Thank you for standing by, and welcome to the Guardant Health Q1 2021 earnings call. It is now my pleasure to hand the conference over to Carrie Mendivil from Investor Relations.
Thank you. Earlier today, Guardant Health released financial results for the quarter ended March 31st, 2021. 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 email to investors@guardanthealth.com. Joining me today from Guardant is Helmy Eltoukhy, Chief Executive Officer, AmirAli Talasaz, President, and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements 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 to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears 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 annual report on Form 10-K for the year ended December 31st, 2020, and in its other filings with the Securities and Exchange Commission. This call will also include a discussion of certain financial measures that are not calculated in accordance with generally accepted accounting principles. Reconciliations to the most directly comparable GAAP financial measure may be found in today's earnings release submitted to the SEC. Except as required by law, 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, May 6th, 2021. With that, I'd like to turn the call over to Helmy.
Thanks, Carrie. Good afternoon, and thank you for joining our first quarter 2021 earnings call. Everything we do at Guardant is motivated by our commitment to serve patients. In line with our patient-first commitment, I will start off our call today with a patient story. Six years ago, a 64-year-old man was diagnosed with metastatic colorectal adenocarcinoma and went through numerous therapy regimens and surgeries. In the spring of 2020, his cancer recurred, and his new oncologist ordered a Guardant360 test. A BRAF V600E mutation was identified. It is estimated that this mutation occurs in approximately 8%-10% of colorectal cancers. By identifying this actionable mutation, he was able to begin treatment with a combination of targeted therapies of encorafenib plus panitumumab, only recently approved by the FDA. Fortunately, the patient responded to this targeted therapy. As we know, tumors are constantly evolving.
After about six months, the patient was showing signs of progression. His oncologist ordered another Guardant360 test with our expanded panel that includes tumor mutational burden, or TMB. This second Guardant360 test identified the patient's tumor as TMB high. A few months earlier, the FDA had approved pembrolizumab for patients with TMB-high tumors of 10 mutations per megabase and above. This finding opened up another therapeutic avenue for this patient. This story highlights how genomic profiling using Guardant360 can keep up with the evolution of a tumor and identify ongoing therapeutic options. Turning to our first quarter performance, we started the year strong with revenue growing 17% to approximately $79 million. I am really proud of our team for their continued hard work this quarter, which translated to solid growth in our clinical business as well as progress across our product pipeline.
As expected, we continue to see residual COVID impacts at the beginning of the year. Over the course of the quarter, as physician offices started to reopen, business improved further. Even with the persistent presence of COVID headwinds, clinical volume grew 21% to record levels of 18,390 tests. We continue to extend our position as a liquid biopsy leader for therapy selection, there is still a vast amount of greenfield opportunity ahead in this market. The underlying fundamentals of our clinical business are very strong, we continue to see growth in both new physician adds and repeat orders. Even with the residual impact from COVID that we anticipate this year, we expect our clinical volumes to grow more than 40% over 2020. We also made important progress on the reimbursement front.
At the end of March, CMS confirmed that our Guardant360 CDx test meets the criteria for advanced diagnostic laboratory test, or ADLT status, which is reserved for FDA-approved tests as well as for innovative products that provide novel clinical information that cannot be obtained by any other method. With ADLT status, Guardant360 CDx will be reimbursed at a rate of $5,000 for all Medicare patients, in line with our internal expectations. Now moving on to our recurrence monitoring opportunity with Guardant Reveal. We are very pleased with the tremendous enthusiasm we are hearing from oncologists since its launch in mid-February. As a reminder, Reveal is the first blood-only liquid biopsy test for the detection of residual and recurrent disease.
With a simple blood draw, the test improves disease management of early-stage colorectal cancer patients by detecting ctDNA in blood after surgery to identify patients with residual disease who may benefit most from adjuvant therapy, and by detecting recurrence months earlier than current standard of care. We believe Guardant Reveal is truly in a class of its own, with industry-leading sensitivity and specificity, and an average turnaround time of only seven days, compared to other tests that require a tissue biopsy and have turnaround times of four to eight weeks. Much as we saw with the launch of Guardant360, a blood-only solution addresses the significant logistical challenges posed by tissue in this setting. Today, the standard of care is CEA, a blood test where you get your results a few days later.
Importantly, Guardant Reveal fits into an oncologist's workflow in the exact same way as CEA is used but gives them extraordinarily better performance. CEA has a sensitivity of 69% with 64% specificity in the surveillance setting, versus 91% sensitivity with 100% specificity for Guardant Reveal. They are getting the better product market fit with the benefits of improved performance. It is still early, but we are seeing strong uptake from both new users as well as customers that have been using other products on the market and benefiting from the deep relationships we have within the oncology community. From the onset, we have said that it takes more than just great technology to drive durable long-term adoption of new products. This type of sustained growth requires seamless integration into clinical workflows, demonstrated clinical utility, regulatory approval, and broad reimbursement.
