than strong

sharing forward also our and making this in progress upcoming are look Reveal We about at data to more for pipeline our excellent clinical Investor Day.

has to liquid a leader as worked Guardant hard biopsy. incredibly in Our establish team

We experience. with have of that commercial investments made paying critical and dividends. We customer share the infrastructure satisfaction voice lead into market now are our in overall

the finished the nearly providers X/X cover in selectively have we United top all These end, practices begun development with providers and X integration country. the oncology States. of EMR that To oncology

volumes to EMR a their account expected, order we increases tests our once strong is in through particular ordering able system. As see

product such to base, we our across within As customer we continue to increases further forward look accounts. driving our volumes broaden in portfolio

payer Slide tests major genomic tailwinds Cross health Humana our all in for are Blue by from Anthem, with These million call, Blue commercial the now Shield, $XXX our and earnings provide clinical covered covered of our to lives. near term. for comprehensive Since during over GuardantXXX profiling U.S. test. coverage will secured X. last for insurers Aetna that big quarter business breakthroughs the some past in on we coverage We Moving had

increasing good covered We in our are also newer products portfolio. for on lives making progress

we Tissue For with million threshold to covered example, this lives approaching hope XXX and Net, year. cross this later are

and for is providing commercial X relapse. patients. monitor Reveal. including physicians coverage Blue Garden a This first also Blue a for is after Louisiana Cross major the milestone received our by Reveal reimbursement and individuals surgery. colorectal Garden progression, a Stage therapy MRD to is about for This time or of first cancer We recurrence X coverage for payer period Shield for Stage with liquid only inform post-treatment granted been has to coverage test disease or private recently decision

of a broad guidelines. settings at adjuvant patients access for CRC this X which significant or across the surveillance tests line patients with provides number Importantly, NCCN Stage X, in and for amounts coverage to monitoring

on of the only very with On Outside received X for in CGP option national reimbursement blood-based of our annually. cancer the and CDx, large United tests the our for July. Ministry despite approval each cases Slide continuing portfolio than to expansion currently Japanese of largest about -- more effective of with large products the XX,XXX strategy performed population, X. Welfare of and more States, of Japan scale in XX% focus to outside to year global achieving that are the core markets. we currently represents And on this still CGP its make end from we progress opportunity testing. Health, new a GuardantXXX early at XX% are Most recently than cancer United million became XXX,XXX notably, Labor States. testing is annually in Japan and of from which There

core hospitals. In about with addition, XXX Japan has genomic focused centralized care

$X,XXX. our breakeven and year. business, we by care system, Japan expect positive our a to and end U.S. is of this margins for international reimbursement With our to selection our with line received testing the $X,XXX health to single-payer reaching of clinical contribute for Importantly, milestone Japan a better we decision significant in represents therapy the This pricing, pricing have ASP business.

Japan, we support forward strong teams we bring of oncology and component continue received look the partnerships have assets these across genomic and patients democratize in the profiling by and to encouraged blood-based precision care are our we region. from furthering as commitment to to to oncologists We

oppurtunities the the call across With I an provide about screening update also to will excited look our U.K. on to are over the our China, turn in now very on international updates providing future. business. and Beyond progress Japan, AmirAli that, to we and our we our business forward in

AmirAli Talasaz

Helmy. Thanks,

to Slide Turning X.

spread We tests. are continuing a new our screening we preferred screening had patient blood to market category in the make as business advancements shale in our with

steady recent successful making progress pleased for by the are the inspection PMA agency. preapproval We review Shell, the our we of and package with with are FDA

We expect FDA continue XXXX. in of SHIELD IVD the and approval launch to

to Turning Slide XX.

life believe in transform --. to screening continue CRC will that result We and more SHIELD

At modalities. average evaluate presented risk adults results of rates model, We SHIELD test the real-world of June, and years. health every SHIELD This late relative a event in examining our adherence have model existing developed the a simulation outcome to simulation screening receiving screening the integrating validated X the effectiveness modeling. conference initial from U.S. we discrete magnitudinal

data total On gain gain was LifeHear's was over to for outcomes with SHIELD to the assuming the modalities. the health adherence left, while a years horizon screening modalities lifetime see life the compared colonoscopies. other colonoscopy in This recommended is number versus gained favorable XXX SHIELD, X,XXX the with XXX in total shows with XXX the to years range, initial life guideline even of tests. colonoscopies different we when XXX for real-world range XXX of other for

