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Guardant Health Reports Fourth Quarter and Full Year 2019 Financial Results and Provides Full Year 2020 Outlook

On February 24, 2020 Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary blood tests, vast data sets and advanced analytics, reported financial results for the fourth quarter and full year ended December 31, 2019 (Press release, Guardant Health, FEB 24, 2020, View Source [SID1234554653]).
Recent Highlights

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Revenue of $62.9 million for the fourth quarter and $214.4 million for the full year of 2019, representing 91% and 137% increases, respectively, over the corresponding periods of 2018

Received expanded Medicare local coverage determination from Palmetto GBA, making Guardant360 assay the first and only liquid biopsy to be broadly covered for use across the vast majority of advanced solid tumors

Initiated the NRG-GI005 COBRA study to validate the clinical utility of LUNAR-1 assay as a diagnostic biomarker for selecting which patients with stage II colon cancer could benefit from adjuvant chemotherapy

Entered into a strategic collaboration with Amgen to develop Guardant360 assay as a blood-based companion diagnostic test for AMG 510, an investigational oral therapy that inhibits KRAS G12C mutant protein
"2019 was a transformational year for Guardant. We made incredible progress across our entire business and rapidly increased our revenue – growing more than 100 percent over 2018," said Helmy Eltoukhy, PhD, co-founder and CEO. "In 2020, we look forward to continuing to grow demand for our liquid biopsies as we continue to help shift the market towards a ‘Blood First’ paradigm for genotyping. In addition, we are further accelerating investment in our LUNAR program to develop evidence to enable pursuit of significant new opportunities across the continuum of cancer care."
Fourth Quarter 2019 Financial Results
Revenue was $62.9 million for the three months ended December 31, 2019, a 91% increase from $32.9 million for the three months ended December 31, 2018. Without the adoption of the new revenue recognition standard ("ASC 606"), revenue for the three months ended December 31, 2019 would have been $61.6 million, an 87% increase over the corresponding prior year period. Precision oncology revenue increased 104% driven primarily by higher testing volume. There were 15,270 clinical tests and 6,316 biopharmaceutical tests performed during the fourth quarter of 2019. Development services revenue increased 15% primarily from new projects in 2019 related to companion diagnostic development and regulatory approval services for biopharmaceutical customers. Total revenue for the three months ended December 31, 2019 included $1.3 million of payments received in that quarter from successful appeals of payers’ denials of reimbursement for samples processed in 2018. Given the age of the samples associated with these successful appeals, the company does not believe this appeals revenue is indicative of results in the ordinary course of its operations.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services, was $41.1 million for the fourth quarter of 2019, an increase of $22.1 million from $18.9 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 65.3%, as compared to 57.6% for the corresponding prior year period.
Operating expenses were $67.0 million for the fourth quarter of 2019, as compared to $46.3 million for the corresponding prior year period, an increase of 45%.
Net loss attributable to Guardant Health, Inc. common stockholders was $25.2 million for the fourth quarter of 2019, as compared to $25.1 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $0.27 for the fourth quarter of 2019, as compared to $0.30 for the corresponding period of the prior year.
Full Year 2019 Financial Results
Revenue for the year ended December 31, 2019 was $214.4 million, a 137% increase from $90.6 million for the year ended December 31, 2018. Without the adoption of ASC 606, revenue for the full year ended December 31, 2019 would have been $214.0 million, a 136% increase over the prior year. Precision oncology revenue increased 130% driven by higher testing volume and increased revenue per test. There were 49,926 clinical tests and 20,643 biopharmaceutical tests performed during 2019. Development services revenue increased 177% primarily from new projects in 2019 related to companion diagnostic development and regulatory approval services for biopharmaceutical customers. Total revenue for the year ended December 31, 2019 included $6.8 million of payments received during that year from successful appeals of payers’ denials of reimbursement for samples processed in 2018. Given the age of the samples associated with these successful appeals, the company does not believe this appeals revenue is indicative of results in the ordinary course of its operations.

