Q2 2021 Guardant Health Inc Earnings Call
Come to the Guardant Health second quarter 2021 earnings conference call at this time all participant lines are in a listen only mode.
After the Speakers' presentation, we will have a question and answer session.
Ask a question during the session you will need to press star 1 on your telephone keypad.
Please be advised today's conference is being recorded if you require operator assistance just press Star Zero I would now like to turn today's conference over to Kerry Amendable Investor Research Investor Relations.
Thank you.
Earlier today Guardant Health released financial results for the quarter ended June 32021.
If you have not received this news release or if you'd like to be added to the Companys distribution list.
Please send an email to investors at Guardant health Dotcom.
Joining me today from garden on.
<unk> I'm really tell Bob and myself.
Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws.
Statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
Additional information regarding these risks and uncertainties appears in the section entitled forward looking statements from the press release Garden issued today.
For a more complete list and description. Please see the risk factors section of the company's annual report on form 10-K for the year ended December 31.2020.
And we reported filings with the Securities and Exchange Commission.
This call will also discuss certain financial measures that are not calculated in accordance with generally accepted accounting principles.
Reconciliation to the most directly comparable GAAP financial measure maybe found in today's earnings release submitted to the SEC.
Except as required by law guardant disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
This conference call contains time sensitive information and is at.
Only as of the live broadcast August 5.2021, but that I would like to turn the call over to help me.
Thanks, Gary Good afternoon, and thank you for joining our second quarter 2021 earnings calls.
Michigan Guardant has always been to ensure patients have access to innovative oncology products today division, it's clearer than ever.
Never been more excited about the opportunity ahead of US. This afternoon. We note a new leadership structure, which will allow us to aggressively moving scale into new areas of growth across the continuum of cancer care.
We have created 2 focused areas within garden from.
Apologies and screening.
And the early and I will serve as co Ceos with a near Raleigh, leading our screening efforts and me really oncology.
We believe this leadership structure will provide the focus on strategic attention required to continue as the liquid biopsy liter at oncology, while aggressively pursuing the massive opportunity in cancer screening.
This structure will also allow for scalability to address new areas across health care beyond screening in oncology.
Everything we do at Guardant is motivated by our commitment to serve patients. We are dedicated to bring the absolute best products to market that will provide clinically actionable information to inform patient care. We believe that this new focus leadership structure will allow us to more rapidly address the unmet need to serve patients and in line with this.
Commitments I will start off today with a patient story.
Last March at 58 year old woman was diagnosed with colorectal cancer.
Shortly after diagnosis surgery was performed followed by adjuvant therapy.
Follow up on oncologists detected elevated levels of C, but she scan negative for evidence of disease.
And another follow up just over a year. After the initial diagnosis for oncologist ordered a gardener of yield test, which showed she was C. P D day negative.
Garden reveal directly measures tumor derived DNA in the blood well see a is it a specific biomarker and can be elevated multiple cancer types. For example in smokers and in patients with various benign diseases Brian.
<unk> has a sensitivity of 91% compared to the E scooter sales could be up 69%.
With a higher sensitivity than <unk> in the surveillance setting Gardner abele showed the patient was not actively progressing this story highlights how Gardner bill can provide confidence in the reliability and recurrence testing for cancer.
Now turning to our second quarter performance revenue grew 39% gross profit grew $92 million.
Second quarter clinical volume grew to 20830 test representing 52% growth over the prior year period and up 13% from the first quarter of this year.
While patient visits and after that there is still not fully back to pre COVID-19 levels. We are pleased with how well our commercial team is continuing to execute in this environment and still achieve healthy volume.
International clinical volumes were impacted by the resurgence of Covid cases, especially in countries, where the vaccination rates remained low.
During the second quarter, we saw strong growth in U S clinical volume because oncology offices gradually reopen throughout the quarter.
In recent weeks, we have seen a reduction of oncology office visits and sales force access in the United States and across our global business, which may have an adverse impact for the remainder of the year. Although we are starting to see some impact globally, we have not seen much yet in the United States. We are monitoring the situation closely as it evolves.
Our portfolio is growing quickly and we have launched a record number of new products and product upgrades in the last year alone, but we are nowhere close to done.
2 of these new product launches were announced in the second quarter Garden 360 tissue net kindergarten through 60 response.
Both projects expand the trusted gardens or 60 portfolio to offer oncologists end to end testing solutions.
Tissue net supplement our blood first approach.
Our tissue next test provides an integrated solution for oncologists to use liquid first ahead of tissue ensuring patients receive guideline complete testing with the fastest turnaround time.
And oncologist ordered integrated product and begins with our Garden Creek 60 liquid biopsy test. If there is no biomarker detected here. She is able to quickly reflex the tissue with tissue next.
This integrated approach has a significantly higher biomarker detection rate than tissue alone.
