GH - Earnings call transcript Q2 2024

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Operator

Good afternoon. Thank you for attending today's Guardant Health Q2 2024 Earnings Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to your host, Zarak Khurshid, Vice President of Investor Relations.

You may proceed.

Zarak Khurshid

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

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

that differ I'd could results to make begin, cause statements meaning statements actual laws. the materially or anticipated. federal within call, and involve we Before material forward-looking remind you risks from management during those like will securities These to of events this uncertainties that

non-GAAP will financial which also to include certain call of exclude discussion This adjusted measures, a are specified items.

the obligation call or and regarding and material are as information release update as any to accurate other well Additional Guardant SEC. reconciliation events the revise our with of most in new comparable or conference risks disclaims Guardant statements, of measures uncertainties forward-looking live otherwise. financial information, intention in this well is as today projections and as or in GAAP or future as because issued whether press broadcast. directly only the XX-K available information financial The to filings

like turn I would Helmy. to that, the to call With over

Helmy Eltoukhy

Thanks, Guardant to its best transforming survival. when patient stages of the cancer been to way quarter tests, lives best with We afternoon, it call. earliest that across the XXXX bold our the founded belief now conquer truly comprehensive are Zarak. we in joining data. continuum to of always second earnings and care. thank It you mission With patients with conquer our Good of cancer a our has Health chance for suite is have catch

era vastly cancer believe will a developing a improved decade screening ultimately, test of launch whole significant detection saved. last in a and we into earlier the increase the lives that spent have We rates, cancer screening with number new blood-based

on off business. moment and on milestone, will important AmirAli an a commemorate journey with screening start have reached us to this pivotal update this We our

AmirAli Talasaz

Thanks, on X. Slide Starting Helmy.

an approved has tests by the milestone recommended offer that XX screening the for colorectal average for primary huge a data, requirements coverage. can test at care am first CRC. option Shield our the victory guidelines. for week, adults health cancer risk for for thrilled last with approved Many in manner patients. for FDA announced to screening to FDA cancer noninvasive I is the we similar disease. to screening older meets in be FDA our Shield the This a to mission As ages first is in share also importantly, providers test in blood for screening blood and Shield conquer our test incredibly approval methods significant Shield more blood an of that CRC and Medicare is

Slide to X. on Moving

this. was testing. the A incidents exemplifies the published permanent world's at was of individuals in efficacy model published study The journal. when study the leading highlight have path I of pave And this and impact the the supporting a inclusion Shield, suite and of public evidence higher. blood-based that Shield. We This CRC publication Shield week, outcome who completed considers ECLIPSE of CAN-SCREEN just when hadn't importance randomized the completed demonstrated of model of Economics. for on rates medical developed in clinical health Journal value mortality robust the the were that screening Kaiser announced outcome data of this few a will Medical offered Journal of evidence New peer-reviewed believe recommendations. pivotal Medicine, from guideline shielding proportion both that longitudinal We was our clinical accurate England we last Health confirms assessing our and Xx

base to cases of considering multi-target averted and DNA. -- CRC live outperforms Specifically, fit deaths. prevention still guideline and recommended X CRC Shield test, When

in specificity first-line below of this with approval and falling a happen be biopsy of forward, and required XX% review learnings on XX,XXX engaging lead a of world-class any enter FDA vote. now test panel hundreds the the did believe this as of other for and registrational we advisory market. committee believe Post a blood overnight peer This decade to a not that bar the more FDA, ahead have incredible raises X. publishing Slide not review than millions of going performance. rigorous Shield with company liquid to heels we test with and came sensitivity in And patient later, a leading detecting conducting investment, dollars will Turning of CRC, buying indication study, bar successful innovation results viable. receiving XX% in XX-month We journal, achievement process

empowered to this our to receiving turning committed launch physician Slide we benefit are is to they be approval. CRC after now few are available, in a samples At we have processing test and able lab. that days a X. we to already of Now I selecting when FDA shared informed commercially Shield just the screening that make begun educating proud IVD Guardant, decision will patients Shield so option. on risk am

annual At an XXX a risk average individuals of by million X. opportunity is first-line addresses between a the enormous opportunities. largest this covered average coverage, Medicare one Slide a the XX at dollar to population, Shield launch, Of the represents of with to with million With opportunity diagnostics ever This on multibillion million XX. are testing age Medicare. market. already indication, Shield Moving already lives $XX XX addressing

the out stool-based to years. screened, have million remain people around has Slide screening more to last screened a screen surveyed previously in rescreening on who would not And Existing of XX X. have screen. who the yet. a have or not stool-based still are steel, we they the been rate are a individuals been been that choose several ] with compliance change CRC There XX and those methodologies decade said poor. for with material seen [ for for on Moving screening X over test

had strong survey a stool. were preference individuals X:X over under-screen blood side, other the for On

to and As of care blood can the ability during routine patients this. change use of a screen test

is months that during XX a and entrenched XX of seen the patient has in testing of had routine already Blood care. last have XX their aged blood last months. the XX% above, people into XX% and draw doctor group

Our over providing And Shield clear Shield has the into chair they LVT do, X that XX,XXX complete when ordering experience test. confirms a during with tests fit with test. existing past years the real-world enthusiastically the patients PCPs

our At Investor million exceed We than continue rate to Shield to we our X adherence tests target more in see an last of incredibly strong Day shared fall, XX%. XXXX.

