Thank you for standing by, and welcome to the Guardant Health Q1 2021 Earnings Call. All lines are currently in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, today's conference is being recorded. 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 Quarter ended March 31, 2021. If you've not received this news release or if you'd like to be added to the company's distribution Please send an e mail to investorsgartenhealth.com. Joining me today from Gartner is Helmy El Touki, Chief Executive I'm Miralee Talazaz, President and Mike Bell, Chief Financial Officer. Before I begin, I'd like to remind you that management 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 Carden issued today. For a more complete list and description, please see The Risk Factors section of the company's annual report on Form 10 ks for the year ended December 31, 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 This conference call contains time sensitive information and is accurate only as of the live broadcast May 6, 2021. With that, I'd like to turn the call over to Helmy.
Thanks, Carrie. Good afternoon and thank you for joining our Q1 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. 6 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% to 10% of colorectal cancers. By identifying this absentable mutation, we was able to begin treatment with a combination of targeted therapies of encorafenib plus pannatumumab Only recently approved by the FDA. Fortunately, the patient responded to the targeted therapies.
But as we know, tumors are constantly evolving. After about 6 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 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.
So this finding opened up another therapeutic avenue This story highlights how genomic profiling using Guardant360 can keep up with Turning to our Q1 performance. We started the year strong With revenue growing 17% to approximately $79,000,000 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 impact at the beginning of the year, but 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 and there is still a vast amount of greenfield opportunity ahead in this market.
The underlying fundamentals of our clinical business are very strong and 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 We also made important progress on the reimbursement front. At the end of March, CMS confirmed that our Guardant360 CDS test meets the criteria for Advanced Diagnostic Laboratory Test or ADLP status, which is reserved for FDA approved tests as well as for innovative product to provide novel clinical information that cannot be obtained by any other method. With ADLP status, Guardant360 CDF will be reimbursed at a rate of $5,000 for all Medicare patients in line with our internal expectations.
Now moving on to our occurrence 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 1st blood only liquid biopsy test for the detection of residual and recurrent disease. With a simple blood draw, the test improved disease management of early stage colorectal cancer patients by detecting ctDNA in blood after surgery Identify patients with a residual disease who may benefit most from adjuvant therapy and by detecting recurrence months earlier than current standard of care. We believe Gartner Reveal is truly in a class of its own with industry leading sensitivity and specificity and an average turnaround time of only 7 days Compared to other tests that require a tissue biopsy and have turnaround times of 4 to 8 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 There is CEA, a blood test where you get your results a few days later. Importantly, Guardant revealed fits into an oncologist workflow in the exact same way as CEA CA is used, but gives them extraordinarily better performance. CA has a sensitivity of 69% with 64% specificity in the surveillance setting versus 91% sensitivity with 100% specificity for Garden Reveal. So 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 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 in the reimbursement front and We are confident we will have Medicare reimbursement in place for Gartner Rebuild by end of 2021. At the beginning of April, the New York State Department of Health Clinical Laboratory Evaluation Program or CLIP approved GuardantReveal for the detection and monitoring of MRD in patients with early stage cancer.
This approval is an important proof point for ReVeil and builds on our commitment to improving care for all cancer patients. By expanding access to our test through compliance with the appropriate clinical laboratory regulations. I'm so excited About what is ahead for Guardant and Belize, 2021 will be a pivotal year for us as we expand our product portfolio and invest across our business To build the foundation for complete cancer testing across the continuum of care. Looking ahead in our therapy selection business, We will 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 demonstrates 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 J. C. Oakes with Oncology shows that Guardant360 provides An early indication of treatment response to tembrolizumab 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 patients in the clinical trials.
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 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 reveals just as we did with Guardant360 several years ago, ushering in a new era of precision oncology for earlier stage patients. And finally, in screening, we expect to complete enrollment of our CLPS trial before the end of the year and to begin work on our expansion into other cancer To support our ambitious vision, we are continuing to grow our incredible team. I'm excited to welcome Doctor.