And the flip study in non small cell lung cancer CGP liquid testing using garden's resets, we identified 81% of patients with informative test results and tissue testing found informative biomarkers and the remaining 19% of patients.
On the other hand standard of care tissue testing alone identified just 37% of the patients will form discussed results from this study.
This study is 1 of many that highlight the blood first tissue net approach offers a clinically superior paradigm there.
On the early response to tissue net has been very encouraging the reimbursement path for tissue is well defined and we expect to submit the technical assessment application to Mol Dx. This year. We believe this operating will serve as a stepping stone for those who continue to rely solely on tissue testing to move towards a blood first testing paradigm.
Garden's day 60 responses the first commercially available blood on the liquid biopsy test that detects changes in Cte DNA levels to provide oncologists and early indications of a patient's response to treatment such as targeted immunotherapies.
Our comprehensive product portfolio, essentially lay book oncologists perform profiling for treatments without share in both blood and tissue as well as response monitoring.
Feedback from both new product is very positive we do not expect either product would be a significant revenue contributor in the near term as we work to establish reimbursement.
Turning to our current monitoring opportunity garden to reveal we're pleased by the encouraging feedback and reception from oncologists based on the early success, we're seeing on the market around reveal we have expanded this dedicated commercial team.
More than 9000 oncologists have ordered a garden 360 cars and we are leveraging these existing customers as well as our relationship with Kols for their launch of per deal.
On CRC, we're also making great advances in other cancer types with compelling data on bladder lung and breast as well.
Moving on to Biopharma.
<unk> volumes grew to 3653 tests up 30% year over year and up 4% from the first quarter. We continued to experience some pressure on biopharma sample volumes given the lag in many of those kind of book coming to us per analysis due to slower enrollment during COVID-19 peaks.
Q2 development services and other revenue was approximately $19.5 million up 27% year over year.
We are pleased by the growth of our overall pharma business and continue to serve an increasing number of biopharma customers with more than 80 active partnerships.
As our Biopharma business matures, we expect growth to be underpinned by sample volume, including new product introductions for example, multi indication on the deal as well as companion diagnostics.
This quarter, we announced 2 new companion diagnostic approvals with the Ensign and Amgen growth for use in advanced non small cell lung cancer.
The FDA has approved the garden 360, <unk> is the first on the only liquid biopsy companion diagnostic for comprehensive genomic profiling to identify patients with locally advanced or metastatic non small cell lung cancer, who harbor, the <unk> <unk> mutation and who may benefit from amgen's, where macros or who harbored egfr.
Exon 20 insertion mutation, who may benefit from Jensen Reiber event.
Moving on to Gardner and form a real world evidence platform, featuring an extensive clinical genomics liquid biopsy data set of advanced cancer patients. We are planning more than a dozen biopharma collaborations for guardant form since its launch.
Just over a year ago.
We are pleased with the success on growing interest from our Biopharma partners in this offering.
Ed Garden are sectors that not only in providing solutions for patients with advanced on early stage cancer, but early cancer detection as well we are focused on establishing ourselves as the best in class company in these large markets, while maintaining a culture of fast execution as the organization continues to scale.
Since founding garden from your all in I have always had a strong partnership.
We have been laying the groundwork for these 2 focused areas of oncology and screening for quite some time.
This co CEO leadership structure is a continuation of our current strategy and supports the evolution of our business. We are scaling the team to support the growth of both businesses and recently brought on Chris Freeman as our new Chief commercial officer of oncology.
We expect to bring on several more key leaders in the near future and have started building a dedicated commercial organization for a screening business.
Having leadership teams dedicated to each opportunity will give us the focus on velocity to rapidly scale in each of these areas to drive both near term on long term success.
We have also continued to invest in our government and made recent changes and additions to our board of directors and will now be serving as chairman of the board and Amir Ali will continue to serve on the board as a director. We believe this rotation in our responsibility as a fresh perspective and is in line with our overall focus to scale our organization.
In addition, Megan Joy has been appointed to our board of directors begging us to Chief operating Officer, and Executive Vice President of platform at Oscar Health, a high growth Health Tech and health insurance company, where should we the operations technology clinical marketing and new business lines.
Higher to joining Oscar health Megan had several leadership roles at Uber, Most recently as regional general manager of the United States, and Canada or ex.
Pretty thin scaling high growth organizations will be invaluable to a next phase of growth.
Look forward to her contributions and guidance.
We are committed to continue to develop a portfolio of breakthrough products across all stages of cancer and ensure these innovations are not only available but readily accessible for all patients.
We look forward to continuing to expand our product portfolio attract and develop top talent and improve patient outcomes as we conquer cancer with data across the continuum of care.
I will now turn the call over to them here all day.
Thanks on me.
I want to start by Ed Klein Cal me the excitement for what is ahead that Gardner.
Any cancer screening has the potential to significantly transform patient outcomes.
If successful the readout of our eclipse trial.
Potentially all pent up at $28 billion screening opportunity in colorectal cancer.