As for our work with Guardant360, we are committed to achieving excellence in each of these to ensure that our product drives superior value to the market and maximizes access for patients. We are making great progress on the reimbursement front and are confident we will have Medicare reimbursement in place for Guardant Reveal by end of 2021. At the beginning of April, the New York State Department of Health Clinical Laboratory Evaluation Program, or CLEP, approved Guardant Reveal for the detection and monitoring of MRD in patients with early-stage cancer. This approval is an important proof point for Reveal and builds on our commitment to improving care for all cancer patients by expanding access to our tests through compliance with the appropriate clinical laboratory regulations.
I'm so excited about what is ahead for Guardant and believe 2021 will be a pivotal year for us as we expand our product portfolio and invest across our business to build the foundations for complete cancer testing across the continuum of care. Looking ahead in our therapy selection business, we'll continue to expand the utility of Guardant360 with additional approvals, clinical data, and broaden use of the test in the molecular response and monitoring settings. There have been more than 40 publications to date that highlight the utility of Guardant360 in this setting. We have generated data across multiple tumor types, including lung, breast, gastric, and bladder cancers, and multiple classes of therapies, including immunotherapies, that demonstrate a second Guardant360 test a few weeks after treatment initiation can segment responders versus non-responders.
To that end, a new study recently published in JCO Precision Oncology shows that Guardant360 provides an early indication of treatment response to pembrolizumab-based immunotherapy by detecting molecular response as measured by changes in circulating tumor DNA levels early on. This study adds to the growing body of evidence showing that our Guardant360 test can effectively measure molecular response, giving clinicians an earlier indication of whether to continue or stop treatment, to explore other therapeutic regimens, or to enroll the patient in a clinical trial. Monitoring molecular response is an important application of our technology platform that will soon usher in a new era of adaptive management of treatments and disease, all within the reach of any oncologist using a simple blood draw.
We are also looking forward to the upcoming launch of our first tissue product, which we believe will address the unmet need that persists in the therapy selection market today due to the challenges with many of the existing tissue offerings. In recurrence monitoring, we'll continue to drive the adoption of Guardant Reveal, just as we did with Guardant360 several years ago, ushering in a new era of precision oncology for earlier-stage patients. Finally, in screening, we expect to complete enrollment of our ECLIPSE trial before the end of the year and to begin work on our expansion into other cancer types. To support our ambitious vision, we are continuing to grow our incredible team. I'm excited to welcome Dr. Craig Eagle, who recently joined Guardant as our new Chief Medical Officer.
Craig most recently served as Vice President of Medical Affairs Oncology for Genentech, where he oversaw the medical programs across oncology portfolio. He will undoubtedly make a great impact as we continue to develop and commercialize best-in-class products that scale the company for the future. With that, I will now turn the call over to AmirAli for more details on our biopharma business and our pipeline activities.
Thanks, Helmy. Our biopharma business as a whole is roughly back in line with the pre-COVID levels, and we are pleased with the progress we have made in Q1. Looking at biopharma samples, as expected, volumes for the first quarter was sequentially down from Q4 levels, but higher than the COVID trough we saw in Q2 and Q3 of 2020. Biopharma sample volumes was 3,522 tests for the first quarter, a decline of 33% from the prior year period. We continue to serve a growing number of biopharma customers with more than 70 partnerships currently underway. We are supporting an increasing number of studies, and we have a robust pipeline of discussions for future collaborations. However, while clinical trials are picking back up, enrolling patient volumes are still depressed compared to pre-COVID levels, continuing to impact both prospective and retrospective sample volumes.
Looking at development services, we continue to see strong interest in our companion diagnostic business following FDA approval of Guardant360 in 2020. Development services revenue for the first quarter 2021 grew more than 100% to $14.9 million. Last week, we announced a strategic collaboration with Daiichi Sankyo to pursue regulatory approval and commercialization of Guardant360 CDx as a companion diagnostic for ENHERTU, a HER2-targeted antibody drug conjugate being studied in the treatment of patients with advanced metastatic non-small cell lung cancer. This further strengthens the importance of comprehensive profiling as more and more biomarkers are being pursued in this disease. We are also investing in our global companion diagnostic footprint as part of our mission to make CGP broadly available to patients around the world. To that end, we recently received our CE-IVD self-certification for the EU and submitted our initial PMDA filing in Japan.
Our platform continues to generate data that further demonstrates the clinical utility of our product portfolio. At AACR, Amgen presented a clinical study that demonstrated how our Guardant360 CDx was effective at selecting patients with KRAS G12C who may benefit from treatment with sotorasib. This mutation exists in one out of every eight patients with non-small cell lung cancer. There is a critical need to improve access to high-quality diagnostics and more routine biomarker screening. Turning to Guardant Reveal. Before its launch, ctDNA-based tests developed to detect MRD mainly required tumor tissue to identify patient-specific tumor mutations. A new study led by Massachusetts General Hospital Cancer Center, which was published in Clinical Cancer Research, demonstrated that Guardant Reveal identifies patients most likely to recur with high clinical accuracy.
The integration of cancer-specific epigenomic and genomic signatures allows Guardant Reveal to detect minimal residual disease in early-stage colorectal cancer with industry-leading performance and without the need for tumor tissue. In the primary landmark analysis, 84 blood samples were taken from the curative intent patient population one month after completion of definitive treatment. In the subset of patients with at least one year of clinical follow-up, all patients with detectable ctDNA recurred. Guardant Reveal sensitivity and specificity were 55.6% and 100%, respectively, for this single time point. By incorporating longitudinal surveillance samples, sensitivity improved to 91%. Tissue-dependent MRD tests have previously reported sensitivities of 40%-50% with a single post-surgical blood draw. Interestingly, integrating epigenomic signatures increased test sensitivity by 36% versus just using genomic alteration alone. CEA tests, the standard of care in colorectal cancer, did not predict recurrence in this patient cohort.
