Good afternoon, and welcome to Guardant Health's Third Quarter 2018 Earnings Conference Call. At this time, all participants are in listen only mode. Call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Lynn Lewis from the Gilmartin Group for a few introductory comments.
Thank you, Amani. Earlier today, Guardant Health released financial results for the quarter ended September 30, 2018. If you've not received this news release or if you'd like to be added to the company's distribution list, please send an e mail to investorsgardenhealth.com. Before I begin, I'd like to remind you that management will make statements today during this call that are forward looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events materially differ from those anticipated.
Additional information regarding these risks and uncertainties appear in the section entitled Forward Looking Statements in the press release Guardant issued today. For a more complete list and description, please see the Risk Factors section of the company's Q3 report on Form 10 Q, which the company has filed with the Securities and Exchange Commission. Guardant disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast November 19, 2018. With that, I'd like to turn the call over to Helmy Elsoukie, Chief Executive Officer.
Helmy?
Thanks, Lynn, and thank you everyone for joining us this afternoon. I'm pleased to welcome you to Guardant Health's first earnings call as a public company to review our Q3 2018 results. Joining me today is AmirAli Talasaz, my Co Founder and Guardant's President and Derek Bertocci, our Chief Financial Officer. The mission of Guardant Health is to conquer cancer with data. The mission is fueled by our commitment to the patients we serve.
Our impact on patient care access both a compass to blaze our path forward and a yardstick by which we measure our progress. Accordingly, I would like to begin our call with a brief patient story. We recently came across a 74 year old breast cancer patient who was unfortunately at the end of her treatment road. She was in palliative chemotherapy and basically out of options. Just a week before we had launched a new feature in Guardant360 that enables us to determine which tumors exhibit the property known as microsatellite instability or MSI high.
Her clinician ordered our test and to his surprise found out that her tumor was indeed MSI high. Why is that important? It turns out that MSI high tumors are much more likely to she now has a renewed potential treatment path forward, which can have prolonged and life changing impact. Additionally, since launching this new feature, we now have identified MSI high patients across 10 different cancer types. This is important because immunotherapies such as pembrolizumab are approved for all types of MSI high solid tumors.
This type of broad pan cancer impact brought on by matching the right molecular information with the right intervention at the right time wouldn't have been possible just a few years ago. As was evident from this story, we believe the key to our mission of conquering cancer with data is through the creation of breakthrough precision oncology tools, tools that can vastly improve access to cancer's underlying molecular information, not only in the metastatic setting, but even at the earliest stages of disease. We enabled this unprecedented access by a routine blood draw or what is known today as a liquid biopsy. A liquid biopsy leverages the fact that tumors shed exceedingly low quantities of their unique genetic material or their DNA into the blood. However, inefficiencies in upfront sample preparation and the noise of sequencing technologies have made it extremely challenging to unlock these tiny signals with extremely high fidelity.
At Guardant, we have created a technology we call digital sequencing that enables us to overcome these previous challenges and capture these signals with extremely high sensitivity and high specificity. Our Guardant Health oncology platform builds on our digital sequencing technology and leverages our capabilities in clinical development, regulatory and reimbursement to drive commercial adoption and improve patient clinical outcomes and lower healthcare costs. To date, we have launched 2 commercial liquid biopsy tests for advanced stage cancer, Guardant360 and GuardantOMNI. Guardant360 which we launched in 2014 has been used by more than 5,000 oncologists, over 40 biopharmaceutical companies and all 27 National Comprehensive Cancer Network or NCCN Centers. And we believe it is the world's market leading comprehensive liquid biopsy test based on the number of tests sold in 2017.
With GuardantOMNI, we are helping pharmaceutical companies develop drugs much faster and gain deep biological insights into their programs. GuardantOMNI is built on the same technology platform as Guardant360, but is a broader 500 gene panel that really encompasses the entire biopharmaceutical pipeline including biomarkers for immunotherapy such as tumor mutational burden. Leveraging data and deep biological insights we are gathering from these programs, we launched our LUNAR program in 2016 to develop tests for the 2 other main buckets in cancer care, recurrence monitoring for cancer survivors and early detection. There are about 20 times as many individuals who are cancer survivors as there are who are advanced cancer patients. These survivors are plagued with worry wondering which day will be the day that their cancer returns.