we approval goal. our first-line FDA indication, are will with following even reach confident that more Now we

Moving X. on Slide to

out-of-market after removing fee pleased screening benefits. close CRC schedule, see its very are years its taking costs barriers is and and test remote test for the schedule. to test. CMS steps its for recently unique many XXXX blood blood-based acknowledging to a We originally entered that loophole after to physician cost follow-up based But Through sharing fee in proposed eliminated the proactively physician is follow-up patient a colonoscopy CMS after positive noninvasive stool-based a market. colonoscopy stool-based CMS

this We We by the great in inclusion blood look of encouraged the fee XXXX fall. the are of finalization schedule. to proposed schedule in forward fee the physician

part receive screening are to expect business Slide multi-cancer the this track well sharing support in Shield on patients. year. our unique system. through Mid-way indication. development, test benefit XXXX, to Turning within remainder innovation health throughout models we look data. adoption XXXX, Also, ADLT to It established to of forward and incentivize ADLT In based status to innovative burden, provides and was we we investment diagnostic ramping based they all XX. bring not and look precedent, forward value the historical to to but new of on on with

a and reimbursement pricing is multi-cancer. its Our also us future-proof Shield best-in-class recognizes ASP for expansion intended strategy of to business sustainable enables the to Shield, that a profitable build to establish value

and As Helmy start cancer the The historic said liquid for call, truly biopsy of this screening. this moment Guardant. at is a field

their for reach this years to team also Our and team worked them bring and FDA hard review their collaboration here. years to and us thank thank acknowledge XX I'd for last and the the during tirelessly has the X their like work like during especially last I milestone. partnership. to to

therapy With that, call turn will update Helmy over now and for on selection an I the to MRD.

Helmy Eltoukhy

Thanks, AmirAli.

XX. Slide to Turning

chapter for our oncology next While in excellent we to progress continue business. we with excited make screening, are the

oncology a late- both have early-stage recurrence as robust monitoring well of as products addressing for cancers and We suite precision survivors. cancer

She biopsy and test diagnosed to identify any actionable diagnose the GuardantXXX the our The to Now a value story I CGP patients. pregnancy. was a received the the liquid initially bring would a patient of test, a during Tissue test carcinoma. third then received to doctor was mask mass, test with thyroid neck our which In identified she highlighting but went positive biomarkers. not late-stage cancer patients did liquid biopsy noticing woman progressive to like share a her XX-year-old for XXXX, ELK cause

As to report for the about no treatment, her pleased in third put therapy. that of I on patient patient gave very evidence child. disease. of after longer a She the a being result, was has successfully also birth year to alectinib am And

one the to for biomarkers test another patient to highlight a care are just and that superior will alectinib there GuardantXXX monitor. effects year minimal actionable other stories cancer over is side on Given she approaches. identify of therapy, a with GuardantXXX ability This every remain months informed X

of million. reimbursement total line This within Precision strong very GuardantXXX biopharma. a well XX. to We quarter, Oncology driven which XX% XX% strong growth volumes, with quarter top quarter revenue as to in on increased performance had Turning tailwinds in second significant another by Slide supported $XXX by as the is particularly revenue, robust growing

XX% broader our Clinical continued volumes, strongly, in XX. even of Slide to grow tests management reimbursement. volumes year-over-year, of ongoing reveal with Turning volume XX,XXX for progress grew with second the ahead to reaching quarter test continued also GuardantXXX

strong XX,XXX exceptionally quarter, tests. in Biopharma record growing volumes second a year-over-year were to the XX%

excitement an growing biopsy in quarter. powered second see liquid continue indicator for smart leading our our future for platform tests. for the newest to of with important by This is biopharma a We demand clinical lot our GuardantINFINITY, offering contributions

on test a covers Last, leading tests. complete under biomarkers any a utilizing and of and much of not genes, this epigenomics available With emerging biopsy XXx cancer and in Moving test launched XX. XXX including sequencing cancer, GuardantXXX genomics Slide LVT Smart upgraded more for currently with biopsy liquid both patients technology. view the other a biopsy panel, upgrade gives by platform. is larger major a novel advanced liquid we our oncologists upgrade GuardantXXX to liquid

burden In major extending covered XXx payers private and addition, the test solid by more advanced the all of tumors. CGP GuardantXXX upgrade LVT performance. marks tumor for beginning its is profiling, genotype further phenotype and identify sensitivity, compensive from with Medicare quantifies best-in-class unlock helping novel next new for the new and of generation and blood. therapies current the of genomic to access and immunotherapies, of target chapter applications a targets This clinical

teams the care the add strategy for them cancer are excited treatment precision more will optimal Over outcomes. exciting inform out by ability that We and the first-of-their-kind test. their more give capabilities can to to better options time, their quickly patients treatment improve help even we

