Guardant Health(US:GH)2020-11-06 07:07Financial Data and Key Metrics Changes - Revenue for Q3 2020 totaled $74.6 million, up 23% from $60.8 million in Q3 2019, driven by increased precision oncology testing revenues and higher development services revenue [36][10][44] - Gross profit for Q3 2020 was $53.4 million, compared to $42.3 million in the same period of the prior year, with a gross margin of 72% compared to 70% in Q3 2019 [45] - Net loss attributable to common stockholders was $77.7 million or $0.78 per share for Q3 2020, compared to a net loss of $12.8 million or $0.14 per share in Q3 2019 [49] Business Line Data and Key Metrics Changes - Clinical precision oncology revenue for Q3 was $60.4 million, with clinical tests contributing $48.4 million and biopharmaceutical tests contributing $12 million [36][37] - Clinical precision oncology volume totaled 16,950 tests, up 28% year-over-year and up 24% from Q2 2020 [38] - Biopharmaceutical tests volume totaled 3,071 tests, down 42% year-over-year but up 9% from Q2 2020 [43] Market Data and Key Metrics Changes - The FDA approval of Guardant360 CDx is expected to enhance adoption of comprehensive genomic profiling in solid tumor cancer patients [12][14] - The company anticipates that the FDA approval will strengthen reimbursement discussions with private payers and improve Medicare pricing [15][75] Company Strategy and Development Direction - The company aims to expand its liquid biopsy platform to address the continuum of cancer care, from screening to therapy selection [20][22] - The LUNAR program is focused on colorectal cancer as a starting point for expanding monitoring and screening for multiple cancer types [22][31] - The company is committed to innovation, launching a next-generation version of Guardant360 to include additional biomarkers [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the resurgence of COVID-19 cases may adversely affect clinical volumes, with expectations for modest growth in Q4 2020 [11][56] - The company is optimistic about the growth of its Biopharma business and expects development services revenue to remain strong [57] - Management expressed confidence in the potential of liquid biopsy to transform oncology and emphasized the importance of FDA approval in driving adoption [21][90] Other Important Information - The company ended Q3 2020 with over $1 billion in cash, cash equivalents, and marketable securities [49] - The company has not reinstated financial guidance due to the unpredictable impact of COVID-19 on the oncology space [54] Q&A Session Summary Question: Clinical volumes and COVID-19 impact - Management acknowledged that while clinical volumes recovered quickly, the resurgence of COVID-19 poses challenges, particularly for in-person patient visits [63][64] Question: G360 LDT regulatory pathway - Management indicated that the FDA approval of Guardant360 CDx provides a framework for the LDT, enhancing its market position [66][67] Question: Multi-cancer screening opportunity - Management believes that the core platform technology can be adapted for multiple cancer types, starting with colorectal cancer [70][71] Question: Private payer coverage expansion post-FDA approval - Management reported positive momentum in discussions with private payers and expects improved ASP due to broader Medicare coverage [75][76] Question: ECLIPSE study enrollment timeline - Management confirmed that they are on track to complete enrollment for the ECLIPSE study within the originally stated 24-month timeline [82] Question: Comparison of LUNAR-1 with other methods - Management emphasized the unique approach of LUNAR-1, which integrates genomic and epigenomic data, providing a comprehensive solution for residual disease detection [101][102]