With in have GuardantXXX, DNA enhancements. and at launched stay our is At our innovation. we Guardant, the best-in-class leadership to maintained biopsy of the market forefront continued performance liquid it

approach taking SHIELD. We the same are with

version including sensitive bar from beginning polyps. Since guideline by progress sharing that Stage Maligan the reimbursement, our we FDA, forward insights year. performance PMA We the developing are with made filed early-stage GRCs, confident powered of and what the SHIELD to inclusion exceeds have look for is more SHIELD more data later can approval SHIELD and but offer. just this clinical next-generation X this we We a gathered for of current the

of we had for to with and started reimbursement, indication have on for pathways FDA access. vision for a as Slide We which approval established blood-based first because Guardant, shrinking. CRC the allow XX. always SHIELD multi-cancer broad Moving the for At

as to is mortality. add indication. second of are lung eligible There the We screening. are cancer for XX the cause about planning cancer-related high-risk leading lung million cancer

differentiated guideline is However, follow-up play. significant is complexity the recommended This the test our screening requirements. of comes value overall due modality and screening than the where rate into XX% to of blood-based less

our study. in progress our NCIRE with pleased are We

We have good for progress are and recruitment row. on surpassed our SHIELD LUNG in pivotal X,XXX also patients making study

add panel time. all cancers, line, of same to we Beyond the to plan large a

financials. months. achieve an I up our will of our we and will upcoming operating now us to set XX a priorities more our As reminder, pipeline detail screening committed for $XXX next Mike million screening This turn fund loss that, over to to the in With than are the for from top milestones. our less call on

Michael Bell

AmirAli. Thanks,

XX revenue our oncology Total in Slide to quarter for $XXX.X of to Total in XX% XXXX million, the review to financial million to the Turning grew year revenue XX% million the to quarter year second $XX.X increasing compared results. prior million $XXX.X precision second compared prior quarter. was for the $XXX.X testing quarter.

growth quarters, year-over-year biopharma As strong was increase in by this clinical in and previous driven volumes.

in million, revenue from oncology totaled prior Precision for million XX% $XX.X the tests the up $XXX.X second year from quarter. quarter clinical

XX% an from be quarter With XXX%. and the continues or TissueNext main of Second increase revenue tests and XX% very and strong prior QX clinical uptick X,XXX year growth volume the cancer. both period increase strong to XX,XXX, lung year-over-year same growing an in of test continued significant growth breast volume both saw of We cancer was in XXXX. GuardantXXX again over in Reveal the with driver from a

GuardantXXX Second of end upper the of range target $X,XXX. continues at ASP to $X,XXX to be quarter our

had in big mentioned, breakthroughs we past some quarter. coverage during Helmy As the

tailwinds the time for of our line provide our however, near the insurers. due in Blended business contract clinical it with to $X,XXX some to approximately for our ASP will these it coverage upsides flow additional this clinical through expect, was takes with that time term, to clinical ASP take we While will in to expectations. length

overall the of reminder, U.S. mix Biopharma to tests influenced TissueNext, as quarter. was strong, year to million due million the well revenue between higher quarter volume second and the and both in prior second the up lending quarter approximately at be by for approximately volume biopharma GardantXXX, clinical test volume prior the Reveal $XX.X from product a continue ASP at ASP last which clinical year $X,XXX, as with totaling tests, from than second quarter X,XXX will oncology the and between international. quarter quarter. XX% XX% from quarter Precision was the both totaled up the in As mix mix. was prior year $X,XXX Biopharma $X,XXX response $XX.X

other diagnostics quarter. profit and to the prior was quarter for a the XX% biopharma gross compared milestones Gross was of partnership was the primarily million million million, amount collaboration Services profit to or in timing the in of companion projects to the million with period in quarter. customers. related second of $XX.X for our revenue from This prior of $XX.X prior down Development second and due year. XXXX XX% $X.X the the XX% and quarter the compared change agreement Gross margin totaled same year $XX.X

The change by gross factors. margin in was number of a driven

For coming due volume to XX% Precision as in from year-over-year mix TissueNext was well increased Oncology, QX change growing revenue biopharma clinical in reduction than and from gross This between due compared of $X,XXX $X,XXX clinical quarter Response. XX% ASP Reveal, proportion the and blended in to revenue revenue clinical of to the margin biopharma change with the was faster second as the XXXX. to XXXX in clinical

and XXXX XX% Shield second QX development are in minimal was The Services for XX% samples XXXX. our as margin primarily LDT of cost quarter to activities other margin change part the revenue. gross we compared which booking Development currently the in was of processing market due in to of

to year expect margin gross overall to approximately full XX% the be continue We for XXXX.

expenses loss year-over-year $XXX.X our quarter XXXX from $X.XX loss primarily in of million XXXX. to was XXXX second in operations $X.XX quarter Net from The compared reduction million $XXX.X of the or loss share is per second Firstly, million reduced to QX Operating returned for million in quarter for compared share $XX.X QX the per $XXX.X $XXX.X XXXX. to the million QX XXXX or million to net in due $XXX.X in second XXXX. of