Turning early more identify of peaking to for we Slide XX. improve an actionable further relevant cancer test In GuardantXXX upgraded featuring to TissueNext advanced best-in-class XXX an and time. with clinically expanded markers panel options patients introduced turnaround June,

the as improves leverages TissueNext a As is our cell that lung XX% PD-LX it test Tissue only by in scoring cancer. reminder, non-small AI-powered is differentiated over detection algorithm CGP and

is covered test all for advanced tumors. TissueNext the by solid Importantly, Medicare

upgrades continued remainder of forward selection beyond. significant for XXXX we and to with are the these our to business X looking our With therapy portfolio, progress

for I'm the Cosmos are MRD. gears at study with looking that Clinical surveillance Slide we This on Research. shifting colon data indication. reimbursement also the where was Reveal Now our study Medicare journal leader patients MRD COSMOS submitted in was manuscript to III accepted TRC preview in publication from our Tissue-free to Stage and II on MolDX CRS Cancer excited XX, Stage to share for

approach longitudinal to evaluated representing of patient. X,XXX patients need using largest samples patients XXX to surveillance the X undergo Tissue-free in our evaluation detection Cosmos, for from MRD CTD without All able per X-month detection and samples date, a this a study median study cancer included and This demonstrated were in II ctDNA with to XX% longitudinal XX% than recurrence Stage study a lead for CRC. recurrence. This in validate time predicting in from meeting utility or testing. higher Tissue sensitivity more data colon of specificity review occurrence

to Slide XX. Turning

will surveillance, to Reveal. for that CRC for in only clinical not extensive to utility building expand This supports an changes has evidence potential in efforts have but practice pipeline also instrumental the establishing reimbursement, and Beyond of we Guardant compelling validity be cohorts guidelines. influence

remainder to ahead to support breast the of publications Medicare we that year, the Looking potential for cancer. coverage submissions anticipate in will

such cancers have pancreatic and gastric. Next additional for important validity studies year, as we clinical lung,

XX. Moving on to Slide

we XXXX. demand the by are are excited seeing multiple are in inflection market in We emerging there the near-term and opportunities Tissue-free

towards just our good As ASP. making improve are which reimbursement, will progress we discussed, CRC surveillance I

to We for Reveal. in progress make are initiatives reduction continuing also our good very COGS

be our As our margins step a these achieving a gross reminder, XX% of towards milestones significant than will X long-term MRD greater for goal business.

seeing are growth which strong manage we burn volumes and until XXXX. reveal, in positive, do strong continue is we will to and to we Reveal continue to market anticipate While margin appetite minimize for so gross cash the

will turn that, call more to financials. now the With over for on Mike our I detail

Michael Bell

Thanks, Helmy.

tests tests XX% Turning volume to XX, growth factored revenue million. in to revenue our otherwise $XXX.X discuss volume growth CDx increased by the our XX. XXXX. quarter for to we GuardantXXX oncology rates, million. $XXX.X Clinical year-over-year the in Precision of results in XXXX precision X to experienced million, to in oncology unless months in XX,XXX driven uptick Slide XX% revenue clinical noted. XXXX XX% which increased of June QX line is and record grew with the to I'll approval volume a the refer Clinical grew for which Total following ended expectations, revenue, $XXX.X second from test ESRX. XX%

contribution volume TissueNext. of and second XXXX, increased U.K. volume Reveal U.S., we in volume GuardantXXX for again the growth growth the saw the both and for Japan year-over-year strong and For GuardantXXX quarter from

full the XX%. clinical we expect growth For XXXX, continue to to volume approximately be year

our high number teens fueled million, incredibly This be teens have tests increased biopharma expectation now a previous low biopharma growth XX%. to precision was in record growth. well to which We was from biopharma expect expectation XX%. second our in revenue full quarter, compared Our the totaling tests, biopharma oncology the XX,XXX business well the to XXXX even perform and of business revenue revenue our for to of the second year performed by growth up with quarter in exceptional $XX.X increasing

revenue Finally, Services Development other and million. $XX totaled

pleased $X,XXX, in $X,XXX both saw Medicare Turning in step-up that and for confidence $X,XXX range increase QX in remained XXXX. ASP to ASP the quarter ASPs approximately $X,XXX this GuardantXXX range in from a and led GuardantXXX the on range driven to to reimbursement. $X,XXX trends XXXX. have to again give QX to the continued report that We're us second the Slide to These by XXXX, new GuardantXXX in remainder collections very These cash for we XXXX, XX. of improvements Advantage improvements of in GuardantXXX strong also an improved from the of commercial

we GuardantXXX collections. prior In approximately for QX million XXXX, also of collected upside had XXXX $X the cash similar related performed in continued QX of recorded in reflects periods. was and a revenue the tailwind improved we tests upside This to to

long-term days, earlier line breakeven. the Although which we reach flow anticipated, Day company-wide will it's presented Investor our our ASV early cash at bring time targets could achieve believe originally than forward potentially we we to

Moving on to on financial non-GAAP Slide measures XX.