And future studies, we will open up opportunities and added solid cancer types paving the way towards a total addressable screening market of margin $50 billion.
We are confident that we will become the leader in screening not just on CRC, but across many cancer types.
That said it is clear that this opportunity requires a dedicated and focused efforts.
I'm, sorry, I'll try to jam their rollout close CEO, how can we position ourselves for the launch of our screening.
We are encouraged by the progress on your peer sanitation and this is just the first of many indication Google per seat for screening.
I'm excited to announce that we have re century enroll 10000 patients in our <unk>.
Eclipse trial.
I'm proud of the progress on our clinical kingmaker in running this study during the.
Pandemics blanking draw on mentoring many clinical trials are heavily impacted.
Now based on the CRC prevalence batteries in that clip so far.
Planting girl and additional 3000 on patients in these studies.
Well, it's all up per team side.
To ensure we reach the required number of yards E positive patients.
We are confident that we will have total enrollment compensated by November of this year. The same 24 months timeframe that we announced when we launched the eclipse study.
In parallel to running Eclipse, we are also making great progress building, our commercial infrastructure to launch our screening product.
I am pleased to announce that we are planning to launch the L. D. T version of our CRC screening assay in the first half of 'twenty or 'twenty 2.
And we expect to launch the IBD bearish on the assay in 2020.3 pending successful FDA review and approval.
The initial version of our screening tests will be for CRC, and we expect over time more indications that will be added to the assay.
GAAP presented data on our continuing to see a good technical performance and detecting early stage like ladder pancreatic and a few other cancer types and final cohort study.
Part of our strategy is to invest in adjacent areas or emerging trends that are synergistic star efforts day in and screening.
To that end, we have recently partnered with no net a company focused on AI powered radiologists pathologists are those shots.
Their vision of streamlining the screening journey for patients.
We believe that our multimodal on integrated screening paradigm.
After a tremendous value to the health care system and patients.
This is on important aspects of our overall strategy and Google Com channel looking for strategic opportunities over the coming quarters.
Turning to clinical data.
At this year's Ash annual meeting.
We presented about Suwanee abstract.
Bring our full suite of product.
I would like to highlight a few of these abstracts per day.
And Mark do you study led by UCSF and other government from static CRC patients.
Garden's reveal what's used to analyze post procedure C P DNA and serial blood samples and 4 to 6 patients.
Positive predictive value a positive post procedures DNA to predict recurrence was 96 per cent.
And on average share.
D&A was detected 28 weeks before radiographic recurrence.
Of 17 versus 4.5 weeks respectively.
Pfizer also presented data leveraging garner interest 62 assets P. T DNA dynamics as a predictor of an early read of your spot.
In newly diagnosed advanced non small cell lung cancer patients treated with low lapping it.
N series 6 day was able to do certain military responders from non responders or Greek faster to startup therapy.
And molecule responders had significantly in buying their progression free survival.
We also reported clinical outcomes from patients in denial study.
Patients will receive target therapy based on their card entry 60 result at comparable outcomes to dose treated based on tissue results.
Importantly time to treat planning C. T. DNA cohort was significantly shorter Concord, so the tissue cohort 18 versus 32 days respectively.
Lastly, and add on.
There are strikes call, Brian early stage cancer management, using cancerous specifics you know, let me kind of epigenomics signal.
We showed the performance of our liquid assay for detecting the presence of speed TDMA in early stage, non small cell lung cancer and bladder cancer patients.
<unk> performance was tested using 175 pretreatment clinical samples from patients with early stage disease and.
<unk> hundred 71 sales declared health you, though on that.
Yes.
Sensitivity for non small cell lung cancer was 70 per cent stage, 156% stage 280 per cent and stage 383%.
And sensitivity for bladder cancer was 51 per cent.
In non muscle invasive 36 per cent and muscle invasive 69%.
<unk> 95 per cent specificity.
These abstracts demonstrate the value and utility of liquid biopsy at cross the con tango of cancer care.
With that.
I will now turn the call over to Mike on <unk>.
More detail on our financial.
Thanks, Sam I wrongly.
Total revenue from the second quarter of 2021 was $92.1 million from 39% from $66.3 million in the prior year quarter.
This growth was driven by a year over year increase in both our precision oncology testing revenue and on development services and other revenues.
Total precision oncology testing revenue until the second quarter with $72.6 million on growth and 42 per cent compared to $51 million in the prior year quarter.
Precision oncology revenue from clinical testing in the second quarter was <unk> 61 per $1 million.
64% from $49.6 million from the prior year on coffee.
Second quarter clinical test volume, which primarily consisted of government 360 tests with 20830, which is an increase of 52% from the prior year quarter.
In the second quarter of 2021.
Average estimate today Asps compelling <unk> was approximately $2600, which was in line with our expectations. Following the April volume increased to $5 of the Medicare reimbursement rates have gone from 360 <unk> on the partial offset from potential payment delays on denials of the need cash.