XXXX. EMEA expense we million XXXX, acquired fair another approximately to our QX of we which value in joint shares the $XXX in outstanding the venture, in the June Secondly, of increase reflect booked in

our second a substantial a TissueNext, months. equity investment in its for strategic IPO Finally, the few XXXX, which last had million in share and last we AI of quarter seen in unrealized price year gain recorded Lunit, the our to has $XX related Korea in increase over partner its

per per on second of non-GAAP $XXX.X $X.XX million quarter. quarter XXXX, XXXX. a of loss was net loss were from million quarter million compared QX in compared $XXX.X of loss for $XX.X to on XXXX. for was financial the quarter was quarter X% in million the expenses to the $XXX.X prior XX. XXXX or in the negative operating cash second second share of $XX.X Slide EBITDA share XXXX. second $XXX.X negative Non-GAAP for the in million of Adjusted XXXX Moving to measures a year second of the quarter Non-GAAP flow or for XXXX quarter increase Free $XXX.X the million to $X.XX million compared million $XX.X of second

our burn approximately reducing full progress of compared to flow and year lowering full free in we million as our for as negative cash goal will continue achieve make our and expenses expenses our well cash We confident XXXX to good very to diligently $XXX are the year. that we operating stated managing operating

shield in raised XXXX, XX. which where runway equity Turning a Slide in cash successful strong us which screening billion proceeds. cash, completed targeting we X very 'XX, million following May, to offering $XXX In position reach inclusion are guidelines. This the to breakeven, CRC we provides with a of puts $X.X years flow X approximately to net in we in

selection as months. the As breakeven we able gaining to next to to therapy leverage achieve cash within in investments this We'll our as office be significant the are therapy and core few we X from lab are back still commercial, and now track across look been gross ahead, volume achieve ASPs business operations, GuardantXXX. milestone and we've we selection strong on the to X years maintain flow scale high we've to consistently last able for growth over made and margins

and our platform technical MRD to be market developing penetration, continue to spend data on increasing support clinical reimbursement upgrade our will coverage. focused

that increasing investment driven from contribution and [indiscernible] are total from total X next confident revenue generated in selection Reveal from across we the reimbursement years coverage. can by MRD the therapy However, be the

screening operating $XXX million screening, from X anticipate our years. we next be over that will the pipeline For the loss year approximately per

receiving Over successful contingent generation approval will revenue the approval the SHIELD ready centers. engaged months, with potentially this success SHIELD launch the to next XX milestones. Investments ongoing we FDA by of performance beyond progress be upon IVD for upon lung and be expansion deliver better and early-stage significant next FDA make even other on commercial indication and and will to

XX. outlook our XXXX for to turning full the Slide year on Now

guidance our million. the and our million reflects XX% million of range raising second to XXXX $XXX very of expect This growth XXXX. This in We expectation be clinical full in $XXX to to $XXX revenue $XXX million, to of update approximately the our strong now representing compares quarter. previous of are compared year to business revenue XX% the performance

remainder the revenue year, sequential the role and of other declining due in Development expect decline and Services timing of to For QX milestones a in see we the [indiscernible]. to project

the see we a year. the for end expect in quarter, seen towards uptick to we've biopharma seasonal volume of fourth historically So that each

to negative consistently to as improve below be XXXX be and to flow improve full to Finally, operating expect $XXX we free in approximately in mentioned, and following million to XXXX cash the continue year years. just expenses XXXX

Turning to Slide XX.

to Our milestones, to we opportunities second a coverage cancer consistent Japan, long-term transform first Guardant reimbursement in high-impact commercial reimbursement diagnostics major our were and technology, the U.S. reimbursement achieve through GuardantXXX vision very focus on quarter, coverage for pleased and national In cutting-edge is execution. obtaining Reveal.

Investor New this At investors@guardanthealth.com out the X deeper for up our questions. Day first We'll look forward on to across in Slide Please more information. now be dive City. We call point, turning sharing to we'll our business. open the reach York to Thursday, hosting to Finally, XX. September

Operator

[Operator Instructions].

line The from Jack today of comes first Meehan Nephron Research. question the with

Jack Meehan

volume -- this about Is showed like ask to seeing clinical breast call cancer strong the or out lung momentum quarter. with to approval wanted possible others? I CDx versus the high cancer really so it indications

Helmy Eltoukhy

carrying Jack. the great that both Yes, that indications. question, and we say strong started a beginning multiple we're would it's Yes, the momentum think, I seeing, of it's are And lung breast I year. really growth from across the

have patients lung, I more further testing United probably leading metastatic tissue good. or seeing product, have behind any in with consolidation lung and really be, place the It's MGS turnaround we're we're performance in think see the the cancer a with other seeing does States our momentum We think continued and leading we're modality, great setting product we really and to just that liquid. there. really market given which I time is the just

obviously, the to with And Breast has continuing swing we're drug sort lift. a then see approval, taken volume really nice breast of up. [indiscernible]

breast terms United patients a it cancer but growth large In doing States. volumes, to limited we've percentage in we're of the been not indications across We've metastatic pleased the by we've the the just now of really word. very progress there, seen the is made

