Q1 2022 Guardant Health Inc Earnings Call
An open forum of patient treatment across the continuum of care.
Now turning to our performance by three.
We ended the first quarter with revenue of $96 million up 22% over the prior year quarter.
Our team delivered strong clinical test volume, reaching 27100 tests, an increase of 47% from the prior year quarter.
This was composed of a somewhat slow start in January and February due to the almost concert followed by a very solid finish to the quarter in March setting us up very nicely for the second quarter and a very strong ramp for the rest of the year.
Moving on to slide four I.
I am proud of our team's work to establish garden is the leader in liquid biopsy for our high performance test results and excellent customer service.
Since the launch of our first product Garden 360, we have been focused on building relationships with a growing number of oncologists.
We now have more than 11000 ordering college and within this group we are seeing our core base of customers ordering more tests and using more garden products each quarter.
This is evidence of the depth. We are building into these accounts and that drives adoption of CGP and unlock more of the Tam over time.
This in turn allows us to expand our portfolio.
<unk>, which positions us for long term sustainable growth.
We believe there is ample opportunity to continue growing both in terms of comprehensive genomic profiling and liquid biopsy share.
Last month, we announced the partnership with epic widely used comprehensive electronic health record system in the United States to integrate our broad portfolio of cancer tests and enable our test to be available to over 250 million individuals with a patient metrics.
This integration will make it easier for ups system community healthcare providers and retail health clinics to make our blood tests part of routine clinical care by providing direct ordering access and results delivery.
We are proud of our team that is delivering on these initiatives in a very condensed timeline, leveraging knowhow and lessons learned from the process et cetera.
This is just the first of a number of partnerships that we are exploring to better integrate our products into clinicians workflows that will include additional EMR system among other tools.
We are also making progress in the reimbursement front.
In early March we received Medicare coverage of our garden <unk> pet.
Under the mold that LCD.
We are already seeing that reimbursement of our tissue product tolerating the positive trends, we have been seeing a increased depth of ordering probe count is now more and more oncologists overdue multiple products from garden and as a result, this is deepening our touch points and amplifying our overall brand awareness in the market.
Yes.
Looking more closely at recurrence monitoring on slide five.
We continue to be excited by the positive response to our reveal assay, especially given where we are in the product cycle. The <unk> space is still in the very early inning, and we continue to hold a singularly unique space as the only commercially available blood only solution. Despite a whole host of tissue dependent entrants.
We are very pleased so far with our progress since launch and the traction we're getting in MRV.
With our unique but only assay. We believe we are on track to have all of the product and commercial elements necessary to be the leader in MRV, specifically, we continue to see strong quarter over quarter growth and are very pleased with our launch trajectory with respect to the competitive landscape and our previous product launches.
We expect to have a series of future tailwind, leading indication expansion reimbursement and clinical utility data rising.
This up well for long term growth.
Turning to slide six.
Outside of the United States, we are continuing to broaden our reach to deliver a new paradigm of cancer care to patients around the world in mid March we were excited to announce that the Japanese Ministry of health flavor and welfare approved the use of garden 360, <unk> in patients with advanced solid cancers.
The Garden 360 Tds test was also granted approval as a companion diagnostic to identify patients with microsatellite instability high solid tumors, who may benefit from Keytruda in patients with MSI high advanced colorectal cancer, who may benefit from Opdivo.
Its regulatory approval has taken on added significant CRC is the most commonly diagnosed cancer in Japan and this is globally. The first liquid biopsy, Google for Io therapy.
This follows the prior regulatory approval for gardens, <unk> from the Ministry of Health and Labor and welfare in December of 2021, as a companion diagnostic for identifying patients with metastatic non small cell lung cancer, who may benefit brokerage segment with low makris.
Following this approval we are now working to securing public reimbursement by the end of 2022.
Japan represents a very large market opportunity with about 400000 late stage patients compared to 700000 in the United States and similar reimbursement rates for CGP.
We are now in the process of building our commercial footprint to serve this enormous opportunity.
We are also moving to quickly establish our footprint in the European market. As we are seeing early traction with hospitals and doctors with programs in the United Kingdom and Spain.
In fact this month our laboratory in partnership with <unk> in Spain will launch and we've officially operational.
We look forward to being able to provide local access to gardens <unk> 16, the region, ensuring that no cancer patients globally is left behind.
Moving on to Biopharma on slide seven.
We delivered 5100 best in the first quarter, representing growth of 45% year over year.
We ended the quarter with more than 110 active partnerships, reflecting our growing and diverse set of customers.
