Also, unlike the vast majority of biopharma and medical technology IPOs to come through the pipeline, GH already has marketable products and is generating revenue. The company also has a substantial amount of cash on the balance sheet, which means it likely won't have to tap into the capital markets any time soon.
Given those positive attributes, and the broad interest for healthcare-related IPOs, its strong pricing doesn't come as much of a surprise. Specifically, its 12.5 mln share IPO priced at $19, above the $15-$17 expected price range, generating $237.5 mln in total gross proceeds. The deal was led by JP Morgan and BofA Merrill Lynch.
GH is an oncology company and developer of proprietary blood tests and advanced 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. These tests fuel Guardant's programs in development that focus on recurrence and early detection: LUNAR-1 and LUNAR-2, respectively.
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 based on the number of tests sold in 2017. 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.
Turning to Guardant's development programs, LUNAR-1 leverages data and learnings from Guardant360 and GuardantOMNI and is designed to develop tests that enable clinicians to detect recurrence at a stage when intervention may have a higher chance to cure the disease. It is also designed to help biopharma customers identify new opportunities in adjuvant drug development targeting earlier stage cancers.
LUNAR-2 is designed to develop tests for the early detection of cancer. Guardant is developing tests for asymptomatic individuals at a higher risk of developing cancer due to multiple factors, including smoking, hereditary risk and pre-existing infections or inflammatory conditions.
Turning quickly to the financials, the company is not yet profitable but is growing strong, steady revenue . In 2016, revenue was $25.2 mln, which jumped 97% in 2017 to $49.8 mln. In 1H18, revenue jumped 93% year/year to $36.1 mln. On a final note, this 12.5 mln share IPO has quality underwriters (led by JP Morgan, BofA/Merrill). Typically a fairly small float coupled with quality underwriters generates good interest among investors.