Jack Meehan

for a Great. follow-up then Mike. And

I top that about kind reported were there was you versus claims of with we've but it there keeping said I talk talk Blues the above some heard coverage, was GXXX clinical know headwinds within about payment the plans. of I I the tonight end? traction new On the that integrity ASP, wondering some are maybe X,XXX, -- were if top lab you're seeing if towards any other others X,XXX, incremental wondering the some with heard range one the end, issues

Helmy Eltoukhy

we're seeing with with negative no we're Yes, headwinds of not payers. No, there's sort traction seeing any any Jack. and payers, that

come ASPs then start it's see these we've respect of And future months. to take rates see coverage phase, we through to we to sort gained come the to the definitely time payers coverage, last the through at think out just to now I we've I to the from ASPs. going need that and in need Yes, through though major point pace. been to to we that We've think tailwinds of from coverage go contracting even got sort pains new X with this because had

seen year, So confident yes, that upwards just it the We've currently now. track time. that of to of And it add, will and ASPs continue range forecasting maybe over still we're we're take beyond that the not time, in. within But we're remainder sort will for potentially this to just rates.

the But were have we with could happen than far we there. things are to quicker inside on some So contract expected the steady. if payers, things are upside so

Operator

Puneet Our next Souda question Partners. comes of from Leerink line the with

Puneet Souda

out if year? obviously, in update are can And on for full X the first is So on guide the the drives outline a just on What within then to any Reveal. sort you context the time upgrade you there have FDA provide the contribution because around the quarter? LTV that on there. line is any common the upgrade then could of if follow-up assay Wondering the MRD I of assay Maybe primarily. that? of And you the

Helmy Eltoukhy

Take the first analysis. part of

Helmy Eltoukhy

in Yes. volumes, -- breaking think in the said not think color the on But those remarks, I we're Reveal, volume out over we revealed that. not prepared We're we've quarter, grew XXX%. done and the I consistently

really we're So with continued revenue sort getting of previously, there. double-digit in that Reveal traction I about we've low And millions. talked we're the pleased think

track And so we're still that. on yes, for

hope much numbers. well color overall, as we and we're review going as as but would So well as probably is in that's the yes, really giving

Helmy Eltoukhy

of just little even do but progression. the fields frankly the understanding tests just our the better think groundbreaking, but transition only disease I this I we've terms track day that new oncology, just of liquid of capabilities single of mean increased a of terms platform. year. frankly, I will to the and of in it's happen every amazing the to will we're it. offer can But much digging biopsy Obviously, the us think just it's with really not not of we going make have field No. terms been performance Yes. in science to our on continue to so are capabilities the capabilities sensitivities, this just And smart the that in in, of

Investor we well. we think, were that of at some Day going better very, than I present our data can it's hopeful that [indiscernible]. But so And

Puneet Souda

think on that. Wondering Amer. to way us And an the forward assay. submit you're next-generation the just X.X Is the a is X in current FDA FDA filing? as updated can a on And this or Shield that Look thoughts adherence going also wondering doing weight for FDA provide the on you aspect improvements the to put supplement that to there points. then into do assay? then wondering, if your those Just you of

AmirAli Talasaz

Thank Puneet. Yes. you,

XX approval get all are steady now, first also chemistry, are As progress the get terms of our assumption BX, to right by are for on I would are mentioned, be right we just fact the are we making the the review that our what with algorithm just getting the hopefully, optimize pathway version. happened AMC. And judgment we that we effectively, regulatory is is in actually same, planning of a workflows insight and for we see submit X, BX in and current supplemental terms we excited that PMA approved after is agency on it the we the

that's our at business. operating So assumption

that actually our of value for location this for rig terms adherence, us In blood-based of field. acknowledge the acknowledge testing agency they

mind that the for and So top this the value on of experience has based have. that they is kind of blood on some we actually the unique believe field

see. will we So

Operator

question next Tejas from Stanley. Our Morgan with Savant comes

Unidentified Analyst

could And looking as Yuko as be And so, is what out should was for? new I on we the year wondering when data? Tejas. that see soon can validation come Shield if This the end? for we next-gen

AmirAli Talasaz

Yes.

more So data later are information actually, to we this expecting actually year. actually share and

stay tuned. please So

Unidentified Analyst

Great. propositions approach? the assays mind lot cohort And separately, data just current a do time, share competing using you who go about I tumor-naive customer Generation accounts when approach? proportion see will using follow-up. super how already next of And are us a on larger have give you we versus approach. a Can also are but expect tumor-informed naive a should of MRD getting what a sense of then