And unfortunately, physicians do not yet have the right tools to give them what we call quantitative peace of mind. Our LUNAR-one program is developing tests that enable clinicians to detect recurrence at a stage when intervention may have a higher chance to cure the disease. It is also designed to help biopharmaceutical cancers. And we are very proud to announce that our first test from that program is still on track to be available later this year in 2018 for biopharmaceutical use. With our LUNAR-two program, we're harnessing all the data that we've generated through Guardant360, GuardantOMNI and some of our LUNAR-one data to develop tests for the biggest bucket in cancer care, which is early detection.
We are initially developing tests for asymptomatic individuals at a higher risk of developing cancer due to multiple factors including moderate to heavy smoking, hereditary risk and pre existing infections or inflammatory conditions. And working to find cancer much earlier when it has a much higher chance of being cured for the longer end. We estimate the market opportunity for our current commercial and pipeline projects is over $35,000,000,000 in the United States comprising applications for both clinicians and biopharmaceutical customers and addressing early detection to late stage disease. As many of you know, we completed our initial public offering in October raising approximately $249,500,000 in net proceeds. I'd like to express my sincere thanks to all of the investors who participated in the offering and continue to support us today.
With that, let me briefly summarize our results for the Q3 of 2018. Revenue for the Q3 totaled $21,700,000 representing growth of 95% over the prior year quarter. Clinical volumes grew 14% year over year 7,027 clinical tests after excluding tests in the Q3 of 2017 from a customer that began processing tests in house in March 2018 based on a joint development agreement. Pharmaceutical volumes grew 67% year over year to 2,505 tests. Based on these results, we are providing full year revenue guidance for 2018 of $82,000,000 to $84,000,000 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.
Looking ahead to next year, we believe 3 elements will be key drivers for continued strong adoption of clinical Guardant360 testing. The first is FDA approval of Guardant360 with a pan cancer tumor profiling label. The second is pan cancer Medicare coverage based on FDA approval that would be granted under the recently finalized national coverage determination for next generation sequencing tests. And finally, the third is a readout from our NILE study, which is a prospective clinical trial measuring Guardant360 head to head versus tissue in the first line non small cell lung cancer setting. We believe NILE if it successfully demonstrates non inferiority of Guardant360 for biomarker discovery could enable a blood first paradigm in clinical testing.
We expect these three elements to read out in 2019 and we will be investing and expanding our commercial team ahead of that to fully capitalize on these anticipated upcoming catalysts. With that, I will now turn the call over to AmirAli Talasaz for more detail on our recent progress of our business and product portfolio. AmirAli?
Thanks, Helmy. As Helmy mentioned, we are continuing to build out proof points that we believe will serve as catalyst for continued adoption and frontline usage of liquid. The first proof point is movement toward the blood first paradigm for genotyping of advanced cancer patients. Traditionally, tumor tissue samples are used to capture the molecular information necessary to appropriately target a patient's cancer. We believe that shifting to this new blood first paradigm will require a drumbeat of robust clinical data tissue sequencing.
Some of these proof points are taking shape with encouraging data from the sleep study, which was presented at the European Society For Medical Oncology or ESMO and recently compelling results from a landmark study published in JAMA Oncology. In that study, researchers at the University of Pennsylvania published the results of a prospective study describing the real world use of Guardant360 in the care of 3 23 consecutive metastatic non small cell lung cancer patient at their institution, approximately half of which were tested at diagnosis versus at progression and therapy. This study was important for several reasons and compromised many interesting observations, but there are 3 key points we would like to highlight here. First, in nearly a third, 29% of these patients, the treating physician chose to use Guardant360 as the sole genotyping test, which represents real world scenarios in which Guardant360 was able to obviate an invasive tissue acquisition procedure by providing the genotyping information necessary. 2nd, tissue genotyping failed in nearly half, 44% of the remaining 71% of the patients in whom the physician elected to use tissue genotyping, which represents real world use of Guardant360 to provide genotyping and target therapy opportunities to patient that would have otherwise not benefited.