We believe that Guardant Reveal can be a powerful decision-making tool for oncologists managing patients with early-stage colorectal cancer. In addition, our blood-only approach offers a more streamlined workflow and faster turnaround time for clinical decision-making. We remain committed to generating clinical utility evidence based on prospective interventional studies. We are pleased with our progress in multiple studies, including COBRA, Stand Up To Cancer, and PEGASUS trials. We continue to believe that demonstrated clinical utility will be the critical component to drive long-term and deep adoption in this space. Turning to screening and our ECLIPSE trial. We continued to see robust patient enrollment throughout the first quarter. We now have over 180 sites enrolling patients. Overall, we are pleased with our progress, and we remain on track to complete enrollment by end of this year.
As we prepare for the readout of ECLIPSE, we are beginning to establish a commercial team engaging industry groups and lay the foundation for a commercial organization to focus on the screening opportunity ahead. In parallel, we are continuing to develop screening data for CRC internally and look forward to presenting data from our largest early-stage patient cohort to date at ASCO in early June. We are also looking further ahead to the opportunities beyond CRC. We are starting to plan our next screening clinical study in other cancer types and expect to share more updates about this in the latter part of 2021. With that, I will now turn the call over to Mike for more details of our financials.
Thanks, AmirAli. Total revenue for the first quarter of 2021 was $78.7 million, up 17% from $67.5 million in the prior year quarter. This growth was driven by a year-over-year increase in both precision oncology testing revenue and development services and other revenue. Total precision oncology testing revenue for the first quarter was $63.7 million, a growth of 6% compared to $60.2 million in the prior year quarter. Precision oncology revenue from clinical tests in the first quarter was $49.8 million, up 31% from $38 million for the prior year quarter. First quarter clinical test volume was 18,390, up 21% from the prior year quarter. The clinical test average selling price was $2,710 in the first quarter of 2021, up from $2,489 in the prior year period. First quarter 2021 clinical test revenue includes approximately $5 million recognized from cash collected for Guardant360 tests performed in prior periods.
There are several factors that will impact the ASP of Guardant360 for the remainder of 2021. Firstly, we will have a positive impact from the new ADLT Medicare reimbursement rate of $5,000 for Guardant360 CDx. As a reminder, the $5,000 Medicare rate took effect on April 1st, 2021, and will continue until January 1st, 2022, at which time the rate will change to the median private payer rate. We continue to anticipate that the April 1st change to the ADLT billing code may have a short-term impact on the processing and payment of Guardant360 CDx claims by non-contracted private payers, which could offset the positive impact we receive from the increased ADLT Medicare reimbursement.
In addition, we expect the impact on ASP caused by prior period cash collections to start to reduce in the second half of the year as our revenue recognition becomes more weighted towards tests performed in the current period. On the whole, we expect the ASPs for Guardant360 to average approximately $2,600 for 2021. Note that it will take time to receive Medicare and private payer reimbursement coverage for newly launched clinical tests such as Guardant Reveal. As a result, we expect minimal revenue for these newly launched tests in 2021, which in turn, and depending on volume, could impact the overall clinical ASP. Precision oncology revenue from biopharma tests in the first quarter totaled $13.9 million, down 38% from $22.3 million for the prior year quarter. First quarter biopharma tests totaled 3,522, down 33% from the prior year quarter.
As previously mentioned, biopharma volume is now back above the lows we saw in the second and third quarter of 2020, but we are still facing headwinds with respect to clinical trial patient volumes. Biopharma test ASP was $3,944, down 7% from $4,230 in the prior year period, primarily due to changes in the mix of tests performed. Development services and other revenue continued to be a strong growth driver and in the first quarter totaled $14.9 million, up 106% from the prior year quarter. Gross profit for the first quarter of 2021 was $49.9 million, compared to a gross profit of $47.0 million in the same period of the prior year. Gross margin was in line with our expectations, and in the first quarter was 63% compared to 70% during the first quarter of 2020.
Operating expenses for the first quarter of 2021 were $157.8 million, an increase of 93% compared to $81.9 million in the first quarter of 2020. Non-GAAP operating expenses exclude stock-based compensation and related employer payroll tax payments, acquisition-related expenses, amortization of intangible assets, and changes in fair value of contingent consideration. Non-GAAP operating expenses for the first quarter of 2021 were $100.7 million, a 53% increase from $65.9 million in the first quarter of 2020. As mentioned during our last earnings call, we expect operating expenses to continue to accelerate in 2021 as we invest in our LUNAR program, the ECLIPSE study, and other development activities, as well as launch new products and expand our commercial organization both in the U.S. and internationally.