Helmy Eltoukhy

have service that clinical running time. really of validation a we been progress We've Yes, question. in it's core terms studies clinical great utility great for made have some

in So later we breast are present to data more cancers. colorectal year going likely this and

looking we'll yes, much allow than platform I think background approach and informed can But of almost we're data, very because is to sort and and the year Day. that science features sometime to it's better around more next that presenting confident our we're we're the detect expand how this performance at positive, will of forward why any ability the hopefully, works the in and of technology, of reimbursement. do terms of works Investor published the pleased of of it data issue more for it the sort some us

a I is biopsy have And that with require undeniable. of yes, mean, people standard. market biopsies tissue. biopsies broader tissue There's book use we're a and seeing this great tissue tissue that GuardantXXX instead we traction. lung biopsy test much a or someone is liquid test us, gold the faster, saw a doesn't We cancer, with asked why would

patients getting tissue more today. liquid U.S. biopsy way tests are GuardantXXX NGS there the than from Now in biopsy

right which we're once to path. take standard the time progress very there So that follow But in the and time. get everyone gold by to becomes we But are the up Yes, up. fit, things have will you product market some north pleased it on will star with win the have at ramp this

Operator

Our Dan next with Cohen. question Brennan comes from

Unidentified Analyst

about Dan. ahead the there is looking range believe growth based year-over-year. of for Is enough you're on XX% clinical the previous With year? It's for for, tracking number XH John volume here. guidance I well

Helmy Eltoukhy

was what? again? the Sorry, What updated is is there question an

Unidentified Analyst

growth number. volume Clinical

ahead on tracking you're is XX% guidance far based last in pretty XH. the think year-over-year, of that I

Helmy Eltoukhy

Yes.

guidance our say, Yes, volume I side. obviously that told think that we Clinical the ahead increase was, volumes our in on of clinical we've growing Yes. out look quarter for had expectations. very the I in the strongly just guidance, increase think I yes, the XX% we've this I'd and seen, in as and

the yes, say, into probably now growth on would is clinical high the XXs, trend low XX% I So expectation our volume.

able we're XX%. the yes, previous So to have increase an from

Unidentified Analyst

some range for Got rate guess time will are flow in it blended that it. take going through there you pricing, fully realized. ASP, to the the locked for clinical is on some rates are ASPs see then and increase your the back And coverage I but

Helmy Eltoukhy

it's I mean it's XXXX I Yes. the at easier ASP. the end And about that higher to of think, GuardantXXX yes, today, talk range. X,XXX to

I major think of can payers, contract payers, then can we north of all if over and full we get time, ASP of those get coverage from with we X,XXX. think sort the these

it between mix the but it's increase, significant -- mix to the blended a and Response. GuardantXXX going potentially It's to primarily harder It's time. Reveal, the obviously, take So on ASP. and is Tissue due

But time, we've that look, beyond about And of changes the is by very say really though going blend mix incremental forecast, the blended remainder going for year, to of X,XXX than reimbursement end to year sort stay get then level. to that increase. our of assumption happen for but got pathways the think that this I'd it's for ASP time very as it going that of of sort to over is this product, around -- I over difficult overall each each products say, is of this is digital. to it's ASP to each and how so And those forecast.

Operator

Derik question with De next comes America. from of Our Bank Bruin

Unidentified Analyst

Derek. for on John is This

that be that the to could pricing the from to ask wanted of I talk the couple the I you be If in ramp, what see on market So landscape Japan over would about great. you contribution appreciate and color the and whatnot. the market next years?

Michael Bell

we Yes. can reimbursement we've our I in of fact, were pleased first really quarter. processed Mike. I sample mean And to Japan. in Japan, it's Yes, coverage sort just for patient take get this that.

we've I So that in In got this in XXXX remainder expecting revenue hoping we're become there. positive and for of really revenue starts the to year for minimal then our guide material. Japan, And think, news. very

market. when think as half overall look a it's size I It's market, large Japan we very overall an the of at U.S. the probably

this So we think time, for can us. be, significant over a

partners. for global at But on I for specific got to Yes, help really partnership. too early to side, business. a guidance out going We've the really China to biopharma the our lab think or be moment, The to power bit it's enables offerings XXXX biopharma us us years. And have specific there that's any our pointing

we're that China. to very to very to excited going business. to soon again, our be And and hopefully go biopharma products so lab in incremental And offer start it's have live

Unidentified Analyst

in you've spend the research the talked sense. that marketing spend OpEx and guide, Appreciate terms And makes about that. of and the sales and

that sequentially quarter. the G&A of Just year that tracking rest How up was for really line specifically? is this specifically the for the

Michael Bell

we probably is half we of line That a saw Yes. of the in an made a release than from litigation will And on this that or the in what legal we've uptick the bit little before. we quarter Illumina just finalized expense recent saw half. day most We press had, second a lower first in be year litigation bit the yesterday the that maybe perspective.

