Guardant Health(US:GH)2022-11-04 02:52Financial Data and Key Metrics Changes - Guardant Health reported record revenue of $117 million for Q3 2022, representing a 24% increase year-over-year [12][45] - Precision oncology revenue reached $102.1 million, up 29% compared to the prior year [45] - Gross profit for Q3 2022 was $76.9 million, with a gross margin of 66%, slightly down from 67% in the prior year [52] - The net loss for Q3 2022 was $162 million, or $1.58 per share, compared to a net loss of $107.5 million, or $1.06 per share, in Q3 2021 [53] Business Line Data and Key Metrics Changes - Clinical test volume increased to over 32,400 tests, a 42% rise compared to the prior year [13][47] - Biopharma volume reached 6,750 samples, up 40% year-over-year [17][50] - Development services and other revenue totaled $15.4 million, down 1% from the prior year [51] Market Data and Key Metrics Changes - The company noted a significant increase in the number of oncologists ordering multiple Guardant products, contributing to growth despite staffing shortages and access restrictions [14][60] - The Medicare reimbursement rate for Guardant Reveal for colorectal cancer increased from approximately $3,600 to over $4,900 [16][46] Company Strategy and Development Direction - Guardant Health is focused on expanding its oncology product pipeline and enhancing its commercial infrastructure, particularly for the Shield LDT test [55][65] - The company aims to address the unmet need in colorectal cancer screening, targeting the noncompliant population with its Shield test [11][27] - Guardant Health is optimistic about the potential of its new smart liquid biopsy platform, Guardant Infinity, which is expected to drive future growth [18][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the operating environment, including staffing shortages and lingering access restrictions, which have impacted growth expectations [59][60] - Despite lowering revenue guidance for 2022 to a range of $440 million to $450 million, management remains confident in the core business's strength, citing a 40% year-over-year volume growth [58][63] - The company is preparing for continued growth in 2023, although it anticipates a lower growth rate compared to previous expectations [100] Other Important Information - The company has a strong cash position, ending Q3 2022 with approximately $1.1 billion in cash and equivalents, allowing it to fund operations for the foreseeable future [57] - Guardant Health is actively pursuing FDA approval for its Shield test and plans to submit its final PMA module for the ECLIPSE study in Q4 [26][65] Q&A Session Summary Question: Timeline and learnings from the Shield launch - Management confirmed that the ECLIPSE trial readout is expected in Q4, with database locking imminent [71] - Performance data from the Shield LDT is anecdotal, making it difficult to assess true sensitivity and specificity [72] Question: Staffing challenges and competition - Management noted that while growth is strong, it has not met initial expectations due to slower recovery from COVID-19 impacts [75] - The company believes it is still gaining market share in the liquid biopsy field despite competitive pressures [77] Question: Reveal reimbursement and cost management - The price increase for Reveal was due to ongoing discussions with MolDX, reflecting the test's value [81] - Management is carefully managing operating expenses to mitigate the impact of reduced revenue guidance [84] Question: Future growth expectations - Management is cautious about providing specific 2023 guidance but is comfortable with a growth rate around 20% based on current trends [100] Question: Shield test commercialization and sales force - The current sales force is about 100 people, with plans to expand as the company builds ASP and approaches FDA approval [115]