Net loss was $109.7 million or $1.09 per share for the first quarter of 2021, compared to $27.7 million or $0.29 per share in the first quarter of 2020. Non-GAAP net loss was $49.4 million or $0.49 per share for the first quarter of 2021, compared to $15.4 million or $0.16 per share for the first quarter of 2020. Adjusted EBITDA was a loss of $45.4 million in the first quarter of 2021, compared to a $15.5 million loss in the first quarter of 2020. We define adjusted EBITDA as non-GAAP net loss adjusted for interest, income tax, depreciation, amortization, and other income and expense. We ended the first quarter of 2021 with $1.9 billion in cash equivalents, and marketable securities. Now turning to our revenue outlook for full-year 2021.
We are pleased with our solid start to the year and view the fundamental drivers of our business to be very strong. We are not yet through the global COVID pandemic. As Helmy mentioned, we are still seeing COVID impacts in our clinical business as some physician offices remain closed. Related to our biopharma business, while clinical trials are picking back up, patient volumes are still depressed compared to pre-COVID levels, continuing to impact both prospective and retrospective sample volumes. Given this backdrop, we continue to expect revenue to be between $360 million-$370 million, representing growth of approximately 27% over 2020 at the midpoint of the range. We also expect clinical sample volume for 2021 to be greater than 90,000 tests, which represents growth of at least 42% over 2020. At this point, I would like to turn the call back to Helmy for closing comments.
Thanks, Mike. Before closing, I want to thank our team for their incredible work to bring to fruition the vision we had when we founded Guardant of significantly improving outcomes across the entire continuum of cancer care. 2021 will be a pivotal year for us as we expand our product portfolio and invest across our business to open up the massive opportunity to transform cancer care for millions of patients. These new products also mark an important inflection point as we begin to transform Guardant from the leading liquid biopsy company to the leading cancer testing company. I'm so excited about what is ahead for Guardant and look forward to updating you on our progress. With that, we will now open it up to questions.
At this time, if you would like to ask an audio question, you may do so by pressing star and the number one on your telephone keypad. Again, that is star one. We do ask that analysts limit their questions to one question and a follow-up. We'll pause for just a moment to compile the Q&A roster. The first question will come from the line of Puneet Souda with SVB Leerink.
Yeah. Hi, Helmy and AmirAli. Thanks for taking the question. First one is on the guide. You're obviously maintaining your guide as before, so just wanted to get a sense from you what you're seeing in the channel, and from the sales reps. Maybe can you give us a sense of what percent of the reps are actually in person and detailing the G360 and other products versus still online? Obviously, vaccinations have ramped up. Patients are coming back to the clinic, obviously not at the same levels as before. Pandemic is still something here. ADLT reimbursement appears to be improving, though I appreciate what Mike is saying, but you also have FDA approval, and that should be helping. Just wanted to get a better understanding of the 90,000 test. What is driving that conservatism?
If you can just walk us through, is that something that you're just waiting for a little bit more time to get a better sense of that or anything else you can provide on that would be very helpful?
Yeah. Thanks, Puneet. Good question. I'll maybe start and then let Mike jump in. I think the first part of the year, obviously a lot of physician offices were still closed. The pandemic was still raging in January. I would say that towards the end of the quarter in March, we started seeing, I think, resolution of a lot of, obviously, offices starting to open back up. We're seeing, I think now over 30%-40% of visits now in person. Things are certainly going in the right direction, and I think we're pleased with the progress. I think what we have baked in is, I think resolution of some of the negative headwinds of COVID, especially with respect to physician office visits and so on by the second half of the year.
It's frankly why we believe we have a very robust guide in terms of 90,000 clinical tests. That's very high growth, in our view, from where we were last year. I think it's baked in our optimism and cautious optimism that essentially the vaccines will continue to do their magic and hopefully protect these more kind of compromised individuals in the metastatic cancer space. I would say that I think what is still uncertain is exactly how fast COVID continues to go down the right path in terms of resolution of those headwinds as well as some of the uncertainty around the transition around our ADLT status. I think we're seeing positive momentum there so far in terms of getting payments from Medicare at the higher rate of $5,000.
Obviously, it's going to take some time to play out in terms of really the impact on the non-covered private payers that are likely to impact ASP for the remainder of the year.
Yeah. Helmy, maybe just to add, in the last earnings call, we laid out a bunch of assumptions with respect to the guidance, with respect to ADLT COVID impact, and those assumptions are playing out as we expected. Yeah, we're very confident with the guidance that we've put out now. I think when we get past these uncertain items, we'll have a much clearer picture for the remainder of the year.
Okay. That's helpful. On ECLIPSE, I just wanted to clarify, you mentioned enrollment completion by year-end, and I think in the past you had said sometime around October that would align with the October 2019 timeline when you started this trial. You had about 150 + sites before. Now you have more than 180 sites, it suggests that the enrollment is ticking up. Just wanted to get a sense of, is this still the same timeline, or is it moving a little bit? It would suggest the timeline should move up rather than later. In terms of the screening data for CRC that you mentioned at ASCO, just wanted to get a sense from AmirAli on that, if I heard that correctly, that large cohort, how big is that cohort and is that still very much a case-controlled study or this is more an average risk?
