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Guardant Health Q4 Revenues up 38 Percent

NEW YORK – Guardant Health reported after the close of the market on Wednesday that its fourth quarter 2021 revenues rose 38 percent year over year, driven by growth in its clinical testing business.

The Redwood City, California-based cancer genomics and early detection firm said its total revenues for the three months ended Dec. 31, 2021, were $108.1 million compared to $78.3 million in the same quarter of 2020, and beating the consensus Wall Street estimate of $98.6 million.

Precision oncology revenues for the quarter grew 37 percent to $88.7 million from $64.7 million in Q4 2020, driven by a 40 percent increase in clinical testing. The company said it performed 25,600 clinical tests and 6,600 biopharmaceutical tests during the fourth quarter.

In a statement, Guardant co-CEO Helmy Eltoukhy said that growth was "particularly strong in the community setting where Guardant360 CDx grew twice as fast as in the academic centers."

During a call with investors, he said that while testing volume continues to grow in academic centers, Guardant's volume mix "is becoming increasingly weighted towards the community setting, where the majority of cancer patients reside."

"Approximately, 70 percent of our volume in the quarter came from the community setting compared to 63 percent in the same period last year," he added.

Development services revenue rose 43 percent to $19.4 million from $13.6 million in the year-ago quarter. This was primarily due to royalty revenues and the progression of collaboration projects with biopharmaceutical customers for companion diagnostic development services, the company said.

Guardant's Q4 net loss attributable to its shareholders was $90.9 million, or $.89 per share, compared to a loss of $93.7 million, or $.94 per share, in Q4 2020. Non-GAAP loss per share attributable to the firm's shareholders for Q4 2021 was $.69 per share and beat the consensus Wall Street estimate of a loss of $1.15 per share.

The firm's quarterly R&D costs rose 74 percent year over year to $73 million from $40.3 million, while its SG&A expenses fell a fraction of a percent to $99.9 million from $100.8 million.

Among recent milestones, the number of patients enrolled in the ECLIPSE study for the firm's Guardant Shield colorectal cancer early detection test reached 12,750. It also enrolled the first patient in a new study, called SHIELD, aimed at validating the technology for lung cancer.

"A successful readout of ECLIPSE will open up a $20 billion screening opportunity in colorectal cancer by bringing high-performance, life-saving tests to millions of people, and SHIELD Lung, along with other future studies, will open up opportunities in lung and additional cancer types, paving the way towards a total addressable screening market of more than $50 billion," Guardant co-CEO AmirAli Talasaz said in a statement.

During the call, Eltoukhy said that Guardant is also making notable progress outside the US, with its lab in Japan now "up and running" with the expectation that it will receive regulatory approval for Guardant360 CDx "in the near future."

According to Eltoukhy, "Japan represents a very large market opportunity, with about 400,000 late-stage patients compared to 700,000 in the US and similar reimbursement rates for [comprehensive genomic profiling]."

Beyond that, Guardant is also investing in Europe, building labs with partners in Spain and the UK, which will eventually provide testing for both clinical research and clinical care, initially to private and self-paying patients "with the plan for future expansion for national health service patients in the UK.

"We believe this strategy of building a global network of laboratories by partnering with key academic centers is the most effective way to unlock the international opportunity," Eltoukhy said.

For full-year 2021, Guardant's total revenues rose 30 percent to $373.7 million from $286.7 million in 2020, exceeding the analyst's average estimate of $364.6 million.

Precision oncology revenues for the year grew 29 percent to $304.3 million from $236.3 million, and Guardant said it performed 87,600 clinical tests and 18,600 tests for biopharmaceutical research partners over the course of the year. Its 2021 development services revenues were $69.3 million, up 38 percent from $50.4 million the year before.

Guardant's net loss attributable to its shareholders for the year rose to $405.7 million, or $4.00 per share, from $253.8 million, or $2.60 per share, in 2020. Non-GAAP loss per share attributable to Guardant's shareholders for full-year 2021 was $2.48 and beat the analysts' average estimate of $4.35.

The firm's 2021 R&D costs rose about 76 percent to $263.2 million from $149.9 million, while its SG&A expenses were up 33 percent at $398.5 million compared to $299.3 million in 2020.

Guardant ended the year with $492.2 million in cash and cash equivalents, and $440.5 million in short-term marketable securities.

The company said it expects full-year 2022 revenue to be in the range of $460 million to $470 million, representing 23 percent to 26 percent year-over-year growth.

In early Thursday morning trading on the Nasdaq, Guardant's shares were up 4 percent at $62.10.