XX% full of non-GAAP Compared XXXX XX% MRD of test screening XX% to was the with line reflects in revenue our in margin, which year and second XX% XX%. to non-GAAP guidance due our XXXX, and was businesses to and excluding gross QX mix. excluding therapeutic Our decreased screening, gross to from quarter

other and XXXX, of in the margin royalty milestone revenue an mix in well negative mix gross the we XXX% oncology Specifically, and in saw in decrease in QX revenue a margin the services of the as precision gross reveal development line increase as test revenue line.

the the QX clinical of Non-GAAP following This year million, year and growth enrollment selection of preparation decreases an and was sales were reduction decrease MRD the million in $XXX.X marketing These and study launch quarter. expense. in in therapy costs completion operating compared Eclipse last increase primarily the a IVD commercial our for offset of expense lower were support of driven G&A in in expenses by continued $X.X Shield by a decrease to prior revenue. and

gauging businesses our tightly expenses and we've We leveraging of built our by support on operating the our continue to specific control milestones. by spend all infrastructure commercial to

For now of reps increase, the of Shield firmly end expect to expect to to by the XXX the and and R&D field phase to the of sales ramping we we're sales be expense that the and half year. expenses and those the second launch be similar we'll XXXX, in of year for marketing up G&A first half number

As revenue $XX.X reduction a decrease was loss from result EBITDA operating adjusted and $XX.X QX million our of QX our in in increased million XXXX, a $XX.X million expenses, XXXX. in of

$XX.X annual which for XXXX. offset by year-over-year million million compared negative and $XXX.X flow payout, cash Free QX an bonus was equipment in negative the of second quarter cash XXXX in reflects change a increase is the The us purchases, in the operating decrease burn of with flow enable billion continue achieve of cash earlier. over April or to ended We by breakeven we cash, to XXXX $X sufficient which quarter our made in is in each goal reaching XXXX year. second potentially believe to to

XX% the XX% the we the and reflects Now year outlook the expect expect we We're XXXX representing our to to the be the in guidance XXXX. year million, to ASP in XXXX the revenue able growth now to in upside our our This the year increase and range increased of pleased second XX. to full expectation revenue had of cash remainder compared million for Slide approximately for and full for increase that turning to full collection GuardantXXX to quarter, $XXX year increase on biopharma $XXX the business. of be

include screening. As contribution any a from reminder, not this revenue guidance does

receive obtain we've the to days, Shield It's Medicare lab. established. all is early rate samples Although coverage still to launched Medicare be yet and IVD, started and very now the successfully into

time appropriate more As such, the guidance we'll screening revenue provide in begin at a to future.

a the $XXX million representing to XX% non-GAAP and to margin a of to $XXX expect expenses million to in non-GAAP to gross be year-over-year. range continue XX% flat in to be X% decline operating screening range excluding of We

in million, $XX continue ciliation cash full improvement million to positive free will deliver we to compared year $XXX XXXX will of range Finally, business negative cash the free expect an to XXXX for for million million flow $XXX the be that to flow therapy our and of $XX XXXX.

also continue million. We $XXX the expect burn to to year cash this maximum in be

increased to cash manage us forward back to flexibility the to automation capital for with expansion as working the this and potential in the fluctuations bring flow maintain enables of half as range capital year revenue free capacity efforts. purchases to further expectation Our potential us well accelerate our providing

our We've across made our on already Finally, of progress XX year. turning review in to areas catalysts. Slide of first significant business the to Masters each half the

As screening. we MRD potential ahead rest to across very the XXXX, the excited opportunities look of we're selection, therapy by

With call open we'll to that, questions. now the

Operator

The Massaro from Instructions] [Operator first Mark comes BTIG. with

Mark Massaro

indication The see discuss you Obviously, in the Natera perhaps submit think tumor that think Can for one of an and informed for a net CRC there. expectations you might Medicare sort publication. are you you your effectively Do you decision? need particular is just what Or space? coverage out can Good Helmy. your on They to has come new coverage? do study blood. Medicare new just to are first coverage -- surveillance the COSMOS talk

Helmy Eltoukhy

No. Yes.

for So Mark. question, we -- thanks the

reminder, coverage already the we Guardant setting a for in As adjuvant Reveal. do have

the coverage -- now, if with least get publication is treatment points. first is the and second us study that multiple -- first the Right for and Medicare within of of months so terms indication, further this testing was of so are at And in they out of we this X surveillance patients sort the essentially, first mind. XX at in the setting we're covered within to the a half essentially time -- of designed is aim which time yes, this points data

in with has current the very the publication, believe said pleased we're prepared that qualifies we pleased of -- and remarks, outcome the and so the it already Very study. with the And exists. it we LCD under

Mark Massaro

have for then Shield. I today the asymptomatic And status for are wanted ADLT the not screening lab Many ask on ADLT that to potential about tests. of tests status

you've obtained might there. So application I'm you line give you tests time for had could just a your I'm it. And if curious have of if ADLT that any dialogue just sense some that curious a the as think the that follow other expectation timing similar

AmirAli Talasaz

Yes. Thank you, Mark.

