Guardant Health(GH) - 2021 Q2 - Quarterly Report

Financial Performance - Total revenue for the second quarter of 2021 was $92.1 million, a 39% increase from $66.3 million in the same period of 2020[18] - Precision oncology testing revenue reached $72.6 million, up 42% from $51.0 million year-over-year[18] - Net loss for the second quarter of 2021 was $97.6 million, compared to a net loss of $49.7 million in the second quarter of 2020[21] - The company reported a comprehensive loss of $98.4 million for the second quarter of 2021, compared to a comprehensive loss of $52.1 million in the same quarter of 2020[21] - The net loss for the three months ended June 30, 2021, was $97,575, compared to a net loss of $49,739 for the same period in 2020, indicating a year-over-year increase in losses[24] - The net loss for the six months ended June 30, 2021, was $204.93 million, compared to a net loss of $81.57 million for the same period in 2020, representing an increase of 151%[28] - The company generated total revenue of $170.8 million for the six months ended June 30, 2021, compared to $133.8 million for the same period in 2020, reflecting a 27.7% increase[190] Expenses - Research and development expenses increased to $63.7 million for the second quarter of 2021, a 75% rise from $36.3 million in the same quarter of 2020[18] - Stock-based compensation for the three months ended June 30, 2021, was $34,507, up from $25,815 in the same period of 2020[24] - The total stock-based compensation expense for the six months ended June 30, 2021, was $89.6 million, compared to $32.2 million for the same period in 2020[158] - Operating lease expenses for the three months ended June 30, 2021, were $6.9 million, compared to $1.9 million for the same period in 2020[124] - The total accrued expenses increased to $32.0 million as of June 30, 2021, up from $22.6 million at the end of 2020, reflecting a significant rise in accrued professional services and clinical trials[93] Assets and Liabilities - Total current assets as of June 30, 2021, were $1.89 billion, slightly up from $1.88 billion at the end of 2020[15] - Total liabilities increased to $1.44 billion as of June 30, 2021, compared to $916.2 million at the end of 2020[15] - Cash and cash equivalents were $938.6 million as of June 30, 2021, an increase from $833.0 million at the end of 2020[15] - As of June 30, 2021, total stockholders' equity was $788,065, an increase from $847,046 as of March 31, 2021, reflecting a net loss of $97,575 during the quarter[24] - The company had cash, cash equivalents, and marketable securities of $1.8 billion as of June 30, 2021[190] Revenue Recognition - Revenue from significant customer B represented 29% of total revenue for the three months ended June 30, 2021, compared to 23% for the same period in 2020[48] - Revenue recognized in the six months ended June 30, 2021, from deferred revenue was $6.4 million, including $3.0 million from development services under collaboration agreements[70] - Revenue from clinical tests for patients covered by Medicare represented approximately 44% of precision oncology revenue from clinical customers during the three months ended June 30, 2021[192] - Revenue from clinical tests covered by Medicare accounted for 42% of precision oncology revenue for the six months ended June 30, 2021, up from 36% in the same period of 2020[197] Joint Venture and Collaborations - The company has a 50% ownership interest in a joint venture with SoftBank, which has subsidiaries in Singapore and Japan[33] - The Joint Venture is expected to accelerate commercialization of the Company's products in Asia, the Middle East, and Africa[81] - The company formed a joint venture, Guardant Health AMEA, Inc., with SoftBank to accelerate commercialization of its products in Asia, the Middle East, and Africa[195] Stock and Equity - The company issued 88,832 shares upon the exercise of stock options and 60,898 shares under the employee stock purchase plan, contributing an additional $6,327 to additional paid-in capital[24] - The total number of common shares outstanding increased from 101,085,653 as of March 31, 2021, to 101,265,100 as of June 30, 2021[24] - The company has 13,939,220 shares reserved for potential future issuances as of June 30, 2021, compared to 11,344,620 shares as of December 31, 2020[142] Legal Matters - The company is involved in multiple legal proceedings, which may have a material adverse impact on its financial position if unsuccessful[128] - The company has ongoing patent disputes with Foundation Medicine, including multiple lawsuits filed in both the U.S. and Germany[132][134] - The company has settled a patent infringement lawsuit with Personal Genome Diagnostics, resulting in the dismissal of all related claims[137] Product Development and Market Expansion - The company launched Guardant Reveal in February 2021 for Stage II-III colorectal cancer and Guardant360 TissueNext in June 2021 for advanced cancer treatment[32] - The company launched Guardant360 TissueNext and Guardant360 Response in June 2021, expanding its product offerings for advanced cancer treatment[188] - The company initiated the ECLIPSE trial, aiming to recruit approximately 13,000 patients to evaluate the performance of the LUNAR-2 assay in detecting colorectal cancer[195] - The Guardant360 CDx test received ADLT status from CMS, allowing billing at the lowest available commercial rate for the first three quarters from April 1, 2021[195] Future Outlook - The company anticipates continued growth in precision oncology testing revenue driven by increased demand and market expansion efforts[14] - The company expects research and development expenses to continue increasing in absolute dollars as it innovates and develops additional products[204] - Sales and marketing expenses are anticipated to increase in absolute dollars as the company expands its sales force and marketing activities[206]