Regarding timeline 24 for ECLIPSE, last patient enrollment, still we are on track to finish it at the timeline I would be set within the 24 months. The timeline that you mentioned is actually where we think we are going to have the last patient in, so definitely before the end of the year. We are going to scan monitor the field and we'll see. We are going to have some ups and downs, we feel very confident that it would finish by the timeline that we always mentioned throughout this course of study with all the ups and downs that we had due to COVID, which we are very excited about. In terms of the ASCO data, actually it's a pretty interesting cohorts. It's the largest cohort data that we are showing. It's not like a prospective screening cohort that we are getting in ECLIPSE.
ECLIPSE is one of a kind. We have to just wait to see what readout we are going to get from ECLIPSE. Systematically, we are removing some of the technical risk in terms of some potential variation in different cohorts, potential variation in terms of type of patients that they were in the cohort. Please stay tuned here, please, with that data and we are going to share the ASCO pretty soon.
Okay. That's super helpful.
One other thing-
Yeah, please
One more thing about the timelines for ECLIPSE. I think we're very pleased with the progress there. We've been able to maintain our initial timelines of 24 months since we started the trial, and I think that's a testament to the level of resilience and the level of execution that the team has had. We're seeing other trials delayed from where they were initially kind of posted. I think it puts us in a singular position.
Okay, great. Last one, if I could just squeeze in. In terms of the Guardant Reveal data and the CTR paper, obviously a really good paper. Is that clinical utility data good enough for reimbursement, or are there other data sets that you would want to add here before getting the reimbursement from Medicare by the year-end? Wondering if there are any indication as far as indication expansion that you're thinking about Guardant Reveal. Thanks so much.
Definitely we are very pleased with that paper. It was a collaboration which we had with MGH for a while. There are some additional ISTs that we are doing in the same space of CRC, which the data is cooking and we are going to show the data at the right time. In terms of reimbursement, we are pleased with some of the conversations we had with some of the major players in the field. Is that something which would convince all the major national payers to cover this test? No. If we thought that would be the case, we wouldn't do the clinical utility studies that we have started since almost now a year and a half, two years ago.
We think the readouts of some of those studies would really impact long-term adoption, commercial adoption of the test and long-term reimbursement by many payers. That's why we prioritize those activities over this commercial launch. Still, we are seeing some interesting and exciting signals from some of the conversations we have. Please stay tuned, so if we have some good information to share in future.
Great. Thank you.
You asked about other indications, then very quickly.
Yeah.
For a while, we talked about our platform technologies definitely way beyond CRC. CRC is our lead indication, not the only indication. We have been working in a few other cancer types, and we are pleased with progress that we've seen in really multi-cancer setting, which has some implication in MRD side and some implication on the screening side. We are pleased with the progress on those fronts.
Great. Thanks, guys.
Okay.
The next question will come from the line of Dan Arias with Stifel.
Good evening, guys. Thanks. Helmy, just maybe a couple on some other clinical trial questions. Just on ECLIPSE, that's obviously going to be a pretty high-profile data set. Would you feel the need to unveil that at a meeting or can that kind of be ad hoc when it's ready to be put in front of people?
I think we'll see what makes sense. It depends on timing. Obviously, if timing works out, I think it could be unveiled at a trial, it's obviously a very sensitive data set that w ould likely need to be shared in a timely fashion. We'll make sure it gets out then.
Okay. Maybe on the MRD side, Stand Up To Cancer and COBRA, I think the primary completion date for Stand Up To Cancer is listed as February of 2022, COBRA is summer of 2022. Do you think we might get an interim look at data from either of those before those dates, or is that more or less the time that we should think about when it comes to just sort of seeing results and having something to evaluate?
AmirAli ?
Yeah. Those are the timelines for the enrollments. This is a multi-year trial in terms of figuring out the clinical endpoints that we have in those studies. Some of the studies, in fact, go all the way to end up overall survival. It's going to take a few years for some of the studies to have a solid readout on the clinical endpoints while the enrollment was finished and close to the timelines that you stated. It's going to take us some time to really get some good return out of those investments. As I indicated before, we believe those are very key for the progress that I think the whole MRD field needs to make to really open up this big opportunity that we are excited about.
Okay. Sorry. One last quick one for Mike. Mike, are you able to say what percentage of private payers are actually billing using the miscellaneous code right now?
No, Dan, we don't really break out the codes that we use. If you're trying to get at how that ADLT impacts the private payers, I think all we're saying is that with those non-contracted payers, really the sort of negative short-term impact of that will offset this positive Medicare rate of $5,000.
Okay. That was in fact what I was trying to do. Thanks.
The next question will come from the line of Derik De Bruin with Bank of America.
Hi. Thank you for taking my question. This is Ivy on for Derik today. First, I want to start with Reveal. Just wanted to see if you could share a bit more about the uptake so far, and also what kind of revenue growth trajectory you are looking for. Can we look to the G360 ramp? I know it's still early, but would appreciate any comment on that.
We're very pleased with what we're seeing so far with Reveal. I think it's meeting all of our expectations in terms of having a product that really has the right product market fit. There's just really no other product like it in the market today, both from performance and from really just the ease of use of a blood-only test. We're seeing, I think, physicians who've both using CEA and others that are using other ctDNA tests out there very easily switch to using Guardant Reveal. I think we couldn't be more pleased. I would say that in terms of the ramp that you should expect, we have much deeper relationships today than we had seven years ago when we launched Guardant360.