On the <unk> from private Payors.
The remainder of 2021.
Estimate today Inchcape, 2 <unk> debt to continue to average approximately $2600.
But on the clinical revenue recognized from the second quarter of 2021, consistent with teens revenue per test performed in the period based on the estimate today state as well as cash collected.
<unk> performed in price premiums or the cash collected from scratch and on the previously accrued revenue.
Our ability to estimate the ISP forgotten interest safety continues to improve cash while growing historical collection data.
Clinical testing revenues from the second half of 2021 to be primarily derived from a crude revenue per test performed in the period based on estimated ISP.
And therefore, the amount of revenue recognized from cash collected per test performed Lupron schools will be significantly lower volume in the first half of 2021.
Precision oncology revenue from Biopharma tests in the second quarter sales will be $11.6 million up 3.
3% from $11.4 moving from the prior year quarter.
Quanta Biopharma test touch on 3000 seats from getting 53.
2% from the prior year quarter.
Biopharma test ASP was $3163 down 22% from $4054 in the prior year period, primarily due to the mix between the omni and <unk> hundred 60 day.
Development services and other revenue continued to be a strong growth profile.
Second quarter, so from $19.5 million.
Of 27% from the prior year quarter.
Development services revenue, including milestone payments from the 2 FDA companion diagnostic approvals, we received from the second quarter of 2021.
Gross profit from the second quarter of 2021 was $62.2 million.
<unk> gross profit of $43.9 million in the same period prior year.
Gross margin was in line with our expectations and on the second quarter was 16% compared to 66% during the second quarter of 2020.
Operating expenses from the second quarter of 2021 per $159 million, an increase of 62 per cent compared to $98.5 million in the second quarter of 2020.
Non-GAAP operating expenses exclude stock based compensation and related employer payroll tax payments acquisition related expenses amortization of intangible assets and changes in fair value of contingent consideration.
Non-GAAP operating expenses for the second quarter of 2021 were $124.7 million.
71% increase from $72.9 million in the same.
Quarter of 2020.
We expect operating expenses to continue to accelerate from 2021 as we invest in our lunar program.
Study I know the development activities as well as they expand on commercial organization, both in our oncology business, where we have launched several new products. So far this year.
In our screening business as we prepare for the planned launch of the LDC version of our CRC screening assay in the first half of 2022.
Net loss was $97.6 million on 96 per share from the second quarter of 2020 low.
Compared to $54.6 million or 57 per share in the second quarter of 2020.
Non-GAAP net loss was $61.4 million on 61 cents per share from the second quarter towards trying to them.
It's a $23.5 million or <unk> 25 per share from the second quarter of 2020.
Adjusted EBITDA was a loss of $56.4 million in the second quarter of 2020 compared to a $25.1 million loss in the second quarter of 2020.
We define adjusted EBITDA as non-GAAP net loss adjusted.
Interest income tax depreciation amortization and other income and expense.
We ended the second quarter of 2021 with $1.8 billion in cash cash equivalents and marketable securities.
Now turning from a revenue outlook for the full year 2022 of them.
While we feel bullish about the trajectory of on business and against our record revenue this quarter.
Want to be cautious given the uncertainty around the impacts of COVID-19, and in particular, the delta barriers on oncology on fixing it.
Clinical study enrollment and sales force access in the U S and across cycles.
Therefore, we are maintaining our guidance of 360, <unk> from $10.2 million representing growth of approximately 27% over 2020 on the midpoint of the range.
We continue to expect clinical sample volume for 2021 to be greater than 19000 tests representing growth of at least from 2.2% over 2020.
At this point I would like to turn the call back to Hal for closing comments.
Thanks, Mike.
Before closing I want to thank our team for their incredible work this quarter as we worked to establish ourselves as a leader in cancer across the continuum of care.
We have made great strides this year as we continued to expand our product portfolio and establish our solution does.
Cash and cancer testing.
We are looking forward to bringing this to rent them into the second half of the year.
With that we'll now open it up to questions.
Thank you at this time on 1 from the line up for questions I'd like to ask a question. Please press Star then 1 on your telephone keypad. So as part of your question press the pound key.
And our first question will come from the line of Tycho Peterson with J P. Morgan.
Hi, Good afternoon, just continuing on Apple pay Paul Tufano.
Net income.
On a little bit more time on GAAP on the leadership structure.
We understand that.
Being able to pull from animal.
Oncology anytime something on reimbursement timeline and go to market channel et cetera. So will this leadership structure change like what specific operational changes can we expect Florida cancer screening business, especially on kind of something that resource allocation and financial planning.
I know you touched on commercial interest in the.
Expansion is the major part of that but you know are there any meaningful changes on the opex outlook on a long term strategy, we should be thinking about.
Tell me I mentioned on the beginning that there are potential opportunities once school on oncology. So just wondering if you could elaborate a little more.
