All right. Okay, great. Afternoon, everyone. Welcome. I'm Puneet Souda. I cover life science tools and diagnostics here at Leerink Partners. It's a pleasure to be hosting the entire Guardant team. This is exciting. Joining us today, Helmy Eltoukhy, Co-CEO, AmirAli Talasaz, Co-CEO, Mike Bell, CFO, and also in the audience, Derek Bertocci, the Director of Investor Relations. Thank you for being here.
For having us.
Yeah. Okay. So lot to cover, but maybe, you know, obviously look, you have strong three franchise Guardant360, Guardant Reveal, screening. I mean, that in itself is almost more than $80 billion in market or TAM that you can serve. Maybe if I could kick off on, you know, something that you announced today on Shield with Quest. How significant is that? Maybe, you know, maybe tell us sort of how do you think about the contribution from that? Any lift that we can start to see beyond what you had outlined at the quarter?
Thanks, Puneet, for having us. Yeah, it's an exciting day for us. You know, it's a partnership that we talked about with Quest Diagnostics. It's gonna make Shield more broadly available and accessible for patient. It has two main benefits for us. One is on fast-forwarding our EMR integration. Through Quest connectivity system, there are 650,000 physicians that are using that system. Now, Shield is a test that is incorporated into that EMR solution, so they can easily order the test. We expect that would increase the depth of ordering in the accounts who use actually Quest in their workflow. The other element of this partnership is the co-promotion part. The whole PCP channel of Quest is gonna promote Shield in terms of detailing and educating the physicians in parallel to our own sales team.
This co-promotion should have a positive impact, but we are very mindful and thoughtful about guiding for it. We decided that the original guidance that we put out there to not include any contribution in terms of positive contribution by Quest co-promotion in the volume and the revenue that we have in 2026. We see how it goes. It should have some impact, especially as we go to the second half of the year, and hopefully we can have some good updates about it.
Great. Yeah. I wanna come back to Shield in a bit, but maybe, you know, let's talk about G360. I mean, this is a product that, you know, one of the things that I appreciated about this is obviously the sheer growth you've seen in last year with G360. But more importantly, I think on the earnings call, I mean, immediately when we saw remarkable growth, I was reminded when you launched the assay, and that's why I asked the question, you know, this is something you launched ten years ago and ten plus years ago, and it's remarkable to see the growth picking up here, a decade later, and accelerating at these numbers, you know, and obviously the strong clinical background, clinical adoption has been great.
Maybe just, you know, help me, if you could outline what's driving that, how much of that is sort of contribution from repeat testing. I think you talked about an average about 1.2 test. How is that number trending and how can you lift that further?
Yeah, no. I mean, thanks for the question. It's obviously a lot goes into sort of the franchise. You know, I think of these things as three legs of growth. CGPs have been around for a long time, but as new applications obviously came to being, you know, sort of punctuated into different levels of utility and a much larger application space. The first chapter was really just getting sort of liquid biopsy as you know, even just into the standard of care, like getting that sort of zero to one moment of using it one time per patient. We're not even fully penetrated there. I mean, I think it's probably still only 30%-40% penetrated in terms of that one time per lifetime usage of liquid biopsy.
As we sort of increase the capabilities of the test, I mean, this idea of being able to diagnose cancer with a tube of blood, with, you know, a blood draw is sort of unheard of, I think, you know, a few years ago. The fact that with the smart platform and the methylation signals and so on, we can get at the sort of underlying tumor biology and the histology of the disease, I think is taking this to this other level. Then I think, you know, it's not just us in the ecosystem, it's, you know, all the hundreds of biopharma partners we have and the thousands of pharma companies that are essentially developing a much stronger armamentarium in terms of, you know, keeping patients healthier, living longer through multiple lines of therapy.
This is really the power of liquid biopsy, is leaning in to essentially tracking tumor evolution as the disease continues to evolve. That's what's exciting, is going from one test per patient per lifetime to a test per line of therapy, essentially, every time the patient progresses, having another test. Yeah, we've been at that 1.2, maybe inching to 1.3 now, largely because we're also increasing the denominator of the number of patients who are getting the test. Even though some people are doing more tests, it's not necessarily keeping up or beating the rate of the number of new patients that are getting tested.
Over time, that's gonna continue to increase, and I think that's the exciting part of the opportunity we're in, where being a leader in liquid biopsy therapy selection gives us pole position to be able to essentially accrue all of those potential gains as the market grows, substantially larger than it is today.