second of can we're in the year the so going and that, off expense forward. And hopeful half should drop that G&A stabilize

Operator

Citi. Donnelly from question comes next Our with Patrick

Patrick Donnelly

side expect that on to just given on Maybe the bit budgets overall one just little there? volume for you're back pull a What Can biopharma the there. segment, just concerns segment of should kurt you we funding on you? guys seeing what

Helmy Eltoukhy

sort what rejiggering in was of much in pipeline it's have the of the is beginning think sort year line in some layoffs. deciding with of areas the that little beginning snacks. at factored of highlighted kind sort year. a we sort But of bit of areas and the of in the the some companies of They're therapeutic all there what that the at of I

been we a an platform. have expand opportunity. for environment. unique by a to think I early continue company So that we sort diversify great new really we to pharma also challenged We're this which very as our their looking pipeline, areas this and base, of on But we've that continue customer having grow some of growth see volumes conversation pleased in

is I growth to is strong this going think very it's a be year future at. a So

Patrick Donnelly

just That's just around for should clear on around kind Okay. how level the guys piece. helpful. just expectations thoughts think the about you pretty MRD, have But generation the screening side. on the you we market that about data And again, growth then maybe nice Thinking penetration a on levels, spend versus can spend increased the is MRD area guys. your talk of you segment just of investment there, on driving about been

Helmy Eltoukhy

studies and we to run X last in to something much how And in some and that months. studies heavy indications pace that being is market said, years, we the essentially very been and or for building of I'll a and of clinical hope an area invest, and sort X we terms process forward that financial of pieces. across very share. those and how clinical I'll that start about judicious planning fill Mike we're we we're of and have validation the have of we much nice requires collaborations It's these be of amount and how investments going share going multiple we've more can let a pipeline the invest in some up

the continuing But said beginning the to year. really demand, year-over-year. we of grow we're as engineering XXX% the in we're So nicely,

a the us going in category burn -- really see product the essentially think that be market. we're We a to much. of So not ahead is competition winner tissue too of category no product letting MRD of ultimate own sort the degree view. We from -- in is this this get its

we're So right good very now. a spot in

Michael Bell

development I Yes. reiterate just make. development sort a to we judicious and but samples that well processing we technical those the maybe also would getting investments as market to That's mean the just running investments very the on of reimbursement. on as samples prior be

this cash We've and we're year. So and very expenses got on year that very, forward. managing stated operating this goals burn closely. our going on

closely we're set. we -- just within that we're investment those parameters that So managing have

Operator

Dave from comes Goldman question next with Delahunt Our Sachs.

David Delahunt

us give you MRD Any trends. could on additional color

are qualitative year-over-year. I think questions around say selling docs? points most what grow I you're share market And resonated Is you with give you could to color XXX% us they've question, what the main the there the had? any heard have are seeing Pat's main

Helmy Eltoukhy

blood really of apologies really I to really ordered I I of commercial that from fact approaches us. very team, test really there's mean service just, customer than would the say faster haven't few have, our it's that and simple the think, we strength it's the get team, quality the the a quickly, much results tissue-informed if that any

having of really offices big being integrated And is another so unified with experience, think, their piece. and that I sort

evolve to game means, in liquid terms change position. continue towards then obviously, just the we smart to of MRD bias platform of really to the And what what MRD sort as has provide even to going

of are where continue quarters the right to of product to out that So device. of where we're coming especially now. no in probe do, the are we confident upgrade But very as as the same in as yes, market market we going we things terms and we really the capabilities sort there see

David Delahunt

Great. who past value biopsy. guys And the side, mix the have benefit What more screening super think would on of versus from the physician field PCPs that you been the understand you screening blood successful a with leading the share liquid in do for still of is education?

Helmy Eltoukhy

of solutions. we offering promoting haven't obviously, now the and what the with the it are? modalities not They they patients do LDT is done compliant are or this ordered to for modalities or And are other that is almost doctors fact, these other the are those fact inconvenience again, you this acceptance aware have that know complete they test screenings and screening test. is not we brand very colorectal seeing unpleasant with Shield everybody, So their been patients. know onscreen but marketplace kind they like that any I in of how other And concept, population can for did patient right is, just have mean, helping well and new what cancer in blood of,

there. So not mind. the that of really there, experience brand the is terms Completion is modality. of this and on is new acceptance that's the in helping of unpleasant top

Operator

BTIG. Our next question comes from Massaro with Mark

Unidentified Analyst

was there? development. and will some it Guardant more additional is is marketing to Is maybe about data a This TissueNext I more wondering reimbursement item to volumes. Mark. Or Response for [indiscernible] start when become and material key gatekeeping

share any color you there. So can

Helmy Eltoukhy

Mike that to business. been good the contributor a mentioned growing It's our year-over-year. especially very

approaching XXX franchise have think We strong good for obviously coverage Medicare I million covered over very growth. lives. there.