The breadth of our product offering strong customer service and our clinical and market leadership makes us an attractive partner.
We have a healthy pipeline of discussions and expect a number of customers to continue to grow over the course of the year.
We're also seeing growing interest for our garden inform offering further driving our mission of being a partner of choice for Biopharma we.
We have now signed several deals for garden informed spanning applications from translational oncology clinical development and study planning and have seen strong growth in the number of partners and customers. We are accustomed to with regards to this platform.
Turning to slide eight earlier this year I shared our vision for our smart liquid biopsy platform.
We continue to make excellent progress towards this launch and are seeing strong initial interest from our Biopharma partners.
We are encouraged by the early feedback and excitement on its capabilities that are profoundly more rich and any liquid biopsy oncology products in the market today.
Diving a bit deeper into the platform.
<unk> has all the diapers cell types in our body is not the genetic sequence information itself, but everything beyond that such as epigenetics and other markers.
We expect this product to redefine drug development and enabling for the first time, a greatly expanded view into the underlying tumor biology switch the field in general has been largely blind due to a lack of available tools. It's.
Still early days, but we are beginning to witness firsthand the power of that deep multimodal interrogation of cancer pathway will have on development of next generation precision medicine and are very excited for the countless applications possible from this new platform.
We look forward to sharing more about this next chapter of our smart liquid biopsy platform at an Investor day planned for the fall of this year.
Before turning the call over to <unk> I would like to take a moment to talk about <unk>.
Drives our gardens.
One of our most important values that the patients first.
We do have to be led by that Northstar.
Another core value is laser trail.
With a momentous launch of our screening test.
Few days ago, we've now spent almost a decade, putting these values is impacted to make blood based cancer testing across the entire continuum of cancer care a reality.
We've made countless difficult decisions along the way all to develop the right technology and product market fit to bring our vision to fruition.
We learned along the way that as a company when you Blaze the trail got to constantly innovate and disrupt to deliver progress also in displacing incumbent technologies and companies like we did with garden 368 years ago Gardner <unk> last year and this week with the shield.
This generates excitement and attracts new investments to propel more innovation.
We've seen this in the form of billions of dollars in capital invested by financial markets and competitors into blood based testing.
Disruption also triggers vocal reactions at the time.
All of this is evident and we are very much on the right track and leading the nascent industry.
I am very proud of our team our products and this exciting next chapter of Guardant health.
I will now turn the call over to them.
And updated in our screening program.
Thanks, Jeremy.
Turning to slide nine.
At Garnet, we've always believed that a blood based screening test DRAM roadmap checkups.
Hence shelter shield patient cancer.
We've been on a 10 year journey to bring gas high performing blood based screening test to the market that can save millions of lives worldwide.
For colorectal cancer, our core beliefs is that he's a blood based test.
Finally, the high level of early stage detection is the key to improving screening compliance and making our vision a reality.
This has the potential to improve our equity access to screening for underserved populations.
I'm, so excited to announce that.
Now if you're showing on the market with our LDC test and only a short distance away from Cheyenne pivotal results in excess and filing for FDA approval.
Starting with our shield LDC tests launched this past Monday on slide 10.
This is truly a seminal moment or the Gardner.
Ability of the shields pad represents a major milestone in our Permian.
<unk> expense with transform cancer screening.
We have several highly sensitive technology to detect early stage cancers with a simple blood draw.
We are pleased to report that following performance metrics.
Overall sensitivity, our CRC detection up 91% specificity of 92%.
Specificity of 94% and screen negative normal, which excludes Andy adenoma.
Andy State sensitivity up 94% stage <unk> and stage two SaaS facility up 19, 7%.
<unk> advanced setting our detection up 20%.
The clinical performance of the share that there was validated using a set of 309 patient samples, including 93 with CRC the Rotterdam asset.
166 normal cases.
CRC patient samples, we're accurate at cross six cohorts of lifestyle.
Canada and the EU.
SaaS Paas adenoma in normal cases were collected in the U S. Mainly from the same colonoscopy sites participating in the eclipse trial.
Subjects were balanced by H immune up 64 years old agenda.
If they eclipsed to readout is close to our LTC performance, we are confident that shiel real estate confidence, leading noninvasive CRC screening methodologies.
Turning to slide 11.
The recent LDC validation results our shots together with prior studies.
I think in past conferences.
This demonstrates the stability of our overall <unk> performance and specificity.
Moving onto slide 12.
One notable item access performance and advanced second Noma detection.
This is the result of a new R&D pipeline.
That was ramped up over the past year using a proteomics approach.
