Good afternoon, everybody. Luke Sergott, I cover life science tools and diagnostics here at Barclays.
With me, I have Amirali Talasaz , Co-CEO, and Mike Bell, CFO of Guardant Health. I told you I wasn't going to try your last name, but I did it anyway.
Thanks again for making it.
Thanks for having us.
Yeah, it's great. I think I just wanted to come off the jump. I mean, there's a couple conversations that we've been having around SERENA-6, right?
A couple of Fierce Biotech or Fierce articles out there around really the kind of protocol design, et cetera. In the articles and in the conversations, they've talked about, like, the clinical utility of discovering the ESR1 mutation, and it's brought a kind of clinical utility question on the liquid biopsy side anyway. I think.
Can you just kinda walk through where you see the clear clinical utility and the benefit to the patients in getting the test and making that switch without having to talk about the drug itself or anything like that?
Yeah, sure. Maybe for some of the people who could be newer to the story at Guardant, we have three major actually business drivers and brands around treatment selection, MRD, and screening. All of them are giving us opportunities for hypergrowth.
The question about SERENA-6, one of the growth drivers for Guardant360, our liquid CGP test for treatment selection, is making the liquid testing also a monitoring tool while the patients are going through the treatment selection Phase.
We got ESR1 approval from FDA a couple years ago in breast cancer for treatment selection. What happened right after that FDA approval, the volume of our breast cancer testing in a matter of very few weeks doubled up.
It's an emerging mutation that happens as a mechanism of resistance to response, and it's activating some other kind of opportunities for treatment for patients. Now, within the SERENA-6 trial, our pharma partner, AstraZeneca this time, is monitoring the patient to figure out when ESR1 is getting detected in blood and using that as a surrogate for changing the decision on the treatment and starting a different kind of therapy.
That trial readout actually has been very interesting. It's got discussed in ASCO, and the expected decision by FDA for FDA approval is in near future, in the first half of this year. Now, it's a biomarker that uniquely can just be detected for liquid biopsy.
It takes our liquid biopsy at a single time point testing at each round of progression to multiple time points of testing, initially for breast cancer for this ESR1, but it could open up the utility over time to similar kind of studies and similar kind of biomarker testing in monitored setting.
The utility of this drug actually is pretty interesting. Like, when you are looking at the response rate, it's pretty strong.
Our pharma partner, AstraZeneca, it looks like they are very bullish about the opportunity with this drug.
They're getting ready to launch this test, and there's an outcome to talk about the drug actually in late May.
What we do know is whenever FDA want to approve something which could be paradigm change in clinical decision-making, and it could be a big event, they want to actually call for adcoms and get some opinions from KOLs.
That's actually we experienced that with some other brands at Guardant ourselves. For SERENA-6, since the patients are not first-line or second-line, they're falling kind of between these two, it's an interesting new paradigm for oncology management, so it makes sense for FDA to go through this process, and we are very positive and hopeful that would go smoothly.
I guess just on the whole, the ESR1 space, we had a Roche readout also come through. I assume that you guys are involved across the board on the indication. As you think about that, like, what that means for the particular biomarker within the franchise, and I know you guys don't have it in your 2026 guide, but as we think about 2027 and 2028, how instrumental is this approval or if the drug comes on?
Like, what can that do to the overall outlook?
It's a very good growth driver actually for Guardant 360. There are 40,000 breast cancer patients who are candidates for this kind of monitoring if this drug gets approved for this indication. 3-4 time points of testing per year for these kind of patients.
if the patients actually still continue to be ESR1 negative, the testing would continue in the second year. We expect on average maybe 3-4 testing per year. It's a very interesting growth driver for us. It's not part of our guide in 2026. We want to wait for FDA approval to secure that, and then we see actually what happens to our breast volume post-approval. It could be something very interesting for us.
Would this be included on the companion side, or is this just where the HER2, whatever the indication is for the 40,000 breast cancer patients? It's associated with Astra's drug, right?
It's going to be a new CDx for Guardant360, and it's going to be first of its kind. It's going to be the first monitoring CDx for Guardant360.
We already have 25 approvals for 360, but all of them are like companion to drug, specifically for treatment decision-making at a single time point, but this one would be a monitoring CDx.
Okay. This is, yeah, like you said, first of its kind.