And third, in those patients for whom both tissue and plasma results were available, the addition of plasma increased the proportion of patients with standard of care actionable biomarkers by 71% from 21% to 36%, demonstrating that real world use of Guardant360 can substantially increase the number of treatment opportunities for patients. Importantly, Guardant360 increased the biomarker discovery rate in patients both at diagnosis and at progression on therapy. These findings demonstrate that real world application of Guardant360 can improve the care of advanced non small cell lung cancer patients. We are very encouraged by these results and their support of Blood First paradigm. We hope to continue building on these results with NILE, which is multi site and purpose built to assess Guardant360 versus tissue in first line setting.
Just as a reminder, NILE enrolled approximately 300 patients and the primary endpoint is the detection rate of 7 actionable biomarkers in advanced non squamous non small cell lung cancer using Guardant360 versus standard of care tissue testing. We expect the data from NILE to read out in the first half of twenty nineteen. The second key proof point is FDA approval for Guardant360. Earlier this year, we were pleased to learn that Guardant360 was the 1st comprehensive liquid biopsy to receive breakthrough designation by the FDA. If and when FDA approval is obtained, we believe it will help with the adoption of liquid biopsy testing among those sitting on the sidelines because of some of the noise that has been generated by low quality testing.
We anticipate submitting to the FDA for premarket approval or PMA in the first half of twenty nineteen. The third element is continued expansion of reimbursement coverage policies given clinical evidence we have generated so far has led to over 77,000,000 covered lives. In August, we were pleased to hear that our local Medicare administrative contractor, Palmetto GBA, finalized a local coverage determination or LCD for Guardant360 for non small cell lung cancer patients. Late in the Q3, we began billing Medicare and early in Q4, we have already successfully received our first payment. Finally, we believe FDA approval for Guardant360 with the pan cancer tumor profiling label we will expand Medicare coverage beyond lung cancer to all solid tumor types under the national coverage determination for next generation sequencing test that was finalized earlier this year.
Turning now to our product pipeline. As Helmy mentioned, we recently added reporting of microsatellite instability or MSI high to the Guardant360 panel at what we believe to be market leading level of sensitivity and specificity. Guardant Health researchers demonstrated 95% analytical sensitivity for MSI high status at variant levels down to 0.4% and a lower reportable cutoff of 0.1% using Guardant360. In order to meaningfully improve patient outcomes using liquid biopsies, we believe that high clinical sensitivity and specificity of detecting such biomarkers should be achieved, especially at the low levels of tumor variants typically found in circulation. Finally, I would like to briefly give an overview of our LUNAR program, which is focused on recurrence monitoring for cancer survivors and early detection.
Through our first two commercial products, Guardant360 and GuardantOMNI, we have captured data over a number of years that provides us with deep insight into the circulating tumor DNA biology in blood sample of cancer patients. We have deep targeted sequencing data in combination with low coverage whole genome sequencing from tens of thousands of cancer patients. This data has enabled discovery of novel epigenomic variations across multiple cancer tests. We believe augmenting genomic with epigenomic signatures can enhance the clinical sensitivity and specificity of our test significantly and yield critical insight into the tumor microenvironment. Moreover, we developed a database of biological noise sources such as CHIP mutations, which enables us to further enhance the clinical sensitivity and specificity of our test.
We also have an extensive blood biobank of tens of thousands of cancer samples that we use for discovery and more importantly, biomarker verification and validation. We are very encouraged by the progress we are making in our LUNAR program and look forward to launching our first test from LUNAR-one for biopharmaceutical use later this year. With that, I will now turn the call over to Derek Bertocci for more detail on our financials. Derek?
Thank you, AmirAli. Revenue for the 3 months ended September 30, 2018 was 21,700,000 dollars a 95% increase from $11,100,000 in the same period of the prior year. Revenue in the quarter increased strongly in clinical testing, biopharmaceutical testing and development services. Precision oncology testing revenue increased 78%, driven by higher testing volume and increases in revenue per test. In addition, increases in payments from commercial insurance payers were beneficially affected by the Protecting Access to Medicare Act of 2014.