It has yielded solid results in providing advanced I think nobody takes time and also add a slight boost to early stage CRC sensitivity.
Importantly, we were able to include this upgraded technology and safety.
Maybe are you seeing for eclipse.
We believe our shield blood test has the potential to be much more effective in reducing CRC mortality and adding more life years gained that any other SKU based screening tests.
Throughout the history of gardens rehab sale with several skeptics.
The aim that blood test cannot add value in oncology.
And every time they have been proven wrong on liquid biopsy showed is counting back transform precision oncology.
Prior to the combination of USPS, yet, but CRC screening strategies are based on models that axiom Andre <unk>.
However, recent.
At the same studies with real World evidence showing much lower at your X ray or store based assets versus blood based tests.
In a peer reviewed publication as shown in slide 13 artwork medical split in 2019.
Thank goodness are different CRC screening test.
Modeled on their gas stops now 100% adherence rate.
Concord to reported re award adherence rates in this publication.
On the left hand side and this chart assuming hundred first adherence.
It's DNA with three year interval and fit with one year in <unk>.
It's important to supporting <unk> sits at 25 2006 <unk> debt.
Colonoscopy 46 cases at 26 steps at <unk> nine three year interval 35 cases at 23 deaths per 1000 individuals.
Now the right hand side is assuming our reported real world adherence set nine that's very.
Third the CRC cases at 19, CRC that colonoscopy is there any four cases, and so I think thats fair.
This DNA in that.
<unk> 25 cases, and so in that spirit outside individuals.
Interesting to note that nine demonstrated superior seeing adherence that adjusted effectiveness.
Quite slow performance of <unk>, 22% asset sensitivity with only 80% specificity.
The key takeaway here is that with real more of that here at levels still based testing with mid almost perfect performance to match their effectiveness or clinical benefit blood based tests.
Therefore, we believe our ship blood test has the potential to have a higher benefit assessment by USPS, yet that any other stool based screening tests.
Turning to our eclipse trial on slide 14.
The patient journey necklace is broken into multiple stage gate.
On our last earnings call, we shared our progress with patient enrollment now collecting colonoscopy anthology reports to reach our target number of CRC.
Rehab designers steady to receipt of certain level of positive CRC reports and we are still waiting on a number of those to come in.
At this point in time.
I'll, let you reported progress centralized pathology review board has been slower than we expected.
We are doing everything we possibly can so accelerate the SaaS as quickly as possible.
We now expect the readout breakfast to be in the second half of the year with a September or October timeframe as a likely case.
We are already starting our modular submission to FDA and are planning to submit our PMA application by end of the year pending successful eclipsed readout.
We believe we will be the first to have a blood based cancer screening test with Medicare coverage on FDA approval.
Post approval.
The opportunity to secure HPLC status for this test and we have we are confident that we will be able to secure Medicare pricing up over $500.
We are clearly operating in a very different environment than eight years ago, and I am confident about our pricing strategy.
We expect this test to reach favorable long term gross margins of around 60%.
<unk> sales and marketing efficiencies powered by higher at year end application refresh for blood testing. We believe we can be a profitable company. We did a couple of years following USPS TF guidelines.
Moving on to slide 15, colorectal cancer screening is just the startup this journey.
We will soon expand into multi cancer screening, including long <unk> and others, where we believe cancer screening Cascade <unk>.
<unk> got American Association for cancer Research annual meeting.
The new data demonstrating the ability of our next generation multi cancer assay to accurately detect early stage cancers.
This assay.
So I highlight approximately 20000 ft genomic biomarkers that are informative for detection of wide range of solid tumors and a single blood test.
The data for for cancer tax regime, Australia as an example for the rectal lung pancreatic and bladder.
The blood test identified the tumor tissue of origin.
<unk>.
By adding new indications for our blood tests.
Benefit at their resulting life years gained should further improve.
Once commercially available this indication expansion and we will be a major catalyst for our shield assay.
We believe <unk> will be the patients referred CRC screening method that launched at that indication expansion, even further accelerating adoption relative to a stool based test completely transforming the screening market from what it is today.
With that I will now turn the call over to Mike for more details on our financials and outlook for 2022.
Thanks <unk>.
Turning to slide 16.
<unk> revenue for the first quarter of 2022 with $96 $1 million of.
22% from $78 7 million in the prior year quarter.
Total precision oncology testing revenue for the first quarter was $84 4 million with growth of 32% compared to $63 7 million in the prior year quarter.
This increase was driven by strong year over year growth, both clinical and Biopharma sample volumes.
Precision oncology revenue from clinical tests was 66.0 million.
32% from $49 8 million for the prior year quarter.