On the opportunities.
Yeah.
Oh, sorry, I don't know early on.
On a spending side, but.
It's really a culmination of changes and evolution of the organization that has been ongoing for the last several years.
I think it earlier the testament to the confidence.
And on there.
1 screening Morocco need on our separate businesses.
Okay on the ability of the future.
We wanted to.
Although there are always a little bit about the screening.
Got it back here on me and so on.
True.
Our responsibility.
I know everything from Jared actually Hi, Vishal.
Sure Sean.
For us that was true Brian oncology on screening.
1 on a bunch of alcohol price either that or John D through businesses.
Sure.
As always be very important partners and so on.
Operating on their lawn and garden.
Our business operations.
On slide to make sure they have more focus and dedication.
From a friend.
On slide <unk>.
Thank you in terms of the second part of your question.
I think in terms of a second part of your question.
I think the structural so low for scalability beyond the areas. We're targeting today, we're not making any announcements on those areas, but we do know that our platform really has the legs.
Capability.
Addressing other areas in health.
But more to come on that.
Alright, that's helpful.
Ken.
And then separately I have a question on debt.
In response passed just curious since you already have with me al what's the rationale for launching response as corporate cash instead of having a single quantitative and I get a cash.
And then a related note that several.
Clients asking day.
Ballpark cause any cannibalization on GC system.
So our response as early.
I think a.
Very well.
<unk> targeted the.
Product if you think about therapeutic response, both targeted immunotherapies early on just worth Kansas.
Cancer patients market.
And so.
It really income, stating to 2 different animals, as Dan Malone, and R&D and therapeutic response.
So this is absolutely the right products for the field, we're seeing really a lot of excitement in terms of the launch of this test.
Wealth of data or 40 publications.
But at least to award the signs from the clinical utility and clinical validity.
As in life Science, stools, and diagnostics and none of them have this structure. In this includes very successful companies like thermo down on her agilent just the name 3 you know and I could probably name 15.
15 to 30 more.
So recognizing part of leading a company is being decisive and nimble and ultimately.
Ultimately, having 1 person at the helm, what what precedent can you point to that supported this decision how did the board make a decision that this was the right thing to do when no 1 else in the space has and often and this is really important co CEO structures lead to eventual.
Single CEO structures, usually these are temporary when we've seen them in other areas.
Hell me. This this seems like it could be a sign that you are likely to leave the CEO role at some point relatively soon are you committed to this current role through 2022. This seems very very important given how many clinical readouts and how many product launches you plan for that time period.
Yeah, just the Burger.
Leslie I'm not going anywhere.
From Lincoln and Garden.
Ali.
Crazy.
When we have so.
Environment, where in that there is still some uncertainty as it relates to what's going on with Covid and specifically the delta there in on.
And recognizing that I'm wondering if you can say anything about what you saw over the course of the quarter and what you've seen in the early part of the second half of the year in terms of.
Ordering activity and your ability for the sales force to actually get in and detailed clinical practices.
Yes, I think as we as we mentioned in our remarks.
We actually saw improvement during the quarter.
This is opening up with more access.
I think as part of the driver in terms of business from quarter.
That we had in Q2.
I think what we've started to see especially on the last 2 days in some of these offices starting to restrict access starting to close backup.
<unk>.
Not surprising given where.
The number of cases per.
Per day now in the United States.
Things are rising and so.
It's certainly something that despite the strong progress.
Seeing the momentum we're seeing.
We wanted to be I think cautious in terms of the second half of the year, because we're still on the summer months.
Who knows what happens, especially in the winter sort of Mike.
Well, maybe just bolt on some of these rating book.
We did see a little bit of impact of Covid.
The national business.
The last piece of our business, but we saw an impact.
Again, I think we've seen continued on.
S&P internationally.
Well. So again just another reason why we've maintained the guidance where it is.
Thank you and our next question is going to come from the line on pages Savant with Morgan Stanley.
Hey, good afternoon, guys. Thanks for taking the time this is edmund on for patients.
First question I had was on on that Mark.
And.
Given the debate around the tumor informed and tumor agnostic assays on how many can you.
You provide us with some quantitative color on how the mind share battle is progressing I guess on that.
Simple and time is there any way you can give us some information on how many of your new ordering physicians for video on response platform and using more data.
Yes.
We continue to see good traction.
Yes, very logistically, it's straightforward test.
That really fit in.
Physicians currently order.
On a test like CA and how they practice medicine.
1 thing that.
I think we've been very pleased by the traction we've seen with reveal we continue to be pleased there are a number of kols, who I think have publicly in various forums both.
In the U S and internationally about that.
The challenges with tissue acquisition.
Even in the early stage cancer, setting and how having a.
On the tissue independent approach is 1 that is.
I think.
It really simplifies some of them.
On some of those challenges that exist.
In terms of obviously hard to get exact numbers, but we really do not see.
A lot of pushback.
