Precision oncology specialist Guardant Health (GH 8.53%) was something of a stock market star on Tuesday. On the back of very positive news in the regulatory sphere, the company's shares jumped almost 9% higher today. This made it quite the outperformer on the exchange, as the bellwether S&P 500 index's gain was a relatively modest 0.6%.A new designationThis morning before market open, Guardant announced that the U.S. Food and Drug Administration (FDA) had granted the healthcare company's Shield multi-cance ...

Core Insights - Guardant Health's stock is experiencing an increase following the FDA's Breakthrough Device designation for its Shield multi-cancer detection test [1] - The Shield MCD test is designed for multi-cancer screening in individuals aged 45 or older at average risk, targeting various cancer types [1] Clinical Validation - At the 2025 ASCO Annual Meeting, Guardant presented data showing the Shield MCD test's high specificity and clinically meaningful sensitivity across multiple tumor types [2] - The test demonstrated 98.6% specificity and 75% sensitivity for detecting bladder, colorectal, esophageal, gastric, liver, lung, ovarian, and pancreatic cancers, with a cancer signal origin accuracy of 92% [3] NCCN Guidelines Update - The National Comprehensive Cancer Network (NCCN) has included the Shield blood test in its updated colorectal cancer screening guidelines, recommending testing every three years [4] - The NCCN's guideline update references the ECLIPSE study, which showed the Shield test's effectiveness in detecting colorectal cancer with a sensitivity of 83% [5] Stock Performance - Following these developments, Guardant Health's stock price rose by 10.4%, reaching $46.49 [5]

Group 1 - The article discusses the positions of various analysts regarding specific stocks, indicating that Anand Chokkavelu, Karl Thiel, and Keith Speights do not hold any positions in the mentioned stocks [1] - The Motley Fool has positions in and recommends Guardant Health, highlighting its investment interest in this company [1]

Summary of Guardant Health (GH) 2025 Conference Call Company Overview - **Company**: Guardant Health (GH) - **Event**: 2025 Conference on May 14, 2025 - **Speakers**: Helmio Touki (Chairman, Co-Founder, CEO), Amir Aliy Talasaz (Co-Founder, Co-CEO), Mike Bell (CFO) Key Points Industry and Product Performance - **Shield Test**: - 9,000 tests conducted in Q1, exceeding expectations [5] - Volume guidance raised to 52,000 - 58,000 tests for the year, indicating strong launch performance [7][9] - Anticipated revenue of $40 million to $45 million from Shield, potentially one of the largest diagnostic launches [9] - Cost per test reduced from over $1,000 to below $600, with a goal of reaching $200 per test by achieving higher volumes [15][17] - **Shield V2**: - New algorithm developed to improve sensitivity for colorectal cancer detection [19] - Expected FDA submission and potential approval by year-end [20] - **REVEAL Test**: - Positive reimbursement decision for colorectal cancer surveillance, leading to increased volumes [25] - Transitioned from gross margin negative to positive, with ASP over $600 and COGS around $500 [30][31] - **Guardant360 (G360)**: - ASP increased from $2,700 to $3,100, with further growth potential through payer negotiations [41] - Significant growth driven by the launch of a smart liquid biopsy platform [39] Financial Guidance and Profitability - **Financial Outlook**: - Screening business expected to incur a net burn of $200 million over the next two years, with a path to breakeven by 2028 [61][63] - Other segments, including therapy selection and biopharma, are already profitable, contributing to overall financial health [62] Market Position and Strategy - **Comprehensive Portfolio**: - Guardant is positioned uniquely with offerings across screening, MRD, and treatment selection, differentiating itself from competitors [65] - Anticipated integration of services to simplify the ordering process for oncologists [54] - **Future Growth**: - Plans to expand sales force to 700 representatives to enhance nationwide coverage [13] - Continuous investment in automation and workflow efficiencies to further reduce costs [16] Additional Insights - **Multi-Cancer Detection**: - Shield designed as a multi-cancer detection platform, with potential to expand indications beyond colorectal cancer [21] - Selected by the National Cancer Institute for a multi-cancer detection trial [22] - **Clinical Utility and Research**: - Ongoing studies and trials expected to provide additional data readouts, enhancing the clinical utility of tests [35] This summary encapsulates the key insights and developments discussed during the Guardant Health conference call, highlighting the company's strategic direction, product performance, and financial outlook.

Conquering Cancer with Data Q1 2025 Earnings Call April 30, 2025 Safe harbor and non-GAAP disclosures Certain statements in this presentation and the accompanying oral commentary are forward-looking statements within the meaning of federal securities laws. These statements relate to future events or Guardant Health, Inc. (the "Company")'s future results and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of t ...

