NEW YORK – Guardant Health said Thursday that its Guardant Reveal minimal residual disease test is rapidly gaining adoption, with test volume during the second quarter of 2023 doubling over the same period of 2022.
During a call with investors discussing the company's Q2 financial results, Guardant co-CEO Helmy Eltoukhy said that as clinical sales have ramped up, the company has continued to amass new data on the test, which it plans to share at an upcoming meeting.
The firm celebrated a major milestone for the assay in July, announcing that Blue Cross and Blue Shield of Louisiana had decided to cover Guardant Reveal for individuals with stage 2 or stage 3 colorectal cancer after curative-intent surgery.
"This is the first time a liquid-only MRD test has been granted reimbursement coverage by a private payer to inform physician decisions about post-treatment therapy and to monitor for disease progression, recurrence, or relapse," Eltoukhy said during the call, adding that the patient population covered represents a "significant number of tests," considering the proscription of national monitoring guidelines.
Eltoukhy said Guardant has also been making strides in securing coverage for its Guardant360 blood-based genomic profiling assay and its more recent offshoots. This includes coverage wins from Anthem, Blue Cross Blue Shield, Aetna, and Humana for the test, which the company said brings it to 300 million covered lives.
The company's more recently launched tissue-based assay is approaching 200 million covered lives, a threshold Eltoukhy said Guardant hopes to cross by the end of this year.
He also highlighted progress for the company outside the US with a recent national reimbursement approval from the Japanese Ministry of Health, Labor and Welfare for Guardant360 CDx, which became effective at the end of July.
"Japan currently represents the largest expansion opportunity for our portfolio of products outside of the United States," Eltoukhy said. "There are … more than 1 million new cancer cases [in Japan] annually. And despite this large population, CGP testing is still in its very early adoption with about 25,000 CGP tests performed annually and only 15 percent to 20 percent of that being blood-based testing."
Overall, Guardant reported second quarter revenues of $137.2 million, up 26 percent from $109.1 million in the same quarter last year and beating Wall Street expectations of $129.4 million.
Based on the results, the firm raised its full-year 2023 revenue guidance to between $545 million and $550 million from a previous projection of $535 million to $545 million.
Guardant reported that its Q2 precision oncology revenue grew 36 percent to $125.2 million from $92.1 million in the year-ago quarter, driven predominantly by an increase in clinical testing and biopharma sample volume, which were up 49 percent and 12 percent, respectively, year over year.
The firm reported 43,500 tests to clinical customers and 6,700 tests to biopharmaceutical customers in the second quarter of 2023.
According to Eltoukhy, clinical testing growth has been spread across multiple indications, but recent expanded approvals for its Guardant360 CDx test have certainly played a role, namely the US Food and Drug Administration's approval of the assay as a companion test to identify patients eligible for treatment with Menarini's Orserdu in ESR1-mutant breast cancer.
That said, the firm's clinical testing growth has also been driven by Guardant360's uptake in lung cancer, he added, driven by what the company believes is industry-leading turnaround time and performance.
Guardant's Q2 development services and other revenues dropped 30 percent to $11.9 million from $17.1 million in the same period last year. The firm said this was primarily due to shifts in its landscape of biopharma companion diagnostics collaboration projects.
"There is a little bit of rejiggering in much of the pipelines," Eltoukhy said. "Some companies have had some layoffs. They're sort of deciding what areas [to prioritize]. But that was all factored in for us at the beginning of the year, so I think we've been pleased that we continue diversify our customer base [and] continue to grow volumes in this challenged environment."
The company's Q2 net loss was $72.8 million, or $.67 per share, compared to $229.4 million, or $2.25 per share, in the same period last year. According to Guardant, the year-over-year reduction in net loss was primarily due to a charge of $99.8 million recorded in the second quarter of 2022 reflecting gains related to shares in the firm's Guardant AMEA international joint venture, as well as recently realized income of $64.0 million reflecting an unrealized gain related to its strategic equity investment in Lunit.
Guardant calculated a non-GAAP loss per share of $.82, bettering analysts' average expectation of a $1.18 loss per share.
The firm's R&D expenses in Q2 rose 6 percent to $90.4 million from $85.5 million a year ago, while SG&A costs shrank about 4 percent to $112.5 from $117.3 million in Q2 2022.
The company ended the period with $271.1 million in cash and cash equivalents and $953.8 million in short-term marketable securities.