First quarter clinical test volume was $27100, which is an increase of 47% from the same period of the prior year.
After the Covid peak of the start of 2022, we finished the first quarter with good momentum.
We also continue to see strong uptake for our new clinical products revealed tissue extra response, and we expect volumes from these products to continue to increase as we progress throughout the year.
For the first quarter of 2022.
<unk> hundred 16 is in the 2600 to 2700 range, which is consistent with the last few quarters and the blended clinical ASP was approximately $24 50.
While we expect 360 <unk> stable in 2022, the blended clinically ASP will continue to be impacted as reimbursement of new products will take time to ramp up.
We're very pleased in the first quarter to receive Medicare reimbursement for tissue <unk> at $2920, but as a reminder, we don't expect a new product to stop to significantly contribute to revenue until they receive Medicare and private payer reimbursement.
Precision oncology revenue from Biopharma test in the first quarter totaled $18 1 billion up 30% from $13 9 million for the prior year quarter.
Biopharma volume was strong with first quarter samples totaling 5100, which was up 45% from the prior year quarter.
None of that volume was 23% lower than the fortune 2021, due to the positive seasonality in the Biopharma business, we encountered towards the end of each calendar year.
Biopharma someplace between the first quarter was approximately $3600 down 10% from the prior year period, which in line with the fourth quarter 2021 to two a similar product mix.
Development services and other revenue in the first quarter totaled $12 zero million.
Down 20% from the prior year quarter.
Compared to the fourth quarter of 2021 development services and other revenue was down 38%, primarily because fourth quarter 'twenty 'twenty. One revenue included royalties from the increments period from May to December .
First quarter 2022 revenues included royalties from the three month period January to March 2022.
For the remainder of 2022, we will continue to recognize royalties on a quarterly basis.
As we've previously highlighted while we continue to see strong demand for our development services.
Several companion diagnostic projects were successfully completed in the second half of 2021.
We expect that our coordinate development services revenue will be lower than prior year for the next few quarters as new projects take time to ramp up.
Gross profit for the first quarter of 2022 to $64 1 million compared.
Compared to a gross profit of $49 9 million.
In the same period of the prior year.
Gross margin in the first quarter was 67% compared to 63% in the prior year quarter.
The change in gross margins, primarily due to development services and other revenue where the gross margin improved from 65% in the prior year quarter to 89% in the first quarter of 2022.
Operating expenses for the first quarter of 2022 were $197 5 million.
An increase of 19% compared to $157 8 million in the first quarter of 2021.
non-GAAP operating expenses exclude stock based compensation and related employer payroll tax payments acquisition related expenses amortization of intangible assets and contingent consideration.
non-GAAP operating expenses for the first quarter of 2020 to $158 7 million.
At 58% increase from the $100 7 million in the prior year quarter. This.
This increase was driven by the significant investments made over the past 12 months not to mention infrastructure under the continued development of our product pipeline and clinical data across both oncology on screening.
Throughout 2022, we will continue to invest in progressing our strong pipeline of oncology products as well as in generating clinical data to support reimbursement.
Screening 2022 investment will be focused on the commercial launch of our shield Ltte tests completing the data readout from eclipse the PMA submission for our CFC device and the continued development of our multi cancer screening test.
Net loss attributable to guardant health common stockholders was $123 2 million or.
A $1 21 per share for the first quarter of 2022.
That's a $109 7 million or $1 90 per share in the first quarter of 2021.
non-GAAP net loss was $93 2 million or.
<unk> 91 per share for the first quarter of 2022.
Compared to $49 4 million.
<unk> 49 per share for the first quarter of 2021.
Adjusted EBITDA was a loss of $86 6 million in the first quarter of 2022 compared to a $45 4 million dollar loss in the first quarter of 2021.
We define adjusted EBITDA, a non-GAAP net loss attributable to guardant health adjusted for interest income tax depreciation amortization and other income and expense.
We ended the first quarter of 2020 to be approximately $1 $6 billion in cash cash equivalents and marketable securities.
We feel we have a strong cash balance that can support our ongoing operations for the foreseeable future and which gives us flexibility to continue to invest in our business to drive robust future growth.
As a reminder, we previously shared our decision to exercise our call right to purchase 50% of the government help EMEA joint venture shifts that we do not currently own.
We still expect to complete this transaction before the end of the second quarter of 2022.
Now turning to our revenue outlook for the full year 2022 on slide 17.
We continue to expect revenue to be between forward in 16, and $472 million representing growth of approximately 24% over 2021 at the midpoint.
As a reminder, embedded in this guidance range for a few key assumptions.
