On November 3, 2022 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, 2022 (Press release, Guardant Health, NOV 3, 2022, View Source [SID1234622972]).
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Recent Highlights
•Revenue of $117.4 million for the third quarter of 2022, an increase of 24% over the corresponding period of 2021
•Reported 32,400 tests to clinical customers and 6,750 tests to biopharmaceutical customers in the third quarter of 2022, representing an increase of 42% and 40%, respectively, over the third quarter of 2021
•Expanded Guardant Reveal , the only tissue-free liquid biopsy test for detection of residual and recurrent disease, to include early-stage breast and lung cancers in addition to colorectal cancer
•Introduced GuardantINFINITY, a next-generation smart liquid biopsy assay that provides broad genomic and epigenomic insights into the complexities of tumor molecular profiles and immune response to advance cancer research and therapy development
•Received FDA approval for Guardant360 CDx liquid biopsy test as a companion diagnostic for ENHERTU for treatment of non-small cell lung cancer patients with activating HER2 mutations
•ECLIPSE readout and PMA submission for Shield assay both expected during the fourth quarter of the year
"Volume growth accelerated sequentially in clinical oncology, propelling us to new records in revenue and volumes. We made additional strides with Guardant Reveal, expanding its use into multiple cancer indications that now include colorectal, lung and breast cancers. In addition, Guardant Infinity, our first smart liquid biopsy offering, has seen a rapid uptake with our biopharma partners. That said, counter to our expectations earlier in the year, clinical volumes continue to be impacted by a challenging backdrop with lingering access restrictions and provider staffing shortages." said Helmy Eltoukhy, co-founder and co-CEO.
"During the quarter we made great progress on the ECLIPSE study and are very close to locking our study database with about 70 CRCs. In parallel, our Shield LDT screening test continues to be well received by physicians and patients and has demonstrated outstanding levels of patient adherence," said AmirAli Talasaz, co-founder and co-CEO. "This positive early response to Shield LDT gives us increased confidence in our ability to develop Shield into a leading non-invasive cancer screening methodology."
Third Quarter 2022 Financial Results
Revenue was $117.4 million for the three months ended September 30, 2022, a 24% increase from $94.8 million for the three months ended September 30, 2021. Precision oncology revenue grew 29%, driven predominantly by an increase in clinical testing volume and biopharma sample volume, which grew 42% and 40%, respectively, over the prior year period. Development services and other revenue slightly decreased by 1%.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $76.9 million for the third quarter of 2022, an increase of $12.9 million from $64.0 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 66%, as compared to 67% for the corresponding prior year period.
Operating expenses were $221.5 million for the third quarter of 2022, as compared to $171.3 million for the corresponding prior year period, an increase of 29%. Non-GAAP operating expenses were $200.5 million for the third quarter of 2022, as compared to $135.1 million for the corresponding prior year period.
Net loss attributable to Guardant Health, Inc. common stockholders was $162.0 million for the third quarter of 2022, as compared to $107.5 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $1.58 for the third quarter of 2022, as compared to $1.06 for the corresponding prior year period. Non-GAAP net loss was $120.8 million for the third quarter of 2022, as compared to $70.5 million for the corresponding prior year period. Non-GAAP net loss per share was $1.18 for the third quarter of 2022, as compared to $0.70 for the corresponding prior year period.
Adjusted EBITDA loss was $112.8 million for the third quarter of 2022, as compared to a $65.2 million loss for the corresponding prior year period.
Cash, cash equivalents and marketable debt securities were $1.1 billion as of September 30, 2022.
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2022 Guidance
Given the continued challenging backdrop and reimbursement delays impacting the clinical oncology business, Guardant Health now expects full year 2022 revenue to be in the range of $440 million to $450 million, representing growth of 18% to 20% compared to full year 2021. This compares to previous full year 2022 revenue guidance of $460 million to $470 million.
Webcast Information
Guardant Health will host a conference call to discuss the third quarter 2022 financial results after market close on Thursday, November 3, 2022 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 of noncontrolling interest liability, adjustments relating to redeemable noncontrolling interest, contingent consideration, acquisition related expenses, amortization of intangible assets, fair value adjustments on marketable equity securities, impairment of other 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, changes in estimated fair value of noncontrolling interest liability, adjustments relating to redeemable noncontrolling 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.