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Gross profit was $143.7 million for the year ended December 31, 2019, an increase of $96.2 million from $47.4 million for the year ended December 31, 2018. Gross margin was 67.0% for the year ended December 31, 2019, as compared to 52.3% for the year ended December 31, 2018.
Operating expenses were $226.0 million for the year ended December 31, 2019, as compared to $140.4 million for the year ended December 31, 2018, an increase of 61%.
Net loss attributable to Guardant Health, Inc. common stockholders was $75.7 million for the year ended December 31, 2019, as compared to $85.1 million for the year ended December 31, 2018. Net loss per share attributable to Guardant Health, Inc. common stockholders was $0.84 for the year ended December 31, 2019, as compared to $2.80 for the year ended December 31, 2018.
Cash, cash equivalents and marketable securities were $791.6 million as of December 31, 2019.
Guardant Health adopted ASC 606 effective January 1, 2019, which primarily impacted the company’s recognition of revenue related to patient claims paid by third-party commercial and governmental payors. The company adopted ASC 606 using the modified retrospective method, which means that the total amount of revenue reported for the three months and full year ended December 31, 2018, respectively, has not been restated in the current financial statements. Instead, the accumulated difference resulting from applying the new revenue standard to all contracts that were not completed as of adoption was recorded to accumulated deficit as of January 1, 2019.
2020 Financial Guidance
Guardant Health expects full year 2020 revenue to be in the range of $275.0 million to $285.0 million, representing 31% growth over the full year 2019 at the midpoint of the range. Net loss is expected to be in the range of $155.0 million to $160.0 million in 2020.
CFO Transition
Guardant Health also announced that its Chief Financial Officer, Derek Bertocci, is retiring during the second quarter of 2020. He will continue to serve in his current role until a successor is hired and plans to remain at Guardant Health and support the company during this transition.
"My time at Guardant has been a true privilege and I am honored to have worked alongside such an amazing team," said Mr. Bertocci "I believe deeply in Guardant’s vision and look forward to seeing Helmy, AmirAli and the entire team achieve even greater success in the years to come."
"Derek’s leadership, business acumen, work ethic and values have been instrumental to Guardant’s growth for over almost 4 years," said Dr. Eltoukhy. "On behalf of our entire management team and board of directors, I want to thank Derek for his contributions. We have a strong bench of talent in our finance and accounting organization and look forward to welcoming a new CFO in the coming months."
Webcast and Conference Call Information
Guardant Health will host a conference call to discuss the fourth quarter and full year 2019 financial results after market close on Monday, February 24, 2020 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone (866) 417-5537 for U.S. callers or (409) 217-8233 for international callers (Conference ID: 8657963). The webcast can be accessed at View Source

Halozyme Reports Fourth Quarter and Full Year 2019 Results

On February 24, 2020 Halozyme Therapeutics, Inc. (NASDAQ: HALO) reported financial results for the fourth quarter and full year ended December 31, 2019 and provided an update on its recent corporate activities and outlook (Press release, Halozyme, FEB 24, 2020, View Source [SID1234554652]).

"I am pleased to report 2020 is off to a strong start as we have substantially completed our actions to reposition the company to focus on ENHANZE," said Dr. Helen Torley, president and chief executive officer. "As a result of our decisive actions, we expect to become sustainably profitable in the second quarter. In addition, we anticipate multiple events that will grow the value of our ENHANZE technology in 2020. Both the subcutaneous formulation of Darzalex and the fixed-dose combination of Perjeta-Herceptin are under regulatory review in the U.S. and EU with potential approvals and launches expected this year. We anticipate three ENHANZE pipeline candidates to begin Phase 3 testing, one to begin Phase 2, and at least five new Phase 1 trial starts. With these key developments, a transition to profitability and plans for continued return of capital, Halozyme has never been in a stronger position to deliver value for our shareholders. With a target of 19 products in clinical development or already commercialized by the end of this year, we continue to see the potential for our royalty revenues to achieve $1 billion by 2027."