Sticking in Guardant360, the recent liquid approval marries really well with the tissue side, and I think that there's a little bit of an underappreciated understanding of how these two are going to be married together and kind of offered as, like, for a bundling opportunity.
Can you talk about that?
Yeah. Actually, very recently, I think maybe what you're referring to, Luke, is the CRC approval that Guardant360 got in January.
We got the first approval for Guardant360 in CRC indication. It's new for us and the utility of CGP and CRC is well-established, but always there are some physicians that once the test is indicated for specific FDA-approved indication, actually the level of confidence even goes higher and the level of utilization goes higher.
That could have some kind of interesting impact. It also drives some kind of new conversation with commercial payers to fill some of the gaps that still we have on the coverage side.
After 10 years, we are in a very good position with Guardant360 reimbursement, but there are still some cases that we are not getting good payment from the payers.
Our experience has shown that once we get actually FDA approval, our conversation with commercial payers for those specific indications becomes even much more solid.
That could have some kind of a tailwind for us on the coverage and ASP front, but it's going to take some time.
Yeah, it'll take time to build that out. On the as you think about the platform itself, you guys really made your bet on the methylation with Infinity a long time ago. But as we see the sequencing costs come down and the elasticity pick up as the amount of data you can put out, talk about the platform strategy and layering on more of multiomics, or are you guys kinda just continuing and adding indications for your existing technology?
This is really the data moat that we have in Guardant story, the flywheel of data at Guardant. When we are looking at 1 million patient data that we have on the genomic side, that's very deep.
When we are looking at the epigenomics side, that's something that internally we even call it the dark matter of biology on our understanding of cancer.
We have many hundreds of thousands of patients that we have actually full epigenomic data in them. That's a treasure that's already paying some dividend for us in terms of technology development, application development for us. like what we are doing on Guardant360 franchise based on this epigenomic data, just to give you some example.
We developed some Smart Apps that is generating some kind of clinical information for physician for first time.
Like subtyping the patient has been enabled by this database and is one of our Smart Apps, just as an example. We are adding some other kind of layers to our data step by step.
We talked about our recent MetaSight acquisition, which is generating a new layer of complementary technology for us, and that would potentially take us to even beyond ctDNA analysis, genomic, epigenomic analysis, and give us a new layer of information which has potential for improvements of our product across the whole portfolio.
Great. Let's shift gears, I guess. When you talk about Reveal, so this is the fastest-growing test in your portfolio. We have you somewhere around 60,000 tests. It'd be great to know if I'm in the right ballpark there. But outside of that, as you continue to land obviously it's really early in the launch, so most of these I assume are on the adjuvant side.
How are you guys thinking about the actual surveillance portion? it was or not promised, but the idea was that surveillance would include, like, 3 or 4 tests a year, and that's quickly been kinda walked back to 1 or 2. Walk me through kind of that waterfall and how you think it builds.
Mike, do you want to take that?
Yeah. I mean, first of all, we don't break out our Reveal volumes, but I think the number you said 60,000. I mean, it's broadly in the right ballpark and yeah, it's been our fastest-growing oncology product by volume for the last few years.
We expect it's going to continue to be so this year. We're very bullish on Reveal for 2026. on the adjuvant surveillance side, we're not sort of breaking that out.
Mm-hmm.
What I would say is that, on the CRC side where we're now reimbursed for CRC surveillance since roughly 12 months ago, yeah, I mean, we're seeing good traction there. We're seeing good pull-through. I think there's been a focus from our commercial operations to really focus on the surveillance aspect and making sure that we've got the mechanisms in there to pull through the patient for the second, third further tests.
It's definitely an opportunity for us. It's somewhere that we're improving and that sort of test per patient is getting better. Yeah, Reveal in both the adjuvant and the surveillance setting for us is very important.
As you think about the you know submitted breast, IO, the Roche MolDX.
Yeah.
How does the actual treatment paradigm change versus CRC with breast or immuno-oncology? The reason I ask is 'cause, like, with CRC, if you come back, you're starting to see the signal again, then you can go back in and identify and cut that out.
With breast, you've already probably done the double mastectomy. It's more about a treatment and a clinical utility question there associated with those. How does that paradigm change as you're rolling out on these new indications? Is that way off?
I think typically post-MRD testing, the next step for a patient is to do radiographic imaging to find where that site of residual disease is or then make some kind of treatment decision just based on that MRD finding. What you're pointing out actually generates some kind of interesting opportunity, which could actually be a paradigm shift, therefore, in the field of MRD.