Craig Eagle, Recently joined Guardant as our new Chief Medical Officer. Craig most recently served as Vice President of Medical Affairs Oncology for Genentech, Lori oversaw the medical programs across oncology portfolio. Craig has a wealth of experience driving medical affairs, clinical development and Clinical trial operations at leading pharmaceutical companies and he will undoubtedly make a great impact as we continue to develop and commercialize best in class products With that, I will now turn the call over to Amir Ali for more details on our biopharma business
Thanks, Elmi. 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 Q1 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 3,522 tests for the Q1, 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 However, while clinical trials are picking back up, enrolling patient volumes are still depressed compared to pre COVID levels, Continue 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 Q1 2021 grew more than 100% to 14,900,000 Last week, we announced a strategic collaboration with Daiichi Sankyo to pursue regulatory approval utilization of Guardant360 CDx as a companion diagnostic for inHER2, a HER2 targeted This further strengthens the importance of comprehensive profiling as more and more biomarkers are being pursued in this region. We are also investing in our global companion diagnostic footprint as part of our mission To that end, we recently received our CEIVD self certification for the 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 1 out of every 8 patients with non Small cell lung cancer. So there is a critical need to improve access to high quality diagnostics and more routine biomarker screening. Now turning to Guardant review.
Before its launch, ctDNA based test developed to detect MRD Mainly require tumor tissue to identify patient specific tumor mutations. A new study led by Massachusetts Chiara Hospital Cancer Center, which was published in Clinical Cancer Research, demonstrated that Guardant's reveal identified Patients most likely to recur with high clinical accuracy. The integration of cancer 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 1 month after completion of Definitive treatment. In the subset of patients with at least 1 year of clinical follow-up, all patients with detectable ctDNA Record, 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% to 50% with a single post surgical blood drop. Interestingly, integrating epigenomic signatures Increased test sensitivity by 36% versus just using genomic alteration alone. Also, CEA test, the standard of care in colorectal cancer, did not predict recurrence in this patient cohort. We believe that Guardant rebuild 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 PEGASIS Charles, we continue to believe that the 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 continue to see robust patient enrollment throughout the Q1.
We now have over 180 sites enrolling 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 laid a foundation for 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 We are starting to plan our next screening clinical study in other cancer types and expect to share more updates about this in latter With that, I will now turn the call over to Mike for more details of our financials.
Thanks, AmirAli. Total revenue for the Q1 of 2021 was $78,700,000 up 17% from $67,500,000 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 Q1 was $63,700,000 a growth of 6% compared to $60,200,000 in the prior year quarter. Precision oncology revenue from clinical tests in the first It was $49,800,000 up 31 percent from $38,000,000 for the prior year quarter.
1st 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 Q1 of 2021, up from 2,489 in the prior year period. 1st quarter 2021 clinical cash revenue includes approximately $5,000,000 recognized from cash collected 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 1, 2021, and will continue until January 1, 2022, At which time the rate will change to the median private payer rate.
However, we continue to anticipate that the April First change to the ADLC 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 received from the increased ADRC 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 for 2021. Note that it will take time to receive Medicare and private payer reimbursement coverage for newly launched clinical tests such as Guardant Revere. 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. Decision oncology revenue from biopharmatest in the Q1 totaled $13,900,000 down 38% $22,300,000 for the prior year quarter.
1st 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 2nd Q3 of 2020, but we are still facing headwinds with respect to clinical trial patient volumes. BioPharma test RSP It's 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 Q1 totaled $14,900,000 up 106 from the prior year quarter. Gross profit for the Q1 of 2021 was $49,900,000 compared to a gross profit of $47,000,000 in the same period of the prior year.
Gross margin was in line with our expectations and in the Q1 was 63% compared to 70% during the Q1 of 2020. Operating expenses for the Q1 of 2021 were 157,800,000 an increase of 93% compared to $81,900,000 in the Q1 of 2020. Non GAAP operating expenses Excludes stock based compensation and related employer payroll tax payments, acquisition related expenses, amortization of
The $100,700,000
a 53% increase from $65,900,000 in the Q1 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, click 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 $109,700,000 or $1.09 per share for the Q1 of 2021 compared to $27,700,000 or $0.29 per share in the Q1 of 2020.
Non GAAP net loss It was $49,400,000 or $0.49 per share for the Q1 of 2021 compared to $15,400,000 or $0.16 per share for the Q1 of 2020. Adjusted EBITDA was a loss of $45,400,000 in the Q1 of 2021 compared to a $15,500,000 loss in the Q1 of 2020. We define adjusted EBITDA as non GAAP net loss adjusted for interest, We ended the Q1 of 2021 with $1,900,000,000 in cash, cash equivalents and masterful securities. Now turning to our revenue outlook for the full year of 2021. We are pleased with our solid start to the year and do the fundamental drivers of our business to be very strong.
