Guardant Health (GH 38.35, +1.19, +3.20%) just made its IPO debut in early October.
Since it reported its first earnings report this week, we wanted to provide
some color on the name.
It's early, but the IPO has been well received. It priced at $19, above its expected range of $15-17, then it opened at $27.75 and has mostly stayed in the $32-38 range. Investors will be looking for GH to keep posting nice revenue growth and the hope is that these tests will catch on with more doctors and get picked up by insurance.
Guardant Health is an oncology company and developer of proprietary blood tests and analytics to improve cancer outcomes. The company believes that the key to conquering cancer is its molecular information, which GH enables by a routine blood draw, or liquid biopsy. Guardant has launched its liquid biopsy tests, Guardant360 and GuardantOMNI, for advanced stage cancer.
- Guardant360 (launched in 2014) is a molecular diagnostic test that measures 73 cancer-related genes from circulating tumor DNA, or ctDNA. Guardant360 has been used over 70,000 times by oncologists to help inform which therapy may be effective for advanced stage cancer patients with solid tumors. It is also used by biopharmas for a range of applications, including translational science research and identifying target patient populations to accelerate clinical trial enrollment, drug development and commercialization post-drug approval.
- GuardantOMNI (launched in 2017) is a broader panel measuring 500 genes from ctDNA. GuardantOMNI has been specifically designed for biopharma customers as a comprehensive genomic profiling tool to help accelerate clinical development programs for both immuno-oncology and targeted therapy.
Guardant360 has been used
by more than 5,000 oncologists. Guardant believes it's the world's market leading comprehensive liquid
biopsy test. Precision
oncology, as it is practiced today, is primarily focused on matching cancer
patients to personalized treatments based on the underlying molecular profile
of their tumors. There is a critical need to expand the scope of precision
oncology to enable precise detection, monitoring and selection of the
appropriate intervention as early in the disease state as possible.
A major challenge to achieving this is the limited access to cancer's molecular information. Traditionally, access to this information requires collection of tumor tissue through a tissue biopsy or surgery. A tissue biopsy procedure, however, is often invasive, time-consuming and costly. Moreover, tissue tests are infeasible for applications such as screening for early detection of cancer. Guardant's liquid biopsy-based tests address many of the challenges of tissue biopsies. Its tests can expand the scope of precision oncology to earlier stages of the disease.
While GH is far from profitability, it does generate revenue for its diagnostic tests. This week, the company reported Q3 revenue of $21.7 mln, which was up 95% yr/yr. Precision oncology revenue increased 78% driven by higher testing volume and increases in revenue per test. In Q3, GH reported 7,027 tests to clinical customers and 2,505 tests to biopharma customers, representing increases of 14% and 67% respectively. GH also guided to 2018 revenue of $82-84 mln.