Whether or not.
Physicians has been existing or a new users for these tests.
Sure.
We're very pleased by the traction that reveal as seen by the reception that we're seeing really all classes of disposition volume.
On.
Got it.
I'm sorry, if I missed this but can you remind me on the timeline from reinforcement.
And the plan to launch in indications beyond seriously.
And so I think we had mentioned before that.
And.
In reimbursement by the end of the year.
At least on the Medicare side, Brian.
But barrel I think will take some time as some of the utilities studies read out most likely in terms of multiple indications.
Something that.
It should have been.
Relatively soon.
We have.
Data that we presented.
Net.
Shows I think the progress we've made and the excellent results that we're seeing on the platform beyond CRC presented data on <unk>.
Either in lung, that's very compelling and.
I think we've mentioned in the prepared remarks on data on breast as well.
So expect to see them.
Coming quarters.
Got it and 1 last 1 from me on <unk>.
Scott.
EMEA you guys showed data on cancer patient population that go on.
Is it still.
Right to think about.
Readout.
On the next year and second on.
In terms on the bogey from a sequence millward will data how should we think about.
Free cash flow patient population data presented at Astro.
Okay.
So.
I understand that.
Net.
We expect that we both finished.
Sure.
Enrollments by November storage on Black Panther, perhaps from the beginning all valves and balance as we have.
And the spending is traveling at that day.
With that event.
And the channel treat out location.
And right after that I think mark that Youre amongst peers.
Readout of <unk>.
Yes.
So we are on.
On track to be granted on those cycles, but steady asset.
<unk> data were presented.
Okay.
On a card.
<unk> data generation IV shall cohort to get access to additional CRC cohort.
Cancer screening cohort.
Negative or positive findings.
A contest that day.
I think we updated our.
Decision, making you know with a cushy on structure is that clear to me kind of you know who who who is at the end of the day really really held accountable for brought on corporate <unk> performance.
Partnerships.
Sales.
And on hang on.
Garden things.
It's pretty clear area in there on screaming and you will be in charge of the same.
They're on oncology.
In charge of.
And we're still having essentially combined leadership structure around other area and obviously some of the decision drive to the board level as well, which is heavily engaged garden, so rarely see no.
Issues not allowed a deviation from where things were in terms of business structures from a very confident that.
The strategic decisions will continue to be made in the context of 1 garden in the early 1 mindset.
Okay and.
And then as it relates to the CRC screening product you know the L. D. T approach, we haven't really seen that before can you talk about obviously you get in the market a little sooner, but is there any other kind of strategic rationale in terms of data collection or other things that would cause you to kind of go with that L. D. L. D. T approach and then are you moving to kind of talk.
About what you're okay.
Updated expectations are for performance on <unk> from in terms of an early on.
And early stage detection as well as advance and a normal where you take you guys get the country to come in on both of those thank you.
Accurate.
Asking about the elderly cabinet crashed out there and I had actually we.
Actually.
You know.
Yeah.
Pickles on both.
I'll be reviewing try and try and stay on you know that's.
That would be made.
Major Carter I shall push for us but.
Couple of years before that day.
Very important on 4 hearts advanced on market start shaping the market the way that the blood faith screaming.
Add social impact.
Outcast square of Asia at standard right way.
Harry day experience for a field and take radar test with.
With Brian Health network share they experience for people attribute day at log base screaming into a bunch of skewed C. P work with those at.
And some are Ti accounts, so it's a very strategy.
On the CRC fact, I Don believe like.
Rio was evident.
Maybe add much.
Into.
Really I don't see any David GAAP that it will.
Do you see the Asp's preclinical going up in 2022.
Yes.
I think when we looked at.
Critical ISP.
Very expert in their prepared remarks.
People got in 360, and so from a guidance.
We see this quarter was 2600 on the.
<unk> change.
And we expect that to this day.
On the remainder of it of course, we will be launching new products and reimbursements tend to take time. So if you take the overall clinical volume and revenue then yes.
The overall is probably going to go down because they're not getting paid for some of the tests, but volume.
<unk> hundred 60, it should at least remain where it is and if we can.
Correct.
From the private payers with the new <unk> been treated with ex faces.
Potential for some upside there.
Got you. Thank you and then you mentioned that the international market the sequential decline in net.
That was delta.
Going forward, how do you how do you see that growing and back back on the domestic like what percentage of the visit.
Our in person you mentioned.
On last quarter that it was around $30.40 wondering on how how much on.
The improvement there has been.
Okay.
And maybe just on the on the international.
It was sequentially down what we said is that we saw we saw an impact.
I think we were low referring to the impact on the on.
On the growth rather than kind of decline.
So we're still I'd say, we're still seeing strong performance internationally, but we will continue to see impact because they are in many different countries and the impact across both contributed as far as.
And.
And again, we think it makes it a impact on our ability to grow the business, but yet on the sequential decline.