Yeah, no, that's super helpful, and that segues into my question around, you know, a bit around repeat testing. SERENA-6 trial, obviously an important one, HR-positive, HER2-negative advanced breast cancer patients and getting them started on camizestrant once they have an ESR1 mutation. Camizestrant approval is expected in the next few months. You know, we found out just recently, I believe on Friday, that there's an AdCom for camizestrant now on April 30th. Just wanted to get your view. Does that change anything? Then more importantly, when the drug, if and when the drug is approved, how are you thinking about that ramp?
Yeah, no, I mean, I think we're very enthusiastic about, you know, that potential approval. I think given the sort of nature, the novel nature of, you know, this drug, the fact that it's sort of in between first line and second line, that it's switching on molecular progression, which is really, I think, the future of cancer therapy, it makes sense that there would be an AdCom to sort of weigh in in terms of this potentially really game-changing paradigm of cancer care. That being said, I think, you know, this is gonna be a catalyst, you know, if it gets approved to essentially move towards that longitudinal testing of patients.
We think it's gonna be a major driver in terms of moving the paradigm to multiple tests per patient, really thinking about top of mind, that sort of tumor evolution, the fact that the cancer does change, and we need to track it. It'll be the first therapy that is, you know, hopefully indicated with that sort of switching in mind. You know, I think there have been some developments with some competitor drugs where essentially I think it increases the probability that I think testing will probably be required for a lot of these SERDs and ESR1 sort of directed therapies.
Maybe just since we're on the volume topic, I do want to ask a few things on the ASP side, but maybe just before that, can you talk a little bit about, you know, tell us how oncologists are sequencing or repeating these assays with Guardant360 first and then, you know, Guardant Reveal for therapy monitoring and that becoming more sort of upstream, so to speak. I think you've talked about maybe additional 1 million patients TAM here. Maybe just walk us through how you think the Guardant360 assays in combination with, you know, other assays, how are those gonna be sequenced and how that continuum works from the time patient is diagnosed till the time they become a cancer survivor, and then monitoring of that patient?
Maybe I'll focus on the late stage-
Yeah.
...part, which, you know, I think is super exciting. In the sense that we're seeing a paradigm shift from really biopsies and scans.
Mm-hmm.
Potentially just using blood for the entire continuum of care. When you think about it, you're having a blood test up front, potentially a tissue, you know, biopsy at the same time, but you know, really sort of giving you sort of very precise therapy selection for that patient. Right after, using Reveal to essentially see is that drug working? Is the patient responding? Using that in a way that, you know, is often more precise and gives you more of a real-time view of what's going on than a CT scan or radiographic imaging. You know, using that multiple times to track the patient.
The beauty of how our platform works is that as you know you see that patient progressing, you know, if you know, if and when they fail the therapy, then the physician can go back and you know order a 360 test very seamlessly to essentially now see, okay, this patient's progressed, what should I switch therapy to? That sort of cycle repeats, and that's how we sort of designed the system from day one and how we sort of built these two tests to really dovetail into each other in a very nice sort of like kind of fashion. You can imagine that paradigm essentially moving towards earlier stage.
Obviously, Reveal is an early stage setting, but I think eventually you look at the colorectal cancer guideline just got updated, you know, I think in the last couple of weeks to indicated that comprehensive testing should be done even the stage two, stage three setting now. You think about, you know, these immunotherapies, these targeted therapies, they're all moving earlier. There is no reason that, you know, all these amazing drugs should just be confined to the metastatic setting. It's better patient care to treat cancer earlier, and most of the studies have shown much better results when they're moved to the earlier lines. Eventually, we think that paradigm will encompass all of cancer, essentially.
These two types of tests, monitoring the disease in terms of the level that's there in blood, and then looking more comprehensively at what is driving the disease, what's the tumor biology, and what is the best sort of therapy that can apply at this exact time.
Just quick clarification on that stage two and three. We've been getting questions around that. Is that, was it stage three or four? Remind us what was the guideline before and what's changed?
Yeah. Where the reimbursement is really in the stage 3, stage 4 setting right now, the metastatic setting.
Mm-hmm.
It's, you know, unfortunately there hasn't been much comprehensive profiling before that.
Mm-hmm.