However, we are not yet through the global COVID pandemic. As Helmy 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 because of pre COVID levels continuing to At both prospective and retrospective sample volumes. Given this backdrop, we continue to expect revenue to be between 360 to $370,000,000 representing growth of approximately 27% over 2020 at the midpoint of the range. We also expect clinical capital 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 Helmut 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.
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 and A roster. The first question will come from the line of Puneet Souda with SVB Leerink.
Yes. Hi, Helvi and AmirAli. Thanks for taking the question. So first one is on the guide. You're obviously maintaining your guidance 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 It's 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 to hear. ADLT reimbursement appears to be improving, though I mean, I appreciate what Michael is saying.
But you also have FDA approval and that should be helping. So just wanted to get a better understanding of the 90 What is sort of driving that conservatism? And if you can just walk us through what 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.
Thanks, Vinit. Good question. I'll let me 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 the obviously offices starting to open back up. We're seeing, I think now over 30% to 40% of visits now in person. So things are certainly going in the right direction, 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. And it's frankly why we believe we have a very robust Guidance comes to 90,000 clinical tests, that's pretty high growth in our view from where we were last year. And I think it's Based on our optimism, positive optimism, but 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 In terms of resolution of the headwinds as well as some of the uncertainty around the transition around our ADLP status. I think we're seeing, I think, positive momentum there so far in terms of getting payments For Medicare, the higher rate of $5,000 but 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 ASC for the remainder of the year.
Yes, maybe just to add, I mean, 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. So yes, I mean, we're very confident with the guidance that we put in now. And I think when we get past these Uncertain items will have a much better picture
for the remainder of the year.
Okay. That's helpful. And On Eclipse, I just wanted to clarify, you mentioned enrollment completion by year end. And I know I believe I think in past You said sometime around October that would align with the October 2019 timeline when you started this trial. You had about 150 plus sites before, now you have more than 180 sites, so it suggests that the enrollment is Ticking up.
So just wanted to get a sense of is this still the same timeline or is it moving a little It would suggest the timeline should move up rather than later. And then 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 is still a very much a case control to study or this is more an average risk?
Yes. So regarding time line 24 Eclipse last patient enrollment, still we're on track to finish it at the time line As we said, we ended 24 months. So the timeline that you mentioned is actually where we think we're going to have the last patient in, so In terms of the ASCO data, actually, it's a pretty interesting It's the largest cohort data that we are showing still it's not like A prospective screening cohort that we are getting in Eclipse, really Eclipse is one of the kind of have to just wait to see what Rita from Eclipse. So 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 as they were in the cohort. So please stay tuned.
We are faced with that data, and
Okay. That's what we're hoping.
Yes, please.
Another thing about the timeline for Eclipse, I think we're very pleased with the progress there. We've been able to maintain our initial time lines of 24 months since we started the trial. And I I think that's a testament to the level of kind of resilience and level of execution that the team has. We're seeing other trials delayed from where they were initially kind of postdated. Yes, I think it puts us in a singular position.
Okay, great. And then last one, if I could just squeeze in. In terms of the REVEAL Data in the CCR 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? And wondering if there are any indication as far as indication expansion that you're thinking about Drabile.
Thanks so much.
Yes. So definitely, we are very pleased with that. Paper, it was a collaboration which we had with MGS for a while. There are some additional ISVs that we are doing in the same space as CRC, which the data is getting basically 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 Of the major players in the field, is that something which would Convinced all the major national peers to cover this test.
No, if you thought that would be the case, we couldn'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, and that's why we prioritize Those activities over this commercial launch, but still we are seeing some interesting and exciting signals from some of the conversations we have. So Please stay tuned. Hopefully, we have some good information to share in the future. Great.
Thank you.
You ask about other indications very quickly. For a while, we talked about our platform technologies, definitely way beyond CRC is our leading indication, not the only indication. We have been working in a few other cancer types, and We are pleased with the progress that we've seen in really multi cancer setting, which has some And on implication in MRD side and some implication on the screening side. So we are pleased with the progress on those fronts.
Great. Thanks guys. Thanks.