I think part of the success we have is just the credibility we've built and the deep relationships we've built with the oncology community in those seven years now. I think we're leveraging a lot of that and we're very, I think, cautiously optimistic in terms of the continued uptake of Guardant Reveal for the remainder of the year and beyond.
Great. Thank you. Wanted to touch on LUNAR-2. Can I get your opinion on your targeted performance on LUNAR-2? In your opinion, what kind of ECLIPSE data you would need to sort of have a faster ramp-up, versus the other non-invasive option out there in terms of CRC screening, aka Cologuard. Also on the commercialization side, I realize it's still early to talk about the plans, but wanted to see what you think in terms of launching it as an LDT versus going a full FDA approval approach. Thank you.
Yeah, sure. Depending on the performance, actually, I think the indication of user success could be impacted and the total opportunity could be impacted. There are some bars that it looks like getting set in terms of getting successful national CMS coverage. Looks like pretty reasonable bars of effectively means our sensitivity to performances of FIT, maybe a little bit more than that. The next kind of target number is numbers by stool-based testing. We believe actually liquid biopsy and blood has the opportunity to even meet or exceed the numbers by stool-based testing. We have to see. We have to see actually what we are going to get in ECLIPSE. When you look at all the data that we've seen so far and we've put out there.
We are within striking distance of having a performance that's very comparable and competitive or potentially even could be better than stool-based testing. We have to see what ECLIPSE is going to show us in this kind of screening trial. Definitely, there is still a bunch of risks left there. We feel very confident based on everything that we know about liquid biopsy, that liquid biopsy will play a major role in screening, especially in this lead indication that we are targeting in colon cancer. In terms of commercial build-out, we are continuing to do the investment on that front, that we are building the team. We are building it top-down.
We have a bunch of senior executives that we have added to our screening core, and we are continuing the recruiting and build-out of the team to be ready for potential launches of our screening tests down the road.
Great. That's very helpful. Last question. I apologize if I missed it in the prepared remarks, but did you talk about the volumes on both clinical and biopharma in April you've seen so far, or just the active rates? Thank you.
No, we haven't mentioned what the volumes are, but I can say that I think we're pleased with how things are going. Certainly, things picked up quite a bit in March, and I think we're continuing on that trajectory.
Great. Thank you.
The next question will come from the line of Tejas Savant with Morgan Stanley.
Hey, guys. Good evening. Just a couple of follow-ups here on Guardant Reveal. First, Helmy or perhaps AmirAli, can you just elaborate what the lead time was versus imaging for the assay in the MGH paper? Then second, in terms of the failure rates for the assay, is that something that we should expect a significant improvement upon given that the paper was based on an older version? How much more optimizing is there for you guys to do there to get those rates down?
Let me take that question. For Guardant Reveal, actually. I think it's interesting what we are hearing in this field. In that paper, actually, the samples that we did in collaboration with MGH, we were getting volumes of 1-4 ml from different patients, and in terms of cell-free DNA, even as low as 4 ng in a bunch of samples. In different kind of settings, we had exclusion QCs for that study. For some of the patients, actually, they never followed through with follow-up imaging, or they didn't comply to the blood testing. We had some exclusion around it. I can share with you what we are seeing now commercially in our clinical lab across many tests that we've done during last couple of months.
Our QNS rates or failure rates or cancellation rate, whatever way you look at it, has been less than 1%. We believe in the quality of the assay we developed and robustness. That's the experience that we are seeing on the commercial side in our clinical lab, less than 1% failure or QNS rates, to my best knowledge. Regarding the lead time to the imaging, I think that's really a function of the cohort and the specific practice in that cancer center, how frequently the patient is getting imaged. I don't want to state something wrong, but I believe that lead time was at least four months. This is something which is related to the practice and how often the patients are getting screened.
I think that maybe a better indication to look at is the clinical sensitivity and specificity in relevant indications, which we believe you need to look at landmark time points and the surveillance time points differently. We are going with standard of care definition for landmark time points, which if there's interest, we can talk about it. Based on whatever way that we cut the data, although it's relatively small cohort, we believe we have leading performance in the field even without the need of tumor tissue. That's our belief.
Got it. Super helpful, AmirAli. One quick follow-up for me. In the past, you've mentioned, and so have some of your peers, just around the fact that background noise from surgery prevents liquid biopsy use for the first few weeks. From a real-world standpoint, how much of a difference does a tumor-agnostic approach make relative to a tumor-informed approach in terms of when the actual monitoring of the patient actually begins? Is that even a fair question? I'd love to hear your perspective on that.
Yeah, sure. Actually, there are a bunch of literature around this now. We know the science much better than earlier days of liquid biopsy, both for Reveal and Guardant360 in terms of post any kind of intervention, like invasive intervention. We are recommending that blood draw to happen at least four weeks after that intervention, to my best knowledge. We have some publication even two weeks after surgeries or two weeks after invasive procedures. What we typically recommend is four weeks after these invasive procedures, and then you can look at molecular response in terms of treatment efficacy and also if you want to look at MRD in adjuvant setting or any kind of landmark time points, still, we can get solid information with very light clinical measures.