Fourth Quarter 2019 and Recent Highlights

In December, Janssen selected for development with ENHANZE the targets EGFR and cMET on an exclusive basis as part of the bispecific antibody (JNJ-61186372), which is being studied in solid tumors.
Halozyme recently completed $200 million worth of share repurchases under the Board of Directors authorized capital return program to repurchase up to $550 million of the Company’s outstanding common stock over the next three years. This repurchase plan was first authorized by the Board of Directors in November 2019 and has $350 million remaining under the authorization. The Company plans to repurchase up to an additional $150M worth of shares in 2020.
In November 2019, Halozyme completed the sale of $460.0 million aggregate principal amount of Convertible Senior Notes due 2024. A portion of the net proceeds from the offering were used to repurchase $200 million of the Company’s stock and $26.1 million to repay all outstanding amounts under loan agreements with Oxford Finance and Silicon Valley Bank.
In November 2019, Halozyme announced strategic actions to reposition the Company with a focus on its ENHANZE drug delivery technology and immediately implemented a restructuring following the announcement of results of the HALO-301 clinical study. Since then, the Company has completed the majority of the restructuring and remains on track to become a sustainably profitable company beginning in the second quarter of 2020.
In October 2019, collaboration partner Roche nominated one new undisclosed target to be studied utilizing the ENHANZE technology, triggering a $10 million milestone payment to Halozyme.
In October 2019, collaboration partner Bristol-Myers Squibb initiated a Phase 1 study of relatlimab in combination with nivolumab utilizing the ENHANZE technology.
Fourth Quarter and Full Year 2019 Financial Highlights

Revenue for the fourth quarter was $53.7 million compared to $60.2 million for the fourth quarter of 2018. The year-over-year decrease was primarily driven by a $25 million upfront payment from Roche in the year ago period 2018 related to the expansion of Roche’s collaboration with Halozyme, partially offset by higher API sales to our partners in the current period. Revenue for the quarter included $17.2 million in royalties, which compared to $19.3 million in the prior year period.

Total revenues for the full year were $196.0 million, compared with $151.9 million in 2018, representing growth of 29% year over year.
Research and development expenses for the fourth quarter were $45.1 million, compared to $36.7 million for the fourth quarter of 2018. The increase in expenses was due to $17.2 million in restructuring and one-time charges related to the shift in strategic focus to the Company’s ENHANZE drug delivery technology, partially offset by $9.4 million lower PEGPH20 clinical trial related costs.

Research and development expenses for the full year were $140.8 million, compared with $150.3 million in 2018.
Selling, general and administrative expenses for the fourth quarter were $23.9 million, compared to $18.0 million for the fourth quarter of 2018. The increase was due to restructuring and other one-time charges of $11.2 million, partially offset by lower personnel costs.

Selling, general and administrative expenses for the full year were $77.3 million, compared with $60.8 million in 2018.
Net loss for the fourth quarter was $34.4 million, or 0.24 per share, compared to a net loss in the fourth quarter of 2018 of $2.1 million, or $0.01 per share.

Net loss for the full year was $72.2 million or $0.50 per share, compared to $80.3 million or $0.56 per share in 2018.
Cash, cash equivalents and marketable securities were $421.3 million at December 31, 2019, compared to $354.5 million at December 31, 2018.
Financial Outlook for 2020

Halozyme is reiterating its 2020 financial guidance ranges as first announced on January 14, 2020. For 2020, Halozyme expects:

Revenues of $230 million to $245 million, representing growth of 17% to 25%;
Earnings per share on a GAAP basis of $0.60 to $0.75 with the first quarter of sustainable profitability beginning in Q2 2020.
The guidance for earnings per share does not reflect any potential impact from the Company’s plans to repurchase an additional number of shares, up to $150 million worth, during 2020. The amount and timing of shares repurchased during 2020 will be subject to a variety of factors including market conditions, other business considerations and applicable legal requirements.