The next question will come from the line of Dan Arias with Stifel.
Good afternoon, guys. Thanks. Helmy, just maybe a couple on some other clinical trial questions. Just on ECLIPSE, I mean, that's obviously It's going to be a pretty high profile data set. Would you need do 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, Yes, I think it could be unveiled in the trial, but it's obviously a very sensitive data set that would likely need to be shared in a timely fashion. We'll make sure I get those then.
Okay. And then maybe on the MRD side, Stand Up to Cancer and COBRA, I think the primary completion date First stand up to cancer is listed as February of 2022 and then 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?
Yes. So those are the time lines for enrollment. This is a multi Your trial in terms of figuring out the clinical endpoints that we have in those studies, some of this that, in fact, go all the way to And that's overall survival. So it's going to take a few years for some of the study to have a solid readouts on the clinical endpoints while the enrollment was And close to the time lines that you stated. So it's going to take us some time
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. So if You're trying to get at how that ADLT impacts the private payers. I think all we're saying is that Those non contracted payers, really the sort of negative short term impact of that will offset this Positive Medicare rates of 5,000.
Okay. That was in fact what I was trying to do. So 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 Derek today. First, I want to start with REVEAL.
I 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 And can we look to the G360 ramp as I know it's still early, but would appreciate any comment on that.
Yes, we're very pleased with what we're seeing so far with Reviel. 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 early just ease of use of a blood only test. So first thing, I think physicians are both using CA and others that are using other CTDNA tests out there, Very easily switch to using Guardian Reveal. So I think we couldn't be more pleased.
I would say that in terms of And the ramp that you should expect, we have much deeper relationships today than we had 7 years ago, when we launched Guardant360, and 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 7 years now. And so I think we're leveraging a lot of that And we're very I think, Tash is very optimistic in terms of the end of our continued uptake of current review
Great. Thank you. And then I wanted to touch on Unit 2. Can I get your opinion on your targeted performance on line 2? And your opinion, what kind of eClipched data, you would need to sort of have a faster ramp up versus the other noninvasive option out there in terms of DSP screening, AKA Cologuard.
And also on the commercialization side, I realize it's still early to talk about the plans. But I wanted to see what you think in terms of launching it as an LDT versus going forward with the approval approach. Thank you.
Sure. So depending on the performance actually, I think the Indication
of users success could be
impacted and the total opportunity could be impacted. There are some bars That looks like it's getting set in terms of getting successful national CMS coverage. Looks like pretty Reasonable bars are effectively, it means our sensitivity. So Performance is a bit, maybe a little bit more than that. And the next kind of Target number is numbers by stool based testing.
We believe actually liquid biopsy and What has the opportunity to even meet or exceed the numbers by stool based testing, but we have to see. We have to see actually what we're going to Yes, in Eclipse. When you look at all the data that we've seen so far and we put out there, we are within striking distance Having a performance that's very comparable and competitive or potentially that could But we have to see what ECLIPSE is going to show us in this kind of screening trial. Definitely, there is still a bunch of risk But we feel very confident based on everything that we know about liquid biopsy that liquid biopsy would 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 end.
We are building the team, so we are building it top down. We have a bunch of senior executives that we Added to our screening core, and we are continuing the recruiting and build out of the team
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 rate?
We haven't mentioned kind of what 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 Piyush Sabat with Morgan Stanley.
Hey, guys. Good evening. Just a couple of follow ups here on review. So first, Helmy or Samir Ali, can you just elaborate what the lead time was versus imaging for the assay in the MGH paper? And then second, in terms of the failure rates for the assay, is that something that is sort of We should expect a significant improvement upon given that the paper was based on an older version.
Or how much more optimizing is there for you guys To do that, to get those rates down?
Yes. So So for Guardant's review, actually, in that paper, I think it's So the in that case, actually the samples that we did in collaboration with MGH, We were getting volumes of 1 to 4 ml from different patients and in terms of cell free DNA even as well as 4 nanogram in bunch of So in different kind of settings, we have kind of exclusion QCs for that study. Some of the patients actually, they never follow through with follow-up imaging or they didn't come Applied to the blood testing, we have some exclusion around it. And 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 Q and S rate or failure rate or cancellation rate, Regarding the lead time to the imaging, I think that's really a function of the cohort and A specific practice in that cancer center, how frequently the patient is getting EMED, I don't want to say something wrong, but I believe that lead time was at least 4 months.