Revenue Performance - Revenue for the three months ended March 31, 2025, was $203,471,000, representing a 20.7% increase from $168,491,000 in the same period of 2024[15] - Total revenue for the three months ended March 31, 2025, was $203.471 million, a 20.7% increase from $168.491 million in the same period of 2024[151] - Oncology revenue reached $150.559 million, up 19.7% from $125.748 million year-over-year[50] - Biopharma and data revenue increased to $45.376 million, representing a 20.7% growth compared to $37.587 million in the prior year[50] - Screening revenue was $5.677 million, with no prior year comparison available[50] - Revenue from significant customers included 29% from Customer B and 18% from Customer C for the three months ended March 31, 2025[42] - Revenue from the United States was $193.609 million in Q1 2025, a 23.0% increase from $157.348 million in Q1 2024[152] - International revenue decreased to $9.862 million in Q1 2025 from $11.143 million in Q1 2024, a decline of 11.5%[152] Costs and Expenses - Total costs and operating expenses increased to $314,512,000 for the three months ended March 31, 2025, up from $268,174,000 in 2024, reflecting a 17.3% rise[15] - Research and development expenses for the first quarter of 2025 were $88,521,000, compared to $83,802,000 in 2024, marking a 5.2% increase[15] - Cost of revenue for Q1 2025 was $72.185 million, up from $63.170 million in Q1 2024, reflecting a 17.0% increase[151] - Total accrued expenses increased to $76.0 million as of March 31, 2025, compared to $68.3 million as of December 31, 2024, driven by higher operating lease liabilities and other accrued expenses[75] Net Loss and Financial Position - The net loss for the first quarter of 2025 was $95,159,000, compared to a net loss of $114,985,000 in the same quarter of 2024, indicating a 17.3% improvement[15] - The company reported a basic and diluted net loss per share of $0.77 for the first quarter of 2025, an improvement from $0.94 in the same quarter of 2024[15] - The net loss for the three months ended March 31, 2025, was $95.2 million, an improvement from a net loss of $115.0 million in the same period of 2024, representing a 17% decrease in losses[26] - The company had a total stockholders' deficit of $250,789,000 as of March 31, 2025, worsening from a deficit of $139,647,000 at the end of 2024[13] Cash and Liquidity - Cash and cash equivalents increased to $698,572,000 as of March 31, 2025, up from $525,540,000 at the end of 2024, showing a 32.8% growth[13] - Cash, cash equivalents, and restricted cash at the end of the period totaled $803.9 million, down from $1.1 billion at the end of Q1 2024, reflecting a decrease of approximately 29%[26] - The fair value of cash equivalents and restricted cash was $753.0 million as of March 31, 2025, up from $590.0 million as of December 31, 2024, primarily due to increases in U.S. government debt securities[80][81] - The total cash equivalents and restricted cash increased by approximately 27.6% from December 31, 2024, to March 31, 2025, reflecting improved liquidity management[80][86] Investments and Impairments - The company recorded an impairment of $5.0 million for non-marketable equity securities in Q1 2025, following a prior impairment of $22.1 million in fiscal year 2023[38] - The company recorded $30.1 million in unrealized losses on its investment in Lunit for the three months ended March 31, 2024, reflecting market volatility post-IPO[82] - The fair value of money market funds was $3.7 million as of March 31, 2025, a decrease from $57.2 million as of December 31, 2024, indicating a shift in investment strategy[86] Stockholder Equity and Compensation - The total stock-based compensation expense was $37.8 million, an increase from $27.0 million in the same period of 2024[137] - Future stock-based compensation for unvested options as of March 31, 2025, is estimated at $48.8 million, expected to be recognized over a weighted-average period of 2.3 years[130] - The balance of restricted stock units as of March 31, 2025, was 8,430,026, with a weighted-average grant date fair value of $33.34[131] - The total intrinsic value of options exercised was $1.1 million for the three months ended March 31, 2025, compared to $0.6 million for the same period in 2024[129] Regulatory Approvals and Product Development - The Guardant360 LDT and Guardant360 CDx tests are now FDA-approved for tumor mutation profiling, enhancing the company's product offerings in precision oncology[28] - The Shield LDT test for colorectal cancer screening received FDA approval in July 2024 and became commercially available in August 2024, marking a significant milestone for early cancer detection[30] Debt and Interest - The outstanding principal amount of the 2027 Notes is $490.7 million as of March 31, 2025, down from $1.150 billion as of December 31, 2024[105] - Total interest expense recognized for the three months ended March 31, 2025, was $791,000, an increase from $645,000 in 2024[106] - The effective interest rate for the 2027 Notes is 0.2%, while the effective interest rate for the 2031 Notes is 0.4%[106] Future Outlook and Risks - The Company expects to recognize substantially all remaining transaction price allocated to performance obligations in the next 1-2 years[63] - The company expects future operations and cash flows to be increasingly affected by foreign currency exchange rate fluctuations as it expands internationally[219] - A hypothetical 100 basis point change in interest rates would have an immaterial impact on the fair value of the company's investments as of March 31, 2025[218]