We expect to clinical oncology sample volume for the full year 2022 to grow by more than 50% compared to 2021, and biopharma volume to grow by at least 30%.
Results, we expect precision oncology testing revenue to grow more than 35% over the prior year with higher growth expectations for the second half of the year versus the first half due to the reduced impact from Covid and improved reimbursement of new clinical products second we expect development services and other revenue to be approximately 50.
For 2022.
Finally, while we are excited about the launch of Osteo RVP test, we are not expecting significant revenue contributions from it this year.
We are continuing to make great strides across our business broadening our product portfolio with Ashfield, and <unk> and expanding our reach into the cancer screening market.
We are aggressively pursuing the best opportunity is ahead and we are confident that we will be a leader in cancer across the continuum of care.
At this point, we will now open it up to questions.
Thank you if you'd like to ask a question. Please press star followed by one on your telephone keypad now maybe.
If you'd like to draw. Your question. Please press star followed by two.
Okay. Thank you ask a question. Please ensure your line's on mute Luckily.
He's noted that will only be taking one question and one follow up from each basket.
Our first question comes from Puneet Suiter of SP SBB Securities Puny. Your line is now open.
Okay, great. Thanks.
Thanks, guys. Thanks for taking the question.
First one primarily on the stage, one and two performance for shield CRC screening that was remarkable at sort of the 90% 97% of that you add obviously well ahead of anyone that.
Anyone was expecting sort of that number.
<unk>.
If I look at that.
Performance I mean do you expect that.
<unk> question from investors at this point is really do you expect that data to hold up and the eclipse trial I know, it's sort of hard to speculate and you've given a number of points around validation study and cohorts and some of the samples from the clip side, but sort of does that does this give you enough confidence that the <unk>.
Performance on the sensitivity side is going to hold.
Thank you <unk>.
Well, obviously, we are very excited with this shield LPTA launch.
<unk>.
The fact that the tariff formats that cross.
Or some of the samples actually we're running obviously reported a first time.
And especially for these sample sets.
CRC side the samples campfire.
And in Europe .
That data is holding up on the earlier stage be conscientious series. There is stability on the assay over time over the prime reagent batches all of those things that basically put contributes into technical variation on that day, we are very pleased with that and on the specificity.
At this apple there isn't that much much much closer to actually what we expect and eclipse as I mentioned to you prior to your marketing back office staff was Kim examples came from many sides through nitrate sales of our concentrates and academic experts trial.
In terms of our expectation is still the same that I always mentioned and I've seen so far what we've seen on the early stage side I E <unk>.
<unk>.
Now we will see what <unk> is going to have for us on the specificity of <unk> samples are much much closer to really intended use based on now.
So I think we have a very good understanding of specificity at this time.
Okay.
Okay, that's great and just a follow up on that.
Thanks for really clarifying the modeling and the questions that have been raised around sort of the USPS TF.
Potential coverage after USB itself, but just to boil that down that modeling study that you showed I mean is it safe to say if the sensitivity of liquid biopsy is strong obviously the ease of use simple blood drives a strong and the sort of the performance that you're seeing at sort of the 90% sensitivity and 92% specificity.
That even 20% advanced adenoma data and I appreciate that that had.
Some more.
Larger confidence interval around it but even with the large conflict confidence interval as long as USPS TF as modeling it.
<unk> adjusted that.
But you have no doubt that this would be covered by commercial payers. So I just want to be clear on that point. Thank you.
So our current understanding based on everything that we looked at that extra it's interesting you look at 2020. One you asked yes, just start there.
Right, Thanks from that economy Ts, but.
Okay.
That's just bear that adherence is obviously of amateur it has not been always.
Fifth.
Cologuard kind of models extreme I assume <unk>, but 100% by Daniel.
They reprice based on real World experience, obviously out of pocket for us.
I must agree with Abbvie issues, we are dealing with probably the only doing any blood test.
Yes, there were not issues with patient <unk>, France at adherence. So thats why everybody is well aware of this and now.
Now.
Yeah.
We need to do our work to make sure we constantly have to publish papers out there modeling and show the importance of adherence with the reality of the SPR, Brian and that's the way to save lives to make sure patients with complied and adhere to these kind of test year after year in terms of like.
Every three years, Brian sustaining that that's baked into the best almost.
Yeah.
The impacts of it would light year again would go down so.
It's notable that it's not that we need for short term adherence in the modeling show positive.
Five year kind of gain a contribution like all of these kind of obsessed with the performance that we are talking about based on our assets.