Furthermore, the average selling price of biopharmaceutical tests increased in the 3 months ended September 30, 2018 compared to the 3 months ended September 30, 2017 due to the introduction at the end of 2017 of the GuardantOMNI test, which has a higher selling price than the Guardant360 test. As Helmy mentioned, we received our first Medicare payment in Q4 and we expect to continue to book Medicare payments throughout the remainder of the quarter, which will contribute to our revenues for Q4 2018. 3rd quarter clinical volume grew 14% year over year to 7,027 tests due mainly to an increase in the number of physicians ordering Guardant360 tests. In calculating the period over period increase clinical volume, we excluded tests in the Q3 of 2017 from a customer that began processing tests in house in March 2018 based on a joint development agreement. 3rd quarter biopharmaceutical volume grew 67% year over year due to 2000 year over year to 2,505 tests due to an increase in the number of biopharmaceutical customers and their contracted projects.
Development services grew to $3,400,000 from $900,000 due primarily to increased work with biopharmaceutical customers on companion diagnostic development and regulatory approval services. Gross profit is total revenue less cost of precision oncology testing and cost of development services. Gross profit for the Q3 of 2018 was $11,600,000 compared to a gross profit of $2,500,000 in the same period of prior year. The gross margin or gross profit divided by total revenue in the 3rd quarter was 53.7% as compared to 22.2% during the Q3 of 2017. Gross margin improvement was due to several factors: increases in commercial payer payments for clinical tests that were beneficially affected by the Protecting Access to Medicare Act of 2014, higher average selling price of biopharmaceutical tests due to introduction at the end of 2017 of the GuardantOMNI test, which has a higher selling price than the Guardant360 test and 3, the overall increase in volume of tests, which supports more efficient use of our production facilities.
Total operating expenses for the Q3 of 2018 were 35 $800,000 a 15% increase from $31,100,000 in the Q3 of 2017. R and D expenses for the Q3 of 2018 were $14,300,000 compared to $7,200,000 in the Q3 of 2017. The increase was primarily attributable to development and clinical research and validation of products, including our LUNAR, OMNI and G360 panels and work on submissions to the FDA. Sales and marketing expenses for the Q3 of 2018 were $13,500,000 compared to $7,800,000 in the Q3 of 2017. The increase was due to expansion of personnel and programs to drive the growth in sales, adoption and reimbursement of our products and services.
General and administrative expenses for the Q3 were $8,100,000 compared to $16,100,000 in the Q3 of 2017. This decrease was primarily due to compensation expenses of $9,700,000 during the Q3 of 2017 for the repurchase of common stock from certain executive officers. Net loss from operations for the period was $24,100,000 compared to a net loss of 28 $700,000 in the Q3 of 2017. We ended the Q3 of 2018 with 270 $4,300,000 in cash, cash equivalents and marketable securities and raised approximately 249,500,000 dollars net of underwriting fees and other expenses from our IPO in early October 2018. We expect full year 2018 revenue to be in the range of $82,000,000 to $84,000,000 During the Q4, we expect to record revenue on payments from Medicare of approximately $1,100,000 to $2,000,000 for tests processed in Q3 and approximately $2,000,000 for tests processed in Q4.
Biopharmaceutical customers use our services in drug discovery and development programs and have significantly increased their activities with us in the last year. Biopharmaceutical drug discovery and development programs start and complete at various times. In preparing our revenue forecast, we recognize that revenue earned from biopharmaceutical customers can vary more than revenue earned from clinical testing. At this point, I'd like to turn the call back to Helmy for closing comments.
Thank you, Derek. In closing, we believe we have a unique opportunity at Guardant to expand unprecedented access to cancer's molecular information throughout all stages of the disease. We are well positioned for growth and look forward to what is ahead. I want to thank the growing team of Guardant employees for their enthusiasm and hard work and continued drive to achieve strong and consistent patient outcomes. With that, we will now open it up to questions.
Operator?
Thank Our first question comes from Tycho Peterson with JPMorgan. Your line is now open.
Hey, guys. It's Tejas on for Tycho. Congrats on a solid first quarter out of the gate here. I had a quick question that's more on the housekeeping side of things. I mean, can you give us a sense of the split between clinical versus biopharma revenue for the quarter?
Thanks, Dallas. Derek, you can Sure.
So the split was 9 point $6,000,000 in clinical revenue and $8,700,000 in biopharma revenue.
Perfect. That's helpful, Derek. And then help me, has there been any change in sort of your conversations with private peers following the granting of the LPD? Any color you can share on that would be great.