Financial Data and Key Metrics Changes - Q1 2025 total revenue grew 21% year over year to $203.5 million, driven largely by oncology revenue which increased 20% to $150.6 million [6][27] - Non-GAAP gross margin improved to 65% in Q1 2025, up from 63% in Q1 2024, primarily due to improved oncology ASPs and significant reductions in COGS for Reveal and Shield [32] - Adjusted EBITDA loss was $58.5 million for Q1 2025, an improvement from a loss of $61.1 million in Q1 2024 [33] Business Line Data and Key Metrics Changes - Oncology revenue increased 20% year over year to $151 million, with volumes growing 25% to approximately 59,000 tests in Q1 2025 [6][27] - Biopharma and data revenue grew 21% year over year to $45.4 million, supported by increasing partnerships and volume leveraging methylation analysis [15][28] - Screening revenue from Shield totaled $5.7 million in Q1 2025, driven by approximately 9,000 tests [17][29] Market Data and Key Metrics Changes - Guardant360 ASP improved to the range of $3,000 to $3,100 in Q1 2025, compared to approximately $3,000 in Q4 2024, due to better reimbursement from Medicare Advantage and commercial payers [8][27] - Shield received ADLT status, increasing the Medicare price from $920 to $1,495 effective April 1, which is expected to enhance ASP and volume [18][50] Company Strategy and Development Direction - The company aims to support patients throughout their cancer journey, focusing on early detection, monitoring recurrence, and treatment selection [4][5] - Continued investment in EMR integrations is expected to improve ordering depth per account, enhancing overall business performance [8][15] - The launch of upgraded products like Guardant360 Tissue is intended to leverage the smart liquid biopsy platform, providing a comprehensive testing solution [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow breakeven by 2028, with cumulative free cash outflow projected between $450 million to $550 million over the next three years [34][37] - The company anticipates total oncology volume to grow greater than 25% in 2025, driven by strong product performance and improved reimbursement [35][36] - Management highlighted the importance of both liquid and tissue testing modalities, suggesting that both will be standard care for patients in the future [71] Other Important Information - The company reported that both Reveal and Shield became gross margin positive in Q1 2025, with significant cost reductions achieved [30][31] - The company is focused on cash management and reducing burn rates, with a free cash flow burn of $67 million in Q1 2025, influenced by the timing of annual bonus payouts [33][34] Q&A Session Summary Question: What are the drivers for the accelerated growth in oncology volume? - Management noted strong growth from Guardant360 due to recent product upgrades and the positive market fit for liquid biopsy in therapy selection [42][44] Question: Can you elaborate on the components of the raised guidance for Shield? - Management indicated that improved sales force productivity and the recent ADLT status for Shield contributed to the raised guidance, with expectations for ASP to increase to around $800 [45][50] Question: What is the market share in tissue testing and long-term expectations? - Management acknowledged that the tissue market share is currently small but expects significant growth potential due to the new product's capabilities and market demand [97]

Financial Data and Key Metrics Changes - The company reported Q1 revenue of $203.5 million, a 21% year-over-year increase [7][28] - Oncology revenue grew 20% year-over-year to $150.6 million, with volumes increasing 25% to approximately 59,000 tests [29][30] - Non-GAAP gross margin improved to 65% from 63% year-over-year, driven by better ASPs and reduced costs [34] Business Line Data and Key Metrics Changes - Oncology business revenue increased 20% year-over-year, with Guardant360 and Reveal being the main growth drivers [29][30] - Biopharma and data revenue also grew 21% year-over-year, totaling $45.4 million [31] - Screening revenue from Shield reached $5.7 million, driven by approximately 9,000 tests [32] Market Data and Key Metrics Changes - Guardant360 ASP improved to the range of $3,000 to $3,100, benefiting from better reimbursement rates [9][30] - Shield received ADLT status, increasing its Medicare price from $920 to $1,495, effective April 1 [20][54] - The company expects Shield revenue to be between $40 million and $45 million for 2025, up from previous guidance of $25 million to $30 million [37] Company Strategy and Development Direction - The company aims to support patients throughout their cancer journey, focusing on early detection, monitoring, and treatment selection [5][6] - There is a strong emphasis on expanding the oncology portfolio and enhancing the capabilities of both liquid and tissue tests [12][16] - The company plans to reinvest gross profits from Shield into commercial infrastructure to accelerate growth [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving cash flow breakeven by 2028, with cumulative cash outflow expected to be between $450 million and $550 million over the next three years [36][40] - The company anticipates continued growth in oncology volumes and ASPs, driven by recent product upgrades and Medicare coverage [37][39] - Management highlighted the importance of both liquid and tissue testing modalities, suggesting that both will become standard care for patients [72] Other Important Information - The company achieved gross margin positivity for both Reveal and Shield in Q1 2025, with significant cost reductions [32][33] - The Guardant360 Tissue test was launched, requiring 40% less tissue than competitors, enhancing its market appeal [12][71] Q&A Session Summary Question: Can you rank the opportunities for Guardant360's growth? - Management noted strong growth driven by product upgrades and market fit, with Reveal also showing accelerating growth [45][46] Question: What are the components of the raised guidance for Shield? - Management discussed the positive impact of ADLT status and the potential for increased sales force productivity [49][50] Question: What is the ASP for Guardant360 and how does it relate to Medicare? - The ASP for Guardant360 is now expected to be between $3,000 and $3,100, with improvements from Medicare Advantage reimbursements [59][60] Question: What is the market share for the new tissue product? - Management indicated that the new tissue product is expected to capture significant market share due to its unique features and capabilities [98]