This is the first sort of, I think, major foray into sort of moving that backwards. There's been, you know, some drug approvals. There's been, you know, EGFR, sort of like, mutant lung cancer approval with TAGRISSO in the-
Mm-hmm.
... sort of, you know, earlier stage setting. There's been some immunotherapy approvals. There have been some HER2 kinase inhibitor approvals. There are approvals earlier stage, but this is the first time I think the guidelines talk to comprehensive profiling in that sort of stage two.
I'm just wondering if you have quantified that sort of expansion or how big of a expansion that is. Correct me if I'm wrong, but first initially I saw that was for CRC, but is this more broader than that?
I think right now it's just CRC.
Yeah.
You know, clearly lung cancer has even more targets. Breast cancer has a number of targets.
Mm-hmm.
There's no reason that this should just be.
Yes.
Isolated to just colorectal cancer. Now it can add a substantial number of patients. You know, certainly, you know, potentially even, at least, you know, 50%-75% increase in the patient population.
This could be another expansion vector beyond the ones that we have.
Yeah. It's one we outlined a few years ago.
Yeah.
At Investor Day, not the recent one, but the previous one in terms of-
Yeah.
... where the field is going, is really, longer tail of cancers as-
Mm-hmm.
...we have better tools, better drugs for some of the tumor types that have been hard to treat, as well as moving essentially the treatment paradigm earlier stage.
Got it. One of the powers of having a test that's, you know, decade plus on the market is you obviously have great reimbursement from commercial payers, but the product itself is evolving. Maybe just on two quick points before we shift over to screening and other questions. One is FDA approval. How are you thinking about that one being, you know, simply a CDx approval? Well, FDA approval for the LDT product, any CDx approval that we need to keep in mind, and then ADLT, how are you thinking about that and potential, you know, pricing step up, just the timing of that as well?
Yeah. I think we're still on track for second half of this year for FDA approval of Guardant360. That is gonna be a really major catalyst for us for a number of reasons. I think first and foremost, it's gonna certainly simplify the portfolio.
We have a complicated portfolio, in the sense that we have two tests, two different liquid biopsy tests that frankly can create some confusion in terms of which test is what, and being able to sort of consolidate it, have a single test, a single flagship test that is both FDA approved and has all the bells and whistles in terms of the smart platform. I think is really gonna see a nice sort of boost to our business and the Guardant360 sort of performance. In terms of like the ADLT, it would essentially have the ability to sort of reprice that, and that would likely get finalized in the first part of 2027.
It usually takes some time, but the nice thing is this is procedural. It's, you know, there's no discretion here. It would be an FDA-approved test that would qualify for ADLT.
Got it. Mike, before I go to AmirAli, maybe just on ASP contribution that you will expect from higher pricing by ADLT? Obviously this is in the outer years, you know, 2027 beyond. You obviously have ASP on other products also improving as they're reimbursed more and indications are covered. Could you maybe talk to us about sort of, you know, how do you think about that as a growth vector and then also how important that is to the margin? How much of that do you want to flow into the margins?
Yeah. I think if we focus mainly on oncology here-
Yeah.
...Yeah, obviously, if we were to get an improved ADLT rate for Guardant360, that would have a positive impact on our current ASP, which is around $3,100. That's likely if it was to come, it'd be at 2027. On Reveal, we're pursuing MolDX coverage on breast, on IO and chemo, and there's more in the works. You know, we're expecting ASP uplift across the oncology portfolio. I mean, obviously that's going to improve gross margins. We're also making good progress on reducing our cost per test. So our gross margin is improving across that portfolio. Incremental gross profit, you know, we're very committed to getting to cash flow breakeven.
You know, we said at our Investor Day by the end of 2027. We brought that forward a year. If we can bring that forward even sooner, we would want to do that. I think we want to get the balance right. You know, there's a lot of things that we also want to invest on, and we're constraining ourselves at the moment on the
On the commercial side and on the R&D side. I think if there's incremental gross profit coming from ASP, we'd balance it. We'd look to drive to cash flow breakeven sooner, but we'd also wanna reinvest to continue to innovate and continue to grow the top line.
Got it. AmirAli, first, one of the things that I noticed, with the recent DTC investments, I almost felt like I was the target demographic for a minute. I'm wondering if you can elaborate to us, a bit more on the Shield DTC campaigns, how the pilots are, and what's the response rate you're sort of getting from that, and how broad this campaign could be?