Got it. Super helpful. One final one for me on GuardantINFORM. Can you just share an update there on the conversations you're having since the platform went live and perhaps any sort of marquee deals that have come about thanks to that launch?
Yeah. We've been very pleased with that. Quite a big pipeline now of conversations and frankly many deals that we've signed there with pharma companies. I think it's just like anything, there's education and socialization required, but we think this is going to be, I think, a relatively significant part of the business in the future.
Got it. Super helpful. Thanks, guys.
The next question will come from the line of Brian Weinstein with William Blair.
Hey, guys. Thanks for taking the questions. To jump on the ECLIPSE train that everybody seems to be on today for some reason, when we do see that data, and I know it's still a little ways away, are we expected to see just the top-line data? Are we going to see data by stage? Are we going to see advanced adenoma data in there? Can you just give us an idea of what the construct will look like when we do see something?
Yeah, sure. In terms of phasing of the data, we have to see when we get the reports, which kind of the data we can actually generate. When you look at actually our ClinicalTrials.gov, you're going to see some of the primary endpoints that we have in that study and also secondary endpoints that actually highlight some of the data that you generate effectively, which would be clinical sensitivity and specificity, some advanced adenoma performance. We are going to actually have stage information for the patients. We are going to have that information. Also, it's just a matter of the timing of when we are going to get access to that information from the path report of the patient. All these will be analyzed by best knowledge. Yeah, we are going to share all the information that we are going to see.
Got it. Okay. Helmy, we've seen others that are in the broader precision oncology space spend significant dollars on adding assets, be it technology or other hard assets that are available. Really haven't seen you do that yet. I'm curious what you think that says. Are you guys more discriminate about what you are looking for? Are you typically not willing to pay up, or do you just really not think that you need to do it? Not that there's a gun to anybody's head, just it's an observation that you guys have not gone down that path as much as, really at all, versus others that are being pretty aggressive on adding technology. Your broader thoughts on M&A and what that says about what you guys are looking at.
That's a great question. No, we're very much I think pro M&A where it makes sense. We have a team that is actively sourcing deals and reviewing deals, I think we're in an enviable position in terms of the pipeline that we have and the platform we have within Guardant. When we do pull the trigger on certain investments, they're going to be investments that make sense. We have a high bar for that given where we are internally in terms of our development platform. That being said, I do think M&A is healthy when it brings in new talent, new technology, diversifies the pipeline. It will be an important aspect of our business going forward.
Okay. Can I sneak one in for Mike? It's just on the ADLT stuff. With respect to the weighted median here, is there any reason to think that that 130% kind of target that CMS has set as it relates to the ADLT pricing, that there would be any kind of an issue there? Are you thinking that you guys are going to be in that, I think it's like $3,800 or something or better on the weighted median, just as I'm thinking about 2022 pricing?
Yeah. Brian, I would say we're pretty confident that this 130% won't negatively impact us. I think when we're contracting, it's usually above the $4,000 mark. I think when we look at the numbers, although we've not seen any of the payment stuff to come through yet from the private payers with the ADLT rate, I think as we look at it, we're pretty confident that we won't fall above that or below that level.
Okay, great. Thank you, guys.
Thanks.
The next question will come from the line of Patrick Donnelly with Citi.
Great. Thanks, guys. Obviously, a lot of ground covered, so maybe I'll just keep it to one. Helmy, can you talk a little bit more about the investment in the global footprint this call? You talked about different approvals in the EU and Japan. Can you just talk about the global strategy? Obviously early days, but how important that is and what we should be on the lookout for in terms of traction over the next 6-12 months.
No, I think we're continuing to really ramp up our investments globally. We're making very good progress with our JV in Japan and Asia, as well as Middle East. Japan, I believe we should have our labs up and running sometime later this year. We have obviously submitted to the PMDA. We're very hopeful that's going to open up really a kind of new ramp and opportunity in terms of testing from a public reimbursement point of view in Japan. In Europe, obviously, we've announced a public-private partnership with Vall d'Hebron in Spain. You see that, I think globally, we're thinking of a more of partnership and decentralized approach, which we think is necessary for some of the different regions that we're targeting to really improve access to this type of testing.
Frankly, the inflection point is going to be winning a public reimbursement in each and every country, which there's no cookie cutter approach, but we believe the approaches we are taking are really tailored towards each region and what's likely to be most successful.
That's helpful. Thanks, Helmy.
The next question will come from the line of Jack Meehan with Nephron Research.
Thank you. Good afternoon. I wanted to go back to Guardant Reveal. Helmy, I think you mentioned you felt confident about getting Medicare coverage before the end of the year. Can you just talk about what events need to take place for that to happen? Do you need some of these interventional studies to read out? Can you talk about how you're thinking they'll approach pricing for the test?
Yeah. The discussions have been good in terms of working with our Medicare counterpart and I believe all the data that is necessary we have in hand already. Now it's kind of more procedural in terms of some of the back and forth. We're fairly confident by end of the year we should have both reimbursement and pricing in place. In terms of details-
Right.
Of pricing, that's still something we'll share at a later time.