So clear. criteria the get in We the it's the terms the that unmet -- get very approval. for of It's to designation. criteria need, is clear, designation, FDA very the ADLT

favorable terms just be within process through sometime code get by We our XXXX. enabled our and have the go and get time of ADLT that going to get line, ADLT estimate pricing that Medicare the is in to best designation. status it We to activates

Operator

next from Dan with TD question Brennan The Cowen. comes

Daniel Brennan

in your Maybe you blood do prepared first first you the will Are on AmirAli, how to? viable remarks, mover that I Congrats you you don't with one, they XX. on have quarter. other think and the if just referring little obviously could the not meet given be NCD discussed performance? bit? advantage Shield, tests you think I is Maybe a the the that expand XX mean,

exact, So to are first because you spoke this going thinking approval. kind they position recently is blood you similar Or and their lack in AI. they're contemplating mover own performance superiority penetrable test or obviously, of their the expecting think possible think, you really afford about on what expect performance are and of I FDA you

just the So viable bit, a little Shield. won't competitive this profile comment of a maybe and be unpack

AmirAli Talasaz

Yes.

market, advantage a see data. of that a slide -- anybody long that indication, this a of But in to in CRC hearing with lead are our now we we this first-line marketplace. time performance I the the approval have lot to with talk of presentation interesting, with FDA have So think else relative of the we

that any the performance performance be successful hard here achieved. look us with of the order I that of need eye And RC place. and lower the sit our for to the a to you It's to these imagine to into the get get think pieces of to FDA this able in all at favorable a when physician fall -- test even we'd milestones sure device be be would product first-line then commercially getting approval, would us. we indications making barrier viable similar in believe

just think, data the we point, So of that have. go people feel at talking kind reality the some of I from will to the to -- needs what type see, but

We are setting we very are now. confident with right the position that

Daniel Brennan

just tactically, one a maybe the with It biopharma. healthy just in more the really then And on strength quarter Great. was beat.

Mike, low the kind guidance high updated in like you drove you guide, of -- you extent material that not saw teens, XX%, your think a get that to what to a Can quarter to reflects beat? I we teens And updated of speak but year. kind from steep slowdown I think just the to of I obviously, pretty teens. of think pretty going you're high grow to in half the the back their

So on anything back going wise? your what for comment what's can biopharma you on the guidance here

Helmy Eltoukhy

Mike, fill rest. I'll in the start, can and Yes. you

this has comprehensive Now of of whether of able epigenomic footprint, being lot it with profiling. We've seen of that biopharma. do terms a in that Infinity. a do by and to of whether sort modularity test it's platform or Infinity monitoring lot to uptake

the of years, also sort market elements global regulated you're of what seeing investment companion the in fruits our diagnostic -- just such products made over last offering, competency regulatory essentially of the have terms to only other we products, think but our that of not few bringing that on we've as that I are is reach. the biopharma so of behalf And scope

then let up. I'll about China in healthy sort lot Mike to pipeline major talk really maybe ramp companies. right I a And . high of that's, seeing up global build now think, of are a of biopharma interest the We the

Michael Bell

really half. had strong a first we've Yes.

timing think year be to to to the low increase pipeline. year, able depends pleased in a really get business. we a from lumpy guide strong the I the we teens we're to lot It think get go now as that half we samples door. second on And a I we high teens. through the got still the of very full our for the look It's of

slowdown volume had in a bolus the first but it had second real call the the I we've yes, of QX. half half. wouldn't I And in year, really we've so strong think a in

guidance second teens very a of yes, have increase really still growth. be And strong half revenue we'll think we we're XXXX. high able very the pleased strong to again, to So to

Operator

following Partners. from The Puneet with Leerink comes Souda

Puneet Souda

then for here. Congrats win the first first and things you mean, well. congrats on continue Shpere. AmirAli. line look, cover. FDA in were FDA one approval the that beat CMS and coverage CMS mean, approval to investors you I generally I on Maybe mean, received as question the strong I on then the

up screening address mean cash noninvasive wanted us is an questions I to the ABLT. going pay coming that significantly non-screening -- I the that in help pursuing that's So really in is here, just lately. more understand And into to price be you're the this something products But above X,XXX. assume CRC market.

So rationale what's your rationale pricing. elevated behind what's this behind the

AmirAli Talasaz

Thank Puneet. you,

can pricing you with the maybe I for So share Shield. behind our rationale strategy

benefits that marketplace, see are on view, the by health First how? outcome most the we thing this in the is and the just our results. modeling to going X,XXX outcome based value important in published our like adequately health reflects value we Just Shield of

You costs screening the table with economical screen population years, and the table CRC life see year the is those on to the bringing calculatable going and have to are tremendous can And of the reducing value associated is the that, the on adding to life putting patient value gains. of that amount managing what's the we system. at treating value

So that's that hiring think not is there. price model than totally not justifiable. Attractive more that shows why we

is not purpose. ADLT, the like that's would the value, really based the way, for same which is enacted law pathway to a way based put innovative a today's necessarily and that be in on precedent pathway, one place mechanism about works. their on ADLT The as is And Shield tests we mechanism fair like in of other in beneficiary act

which the not sure companies with there how going get to other exactly are a yes, look, top Now line. I'm dollar of profitability business. Still, they're to multibillion kind

different a mentality. have We

maybe have That's we We a, to the gets And the exciting build think I screening some what expect after. year. that price maybe test. that, not to is pricing a Shield. the futuristic are are sometime a is to time one last profitable going activated be add multi-cancer now, activated, I'd next ADLT to business for here. sustainably And by a multi-cancer related thing, it's is going updates Shield we

So And is well we I the way about this very are saying our think price justified. pricing that's think you strategy.