Yeah. We mentioned, as part of our 2026 operating plan, we are planning to put a fraction of the incremental gross profit that we make into our DTC campaign, and that was in lieu of actually pretty successful pilots that we did back in 2025 in some markets, and we are expanding it in 2026 step by step. Still we are targeted. We are gonna measure the ROI and we go from there. Based on the pilot, we are very bullish on what we could do. Now tactically, what we are doing, we just announced our partnership with a very good cancer advocate, Patrick Dempsey, that we are very excited about as a brand ambassador for us.
He's very personally connected to the cancer and the story of cancers and is telling the story of Shield to the people who follow actually his journey. Then we have some TV campaigns that maybe many of you guys have seen already, target if you are in the eligible patient population for CRC screening.
Yeah. Those are interesting. I think the targeted ads have been very interesting. It's been great. Maybe on the OpEx side, Mike, for the DTC campaigns are obviously expensive, and have to be targeted and whatnot, so now there are obviously better targeting tools and whatnot, but maybe just talk to us, how are you thinking about the OpEx on that side?
Well, you know, I think overall, if you look at our OpEx for the-
Yeah.
... for the company, you know, you'll see where we're growing it this year roughly 14%-15%. The vast majority of that incremental OpEx is in the sales and marketing line. You know, we're keeping R&D relatively flat. We're keeping G&A relatively flat. Again, within the sales and marketing line, a lot of that is directed towards screening. That's DTC as well as continuing to expand our field sales team. We'll be doing that throughout the year. You know, again, we're still trying to get the balance of reinvesting the incremental gross profit, all of that back into the OpEx line for screening this year. We'll continue to do that.
You know, it gives us the ability to have some healthy level of spend on DTC. As we continue to grow Shield, then I think we can continue to invest more in that DTC line. I think, yeah, I mean, we're feeling good about the OpEx expansion and where we're directing it and, you know, hopefully getting the ROI on that.
Great. On the Shield revenue guide, I think you initiated guidance at $160 million-$174 million, 130% growth year-over-year, excluding any true ups there. Maybe, you know, give us some. What are other factors that we ought to consider? Obviously, the Quest was announced after you gave that guide, so potentially an upside to that and maybe the DTC campaign, I don't know to what extent was already baked into that.
Maybe I can list. You know, obviously, improvements of the productivity of our sales reps were part of the guide. We started last year with 100 reps, ended the year with 300 reps. Still many of our reps are going through their ramp and, you know, the territories are warming up. There are a bunch of elements that we decided not to have as part of our guide. Like all of you are very bullish that we are gonna get ACS guideline recommendation in very near future. The impact of it, we did not add to our guide. On Quest side, we included some which are related to the EMR benefit of it, but we did not count on any kind of co-promotion success with Quest in our guide right now.
We started a program engaging the health systems based on some of the market pulls that we were experiencing. Since that's a new activity for us, we decided the volume contribution of health system to be upside in our guide too, so, and also international expansion.
Got it. If I could, any updates on the ACS guidelines? We've been watching that for some time. I mean, any news, any updates on that? We haven't seen much yet.
Our team is in touch with the ACS team. The tone of conversation continues to be very positive. We are very optimistic that it should happen in very near future. You know, I expected it to happen by end of last year, but it has not happened. But what we are hearing from ACS team, this is their priority. They are actively working on it, and they know the impact that they would have on accessibility of this life-saving device. We are monitoring it very closely, almost on daily basis.
Got it. Just continuing on Shield, just briefly on the MCED, obviously, we saw large scale trial failure there. You know, just wondering, obviously, you have taken a different path in that with a CRC backbone of an assay and building indications on top of that. Maybe just, you know, talk to us. Obviously, one of the things I've recognized is this is a hard problem. You guys have managed to maneuver through those challenges and deliver a product in the marketplace that is now getting reimbursed at, you know, $14.95.
So maybe just talk to us as to, you know, what is the attach rate maybe you're seeing on the Shield product and, any thoughts on, you know, overall your platform compared-
Yeah.
...to the trial challenges that are happening in the marketplace.
I think there are a few takeaways. One is, like, it really highlights the importance of early stage detection. If you cannot have good performance in detecting stage one, two, the performance in terms of stage distribution and stage shift in terms of staging of the cancer at the time of diagnosis, you have to have very limited expectation. The other element is I think it's really continuing to endorse the pathway that we took, to your point, Puneet. Like, we went after a cancer type that the clinical utility is known, the pathway for reimbursement was known, and then we added MCED with the reality of the state of the art of today, that we know the technology works, but we need to collect a lot of clinical data yet, especially in U.S. patient population. That's the way we rolled out our MCED offering.