I mean, I think you've seen the momentum we've had kind of prior to the LCD and I can say that our conversations are still very encouraging with private payers and certainly the LCD has helped accelerate some of this conversation.
Got it. And then one final one here for me on bio pharma. Obviously, the testing volume seems to have been sort of significantly better than what we had expected in the quarter. Were there any sort of one off dynamics here to call out in terms of an unexpected ramp of clinical trial or just a pull forward dynamic? And can you share some sort of color on the strength in G360 versus omni volumes within biopharma?
Yes. So, I think if you think about the drivers for revenue this quarter, I guess maybe Derek can Sure.
The revenue for pharma was strong this quarter. It's part of as you can see, the continuing, strength that we're seeing in terms of interest from biopharmaceutical companies. We continue to have very good testing from G360 and the OMNI program continues to grow very nicely. Demand for that is continues to grow and it's been stronger than probably we expected.
Got it. Thanks so much
guys. Yes. Thanks, Dan.
Thank you. Our next question comes from Derik De Bruin with Bank of America Merrill Lynch. Your line is now open.
Thanks guys. This is Mike Ryskin on for Derik Sline. I want to follow-up on the last point really quick. You talked about omni strength and given the differential ASPs between the omni and the G360, we've seen pretty fast uptick in the sample mix of the omni in 1Q and 2Q this year. Can you talk a little bit about how that progressed as a percent of overall mix in 3Q and how we should think about that leveling out in the future?
Okay. I think it's Merrill. Yes, sure Helmy. So as we mentioned before and you're seeing definitely omni volume is growing very fast and faster than what we expected. There are multiple drivers for that.
So definitely, it's a much more comprehensive panel for biopharma companies and some additional content in Omni that's not in Guardant360 is generating some excitement across different kind of departments in our biopharmaceutical customers that's currently driving the demand.
All right. Thanks. And then, on the clinical side, you mentioned, I think $1,100,000 to $2,000,000 for Medicare from 3Q samples that will be recognized in 4Q and then $2,000,000 from 4Q. At that point, will you be fully caught up? And how should we think about that progressing forward in terms of your ability to capture revenues and the delay there into quarter?
So we would have anticipated getting paid for most of the Q3 samples that we process in Q4. And then, some of the Q4 samples payments obviously will go into Q1 of next year. I would just note that in Q1 of 2019, we will switch our revenue recognition from a cash basis to an accrual basis. So there'll be a switch in our volume and how we recognize revenue in Q1. So it will include that when we through our forecast for 2019.
Okay, great. And then one last one. You mentioned in biopharma, you had a sizable CDx contribution. Could you break out exactly what that was this quarter?
Well, we don't actually talk about the individual programs in our revenue, but we did have very good interest and you can see it coming through in work that we're doing with our biopharma customers. We look to that as that kind of revenue is more related to individual programs and can vary from quarter to quarter.
Okay, great.
Thanks a
lot guys.
Thanks.
Thank you. Our next question comes from Doug Schenkel with Cowen and Company. Your line is now open.
Hi, there. This is Adam on for Doug. Thanks for taking my questions. You indicate you're on track to submit your application to the FDA in the first half of next year. Can you remind us what the remaining steps are before you're able to submit that application?
And then there's also 2 other competitors, I believe, that have a liquid biopsy test that also have some fast track approval by FDA. Do you expect differentiated pricing relative to them under the CMS entity?
Yes. So as we mentioned, we are expecting our PMA submission to FDA to happen in the first half of twenty nineteen. We are well on track to deliver on that milestone. The remaining activities from now till then is there is many kind of documents that we have to generate and some additional data that needs to be captured, but everything which is in Guardant Health's control in terms of timeline management. So we believe we will be on track to submit our PMA package in first half of 2019.
In terms of your follow-up question about other competitors, we believe we were the 1st breakthrough device designation by FDA for comprehensive liquid biopsy testing. We cannot comment on where other players are in their roadmap. In terms of pricing, we mentioned our Medicare pricing based on LCD, which is $3,500 for Guardant360 and pricing under NCD, I think still is to be determined after we get FDA approval.
Maybe if I can add, I believe we are the only comprehensive liquid biopsy with formal Medicare coverage. Secondly, we also have very good progress with the private payers for our test. And all of that is going to help when we become a ADLT and have our FDA approval because as you remember, the pricing is set by essentially the median of the private payer rates. And so we believe we've really done a lot of the groundwork that's required to achieve good pricing in the future once we do get our FDA approval.