I show our understanding of models over time and different contrast is that Eric and I talked to you guys. They are a close by when do you actually adherence.
They also have incomes in Connecticut.
Understanding that it's almost like stupid that needs to be.
Everything in order to receive lack of compliance and adherence to really have similar kind of life game contribution.
Two patient population that's our current address at this time.
Perfect. Our next question comes from Dan Arias of Stifel. Your line is now open.
Yeah, Hi, guys. Thanks for the questions, primarily just to maybe follow up on that can you just kind of recrystallized, what you said.
And clarify whether you think that real world adherence will be considered as the USPS TF guideline consideration and that you think that that is what will drive a three year interval for the test rather than a one year.
Yes sure.
This model actually having it turns that goes into the model extra regard kind of public information anytime desktop those others.
Kind of see what goes into it adherence is a parameter there.
It's been noted that so far when David with that store base essentially all of them in terms of adherence. They have similar ballpark kind of issues Thats all I have.
At least assumption why they haven't really got that here.
Meaningful way everything just under 100.
100%.
Versus wider Youre talking about a new modem screening.
The main value that <unk> is it <unk>.
<unk> Creek blood based test would be the potential for a much higher at much higher compliance, obviously that needs to be a factor.
For sure it said.
Metairie into models, but so far it's being used just as it kind of a faithful theyre 100%.
Mentioned, if you look at 2021.
Write offs, they say you got that.
Greenough adherence is not 100% based on salary of all evidence, but spoke bar and a modeling exercise that if not stabilized debate that simple assumption.
Yeah, Okay, and then can you may be expand a little bit on cost in the Cogs associated with with shield and then how that aligns with the economics of testing either on an annual basis or a three year basis.
And then along those lines the extent to which you just think you achieve price competitiveness with some of the other tests that are on the market.
Thank you.
Yes, we are confident about our pricing strategy.
We are based on the obviously.
Spanning three year pricing you know we after FDA approval, we are kind of be.
While the science, we expect we are going to qualify as a DLT post FDA approval and.
The pricing advantages that you get with the ABL.
The pricing gets set up by saying that said, great offset for our site.
Now and then the Medicare pricing history created game side.
Diagnostics.
Eric.
Uh huh.
Any gain or Osaka conversations with private payers in terms of price and shrink versus other private payors and there are bunch of stories around that and how that Medicare pricing calibrate those negotiations.
Pat.
Some private payers, who kind of.
Pricing issues there are stories about that.
We have built that site English favorable PMA PMA.
Alright, <unk> research Jack Your line is now open.
Thank you good afternoon.
When did the move over to the oncology side of the business start with current reveal I was wondering if you could provide an update just how the discussions are going with mould the acts around potential reimbursement for that test.
Yeah, I mean, we've we've asked <unk> essentially submitted everything that they've Rick.
Requested and we're just waiting right now kind of their feedback on that information so.
Nothing there to nothing new to report at this point.
Okay, and you know if I look so the 27100 clinical test in the quarter, you know I just kind of triangulate based on the ASP commentary, Mike laid out it seems like you had about 2000 or so all other tests beyond garn 360 in the quarter.
Is there any way you can just provide a little bit of color around you know like what's the largest within their between reveal tissue next door response, and you know then off that how does the reimbursement work for tissue next have you started getting paid for that yet.
Okay, Ma'am I can <unk>.
[noise], Yeah, I think essentially on tissue next reimbursement.
Yeah, we received the positive coverage in Q1, so I think.
I expect to be able to recognize revenues from the medical side of things in queue to going forward.
And then.
For the volume I think your number's, probably are a little bit and show us on the on the new products I think we've seen really good attention across the board.
Without without breaking them out I think he was about to say that you know got a review is is really a head on those new products and that's because it's been on the market for just over a year now review the photos below and just you know <unk> <unk>.
Yeah.
Again, we think we seem really southern attraction, we're really pleased with the volume both on the on the Coke gotten 360 business.
But also you have been there with the new products and sound really strong <unk>.
Thank you Mike.
Thank you next question comes from <unk>, <unk> <unk> <unk>, it's not like that.
Hey, guys. This is Edmund <unk>. Thank you for taking my questions. The first question on the new version of the Shield test it requires less sequencing and obviously the price of sequencing for GB has gone down with the emerging players and luminous new chemistry. So I was wondering to what degree will these two factors the less frequent.
<unk> and lower price of sequencing four GB, so what to be without providing off into the margins for this product.
So are you in terms of our roadmap to get through that that 200 dollar device that I mentioned scale. In fact, that's based on the current economy. So she bought <unk> dollars <unk>.