Yes, I think things improved from the 30%.
<unk> reached 50% or more of the.
Third opening up.
And the right direction, but obviously, we are seeing things.
Close it back up I mean, I think yesterday.
On the new cases in the U S sales.
Clearly.
I think theres a lot of justify the risk on the.
Part of the clinicians given the impact from the cancer patients with advanced cancer patients.
Of this disease.
Thank you and our next.
Question will come from the line of Patrick Donnelly with Citi.
Great. Thanks.
I just wanted to follow up on 1 of the prior questions that Brian was talking about the <unk> launch have you guys kind of carved out a type of population you think will be addressable with this launch relative to the overall pie coming with the IBD launch I know other companies that have done LDP launches.
Calmed down a tranche, where they feel is addressable with <unk> just curious your guys perspective on that.
Yes.
Population inventory.
With the launch would be.
Average risk population, having said that ex.
I expect like major adoption or GAAP.
We believe that staff of FDA approval, we believe getting multiple coverage policies.
We would continue to health with the adoption, especially on the maintenance stream ads out there, but we do believe that.
A lot of operating strategies with early adopters on people, who are really interest in being a bunch of people that we're working with really going on due to our test event.
So there are non lay there is severe.
Responding to some extent softer market day, Matt too.
But.
Not that we are carving out back Brian just after the debt high risk patient population.
Of course they.
They don't have that strategy is that this nightmare kind of go into a market with average risk indication.
Frankly that we have but they are kind of sitting on their way market would react to the data package.
But on all of the evidence.
Generates a dividend.
2 years.
Okay. That's helpful and then Toby.
I know you mentioned, we've seen some offices closing back up over the last couple of weeks, but do you feel better prepared to weather. Another let's say partial shutdown I mean are there learnings from the first time around that will help you guys. In flight volume is better. If this continues to worsen and offices close up I'm. Just curious if you think the impact this time around would be less.
Given we all learned something from from the person on that.
Yes, certainly in our ability to interact remotely with the clinician offices. So we can really build.
The capabilities in that area both debt.
Russell.
I think the question would be more kind of <unk>.
Feet of growth and so on and how that could be impacted.
Obviously.
All of it depends on the severity.
Delta interest other variants that come around but.
Yes, I don't expect.
Kind of what happened in Q2 last year on this.
Taylor.
Parallel.
Would happen again, I think we're all living.
We're all learning to low, but I think with the disease in the background.
Thank you and our next question will come from the line of Dan Arias with Stifel.
Good afternoon, guys. Thanks for the questions primarily on eclipse and just expanding the study to 13000 enrollees anything you can you can touch on there just in terms of the need for that move you.
You guys aren't the first company to take the population on from a trial like this so.
Just kind of curious if its total overall colorectal cancer patients that you need to increase the number on related to sub populations by stage or.
Something else altogether.
Yes, sure Nathan from the number of CRT debt.
To find and Thats about it.
Event, driven studies that there are some certain number of PRT, we need to find in this patient population of debt very screening in our per study power.
We couldn't be more growth.
Yeah. Okay. Thank you and then just maybe Mike on the on the mix between on the <unk> 360 on the pharma side, what direction do you think that split heads in the coming quarters, obviously, that's kind of implication on the ASP there going forward.
Yes.
In this quarter, we definitely saw that price hit months was.
2016.
I think.
As we look for the remainder of the year, probably doubling correct a little bit on our.
Our forecast is from the trade back more on the on the on the site.
And so we're expecting the asp's due to improve a little bit because it was a bit of advisors this quarter, but.
So it depends on the debt.
Pipeline on the strength that we got through the through the door, so, but that's how we're looking on it.
Okay. Thank you guys.
And our next question will come from the line of Mac Sykes with Goldman Sachs.
Hey, guys. This is Dave on for Matt Congrats on hitting 10000 patients in the clinic very exciting.
The lunar 2 launch next year.
<unk> been very successful in oncology testing screening is an even bigger opportunity of course could you tell us more about your strategy for ramping sales and marketing to reach the hundreds of thousands of PCT is out there.
Yes sure so.
We talked about it a little bit of sports that we've started building the leadership of our commercial channel on screening.
Okay.
4 years ago, and now I'm happy to actually be.
Right.
Couple of layers on <unk> leadership already in place.
Indicated leadership on screening side at the highest level.
Our in channel executives debt yet oncology.
The responsibility of leading the commercial efforts on screening side.
Now, let's say the details that would be.
I'm really excited about having debt.
And now we have.
Next day as a leader should be in place too.
<unk> building.
Net players to be ready for it as sales launch.
And with the right work on commercial at all operational infrastructure debt.
To support this elevated launch first.
First half book next year.
Fantastic.
Can you tell us a little more about the AI powered pathology partnership you announced you announced for multimodal screen.
Yes, so the company that we at partnership partners share with this comment on it.
AI campaign, Randy I'll, let Chad I'll, let see there.