Just imagine a day that a patient who's going through MRD testing, not only you can figure out if the patient is MRD positive or negative, but also where the site of residual disease is through the same test. These are some of the applications or opportunities that platform technologies that we have has potential to deliver versus just a yes/no quantification level of residual disease in body.
We are very excited to potentially see those kind of future opportunities in the field of MRD.
Yeah. Outside of the counting application, almost like tissue of origin, like you've seen with some of the MCED side.
There are potential for it.
Yeah. Is that a big technology lift or is that just?
Looks like the science of it, like already when, for instance, we have blood tests for multi-cancer detection that we do that has cancer site of origin.
Mm-hmm.
As part of it. There's some aspects of science and technology and understanding that we have.
We are also capturing some additional layers of the data. What I'm talking about is not in terms of prime time, but really like figuring out and seeing a vision for future where we could be.
Right.
That in this field of MRD, not only we find it, but we can also locate it and characterize it and provide additional information about that residual disease.
Got it. I guess sticking with Reveal here, with the Reveal Ultra launch you don't have this in the guide. Walk us through like, I guess, why not include it in the guide?
I understand that there's a healthy dose of conservatism and uncertainty with how this kind of paces out.
You already have kind of the sales force in place ready to build this out. Early feedback from physicians and then timing of when we could start seeing this.
Maybe just some background maybe for some of the people who are newer to the story. We are already a leader in the tumor-naive MRD side. Now we mentioned that we are kinda getting into a tumor-informed MRD testing with Reveal Ultra. It's a new technology stack that we built ground up. We believe it's going to be the best-in-class technology when we launch it.
It's on track to get launched later this year. Now, in terms of the guide it's a product that still we haven't launched, and when we launch it it's not going to.
We are going to have the data, but probably no reimbursement right off the bat. We are not counting it as a revenue contributor in 2026, but it's definitely an interesting development for us as we go to 2027.
Right. From a reimbursement perspective, you kinda give us a specific number you're targeting or is it going to be similar to what Reveal is?
Um
Is it going to change at all?
Well, I think that's to be determined. CRC, we're reimbursed at $1,644.
Yeah.
Our sort of base case assumption is that the reimbursement would be in that ballpark. I think we'll have to see as we go through the MolDX process. There'll have to be sort of discussions on that, and we'll see where we come out.
Y eah, we're hopeful for reimbursement as soon as possible, and we're hoping for the right reimbursement level.
All right. Last here on Ultra, I mean, what really stood out was the limited detection to us. Like, how did you get it so low? Like how deep are you sequencing? Is it just a matter of just brute force or is there something more elegant?
I think by now, we should have developed this confidence at Guardant. We really have very strong muscle power in innovation and going after hard problems, which if we can solve it, would be a major contribution to the field. We've shown it across multiple product, and now Reveal Ultra would be the newest example.
We haven't disclosed details about the technology stack, but we are not far away from the launch when we get there. We are going to have some interesting conversations. Stay tuned.
Okay. Fair enough. All right. Then I guess moving through the portfolio as we talk about screening, and this is. we talked about Guardant back in even back in the day, 2016 and 2017. Like, this is it. Like, this was this big opportunity, and now it's here.
Y ou have Guardant360 still going strong, and you have Guardant Reveal on the MRD, right?
Lot broader portfolio. But as you think about the screening and the ramp here that you've seen, a little bit more mature market, how much of the adoption you've seen, how much of that is closing the care gap from those that haven't had some prior screening technology and just don't want to get colonoscopy or use a stool-based test?
Maybe I just make a general comment about the whole portfolio, and then maybe I go through Shield specifically on the care gap question. To your point, Luke, like we've done several things at Guardant during the last few years that all kind of got ready almost at the same time to really contribute in a very meaningful growth driver.
We are very excited, confident, and bullish about continuity of Guardant360 growth, powered by smart apps of the new indications and going to early stage. Bunch of growth drivers that we are seeing on 360 that gives us a lot of confidence there. MRD, we talked about it earlier, and Shield. This is probably the biggest diagnostic brand ever.
In the first full year of launch, we made it outside COVID testing the best diagnostic launch.