<unk> art is Matthew.
<unk>, but not <unk> in fact, that's why like what we need to deliver on that you know, it's not a future activities a bunch of stuff already happened, but I'm, just I'm, making progress in fact on processing engineering on automation Dot vs reliance on me.
Chemistry that would be dropped sequencing pricing that gets would that cost. If you know what you're doing in the field of N G. S.
Some level up with experience that uhm activate the type of caliber of talent.
Gardner.
<unk> actually very <unk> in terms of this both Ballcocks planning so I imagine in fact future surviving actually screening test manager.
My journey jail downward in fact with heavily rely on N. G. S. I knew back they could keep their cocks really on their controlling this smart so insured.
Definitely any single daughters, saving for a burger flashing cost reduction H as in terms of gross margin info bad, but it's not that we.
Needed in order to get into a 60 per cent March upscale.
Got it. Thank you for that and then I'll follow up question.
With the ethics ethnic agreement.
It's good to hear that the.
Integration is.
But how do you expect me to sit and patterns.
Patterns and specifically with the inclusion of shield does this change your expectations about <unk> contribution.
The F D a approval.
Okay do you want to start with and fax at Redfin.
Yeah I can check.
Yeah can start number very excited about kind of this partnership you know, we think it's gonna be a big boost to.
Yeah, certainly oncology portfolio as well as their shield.
Down the line increasingly and these test become standard of care, you know being able to integrate an an epic and really have that isa bordering really removing sort of barriers and friction in terms of that process is going to be a big boost in a big catalyst for volume for for years to come.
Cause as one of a number of.
Partnerships that you know, we're exploring right now and so.
We see a future where you know all of our products are.
I'm very highly accessible across the <unk>.
Electronic health record ecosystem.
And then I'll, let you know all that kind of impact insurance.
Yeah.
We are very excited about all the advantages in terms of workout messages when you're dealing with the yeah sure am Mar, which has such a high relatively high administration our installed base.
And on the screening sides effective you are heavy on electronic ordering you've answered day based on the I'll need she watched that'd be a bunch of those stuff our operation I was very excited I'm very excited.
Yeah, it's sharp pain <unk>.
Okay, our customers happy and trips over Isa ordering in terms of revenue contribution.
I I just refer back to what might you mentioned that maybe.
Mainly because of low aspd's before I up there for a while we don't expect <unk> conservation of shield this year.
But we are just very few days <unk> launched at we are pleased with what's happening just a matter of a few days.
Great. Thank you very much.
Thank you next question comes from <unk> <unk> Bank of America <unk>.
Hey, Thank you. Thank you for taking the question.
A follow up on the last one just on your commercialization plans and how you're going to roll this out and also just to.
Compare.
Your plans based upon there's obviously another multi cancer detection tests. That's been that's out there is an L. D. T right now and you sort of look at their approach undoing concierge and going up that could you just talk about what your commercialization plans are how you're gonna do it and sort of like what the costs are going to be and how much salesforce you need them.
I think that's where we're getting a lot of questions for investors is just once.
So it could be on the data how do you get the commercial rollout and the costs associated with it.
Yeah sure actually.
<unk> and our comments message to make sure patients at all classes would get access to our shield product.
And definitely the business impact of it is B R. After all I changed his 20th <unk> screening market operate strategy and the expansion that multi cast ran vacation with keep on top of that in order to really odd like that 20 billion operating strategy.
And go after that's $110 million $120 million kind of patient population or eligible for CRC screening.
You are you in need throughout their password reimbursement guidelines <unk>.
And.
That's good that that'd be great. Thank you <unk> as a result of Amish up plan is very good friend that sounds players or just everything access for their cats are highly three village individuals in Kansas Themself <unk>, we have issues with it at a <unk> 20 billion dollar offer insurance he.
A patient who go into that category is obviously, a tiny fraction of it after that.
Now in terms of armor shell.
And a strategy behind this is obvious D V R. As in engaging primary care physician key hospital systems.
And employers.
B R N a L D. Two lines spades with about 100 people commercial in all vein.
And over time, we would expect it at scale to about like 700 people as we get closer and closer to the U S. P. S. <unk>. So you kind of expect over in time and a sister in Ah.
Taught full wave you would scale, obviously based on stop it.
Additional information that we get in terms of getting closer to the asj approval and getting closer to the U S. P. S. Yeah.
Is too.
How 700 or so commercial.
The way that this <unk> that look different than I think maybe <unk> now is.
You know look at patient preferences. This blood testing the adherence we expect to be much higher than slow based testing as a result S. N N efficiency embarrassed apple we'd be much much higher now combine this with 60% gross margin at six <unk> 500.