Puneet Souda

to Got it. CMS That's helpful. your give what's on thoughts step Could needed terms have and And us that behind in USPSTF take you. another and question back is you FDA a you modeling now space? Shield I studies, into the next the steps, get that years is X a lingering to need USPSTF that of question think the next still over in things because happen

AmirAli Talasaz

starting Shield ACS guidelines, We into inclusion then the are very about and USPSTF. from of optimistic

are the This randomized population of plan in in in to that to patient rate prepared generation study terms fact, of population, in patient any evidence would remarks, approval, show support FDA ahead the go show we randomized in like value on Shield. the of by clinical the would, the mentioned screen Chad not study have I We marginally we on-screen had it. of up, screening to prospective

suite think the very society. the evidence by we the really significant don't and for some are model you have missing adherence in models longitude proven. blood-based terms blood I performance of have really appropriately look excited add finally promise. publications just publish that with value of It's outcome We with around got the are a especially It's design. to at clinical And a of and adherence, reality Shield cancer today. to the screening, when not test. The completing we and anything an we package just

We review publications. it evidence research and started soon. plan that in their to for terms ready the get are very we And in of peer-reviewed expect we have the to process drafted get

Operator

Morgan question the from Stanley. with And next Tejas comes Savant

Tejas Savant

as on -- So maybe a I'll on start well. I Shield then GardantXXX with follow-up the side, have and one

of just exact you How note, screening necessarily Shield, PCR-based versus of a implications walk which of thoughts portfolio? related then based a do not this about broader to the sort think related on of And sort that any pros think choice. could that, your approach licensing instant us you assays, your competitors cons screening to but point and assays. about through the on some price just as agreement, an So you mind, AmirAli, could a enable in sort NGS potentially the their for lower-cost of approach, for of lower

AmirAli Talasaz

Yes.

the So was screening, would but top solved our class just this features active solved at maybe features of terms we're XX low-cost Look, XX looking cancer research wish need tell investment have I we can problem just in thousands years performance easier maybe the the then field. this PCR in problem we you technology, we the be. X-year of that been years hard at look old we technology and with what ago. XX, if of kind easy, this of didn't can the of X that have is of a science area, would was science old

running lab In at $XXX. that because even terms just about an blood pricing, a is of like bunch frankly, like is We of look tubes, us. scale, stuff, of traction low And reality the we a tests cost. of sample, kids, like to NGS high not is our how card getting experience assay sequencing mentioned to with $XXX kind throughput good the sample. of samples, many least which once cost different the the operation versus the know processing X have and million of logistics of shipment, we get that of of It's at upfront many,

gurus best the automation low who of throughput, have some cost have done for. operation high We

NGS experts. are We

long-term are the be actually, to the future that mentioned picked and So Twin of technology comment confident of -- imply genomics tech it levels for that the I have strand About going stack. products other only. we viability these of on Shield top very products we to some not cannot stack we with and that some are the

want I but per think to opinion. that know the I put don't cannot make anything hat we I legal say on I because my So don't

Michael Bell

don't add. think Yes. anything I to more No,

Tejas Savant

Okay. enough. right, guys. All Fair

the then can color you Or U.K. program, OUS Do as And of just this some see for any you. So of this greater a U.S. it new on tenfold one Royal the thinking GXXX, mean, from of we that sort really Marson look share to any gross a U.S.-led at you from I Helmy, it expansion, on including there about. shift Do year-over-year? volumes assay are should Tissue you uplift be quarter? implications as you from uptick there, liquid? well? margin sort was from version that envision perhaps

Helmy Eltoukhy

Yes.

first. right biopsy early maybe So I'll about. something upgrade smart days XXX is of a lot the of take of this physician excitement. super Obviously, now. And liquid We're it's a excited sort we're sort -- seeing like

happened, the that of see in has terms can biopharma You uptake out leading of the indicator most from are some and they discriminating there. customers

that in to other obviously as accelerate us no such the one help going as our well the else fact have growth really, we take really as products is that project. liquid I share from Tissue so can biomarkers And think, see,

transition. I'll excited we're Mike about then So very, that about margins. talk And maybe gross let very

Michael Bell

Guardant not gross the gross range yes, uptick there's say, screening. margin business, significant the of features. On we've the to manageable the making, But costs little it's XX% set for now within any gross well impact on it's excluding the margins. with bit the I'd that of overall in sort LDT because side, XX% a additional margin our And of

anything think I that as answered the else. question,

Helmy Eltoukhy

Just of thing in terms last volumes.

the seeing really both in broad growth internationally. I we're U.S. think and

Operator

The following Bonello comes from Craig-Hallum. Bill with

William Bonello

a Switching of couple be bit But build I'm color ask. Shield, you date you're where and primary marketing first, sales give able of a of with just care to force talk back your of little at can things sort to on plans? to hoping near-term about sort your to

AmirAli Talasaz

track. on are we So

And new and in just higher, promoting So a actually, fact. XXX class. progress year salespeople of we quarter, actually have in bunch a trained made buyer a we good finished the which class, training second them the We Shield. field, with in in very the put actively is we

to of people confidence we're have the very year. have XXX the by end high going I this So that

very expectation us need very line. wait Shield of very top specific In with in to And early for Medicare how gap are see. few terms can numbers, just and specific you, pleased I'm But this of days what any We we it's of sharing I again, tell -- we just KPIs days. for goes. deliver rate to can this to set what we guidance by of terms it see and any also, need