Thanks. That's super helpful. And at the AMP conference earlier this month, MD Anderson provided some initial positive results from running your test in house. Has that gone as planned from your end as well? And how are you thinking about the opportunity to decentralize your assay to other centers?
Yes. It's a great question. I think that was something that we undertook in 2017 with a very successful collaboration and partnership with MD Anderson, we went about that whole development program and it really we were able to switch volumes really almost overnight once those labs became up and running. And I believe they're very I think impressed with the results and it's something that I think is a good foundation for when we think about continued promulgation of our testing platform globally. We're fairly agnostic to the question of centralization and de centralization.
What's important for us is that essentially our testing platform is ubiquitous that patients who need access to the critical information that we can provide with their technology actually get it and receive it. And so we believe we have the tools and the technology and the platform and capability to be able to do that using both modalities, centralized or decentralized.
Great. Thanks, Elmi.
Sure.
Thank you. Our next question comes from Brian Weinstein with William Blair. Your line is now open.
Hey guys, good afternoon and thanks for taking the question. Can we talk a little bit about utilization? How are you specifically driving this higher? And what are the biggest hurdles been to date to getting broader uptake among the existing physicians? And alongside of that, how big of a deal is FDA approval specifically to accelerate this adoption?
Yes. So, as we mentioned on the prepared remarks, we really do believe that if there's 3 components that will be anticipated catalysts for the market. I think FDA approval traditionally hasn't been something that has been kind of maybe noticed by the medical community as much at least on the diagnostic testing side of things. But because of the NCD, the fact that it links regulatory approval with potentially broad reimbursement, the 2 really go hand in hand in terms of the perception that an FDA approved test really breaks down the barriers of reimbursement. Secondly, we believe FDA approval is more important frankly in the liquid biopsy space because of the fact that liquid is a new modality, one that many physicians may not be familiar with.
And so FDA approval having that 3rd party really put their stamp of quality on that type of testing, we believe is very critical. And then finally, as we mentioned, NILE is really the 3rd leg of this tool, where we essentially can show that we can go head to head with liquid with tissue potentially and show that we don't find less that we find the same number of biomarkers and that physicians can choose liquid, essentially with confidence. And the good news is those 3 kind of components will read out in 2019. And we even from our early signs and from our interactions with physicians, we believe that those three components will indeed be very good drivers for continued adoption of liquid.
Okay, great. And then for the implied 4th quarter revenue that you guys have now guided to, I just want to sure there's nothing kind of one time in nature on the biopharma side in the Q4, correct? I mean, I guess I'm asking is that number a reasonable starting point to think about building off of for 2019?
As I mentioned earlier, Brian, the biopharma business in this especially in the clinical development area is prone to wider ups and downs due to the lumpiness of those programs and the fact that some of the revenue is recognized on milestones achieved. So, while we are gratified, we don't want you to get too carried away in terms of thinking that it's an upward slope at that rate every quarter into the future.
But that being said, we are encouraged by most elements, almost all elements of our business right now, clinical pharma side and so on. But there will be lumpiness, especially in the diagnostic services component as we start companion diagnostic deals or other engagements with pharmaceutical companies.
Okay. And then last one for me. Last week, we saw the announcement about the G360 launch in India. Can you just talk about commercial plants and how they're progressing for the larger Asian markets in places like Japan and China and give us any update on that? Thank you.
Yes. Thanks. So we continue to make a lot of progress with our JV. If you remember, our joint venture with SoftBank is charged with essentially commercialization of our products in Asia, Middle East and Africa. Our focus our primary focus has really been Japan and China in that region.
In Japan, we continue to make fantastic progress. We are working with 2 larger programs over there, Godzilla and Scrum that are testing over 1,000 patients each in lung cancer and in gastrointestinal cancers. And we're seeing very good uptake of sample volume based on those programs. And we believe that data is going to be very critical to getting the right regulatory approval and reimbursement in Japan specifically which we believe is a market that is fairly large in terms of the opportunity maybe even rivaling that of the U. S.
At some point. But that being said, we do have relationships with multiple distributors, multiple hospitals globally. We're in about 39 countries now. So India is just building on the progress we've made in many of those countries.