It's really an endorsement of the unmet need which is out there. We have a blood test that this time we are really messaging for unscreened patient population to get tested in PCPs. That's the biggest piece of untapped opportunity, 54 million patient opportunity there.
What we've seen in some of the latest data that I've seen is about 90% of the patients who've been tested by Shield, they haven't been screened during last five years based on their medical information that we have. Which means really our messaging is working, and we are filling the gap of really bringing unscreened patient population around the table.
At the end, it's a simple routine blood test that 90% of the patients age 50 and above do it on annual basis, and Shield is just getting added in. We're very excited of what's happening there.
You, you're exiting the year with 300 reps. You guys are guiding to 150% volume growth. Do you have ACS and HEDIS and USPSTF baked in? Just walk through the assumptions there on this growth, and is it more about just increased productivity on your existing reps?
Effectively, that's right, Luke. we've not included being in ACS guidelines.
Mm-hmm
In our guidance, neither being in quality metrics or USPSTF. We look at ACS guidelines as being in the relatively near future.
Mm-hmm.
That would be an upside. The main driver is just going to continue to be execution on the commercial side. We ended last year with 300 sales reps. We're going to add to that this year, but those 300, productivity is going to be increasing throughout the year.
We'll bring on new reps. We'll put them into new territories. I think the field sales is going to be a main driver of that. we've started now a DTC campaign.
Mm-hmm.
We're very hopeful for that. With the early days look very, very promising, so we think that's going to be a driver of growth. We announced yesterday a partnership with Quest. that gets us really to fast-track our EMR connectivity. So we're assuming that that's also going to be a driver, and that's in our guidance.
What we haven't included from the Quest partnership is the reps are going to be calling on their accounts to educate them about Shield. We're going to be able to utilize that to send in our reps as well and drive volume into those accounts.
We haven't baked that into our guidance. If that's successful and it works well, I think that could be a potential upside on-
Yeah
What we've guided to. we think we've got a lot of drivers already in that guidance, but we've left ourselves some room for potential upside.
Yeah. that makes sense. 'Cause if you haven't worked with them before, so you don't really know how that's going to play out.
Mm-hmm.
From a coverage perspective on those 300 reps and maybe adding a few more, but how do you guys have that structured? How is that? 'Cause there's a lot of PCPs out there, and a lot of them are, let's say, not as conducive to growth as some others might be.
Like, how are you guys kinda segmenting the market and going after it versus boiling the ocean, I would say?
Launched in a very targeted way. We have targeted the people who have experience with non-invasive CRC screening. In early days, we really targeted people who are super users of non-invasive CRC screening, have good volume of Medicare beneficiaries since that's the reimbursement that we had at the time of launch.
Now with this 300 and continuing to increase reps, we have a nationwide coverage. Still, there are 250,000 potential PCPs who have experience with CRC screening, and we are just scratching the surface.
We are just opening up this opportunity, and there is a lot of room for potential growth left, obviously. In terms of coverage now, we have nationwide coverage.
Yeah. I guess as from your thinking about building up the next year or two of the business, it's more focusing on those patients that are non-compliant, right? Or are you starting to go into the hand-to-hand combat with some of the stool-based testing?
No, not yet. I think obviously our coverage is broad. Our indication in terms of FDA approval is first line is broad. we are after screening unscreened patient population. That's the biggest untapped opportunity.
We are already seeing, although we are not promoting it, we are seeing actually cases in some accounts that they have some other interesting use cases.
For instance, we are seeing when the patient is due for re-screening, some of the patients are really opting out of continuing with the previous modality, and blood is a great opportunity for that. Some patients are getting tested between two interval of colonoscopy.
There are some incidental CRCs that we know are getting diagnosed in as interval CRCs. There are some interesting cases that we are seeing in terms of market adoption, but we are focused on unscreened patient population.
All right. I know we're over time, but just on the DTC side, so if I went on, like, and tried to go get screened, could I just log in and just get one sent to me? Or like, how is this, or is this more about just educating the consumer so that they can go to their PCP and get it?
We are targeting 45 and above and double indexing on 65 and above.
I just did it earlier this month. I'm ready.
Yeah, I think you're seeing some heavy kind of presence in the digital side, some presence on TV. still we are not doing full force DTC campaigns.
Got it.
Step by step, we are pleased with what we are seeing.
Great. All right.
Thank you.
Thanks for your time. Thank you.