William Bonello

clear. Yes. marketing your around I any I plans. color plans, asking was wasn't not probably your just revenue-generating

AmirAli Talasaz

mainly physician this plans, kind Marketing less ordering. of is

commercialization have of got And in a Many not are We're with interesting But our going force it's it so accounts that see better. PCPs direct funds approval things our fraction main lot facts just attention to in do very of to of a the that going new effort. PCPs. going promotion strategy heard through which we dealing good was to to is media of early of some Shield media phenomena. amount this is actually reps program we we Guardant sales marketing on about to new here. tremendous some although with way. any interesting funded kind a got direct material days. FDA try again, Interestingly, again, coverage the by are and scale personal to and in focused frankly, But

Operator

Jack The next question with comes Research. Meehan Nephron from

Jack Meehan

talk to about for wanted the I Shield questions.

for First one is AmirAli.

$X,XXX bills address the out-of-pocket around cash of might So you marketing get? just this the about office that covered price team, talk when a the potential into IVD sales concerns test. for pay physician maybe for for patients you you the Can how version plans non-Medicare just go

AmirAli Talasaz

Yes, sure.

well very high make are both this agree sure we they informed test. at physicians use So patients and when a are upfront to we and level,

population, they with minimal have obviously, we down physician as go them transparent very is to financial the to younger and out out I we any road. access and of costs good as until or not it. to to But physicians cash $X The go like in have both So cost. guidelines. XX when we beneficiary, above, for Medicare price mentioned. of want of and we you equitable never a the about rate test, patients the market to of And all, at access patients shared by Jack, as are the first for terms of Because pocket many are the that Guardant, patient fact this patients patients, responsibility shield surprise mentioned,

very learning oncologists, And through learned and but we of at something this PCPs I about a interestingly. frankly, learnings in we So with there's way. we Reveal, leveraging that GuardantXXX have skill of bit are it. a of are the lot years different, have very a virtualization upfront financial in XX we look are and gathered terms are toward actually of some set that's a responsibility, of marketing that Shield of in we positive lot,

and the of good and this expect above. the a younger dynamic focus. our to conversation more just that's some would volume use we on really population. get At in which We case are help time, us in suppress Shield, volume reimbursable for this that's XX And really And thing. patient our would reimbursable mix. to this prefer out the

Operator

from The with next comes Stifel. question Dan Arias

Daniel Arias

to ask but from for the there a of think over Obviously, and oncology part, competitive Helmy marketing Mike, I selection we therapy context piece. the on more in the at thoughts the thinking And love necessarily one me, trying just OpEx. clinical at of level on Maybe an time? does of market street the see force? don't evolving the on that way it MRD that's to I'm evolution stake team how number and see and the market just do important feet about claim there. the point or commercial are as standpoint, the on PC the just you on any the sales more follow-up side, more but of game just the I'd become your or how points you that size the there's players of get a a Does just market, sales their business to

Helmy Eltoukhy

extent think of promotionally Yes. it's I some market. to I mean oncology been always in sensitive terms

position in in very per oncology channel. think where think of gross in time are diagnostic fairly reps pharma I right enviable trained where given companies now vein. sales team first building sort the that the rep margins I we have our the given sizable a we're And now. market the are, And revenue for have

the market and other an continue that's adjust at in terms partnerships. and of that it other terms of some we saturates well, But EMR in channels add We'll reps built efficient reps. to out where way. channels digital, we marketing as can drive -- top-down obviously, marginal have help point, we accordingly, to it of volume And and more typically do sales in can sort improvement see volumes we us the so our add can

And methodology how of surround really we the voice so share terms a of in winning it in sound continue is market.

in years, Mike, if, that you maintain to want of don't we'll We've there's that share anything #X have know last for the We few had if voice market. and I on? accordingly. continue

Daniel Arias

No.

Operator

The Wolfe from Doug following comes Research. Schenkel with

Douglas Schenkel

if I COGS Stage than Stage XX% the is have detection your but question. first your viability is And XX% an I what as of Shield? it's then strong logic, out ASP Or penetration up surprised into such there blended? targets? And in get on breakeven equivalent using happens sensitivity assumptions better assumptions? like change of my good sounds of or it market was have same how essentially studies. But than -- test than couple that's on these sensitivity randomized the viability increased when the stance your if shakes call of topic for to a described some competitors. So your changes your blended, and With emerging what that better does let's prospective What terms see fair a you been better test XX% the as question autonomo a that we point, has advanced field. why I took data offset and/or it's detection. A think the I else

AmirAli Talasaz

Yes.

think point I first for Doug and thanks So it's an important one. for asking, a

associated very, very are So the that biomarkers wearers very, biology very and of DNA the of with it absolute biology and well. science of cell-free DNA cell-free well kind

for the probabilistic do science, we cannot So a cell-free doesn't high very DNA kind technologies that, of in kind at are what versus fiction, long it's mission but can you is think happen really biology there So way in probability. it like no they impossible, can some like which biology, science can tell mentioned of I very, scenarios biology the reality I some as never biomarkers know as again, can we of looking I think with of the we say like different you,