Revenue Performance - Revenue for Q1 2025 was $203.5 million, a 21% increase from $168.5 million in Q1 2024[4] - Total revenue for the three months ended March 31, 2025, was $203,471,000, representing a 20.7% increase from $168,491,000 in the same period of 2024[28] - The company raised its 2025 revenue guidance to $880 to $890 million, representing growth of 19% to 20%[1] Oncology Revenue - Oncology revenue grew 20% to $150.6 million, driven by a 25% increase in oncology test volume[4] - Oncology revenue increased to $150,559,000, up 19.7% from $125,748,000 year-over-year[28] Screening Revenue - Screening revenue was $5.7 million from approximately 9,000 Shield screening tests[5] - The company expects full year 2025 screening revenue to be in the range of $40 to $45 million, driven by Shield volume of 52,000 to 58,000 tests[14] Profitability and Margins - Gross profit was $128.7 million with a gross margin of 63%, up from 61% in the prior year[6] - GAAP gross profit for Q1 2025 was $128,748,000, up from $103,195,000 in Q1 2024, marking a 24.8% increase[30] - Guardant Health achieved positive gross margins for both Reveal and Shield in Q1 2025[5] Net Loss and Cash Flow - Net loss for Q1 2025 was $95.2 million, an improvement from a net loss of $115.0 million in Q1 2024[9] - GAAP net loss for Q1 2025 was $95,159,000, compared to a net loss of $114,985,000 in Q1 2024, reflecting a 17.3% improvement[31] - Non-GAAP net loss per share for Q1 2025 was $0.49, slightly higher than $0.46 in Q1 2024[31] - Free cash flow for the three months ended March 31, 2025, was $(67,148,000), compared to $(37,218,000) in the same period of 2024, indicating increased cash usage[35] Expenses and Liabilities - Research and development expenses for Q1 2025 were $88,521,000, compared to $83,802,000 in Q1 2024, reflecting a 5.2% increase[30] - Total assets decreased to $1,344,226,000 as of March 31, 2025, down from $1,485,609,000 at the end of 2024[26] - Total liabilities decreased to $1,595,015,000 as of March 31, 2025, compared to $1,625,256,000 at the end of 2024[26] - Total stockholders' deficit increased to $(250,789,000) as of March 31, 2025, from $(139,647,000) at the end of 2024[26] Pricing - Guardant360 average selling price (ASP) increased to $3,000 to $3,100 per test[5]

Group 1 - Guardant Health (GH) is expected to report a year-over-year decline in earnings, with a projected loss of $0.61 per share, representing a -32.6% change, while revenues are anticipated to be $191.1 million, up 13.4% from the previous year [3][10] - The earnings report is scheduled for April 30, 2025, and could influence the stock price depending on whether the results exceed or fall short of expectations [2][12] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4] Group 2 - The Most Accurate Estimate for Guardant Health is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -38.35%, suggesting a bearish sentiment among analysts [10][11] - Guardant Health has a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11] - Historically, Guardant Health has beaten consensus EPS estimates three times over the last four quarters, but the last reported quarter showed a surprise miss of -24% [12][13] Group 3 - In comparison, Repligen (RGEN) is expected to post earnings of $0.35 per share for the same quarter, indicating a year-over-year increase of +25%, with revenues projected at $164.48 million, up 8.7% [17] - Repligen's consensus EPS estimate has been revised 0.4% lower in the last 30 days, but a higher Most Accurate Estimate has resulted in an Earnings ESP of 3.77%, indicating a likelihood of beating the consensus [18]