Webcast and Conference Call

Halozyme will webcast its Quarterly Update Conference Call for the fourth quarter of 2019 today, Monday, February 24, 2020 at 4:30 p.m. ET/1:30 p.m. PT. Dr. Torley will lead the call, which will be webcast live through the "Investors" section of Halozyme’s corporate website and a replay will be available following the close of the call. To access the webcast and additional documents related to the call, please visit halozyme.com approximately fifteen minutes prior to the call to register, download and install any necessary audio software. The call may also be accessed by dialing (877) 824-0907 (domestic callers) or (647) 689-5655 (international callers). A telephone replay will be available after the call by dialing (800) 585-8367 (domestic callers) or (416) 621-4642 (international callers) using replay ID number 1266162.

Exact Sciences Announces Offering of $850 Million Convertible Senior Notes Due 2028

On February 24, 2020 Exact Sciences Corporation (NASDAQ: EXAS) (the "Company") reported an underwritten public offering of $850 million aggregate principal amount of convertible senior notes due 2028 (the "Notes") pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC") on Form S-3 (Press release, Exact Sciences, FEB 24, 2020, View Source [SID1234554651]). The Company has also granted the underwriter a 30-day option to purchase up to an additional $127.5 million aggregate principal amount of the Notes. The Company intends to use the net proceeds of this offering for general corporate purposes, which may include the repayment or repurchase of debt, working capital and possible acquisitions. The Notes will be convertible into cash, shares of the Company’s common stock (and, if applicable, cash in lieu of any fractional share), or a combination thereof, at the Company’s election.

BofA Securities is acting as sole book-running manager for the Notes offering.

An automatically effective shelf registration statement relating to the Notes was filed with the SEC on June 6, 2017. The offering of the Notes will be made only by means of the prospectus and related prospectus supplement, which have been or will be filed with the SEC. A copy of the prospectus supplement and prospectus relating to the Notes offering may be obtained free of charge on the SEC’s website at View Source or by sending a request to BofA Securities, NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte, NC 28255-0001, Attention: Prospectus Department (or by e-mail at [email protected]).

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.

Immunotherapy combo effective for patients with high-grade neuroendocrine cancer

On February 24, 2020 SWOG Cancer Research Network reported that many patients with rare, fast-growing neuroendocrine tumors respond well to a common immunotherapy drug combination, according to the first peer-reviewed publication out of DART, short for Dual Anti-CTLA-4 and Anti-PD-1 Blockade in Rare Tumors, a unique rare cancer clinical trial (Press release, SWOG Cancer Research Network, FEB 24, 2020, View Source [SID1234554650]).

DART offers the immunotherapy combination of ipilimumab and nivolumab to patients with 53 classes of rare cancers through an innovative "basket" design, which allows a single drug or drug combination to be tested in a variety of tumor types. The trial has rapidly expanded the opportunities for immunotherapy drug development in rare cancers, which make up almost a quarter of all cancers diagnosed worldwide.

DART is managed by SWOG Cancer Research Network, a clinical trials group that is part of the National Cancer Institute’s (NCI) National Clinical Trials Network (NCTN), the oldest and largest publicly-funded cancer research network in the U.S.

The study results appear in Clinical Cancer Research. When presented in March 2019 at the annual meeting of the American Association of Cancer Research, initial findings were met with excitement. That’s because patients with high-grade, or fast-growing, neuroendocrine carcinoma have few treatment options.

"We’re very encouraged by these results," said Sandip Pravin Patel, MD, the DART clinical study chair, an associate professor of medicine at the University of California at San Diego School of Medicine, and a medical oncologist with Moores Cancer Center at UC San Diego Health. "Based on the response, we opened another study enrolling only patients with high-grade neuroendocrine carcinoma to see if we can replicate our results. We’re eager to share those findings later this year."

Patel’s fellow DART chairs are Razelle Kurzrock, MD, of UCSD Moores Cancer Center and Young Kwang Chae, MD, PhD, of Northwestern University.