X Shield IV with performance be what the BX, III, that frankly, do think, but hopefully, is And similar. kind as of care to going in the II, Stage I. of is our be like better. response Stage that than as is going a are can I see some We So response upgrades capable, DNA we cell-free kind team matrix sell to care DNA would long

Like more some just if plus they but them CRC, just We learn change they a XX% AA. it's can and somebody a have materially lessons let but think XX or I topic. detect, biology. through thinks can different

better terms some In target, time. $XXX ever $XXX stuff fall, Day than our of, the the sample confident are more I'm But went last X targets that we think, million at a I a revenue profitability in Investor about cost shared pricing million to there get with that than indication is higher The again, for the this first-line expectation, frankly, us ADLT ahead adjust the doing our than base are case our better. way early we like still, too any cannot before. we is of But it's of skis.

to look see the perspectives is months then volume like as of payer going to better And after. just need talk the how and this through going go skis. ramp We We the about mix maybe can long-term data. get first will to ahead like few launch we not is our with how we look

Operator

with next The comes Patrick from Donnelly Citi.

Patrick Donnelly

little volume, our a number? the the kind like like was potential the just any sounds bit pretty upside it a that Is curious we maybe of on biggest one on thinking to you guess about game depth the It of volume little and Is as how X know a again, then talked that Is given higher work integrations? terms the for months drivers. relative I you half talk -- in that opportunity? I about it changes the way broad-based. bit Can still to GXXX of about confidence more back EMR just broadly. year. clinical that sounds potential volume And ago? still you're Just XX% the

Helmy Eltoukhy

mean, Yes. it lot a is obviously, point. at I this depth of

XX% to from of I think, test. test order U.S. We have, something a probably a us close or have GuardantXXX --

can of that driving kind monitoring surface the the the showed a testing that's obviously, this come obviously then per GXXX. as accounts. progressed, one into think about And so RD that then -- all story and single their patient it's And response they the testing as get so I cancers idea as setting we're in we go think the from patients comes even to scratching I think is back patient test more of just of And as that in of deeper cancer or I terms back. outside

the terms excited had. we're the very we've the for In about of contours year, product upgrades

to going think, year. much a We us Mike, obviously, been panel liquid are have important for for, if want to the catalyst know be has really you don't TissueNext waiting everyone this add? upgrade with much, bigger biopsy anything that and I smart I

Michael Bell

Yes.

did and year-over-year because we very volume think for just full comp the growth. the in I a remarks, the we expectations And XX% in on difficult reiterate we clinical know QX prepared of that had first that to than a half saw the rapid of ESRX bolus a breast QX in GuardantXXX last in volumes last CDx, we year, effect. increase year, led of approval had we for

on pleased growth and with And Japan the really across the Reveal. and saw so also we in outside this U.K., volume were Ghana clinical quarter. the in TissueNext Again, but we growth also U.S. but

the And full pleased really ahead that QX. with we clinical the we're growth confident reasons year, volume XX% the we And still very for so just look outlined. on we're for yes, as

Operator

final with The Jefferies. Tycho from Peterson comes question

Tycho Peterson

feed it reimbursement. and on risk, until a someone USPSTF. into Advantage questions. you non-guideline test, They Medicare, matter. And like actively specifically One It's the of have two heads Medicare and puts it Medicare over at let reimbursement So right? actually star Advantage, really Medicare, get they XX% plans scores feels ratings

that HEDIS about you line And years. exact do then X took with agree I what's the it for scores? So know time view?

confirm was sequentially the sequentially volumes down were second the per GXXX I then And down question ASPs our clinical are Were -- GXXX. ASPs on up just to sequentially. XQ. slides. want in

seem So unpaid down obviously sequentially are a tests that driving the GXXX as to volume. lot would are of volumes imply that

AmirAli Talasaz

That would no because -- are supposed brought collect Advantage easier play Medicare from it's restriction. Medicare that service for true fee to to to and NCDs actually, be plans us likely pay

Our label is brought, no restriction.

too. But some to to it deal road with of So are they're sometimes pay blocks before, and we've as but stuff. -- supposed kind seen needed plans we notorious for

plants we've experienced with XXX successful looking those and dealing great had strides, success, forward to now outline and been great advantage both We for them have Reveal, with earnings them. Shield working to very and and

Michael Bell

tests. GuardantXXX the yes, grew, on I volume, And the sequential sequentially. Overall, volume, about can growth clinical the X,XXX saw confirm clinical GuardantXXX we Yes, of on volume.

As outside well. comment a did U.S. the grew and of last ASPs think We've And the sequentially on with tailwind XX a in River the over ASP. seen GuardantXXX I and XX, significant U.S. did GuardantXXX was GuardantXXX sort there as ASP. TissueNext months sequentially. the

So that improved significantly but as year-over-year, also sequentially well. they improved

up we're X,XXX. to to now So X,XXX

really again, ASP perspective we're sequential volume perspective. -- from with I So pleased quarter an and think year-over-year from the a we

for And quarter it very a so us, yes, XXXX. second was strong

Operator

This concludes participation. your today's Thank for conference call. you you. Thank

You disconnect lines. your may now

Guardant Health (GH) 7 Aug 242024 Q2 Earnings call transcript