I big both months is us of it's component be and received that there going [indiscernible] think very a just a going our something here smartly growing aspects response, for a that's ago, to portfolio. we to Medicare becoming coverage already strong business think be I and very few and ASPs driver also

Unidentified Analyst

just take Okay. prior question a little screening. in bit on

your PPP to So work. docs own half looking most We survey to test, are and simple primary survey blood I a or showed all commissioned order that know want of their to the a of care over about conducted for X recently patients. you've order

to similar interest a think around Thanks. curious yield. thinking just our ballpark order I'm So our if you is data in and for

Helmy Eltoukhy

the opted right, are interested patient like even of you their course, X/X doctors heard of very like of I at population. not XX% are

general, in what shows. experiencing it's think with we I are survey in So line our in

$XXX the this lack still are the field make the who patients your again, this not of Future the the I'm market kind that, of think numbers like million. fact that, I of whole are of surprised And then completion fact PCPs, patient for kind in unknown. these unscreened and surveys. and sense. with again, of also unpleasant these experience a like is

Operator

with Credit Suisse. Leonard question comes next Dan Our

Daniel Leonard

A question for you, Helmy.

You mentioned you'd and integration? you're accounts the quantify that the seeing you've -- the EMR are can initially volume how and that broader integration in benefit you your frame lift prepared Possibly integrated at underway. that's remarks from

Helmy Eltoukhy

get lift comes accounts volume number of sort XXX% with. of I mean we've XX% that I it you play we're really happens, integration seeing a think is a when historically, Yes. and to that thumb that integrated rule out of that in

So driver strong best portal yes, of there, make EDS. they acquisition we're a to or continue it or so sell out paper to will as hopeful that we go friction form have here progress be just on into of is growth another

it that up else building using in that that's order system seamless we're and of really able a lot everything so system is years that removing an doing really possible for and quarters friction, is coming test the what as part a that [indiscernible]. be to just experience in from And is they're each account being to customer the of same

Daniel Leonard

point could of for import don't follow-up, being talk Helmy, in recall elaborate Understood. the you further Galaxy a on my I that your And primary track prior. then

Helmy Eltoukhy

launched analysis biomarker sort Yes. special to read It's those power to the of to pathology got that Lunit. and using first with was partnership a sort in digital and spatial of AI of genomics kicked They're -- space our And with really PD-LX using read that. about application AI, thinking AI off images. sort the we leader

find a of able important to might with it's have PD-LX positive application, though very therapeutic And even patients negative so a it's as it's for pretty XX% relatively powerful, straightforward that implication. being been manual

So tissue of as possible really drive that our in helping of terms with but that's other in to sort we the testing to beginning be of a physicians it's the lot tissue, going in on side. resonating what's to just our growth liquid tie

So stay tuned.

Operator

with Our Brackmann Blair. William next question comes from Andrew

Andrew Brackmann

Maybe for a me. couple

sort past, And performance on us on on readout, upcoming of sort as success? follow-up constitutes you set CRC, what there? just level Steel then of expectations on your Just the NCIE a First, maybe can to I in asked been sort advisory how it's the whether goes about that on of expectation not? us know that remind potential? an thinking you're any update but to panel Just or on your

Helmy Eltoukhy

Yes.

going that study. going is mini are of So which see, be for even patient first screening really good bunch the of relevant population, actually performance in a a screening studies. case shown the our to kind we've of This entry data is long, testing actually, control of indication to we the a

waiting we data to going show. is actually what are to that So see

I the of less mentioned this remarks, as risk, I when the the terms look the mine adherence people in at you mean rate million space they have of than XX%. bar, In high prepared cancer, of that XX at

I of this grow. till Now to large just are it for about they another second part not with call that an If of When contain gives opportunity are CRC, from care, getting at advisory still that that even the iris on done, about are lot your at any modules is the again, getting some advisory associated standard seeing you an standard right, screening look to and excitement agency of faced real us the sometimes care with relatively far. the a want world delayed that that's risk that factor really so to haven't confirm blood even nodules, table. biopsy got people study reality of heard Board ad we SHIELD that we doing imaging getting high-risk question, of even the we due but the biopsy, that put diagnosed

have we any like already, that, see that. but do do. at United what far, -- indication And of to to like agents they haven't got but so want should if probably So choice cared we they we'll

Operator

Nam comes Ji Scotiabank. Sung with next question The from

Sung Ji Nam

in Just a receiving an ones with again approval? me couple the of terms that remind the of me for Ali. clip important FDA Maybe quick milestone whether the peer-reviewed or publication, is

Helmy Eltoukhy

review part that [indiscernible]. and reviews is We've see, own FDA have hand, they so track. box the it's by a for that the data in do USPS care to their we details of all able review cycle we we on majority approval, no. important reps. publication. the Like FDA of They evidence independently, and be us published ship and are looking that data are data cases at done our when for in not Less period should will but