For this neuroendocrine cohort, 32 eligible patients received the ipilimumab and nivolumab combination. Of the 32, 18 had high-grade cancer, with tumors most commonly appearing in the lungs or gastrointestinal tract. Regardless of where their tumors appeared, eight out of 18 high-grade patients – or 44 percent – saw them shrink partially or completely. By contrast, patients with intermediate or low-grade tumors saw no response.

Since its 2017 launch, physicians at 823 cancer centers, academic medical centers, and community clinics and hospitals have opened DART. As of February 13, 715 patients have enrolled out of a goal of 818 – beating all expectations. Historically, rare cancer trials struggle to find patients, leading many investigators to abandon rare cancer research.

Currently, the trial is enrolling patients with 12 different cancer types. For information, call the NCI’s Cancer Information Service at 1-800-4-CANCER and ask about DART or S1609. More information about the trial, under NCT number NCT02834013, can be found at clinicaltrials.gov.

DART is funded by the National Institutes of Health through NCI grant awards CA180888, CA180819, CA180821, and CA180820 and in part by Bristol-Myers Squibb.

Patel is first author of the Clinical Cancer Research article, and Patel, Chae and Kurzrock all serve as corresponding authors. Other authors include: Megan Othus, PhD, of SWOG and Fred Hutchinson Cancer Research Center; Francis Giles, MD, formerly of Northwestern University and now at NEOMED Therapeutics; Donna Hansel, MD, of UCSD Moores Cancer Center; Preet Singh, MD, of Springfield Clinic; Annette Fontaine, MD, of New Mexico Cancer Center; Manisha Shah, MD, of The Ohio State University Comprehensive Cancer Center; Anup Kasi, MD, MPH, of the University of Kansas Cancer Center; Tareq Al Baghdadi, MD, of IHA Hematology Oncology at St. Joe’s Ann Arbor; Sreekanth Vasireddy, M.D. of Ochsner Health System; Zoran Gatalica, MD, DSc, of Caris Life Sciences; W. Michael Korn, MD, of Caris Life Sciences and the UCSF Helen Diller Family Comprehensive Cancer Center; Jourdain Hayward of the SWOG Statistics and Data Management Center; Christine McLeod of the SWOG Statistics and Data Management Center; Helen X. Chen, MD, of the National Cancer Institute; Elad Sharon, MD, of the National Cancer Institute; Edward Mayerson, MS, of the SWOG Statistics and Data Management Center; Christopher Ryan, MD, of Oregon Health & Science University; Melissa Plets, MS, of the SWOG Statistics and Data Management Center; and Charles D. Blanke, MD, of the SWOG Group Chair’s Office.

Nymox Announces New Peer Review Publication of Prostate Cancer Fexapotide Clinical Trial Results in World Journal of Urology

On February 24, 2020 Nymox Pharmaceutical Corporation (NASDAQ: NYMX) is reported that a new peer review report was published in the World Journal of Urology, documenting the successful long-term clinical trial results after Fexapotide Triflutate treatment for early stage prostate cancer (Press release, Nymox, FEB 24, 2020, View Source [SID1234554649]).

This report represents the first publication in the medical literature of multi-year long-term data from a well-powered prospective randomized multi-center clinical trial for a prostate injectable treatment in men targeted to low grade early prostate cancer and showing statistically significant efficacy for a locally targeted molecular injectable treatment.

The new publication is entitled "Prospective Evaluation of Fexapotide Triflutate Injection ‎Treatment of Grade Group 1 Prostate Cancer: Four Year Results". The authors are Neal Shore, Myrtle Beach, SC; Steven A. Kaplan, New York, NY; Ronald Tutrone, Baltimore, MD; Richard Levin, Towson, MD; James Bailen, Louisville, KY; Alan Hay, Salem, OR; Susan Kalota, Tucson, AZ; Mohamed Bidair, San Diego, CA; Sheldon Freedman, Las Vegas, NV; Kenneth Goldberg, Lewisville, TX; Frederick Snoy, Albuquerque, NM; Jonathan I. Epstein, Baltimore, MD. The article is available online at View Source