But this is something which is related to the practice and how often the patients are Screen. I think maybe a better indication to look at is the clinical sensitivity and Specificity and 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 you're interested, we can talk about it. But based on whatever way that we cut the data, although it's relatively smart cohort, We believe we have leading performance in the field even without the need of tumor tissue. So that's our belief.
Got it. Super helpful, Amarali. And then one quick follow-up for me. In the past, you've mentioned and still have some of your peers just around the fact That background noise from surgery prevents liquid biopsy use for the 1st few weeks. So 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? I mean, is that even I mean is that even a fair question? I'd love to hear your perspective on
Yes, sure. Actually, there are a bunch of literature around this having other science much better than earlier days of the With biopsy, both for REVEAL and GARDEN360 in terms of like post any kind of intervention, Invasive intervention, we are recommending that blood draw to happen at least 4 weeks after that intervention. To my best knowledge, we have Publication even 2 weeks after surgeries or 2 weeks after invasive procedures. But what we typically recommend is 4 weeks after this invasive procedures. And then you can look at molecular response, right, in terms of And also if you want to look at MRDs in adjuvant setting or any kind of landmark time points, Still, you can get solid information with very light clinical measures.
Got it. Super helpful. And then one final one for me on Guardant Informed. 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?
Yes, we've been very pleased with that. Quite a big pipeline now of conversations and Frankly, many deals that we signed there with the pharma companies. I think it's just like anything, there's Education and virtualization are acquired, but we think this is going to be, I think, a very significant
The next question will come from the line of Brian Weinstein with William Blair.
Hey guys, thanks for taking my questions. To jump on the Eclipse train that everybody seems to be on today for some reason, when we do see that data, I know it's still a little ways away, Are we expecting 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 Do you have kind of what the construct will look like when we do see something?
Yes. First of all, in terms of phasing of the data, we have To see when we get the reports, which one of the data we can actually generate. But when you look at our clinical trial, that's where you And I see some of the primary endpoints that we have in that study and also secondary endpoints that actually highlights some of the data that we would generate effectively, which would be Clinical sensitivity and specificity, some advances in our 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 I think of when we are going to get access to that information on the actual report of the patients. So all of these will be analyzed by this We are going to share all the information that we are going to see.
Got it. Okay. And then Helmy, we've seen Others that are in the broader precision oncology space spend significant assets spend significant dollars on adding Assets be it technology or other hard assets that are available, we really haven't seen you do that yet. And I'm curious What you think that says? Are you guys more discriminated about what you are looking for?
Are you typically not willing to pay up? Or You just really not think that you need to do it, not that there's a gun to anybody's head, but just it's an observation that you guys are Kind of not going down that path as much as really at all versus others that are being pretty aggressive on adding technology. So Kind of your broader thoughts on M and A and what that says about what you guys are looking at?
That's a great question. No, I mean, Very much, I think, pro M and A where it makes sense. We have a team that is actively Sourcing deals and reviewing deals, but I think we're in a very well position in terms of the pipeline that we have and the platform we have within Guardant. So when we do pull the trigger on certain investments, they're going to be investments that make sense. And We have a high bar for that given where we are internally in terms of our development platform.
But that being said, I do think And M and A is healthy. It brings in new talent, new technology, diversifies the pipeline. So it will be an important aspect of our business going
Okay. And can I sneak one in for Mike, 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 ADLP If there would be any kind of an issue there, are you kind of 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 'twenty two pricing?
Yes, Brian, I would say we're pretty confident that this 130% won't negatively I think when we're contracting, it's usually above the 4,000 mark. And so I think when we look at the numbers, although we've not See, none of the payments start 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 follow-up on 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 cover, so maybe I'll just keep it to 1. Helmy, can you talk
a little bit more about the investment
in the global footprint this call?
I know you talked Different approvals in 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 look Or in terms of traction over the next 6 to 12 months?
No, I think we're continuing to Earlier I thought our investments globally were making very good progress with JV in Japan and Asia as well as the Middle East. Japan, I believe, we We should have our lives up and running sometime later this year. And we have obviously submitted to the GMDA. We're very hopeful that's going to open up really kind of new ramps and opportunities in the testing Public reimbursement point of view in Japan. In Europe, obviously, we've announced a public private partnership with El Dragon in And so you see that I think globally we're thinking of a more kind 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 and 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 Very tailored towards each region and what's likely to be more successful.