Very strong.
The weighted very heavy experience on AI side, especially on the image processing and they have our aes on the regulated products Inc.
Radiology side.
Alex with their productivity and improve productivity of the radiologist reading different kind of stats on.
Different either.
Scanning modality and why do you think about what would be the future of screening.
Believe debt had a blood based.
They are very important.
But cannot be on the.
No.
Assets, there to really streamline screening share any sort of patients.
So we envision August and multimodal solution out there that starts with <unk>.
<unk> broad based screening, but there was renewed.
We need to put some kind of additional solution on the content on back at to really have a great experience and work on patients and providers to really take off.
1 of the opportunities that blood based screening on.
Offered index.
So we are very excited about that partnership.
With that to see how much we can share back should future activity towards that.
To really help us on the screening side.
Mark.
Thank you and our next question will come from the line of Jack Meehan with net from.
Thank you good afternoon I.
I was wondering if you could comment on how much guardant reveal added in the quarter in terms of volume.
And we're waiting on the Medicare final LCD for them or do you think through the channel could be included in that.
So.
The final LCD from <unk>.
Seriously.
And I think the 1 that still on drug.
Net expense.
<unk>.
Extended 2 applications on liquid mud pumps as well.
So yes.
We're going to have them later this year in terms of the stabilization, but that's obviously up to the.
Up to them in terms of time lines.
You spoke a little bit on.
On the volume.
Obviously went up.
On splitting out the specifics per sales volumes.
Competitively competitive reasons amongst amongst other things.
And we did say in the prepared remarks on the vast majority of them.
<unk>.
Central from the volume that we are reported down.
<unk> hundred 60, I think what we would say again is that the reveal launches on.
It's going as well as the kind of unexpected and we're really pleased with it so the volume coming through the door.
As soon as we expected.
And we continue to season growth again.
I'm going to be breaking those out specifically.
Great. Thank you.
And then just 1 last question sorry, juggling a few earnings sorry. If this is a dumb question, but on.
$61 million of clinical sales force.
<unk> thousand 830 test.
My math was going in $2900 price point on or you quoted 2600 is there some other dynamic that I missed.
Yes.
To explain items.
Further modest but maybe.
Due to the.
The growth is there'll be others.
The way that we recognize revenue in the past there's always been a launch.
Cash collection components from samples from.
Previous periods included in revenue, we're moving more and more suits, having on revenues is purely based on that debt decrease in from the samples and according to some day.
We still have some cash in the Q2 number from.
From prior periods and us absolutely on that.
Is it on.
And our last question will come from the line of Andrew Cooper with from Raymond James.
Hey, guys. Thanks for sneaking me in a lot's been covered but.
Maybe just first when we think about the screening commercial sales force you intend to build on sort of timeline on LDC to FDA.
Can you help us a little bit more think about obviously, it's early today, but where do you want to be in the first half on your laundromat LDC and then where do you want to be again, when we think about the timing for the FDA approval, so just sort of what the.
Page 8 looks like would be helpful.
So a lot on tysons metrics for us during this COVID-19 is making sure that actually we can build strategy relationship get into <unk> and really deal bunch of power matrix more non life volume match rates, so and we.
It would be ready once FDA approval.
Bag all the infrastructure at.
Or flow integration and actually we haven't deal during this period of time or take on.
Earnings per day.
<unk> channel opportunity that blood based screening can offer much faster than that.
Without this SDK experience, having said that we think there is good opportunity with like early adopters on by really do expect non cancer data base that based on debt dataset, Inc.
They want to get their hands on this day bye.
Start.
Do think using it clinically, but our main goal as I mentioned on it for the <unk> launch.
There's too much on power administrative that make sure we are well integrated into.
PCP on those.
Sure.
Any network consistent net for the system.
Okay, Great and maybe just 1 more if I could.
On on alluded again, just thinking about sort of the multi modality I just want to make sure you're kind of thinking about the way you are viewing this appropriately they've got scope Io that is more on the immuno oncology side and then more of their kind of traditional radiography type tools as well. So is this something that you envision on.
The front end with the IOP from maybe the backend in terms of reflecting from.
On a multi cancer test how do we think about where that fits in to the garden.
Pipeline.
I would maybe encourage you to maybe stay a little bit.
Sure.
Sorry about this partner's share on behalf of.
Average and on how this multi modal integrated radiology blood testing could really shape the future.
Let's go through that process.
Hugh.
Posted about the progress that we may buy incentives failure that we are very excited about this huge share and away screening candidates streamline.
For the patient.
In oncology and potentially have on other diseases.
Thank you and with that we have no further questions and I'd like to thank everyone for participating on today's guardant health for the second quarter 2021 earnings Conference call. This concludes today's conference call and you may now disconnect. Thank you.
Okay.
Okay.
Okay.
Okay.
Okay.
[music].
Okay.
Okay.
Okay.
Okay.