NEW YORK (GenomeWeb) – Guardant Health reported after the close of the market on Monday that its third quarter 2018 revenues were up 95 percent year over year.
The liquid biopsy firm reported total revenues of $21.7 million compared to $11.1 million in Q3 2017 and significantly above the $17.5 million Wall Street analysts, on average, had predicted.
Its precision oncology testing revenue increased 78 percent to $18.3 million from $10.3 million in the prior year's quarter, driven by higher testing volume and increases in revenue per test, Guardant said. Development services revenue was $3.4 million compared to $879,000 in Q3 2017.
The company reported 7,027 tests to clinical customers and 2,505 tests to biopharmaceutical customers in Q3, an increase of 14 percent and 67 percent, respectively, over the same quarter last year.
Among recent milestones, the company highlighted its receipt of Medicare coverage for the Guardant360 assay in non-small cell lung cancer through a local coverage determination from Medicare Administrative Contractor Palmetto GBA, which was finalized in July.
During a call discussing the Q3 results, Guardant CFO Derek Bertocci said that the firm received its first payment from Medicare early in the fourth quarter for testing preformed in Q3. "We expect to record revenues from Medicare of approximately $1.1 million to $2 million for tests processed in Q3, and approximately $2 million for tests processed in Q4," he added.
After the end of the third quarter, the firm also completed its initial public offering, raising approximately $249.5 million in net proceeds.
During the call CEO Helmy Eltoukhy said that the firm believes it can occupy the front line in an effort to establish a "blood-first paradigm" in cancer biomarker testing.
"We are encouraged by the strong organic growth we have continued to see in our business, despite our constrained commercial investment ahead of broad reimbursement," he said during the call.
According to Eltoukhy, Guardant believes that three main elements will drive adoption of its testing in the clinic and the shift to this new paradigm over the next year. The first is US Food and Drug Administration approval of the Guardant360 test with a pan-cancer indication, for which Guardant expects to submit its application during the first half of next year.
Connected with that, the company would hope to gain expanded Medicare coverage based on that FDA approval under CMS's recently finalized National Coverage Determination for next-generation sequencing tests.
Finally, the company believes that results from its NILE clinical trial, which is prospectively evaluating the impact of its blood-based test compared to tissue genotyping in non-small cell lung cancer, will provide another push for clinicians to embrace its test.
"We expect these three elements to read out in 2019, and we will be investing in expanding our commercial team ahead of that to fully capitalize on these anticipated upcoming catalysts."
Guardant's net loss for the quarter dropped to $24.5 million, or $1.94 per share, from $33.3 million, or $2.76 per share, in Q3 2017.
The company nearly doubled its R&D expenses, which were $14.3 million compared to $7.2 million in Q3 2017. Its SG&A expenses shrank about 10 percent to $21.6 million from $23.9 million in the prior-year period.
"We are continuing to build proof points for a blood-first paradigm ahead of traditional tissue genotyping, as demonstrated by the study from the University of Pennsylvania which was recently published in JAMA Oncology," Guardant CEO Helmy Eltoukhy said in a statement.
"We are grateful for the support of our investors who participated in the [IPO], and we are focused on the creation of long-term shareholder value through unprecedented access to cancer's molecular information throughout all stages of the disease," he added.
As of Sept. 30, 2018, Guardant had $114 million in cash and cash equivalents, and $157.4 million in short-term marketable securities.
The firm provided guidance for full-year 2018 revenue in the range of $82 million to $84 million.
In late Tuesday morning trade on the Nasdaq, Guardant's stock was down a fraction of 1 percent at $33.49.