On November 4, 2021 Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary tests, vast data sets and advanced analytics, reported financial results for the quarter ended September 30, 2021 (Press release, Guardant Health, NOV 4, 2021, View Source [SID1234594433]).
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Recent Highlights
Revenue of $94.8 million for the third quarter of 2021, an increase of 27% over the corresponding period of 2020
Reported 22,806 tests to clinical customers and 4,839 tests to biopharmaceutical customers in the third quarter of 2021, representing an increase of 35% and 58%, respectively, over the third quarter of 2020
Initiated ORACLE study to evaluate performance of Guardant Reveal to predict recurrence across eleven early-stage cancers
Presented data at ACG showing LUNAR-2 blood test is highly sensitive in detecting early-stage colorectal cancer
Announced SHIELD study to validate the performance of blood-based assay in lung cancer screening, with enrollment beginning in December of 2021
Added Myrtle Potter, CEO of Sumitovant Biopharma, to Board of Directors
"We delivered solid results this quarter as we continue to build on our strong foundation as the liquid biopsy leader in oncology, despite the continued impact of COVID," said Helmy Eltoukhy, co-founder and co-CEO. "We have continued our strong cadence of data supporting our Guardant360 products and are making solid progress towards our multi-cancer goal for MRD with the initiation of our ORACLE study. We are dedicated to offering healthcare providers a complete portfolio of oncology products that will provide clinically actionable information to guide patient care."
"At Guardant, we are focused on developing a highly accurate blood test to screen for multiple cancers where lives can be saved," said AmirAli Talasaz, co-founder and co-CEO. "Guardant’s differentiated core technology platform has the potential to significantly improve our ability to detect many cancers at their earliest stages. Successful readouts of ECLIPSE and SHIELD, as well as future studies, will unlock the tremendous opportunity for blood-based cancer screening."
Third Quarter 2021 Financial Results
Revenue was $94.8 million for the three months ended September 30, 2021, a 27% increase from $74.6 million for the three months ended September 30, 2020. Precision oncology revenue grew 31% driven predominantly by an increase in clinical testing revenue which grew 27% over the prior year period. There were 22,806 clinical tests and 4,839 biopharmaceutical tests performed during the third quarter of 2021. Development services and other revenue increased 9% primarily due to progression of collaboration projects from biopharmaceutical customers for companion diagnostic development services during the three months ended September 30, 2021.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $64.0 million for the third quarter of 2021, an increase of $10.6 million from $53.4 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 67%, as compared to 72% for the corresponding prior year period.
Operating expenses were $171.3 million for the third quarter of 2021, as compared to $127.6 million for the corresponding prior year period, an increase of 34%. Non-GAAP operating expenses were $135.1 million for the third quarter of 2021, as compared to $71.8 million for the corresponding prior year period.
Net loss attributable to Guardant Health, Inc. common stockholders was $107.5 million for the third quarter of 2021, as compared to $77.7 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $1.06 for the third quarter of 2021, as compared to $0.78 for the corresponding prior year period. Non-GAAP net loss was $70.5 million for the third quarter of 2021, as compared to $15.4 million for the corresponding prior year period. Non-GAAP net loss per share was $0.70 for the third quarter of 2021, as compared to $0.15 for the corresponding prior year period.
Adjusted EBITDA loss was $65.2 million for the third quarter of 2021, as compared to a $14.1 million loss for the corresponding prior year period.
Cash, cash equivalents and marketable securities were $1.7 billion as of September 30, 2021.
2021 Guidance
Guardant Health expects full year 2021 revenue to be in the range of $360 million to $370 million, representing 26% to 29% growth over full year 2020.
Webcast Information
Guardant Health will host a conference call to discuss the third quarter 2021 financial results after market close on Thursday, November 4, 2021 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at View Source The webcast will be archived and available for replay for at least 90 days after the event.
Non-GAAP Measures
Guardant Health has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP cost of precision oncology testing, non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to Guardant Health, Inc., common stockholders, non-GAAP net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted, and Adjusted EBITDA.
We define our non-GAAP measures as the applicable GAAP measure adjusted for the impacts of stock-based compensation and related employer payroll tax payments; changes in estimated fair value redeemable noncontrolling interest; contingent consideration; acquisition related expenses, amortization of intangible assets, and other non-recurring items.
Adjusted EBITDA is defined as net loss attributable to Guardant Health, Inc. common stockholders adjusted for interest income; interest expense; other income (expense), net, provision for (benefit from) income taxes; depreciation; and amortization expense; stock-based compensation expense and related employer payroll tax payments; adjustments relating to non-controlling interest and contingent consideration and, if applicable in a reporting period, acquisition-related expenses and other non-recurring items.
We believe that the exclusion of certain income and expenses in calculating these non-GAAP financial measures can provide a useful measure for investors when comparing our period-to-period core operating results, and when comparing those same results to that published by our peers. We exclude certain other items because we believe that these income (expenses) do not reflect expected future operating expenses. Additionally, certain items are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. We use these non-GAAP financial measures to evaluate ongoing operations, for internal planning and forecasting purposes, and to manage our business.
These non-GAAP financial measures are not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. There are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation, and do not present the full measure of our recorded costs against its revenue. In addition, our definition of the non-GAAP financial measures may differ from non-GAAP measures used by other companies.