Sung Ji Nam

lung largely for the market care And cancer screening, XX% driven you primary that today. slightly then realized Is Got by screening. talked it. about it's

kind of the and process the to modality testing new what need with pulmonologist? Just might whether involve a educational entail you curious of might

Helmy Eltoukhy

hectic long a adverse of we of a level, a cancer of events high commitment significant which very just and a we market biopsies, we Still, kind imaging, a that would of through. are lot learning journey, of patients ship screening that at as bunch fraction indicate of of still modality details follow patient multiround as large or speak. But it's about not biopsies The biopsy. needs commitment. He's is build and

So CRC. more we surprised to are details continuing learn we dynamics. not that than much about market are But lower rate in the is the fact, very adherence

Operator

UBS. from Our [indiscernible] next comes question with

Unidentified Analyst

monitoring Great. volume of to revenue know, have I clinical assays. wanted just I response. And But doing kind And of a feedback, been was a just work circle just was differently hearing I had treatment kind back maybe space belt, that any little the pretty the And obviously, quarter about clinician last a I the think to assay what you're follow-up. you maybe given right well of contribution to of under low on kind think your had of in I if indicated quarter, still. just wondering, trends think then one single-digit another there. what kind like if about. you that contribute this assays with way and know other

Michael Bell

take Yes. piece. the Makis, financial I'll

asked maybe earnings million had yes, this on we respond Medicare think, will about because I think from days call, since that come would reimbursement. early very revenue what we last Yes, low year contribution mentioned now response. And deliver Medicare when I received you single-digit reimbursement. the very it's

still And so the that's case. yes,

the the on question. I of think second part

Helmy Eltoukhy

fashion of liquid a leading have conjunction that monetatively. view It's the really nothing a another to think therapy is in work GuardantXXX. it with the straightforward and over product pretty right of and terms they fact that advantage that with in we is biopsy the in now, huge works I X of sort Yes, selection,

it's a No, it well, it's So product be We have growth that that that Yes. we're now Medicare continuing to one resonates coming promote should aggressively a important very think the more reimbursement I much driver we think side. behind years. those,

Unidentified Analyst

just on the EMR last integration. Great. And one one then

finished. in a practices utilization -- think big mentioned you I integration obviously, happens. just oncologists oncology -- EMR you of from you And think some question, ordering when increase on with pretty X/X integration prior I you cited

was if wondering this happened So in I that quarter.

how if some kind and be of dig of of kind line that provide great could little happens in time kind XXX% would kind increase more. to around of to So context kind of XQ is you that think some bit or a of kind of into like ordering happening figure, just that or that that

Helmy Eltoukhy

of on lot work to be have about to to a we them. work them able We've many Just X/X turn market, the of the one there's in where we're integrate one, of those with of comprise do but done still integration. being account side just to starting that clear, the by terms vendors on the

journey early in of accounts a We're integrated with that very multiyear So But and a we're the innings we've with. initial [indiscernible]. of progress pleased handful that. it's

Operator

question JPMorgan. final Our comes today from [indiscernible] with

Unidentified Analyst

doing This is Rachel and it we're Casey, squeezing Great. on for then.

guess for just ones you. two quick So I

other indications breast of for targeting picked or you'd terms you'd volume talk I expect approval pipeline And those? about approval. next On expect the last to some the CDx and you're similar said that up maybe XX% right in you volume ramps lines you when time areas think after can of quarter, around what's side,

the And biopharma then on just my business. question second is

about flagged China? have you that been so the into companies weakness plans quarter, table on material from Is it last expand think I the in year, talked that to that reporting, China. heard this still far we've

this table thoughts that. So year and around

Helmy Eltoukhy

the of either we opportunity a CDxs signed other list Yes, at with to think the other being on classes volume I but indications. uplift that see as well. bunch in negotiations in us in indications were have where mean ahead they therapeutics new other have biomarkers And other I ESRX, We that's a of indications terms partner and of hopefully future. of similar a able

at and right point. There's partnership starting we're yes, there's end a this pipeline year, at China, of zero strong the Adicon we've by of partners over progress able with biopharma be strong But to running terms to in sample up very and making been very We upside In there. now. in be this a of should that China. to we're terms pleased with want

are do maybe have sort of and There's moving that that right are a nicely there very facing progress the others spring we global can for us, we weakness a in in we now terms that operate there. companies of is of scale vacuum terms maybe see that in that

Operator

no questions. further We have

I'll for remarks. the any closing management turn the to So call team back

Helmy Eltoukhy

you. thank Well,

Operator

your for may concludes everyone, This today. joining you you, call, Thank and our lines. disconnect us now

Guardant Health (GH) 3 Aug 232023 Q2 Earnings call transcript