Okay. On the biopharma side, you talked about the continued impact on clinical trials from the pandemic. On the CRO side, we're seeing a lot of momentum helping customers catch up. Are you seeing that for the year as well, and can you just talk about within the guidance, what you're assuming in terms of revenue for the year?
On biopharma or just-
Yeah. I guess within precision oncology for biopharma.
Yeah. Yeah, I think we're seeing that trials are picking back up. CROs are obviously getting back into the swing of things. The challenge is, I think, patient volumes. Even though the sites are back up, the trials are ticking away, the patient volumes have still suppressed in terms of enrollment. There's still been a big shift towards telemedicine. Even though physicians or patients can go back in, they're not necessarily going in, they're not necessarily traveling the 50, 100, 150 mi that they have to travel to different clinical trial sites. That's going to have residual impact, certainly first half of the year and maybe even beyond to some extent. That's depressing, I would say, retrospective and prospective sample volumes. That being said, I think our development services revenue has been very strong with very high growth there.
We're seeing the overall depth and breadth of relationships we have with our pharma customers continuing to expand. I think we're assuming, I would say, in terms of guidance, probably pretty healthy rebound, I would say, on the testing side and with respect to resolution for some of these COVID headwinds in the second half of the year. Is there anything you want to add to that, Mike?
Yeah. I would just say, I think our volume this quarter was sequentially lower than in Q4. I know we previously signaled that. We had this bolus of samples come in at the end of Q4. If you look at Q1 now, as we said on the call earlier, it's above where we were at COVID times in Q2 and Q3. We have talked about this on a volume basis, if we can recover in the second half of the year, something like a low double-digit growth on biopharma.
Mm-hmm. I'll leave it there. Thank you, guys.
Thanks.
The final question will come from the line of Doug Schenkel with Cowen.
Hey, good afternoon, everybody. Thank you for taking my questions. Just to talk a little bit more about Guardant Reveal. First, how would you characterize biopharmaceutical interest in working with you with this assay? Second, with regard to the data in the ECLIPSE study, in CRC, are there areas where you'd like to see further improvement as you do further optimization work? I'm thinking things like, again, not a huge study, but the failure rates seen there were a little higher than I think we would have liked. Third, there are some, including competitors, that have asserted that there were differences in the study readout on certain metrics, relative to those that were published in some of the tumor-informed studies. Things like adjuvant therapy inclusion, and the therapy, I'm sorry, and the treatment of inconclusive tests.
Just based on this, when you head to the market and you're talking to folks in the field, do you have any concerns about how apples-to-apples the results really are relative to others?
Yeah, sure. On the biopharma side, if you look at some of the interesting clinical trials happening in the MRD space, there are not many of them, in fact, around CRC, and that's something that has been impacted. Saw the conversation with biopharma. I know our lead indication is CRC, a bunch of other biopharmaceutical interests are in other cancer types. Now that we have some additional data in some other cancer types, we are seeing bunch of warm-up in conversations around MRD trials with biopharma. Already some private experimentation is going, some heads-up experimentations are going. We have to see what's going to happen there. I think that's one of the issues we have with biopharma side in terms of some mismatch of clinical lead indication versus the lead indication necessary for biopharma trials.
On the Reveal clinical experience study, as I mentioned earlier, in our clinical lab, like in the commercial setting, we have less than 1% failure rate. QNS rate, all that inclusive, is just less than 1%. I think some interesting statements we are hearing in this field is, in that MGH cohort, you're getting small amounts of plasma volumes, as low as 1 ml, as I mentioned earlier, as low as 4 ng of cell-free DNA. Hence we have kind of a higher failure rate. In the commercial setting, as I mentioned, we have less than 1%.
In terms of head-to-head comparison, we tried with that MGH cohort to make the analysis as close as possible to what's been published by the tumor-informed assays before, with the caveat that we believe the landmark time points, really we need to go with the right clinical definition, which is inclusive of any curative intent treatment. It could be surgery, it could be neoadjuvant plus surgery, it could be surgery plus adjuvant. We highlighted that data for what's our performance in landmark cohort. In the supplemental data, all the data is broken out. Whatever way you break out the data, be it surgery, adjuvant, combination, whatever, what we believe is we are showing the leading performance. I think over time, through other studies and I think clinical experience, I think this is going to get further and further confirmed.
Okay.
Yeah.
That's super helpful. Thank you for that. I know we're late in the call, but maybe if I could just ask one last one, not related to Guardant Reveal, just thinking about COGS improvement initiatives over time. Keeping in mind you have a supply agreement with Illumina through 2033, I believe. Noting that, but also acknowledging the fact that others in the space are either evaluating or actively working with or investing in competitive technologies with the intent of reducing COGS over time, do you have the flexibility to work with suppliers other than Illumina over time? If so, is that something that you're actively considering, and what are the characteristics you're looking for?
Yeah, no, we have the ability to work with any supplier. We have a good relationship with Illumina in terms of that working relationship. As I said, as this space continues to evolve, we're going to obviously prioritize technologies that give us the best cost advantage and performance advantage. It's like any other part of the reagents and suppliers that we work with. We're always evaluating kind of better ways of doing things and lowering our costs.
That's great. All right. Thank you very much. Have a good evening.
With that, this does conclude today's conference call. We thank you for your participation and ask that you please disconnect your lines.