NEW YORK – Guardant Health on Wednesday lauded the US Food and Drug Administration's recent decision to authorize its Guardant Shield blood-based colorectal cancer screening test while also highlighting new data supporting adjacent assays during an earnings call recapping the firm's second quarter financial results.
The company reported after the close of the market that its Q2 revenues rose 29 percent year over year driven by strong clinical and biopharma volume and an increase in the average selling price for its laboratory-developed Guardant360 test to guide cancer treatment decisions. Based on its Q2 results, Guardant also raised its full-year revenue guidance.
For the three months ended June 30, the Palo Alto, California-based firm reported total revenue of $177.2 million compared to $137.2 million a year ago and beating analysts' average estimate of $161.9 million.
The company's Q2 precision oncology revenues grew 33 percent to $166.5 million from $125.2 million in the prior-year period. Revenue from development services and other business dipped slightly year over year to $10.7 million from $11.9 million.
Guardant said it reported 49,400 tests to clinical customers and 10,475 tests to biopharmaceutical customers in Q2 2024, a year-over-year increase of 14 percent and 56 percent, respectively.
The precision oncology revenue growth was also attributable to an increase in Medicare reimbursement for the Guardant360 LDT to $5,000, effective Jan. 1, 2024, and an increase in both Medicare Advantage and commercial payor reimbursement, Guardant said.
Guardant's newly approved Guardant Shield test is poised to compete with existing colorectal cancer screening options, which include both standard colonoscopy and stool-based tests, most notably Exact Sciences' Cologuard.
The company reiterated that Shield now meets the requirements for Medicare coverage for an estimated 45 million eligible individuals.
Besides cancer screening, Guardant has also been pursuing other areas where clinicians see a need for similarly sensitive detection of cancer-associated DNA.
In the company's newest paper, which appeared Wednesday in Clinical Cancer Research, investigators reported on a study called COSMOS, in which Guardant's residual disease test, dubbed Guardant Reveal, demonstrated a median lead time for colorectal cancer detection of 5.3 months compared to standard clinical assessment.
Among 342 patients with resected colorectal cancer, a retrospective analysis found that the test's sensitivity, when allowing for multiple tests over time, was 81 percent for stage II or higher CRC.
According to Guardant co-CEO Helmy Eltoukhy, data from COSMOS has been submitted to Medicare's MolDx program for technological review and, hopefully, a positive coverage determination.
According to Guardant, Medicare coverage for the Reveal test is currently limited to assays performed on stage II or III CRC patients when testing is initiated within three months following curative intent therapy. According to the company, it can currently claim a single payment per patient of $4,932, while competitors can bill for longitudinal tests, even when performed multiple times per year.
With the COSMOS data in hand, Guardant aims to gain broader coverage for not just single-time-point testing but also longitudinal monitoring. The company also continues to pursue applications in other cancer types.
"Looking ahead to the remainder of the year, we anticipate publications that will support submissions to Medicare for potential coverage in breast cancer, [and] next year we have important clinical validity studies for additional cancers such as lung, pancreatic, and gastric," Eltoukhy said during the earnings call.
Guardant co-CEO AmirAli Talasaz added that that the company has also been "pleased" to see encouraging signs for Guardant Shield reimbursement, with a proposed change to the Centers for Medicare and Medicaid Services' physician fee schedule that would remove patient out-of-pocket costs for colonoscopy after a positive blood test.
The company's Q2 net loss was $102.6 million, or $.84 per share, compared to $72.8 million, or $.67 per share, in the same period of 2023.
On an adjusted basis, the firm reported a loss per share of $.48 for the second quarter of 2024, bettering Wall Street's prediction for a loss of about $.57 per share.
Its Q2 R&D spending fell 8 percent to $83.1 million from $90.4 million a year ago, while its SG&A costs rose nearly 9 percent to $122.4 million from $112.6 million.
The firm ended Q2 2024 with $1.04 billion in cash and cash equivalents.
Guardant said that it now expects its full-year 2024 revenue, excluding screening tests, to be in the range of $690 million to $700 million, representing growth of 22 percent to 24 percent compared to 2023. The company had previously estimated full-year revenue of $675 million to $685 million.
In morning trade on the Nasdaq, Guardant's shares were down about 9 percent at $30.76.