Thank you.
Thank you. Our next question comes from Puneet Souda of Leerink Partners. Your line is now open.
Yes. Hi, Helane. Thanks for the question. So first one on, first of all, congrats on an impressive quarter as first time as a public company. So maybe let me just clarify on Medicare.
Are you getting 3,500 for the billing that you're submitting in the current quarter. And I just want to make sure what is the look back, how far of a look back are you getting for G360 with Palmetto? And then I have a couple of questions.
Sure, Derek.
So the billing rate is $3,500 under Medicare law, there's a 2% hold back for the sequestration. So it's actually we received $3,430 And the LCD was announced on July 12th. It just took a while to go through the sort of 45 day waiting period and then the finalization of the price. So we're entitled to bill certainly back to July 12. And there may be opportunities to possibly capture some billings earlier.
But at this point, we're looking at the July 12 as the date we know we can build back to.
Okay, got it. And then maybe, Amerile, can you talk a little bit about the JAMA study? I just want to understand how does that data stack versus the other data sets that you've had so far? And how does that translate into take among oncologists? What sort of confidence?
Obviously, this is a high impact journal. So I just want to get a sense of how important is that and how do you think that this stacks up going into NILE?
Yes. So, we were definitely very encouraged with the results. Some of the results published in JAMA Oncology has been published in other publications that current tissue testing suffers with like lack of access to high quantity or high quality tissues and that generates a problem in the field of CGPS as it's known as Q1S, quantity, quality not sufficient for sequencing. So, this study is in the finding of this study is in line with other studies. But there are some kind of unique data sets, which is published in JAMA oncology, which is very interesting.
One was really use cases of Guardant360 as the platform of choice, even at the first line. So half of the patients that they use Guardant360 was at the time of diagnosis. And as I mentioned earlier, about a third of these patients, the physician chose just to use Guardant360 for genotyping. And for the ones that they did tissue testing, about half of them tissue testing failed. So, already this blood first paradigm has been a use case at University of Pennsylvania.
And this would be a good development in the field to generate some additional evidence and more comfort for the physician to consider liquid biopsies as a first line diagnostic test. We are waiting for our NILE readout, which is going to happen first half of twenty nineteen. That's a study that we sponsored and specifically is designed to answer this question in a multicenter trial to look at the biomarker discovery rates when you're using liquid versus when you're using tissue and show if liquid biomarker discovery rate would be non inferior to tissue testing. So we are waiting for that readout to happen in the first half of twenty nineteen.
Okay. Thanks for the color there. And then help me, we're seeing data, early data set, I would say, from OMNI and it's used in TMB. I just wanted to get a sort of high level overview from you in terms of how you are viewing the use of TMB there. Obviously, there is conflicting results in terms of it's useful.
In some cases, it is not so useful. So I just want to get a sense from you as you think about TMB overall to future, how are you positioning omni as a product and what is your view on TMB?
So we've seen, I think as we mentioned great demand for GuardantOMNI and a lot of that has been driven by immuno oncology programs, especially those requiring or exploring TMB as part of their studies. And so we believe that there are no perfect biomarkers right now in the immuno oncology space, but TMB certainly does provide information, How prognostic or predictive it is, I think it still remains to be seen, but it's certainly something that is gaining traction both I think especially on the pharma side and we're starting to see some traction even on the clinical side in terms of at least incorporating that information into the totality of decision making. I don't know if there's something else you want to comment on?
Yes, sure. So, there are some additional key data that as you may know is going to come out later in 2019 and beyond, which I think is going to be key in terms of how TMB is going to be used in clinical practice. In our product portfolios, as Helmy mentioned, we have GuardantOMNI, which is well suited for this TMB use cases. For liquid biopsy to be used in this kind of setting, you really need to have detection limits, which is clinically meaningful that can have decision impact on physicians at the end of the day. And we've showed that GuardantOMNI has very high sensitivity in calling tumor mutation burdens, very large panel and we use our core technologies to build product.
So it's very well suited to address that need.
Okay, good. Thanks for all the color.
This concludes today's Q and A session. I would now like to turn the call back over to the company's CEO, Helmy El Touki for closing remarks.
Okay. Thank you everyone and look forward to the next call.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.