The Fexapotide (FT) study was started in 2012 and enrolled 147 men with localized Gleason Grade 6 T1c prostate cancer at 28 U.S. clinical investigation sites. Patients were followed with clinical and laboratory evaluations and regular periodic prostate biopsies for up to 5 years. Patients randomized to FT were treated with a single one-time targeted injection of FT, either 2.5mg or 15mg. Statistical comparisons were made over time of the proportions of subjects and untreated controls who progressed to higher Gleason grade and/or invasive treatments instituted with prostatectomy, radiotherapy, or chemotherapy. Important clinical highlights from the study include: FT treatment reduced cancer progression (-67.7%) compared to controls (3 years, FT 15mg, p<.02, pooled FT p=.0265) and also reduced (-54.7%) the incidence of surgery, radiotherapy or chemotherapy (4 years, FT 15mg p<.02; pooled FT p=.0374). At 4 years the incidence of surgery, radiotherapy or chemotherapy with increased Gleason grade was significantly reduced (FT 15mg -73.3% p=.0059, pooled FT p=.0064). Results for the high dose (FT 15mg) were superior to the lower dose (FT 2.5mg). Safety data showed no serious adverse events related to FT during the study.

The current recommended standard of care for these patients is active surveillance: patients are monitored carefully over time to determine if and when the cancer becomes more advanced and thus will require more aggressive treatment, like radiation therapy or surgery.

Dr. Neal Shore, lead author of the report, said "The study results demonstrate data in a large multi-center clinical trial of men treated with transrectal ultrasound guided FT for early stage, low risk prostate cancers, which suggest an effective result for reducing histopathologic progression, as evidenced by repeated biopsies over time, while also demonstrating a favorable safety profile. This study presents long-term FT data which supports its efficacy for avoidance of biologic progression in an active surveillance prostate cancer population. A therapy to optimize the success of an active surveillance strategy is a welcomed advance for these patients."

Dr Steven Kaplan, Professor of Urology and Director of the Benign Urologic Diseases and The Men’s Health Program at Icahn School of Medicine at Mount Sinai, New York, and a co-author of the report said, "This study reports the long-term data from a prospective study of an injectable for localized Grade Group 1 prostate cancer — which is the first time this has been accomplished for a very common problem in men. Regulatory approval of Fexapotide Triflutate (FT) will be a very important treatment adjunct for countless men with this problem."

The FT treatments were administered in a urology office setting without anesthesia or sedation, consisting of a single relatively painless transrectal injection into the area of the prostate cancer. The percentage of patients with surgery or radiotherapy with Gleason grade progression was reduced by 73.3% in patients treated with a single injection of FT 15mg and by 62.6% in pooled (high and low dose FT groups combined) FT patients compared to controls.

Dr. Jonathan Epstein a co-author and researcher involved in the study, stated "Although more and more men are electing active surveillance for low grade prostate cancer, approximately 25-35% will show increased grade on follow-up biopsy which typically leads to definitive therapy. In this study, Fexapotide Triflutate decreased the risk of upgrading on follow-up biopsy enabling men to stay on active surveillance. Even if Fexapotide Triflutate enables men to stay on active surveillance longer before they eventually experience upgrading, there would be a significant benefit for men to delay the onset of side effects associated with therapy and in the interim enjoy a better quality of life. Future studies are needed to expand the criteria for study of Fexapotide Triflutate to include men with large volume Grade Group 1 disease and possibly men with low volume, low percent pattern 4 Grade Group 2 cancer. Identifying the ideal candidates for Fexapotide Triflutate also factoring in multiparametric MRI findings remains to be determined."

FT is a pro-apoptotic proprietary drug which promotes natural programmed cell death (apoptosis) in prostatic glandular cells which compose the prostate cancer. FT has been safely administered to men in clinical trials in the U.S. involving over 1700 patients and controls treated for BPH or prostate cancer. FT has completed Phase 3 studies for BPH and further studies of FT for prostate cancer are planned in the near future.

For further detailed information about the published study please refer to the new report online at the World Journal of Urology.