That's helpful. Thanks, Alex.
The next question will come from the line of Jack Meehan with Nephron Research.
Thank you. Good afternoon. I wanted to go back to Garnet 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? And then can you talk about how you're thinking they'll approach pricing for the test?
Yes. So, discussions have been good in terms of working with our Medicare counterparts And we believe all the data that is necessary, we have in hand already. And so now it's kind of more procedural in terms of the guidance for it. So we're fairly confident by end of the year we should have With reimbursement pricing, but
in terms of details, pricing,
that's still something that we shared earlier. Okay.
On the biopharma side, you talked about kind of the continued impact on clinical trials from the pandemic. On the Furo 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
Yes. So, I guess on the within precision oncology for biopharma.
Yes. So I think we're seeing that trials are getting back up, 0s are obviously Getting back into this window of things. The challenge is I think patient volumes, even though the sites are back up, the trials are taking away, The patient volumes that will depress in terms of enrollment. There's still been a big shift towards telemedicine. There's Even though this is a patient can go back in, they're not necessarily going in, they're not necessarily traveling.
You know the 50, 100, 150 miles that we have to travel to different clinical trial sites. But that's going to have residual impact Certainly first half of the year and maybe even beyond to some extent. And so that's the intersecting, I would say, retrospective And perspective sample volume. That being said, I think our development services revenue has Very strong, very high growth there. So we're seeing the overall depth and breadth of relationships we But I think we're more assuming, I would say, in terms of I think probably pretty healthy rebound over the on the testing side and With respect to resolution for some of these COVID headwinds in the second
Yes. I mean, I would just say, I think our volume this quarter It was sequentially lower than Q4. I know we previously signaled that. We had this bolus of samples come in at the end of Q4.
But if you look at If
you look at Q1 now,
it's as we said on
the call earlier, it's above where we were at COVID times in Q2 and Q3. And we have talked about this on a volume basis, if we could recover in the second half of the year, so I mean something like a low double digit growth on
The final question will come from the line of Doug Schenkel with Cowen.
Hey, good afternoon, everybody. Thank you for taking my questions. So just to Talk a little bit more about Guardant Reveal. First, how would you characterize biopharmaceutical interest in working 2nd, with regard to the data in the PARIK study in CCR, 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.
And then third, there are some, including competitors, I've 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 I'm sorry, on 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?
Yes, sure. So on the biopharma side, so 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. That's something that has been impacted on the conversation with biopharma. I know our leading indication is CRC, but in a bunch of other biopharmaceutical Bunch of warm up in conversations around MRD trials with biopharma.
Already some pilot experimentation is going, some heads up experimentation. We have to see what's going to happen there. But I think that's one of the issues we have with Fire Pharmacyte in terms Some mismatch of clinical lead indication versus the lead indication necessary for biopharma trials. On the review, like clinical experience, as I mentioned earlier, in In our clinical lab, like in the commercial setting, so we have less than 1% failure rate. Q1 is right, all that inclusive.
It's just less than 1%. So I think some interesting statements we are hearing in this field is In that MGH cohort, we are getting small amounts of plasma volumes as well as 1 ml, as I mentioned earlier, as low as 4 nanogram of Cell 3 DNA, so 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 try to get NPH and a Cohorts 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, we really 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. So we highlighted that data for what's our performance in landmark cohort.
In the supplemental data, all the data is broken out. And And I think over time through other studies and I think clinical experience, I think this is going to get further and further confirmed. Okay.
That's super helpful. Thank you for that. And I know we're late in the call, but maybe if I could just ask one 1, not related to Guardant Reveal, just thinking about COGS improvement initiatives Over time, keeping in mind you have a supply agreement with Illumina through 2,033, I believe. So 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 alumina over time?
And if so, is that something that you're actively considering? And what are the characteristics You're looking for.
Yes. No, I mean, we have the ability to really work with any supplier. We have a good But as I said, as we continue as the space continues to evolve, we're going to obviously prioritize technologies that Give us the best cost advantage and performance. It's like any other part of the reagents and Suppliers that we work with, we're always evaluating and a better way of doing things and borrowing 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.