Opt-in when the patients are going through CRC screening, and we collect the data, and we figure out the utility of MCED testing at a very large scale, very quickly, hopefully, in near future. In terms of attachment rate, the reception of PCPs and patients have been very good. We are not breaking it out yet, but I can tell you it's going very well. The physicians are very open to get access to this MCED offering, and when they order it.
Mm.
Many, many patients decide to actually go through the process and give us access to their medical records. We are very pleased with the trend that we are seeing on that front.
You know, how should we think about improvement in the MCED and the Shield performance overall, as well, or as, you know, over time? Part of Guardant's presence in the market obviously is the strength of R&D that you have, the work and chemistry that you do, and
Yeah.
the strong tie that you have with bioinformatics and the algorithms improvement and the number of things that you're spending in terms of the R&D dollars. Maybe just give us a, you know, glimpse on how should we think about the improvement of performance
I think what you're seeing continuously from Guardant and our track record of innovation and continuous improvement across all of our brands, and that will continue with Shield too. There are multiple pillars that we are working on. On one side, since we are using AI algorithms in Shield, more and more data we capture, epigenomics data correlated with the clinical status of the patient, that algorithm over time would get better. That's one angle. The other angle is looking at some complementary biomarkers. There are some interesting internal activities that we've done, external due diligences that we've done, and as a result of this MetaSight acquisition that we announced recently, that would give us really a complementary technology stack on top of smart Liquid platform to go beyond ctDNA epigenomic analysis.
We are gonna see what's gonna happen on that side. Still, it's early days for us, but it has potential for Shield improvement and even beyond Shield. Multi-disease detection, Reveal improvement, and all the assets that we have at Guardant potentially can improve when we add that technology stack on top.
Wanted to also touch on the sales reps. I believe you have 300 sales reps there, the target of 600-700 by 2028. You know, how should we see the contributions from your, you know, sales rep ramping through the course of the year?
We're counting a lot on the improved productivity of the reps that we even hired last year. Vast majority of our reps still are not at their, you know, 12- to 18-month tenure. You know, we are a very young team in terms of professional life at Guardant and territories that we were not in. We are seeing actually a very healthy ramp in, you know, nationwide, for the productivity of the reps. Also, throughout the year, we are gonna continue to hire some reps. I mentioned a fraction of our incremental gross profit would go into further build-out of this commercial force. In fact, majority of it. Also, we'll see what happens with some of our co-promotional activity through Quest, Channel, PathGroup, and we go from there.
Maybe this next one is for Mike. In terms of the ASP, we saw ASP step down from $900 to $845, I believe, in the second quarter of 2025. Can you describe, like, sort of how low this ASP can go before it steps up, and what levers do you have to push that higher?
Yeah. I mean, the movement that we've seen on the ASP, you know, our guide, if you back into that, we're guiding for the full year of 2026 in ASP of around $775.
Mm-hmm.
That ASP move, that's deliberate. You know, I mean, first of all, we've got our ADLT rate, $1,495. We're seeing very strong reimbursement from Medicare Advantage payers. Medicare fee-for-service and Medicare Advantage makes up the majority of our volume. On the commercial side, we're getting some payments, but a lot of zeros. It's deliberate that, as we get more and more demand from the under-65 patients, we're opening up in certain areas and allowing that volume to come through. I think, you know, as we move forward and we wanna build the volume, we're ahead of ACS guidelines. I think when they come in those states, we'll open up again to the under-65 volume.
We fully expect, you know, initially we'll get more zeros as we open up, so our ASP will tick down. Again, we've guided to sort of $775 this year. But once that payment starts to take hold, and it probably takes around 12 months or so for the commercial payers to really start paying in those states, then we would expect the ASP to start to tick back up again. You know, again, we're anchored on a Medicare rate of $1,495, strong Medicare Advantage payments. I think what we can expect from the commercial payers when they pay is gonna be a good rate anchored on that Medicare rate.
Great. So that's all the time we have, but I just wanted to say listen, congratulations on all the remarkable progress that you've made, and you have no exposure to Middle East and shipping and everything, so I think that's a positive in the current times. That, thank you for being here.
Thanks, Puneet.
Thank you so much.
Thank you.