<unk> <unk>, we are going to have an obstacle Gardner.
Right after U S. P S <unk>.
Right.
Great.
Thanks for that and and just my father questions. This is can you clarify.
Why you pushed out the readout for eclipses at a pathology black clogged or because you haven't had an upstairs the cases and need to enroll more patience could you just clarify that I'm I've got some as investors, they're a little bit I want a little bit more of an expansion on that.
Alright, thanks for asking them because there are a lot of stuff, that's going well a huge any of his excitement around there I have to say.
You know it's.
It sounds great. So yeah, we are waiting for it just takes us to read out to come out I think it's gonna be a defining moment for patient for a fully knutsford like do you work on this thing for years now.
Waiting for this things will happen and we are doing our best to make sure we get to that point sooner than later.
Now in terms of the <unk> factories like steel here waiting for like.
<unk>. Unfortunately, the details of this trial inflation's complicated and.
No there is central at all about your review that needs to look at all of these cases that we are finding a colonoscopy cases.
And there is still a few thousand cases in the backlog of that review that needs to happen so based on.
<unk>, we found the reports that we got the backlog of that centralized pathology and a bunch of stuff that we are doing to increase the product G V T plus for such a regulated steadied steal that single guard centralized I'll. Let you review is very important.
Now, we expect to reach out to be a second half and that's S.
Yes is around September or October timeframe, but you think now instead of Miss here that's gonna be.
Some time after its spirit waiting for it you are doing the best our team is on that to be I think the best that we can <unk> waiting for this thing so calm and.
You can just mix them now wait a little bit.
Thank you.
[noise] next question comes from <unk>.
Your line is not with them.
Hey, Thanks for taking my question the <unk> on the on the quarter. So just similar to be the question before I. Just wanted to know if you can kind of walk through your confidence level that'd be that'd be the 20 per cent from the <unk> from the the sample set on Monday is that reproducible.
Just give any other screen products I've seen degradation of over 15 percentage points in Photoshop, it's gonna be a big swing, Patrick breathy, and so forth and so I just wanted to get your sense. Sir Thanks, That's all for me.
Yeah sure. So you know the nature of <unk>.
That's the reason that means you know.
You have much the order number of samples for training on for this Saturday and much starting number of samples as much admass spending all my cases, if you're calling from.
Oscar recession effectively right so that people who go through an Oscar same factor.
<unk> <unk> <unk> <unk> <unk> <unk>, both from their colonoscopy, so in terms of really clinical in vacation.
That'd be like closer that is in terms of English in terms of variation.
I think it's just it can't be that same sort of all around this 20 per cent of your <unk> data that you're seeing like 20 per cent sensitivity. So when you look at the cockpit that seems to have all around it that's just a statistical variation.
Obviously eclipses kind of quasi five days that sensitivity since we have already identified over a thousand plus kind of that man I didn't know much.
Kind of having like a very fine so that I feel that seems to have all these shows and in our L. P. T press release.
I hope I'm not going to school team, but that confidence seems hear about this from my <unk>. When you go from school any first sent out to 61, so but that Asia low and we just need to hire an advice I didn't know much though.
Figure out in terms of degradation I mean, these are coming from screenings types of basically.
Same kind of add $30 to a large extent.
Perfect next question comes from <unk> B T. L G Mark you'll understand what I <unk>.
[noise] Hey, guys. Thanks for the question there seems to be some sufficient confusion out there in the marketplace, but I wanted to just maybe get to the basics. You know there was that CMS memo January 2021 that specify that CMS.
Would cover any blood based task that sensitivity and specificity of 70 490, but it also Ah Ah sided test interval of once every three years. So I guess I know that's a CMS question, but do you have any doubt.
Or material that you can obtain at once every three year interval from C. M S.
We know that the other bothered based on everything that's me now so I think it is M. C. In fact, <unk>, what's the Barra changing M. C. D. S. S. Like these stuffed changing NC, that's why I typically just C. M S.
The chance to do that.
<unk> of changing M C D.
So M C. The language is very clear I think one thing that may be.
You know maybe I take this opportunity that maybe there is not also high awareness around like the <unk> like specificity of 90%.
Under that in fact is but they wanted to make sure. It does <unk> Boulevard on that 90 per cent from 89.8 per cent Olive garden steadied. When you <unk> when you just to get specificity and <unk> basically negative samples so whenever you're talking.
About our specificity numbers like processing <unk> bye.
It's not that 92 embarrassed temporarily G that includes some early I didn't know if it's like when you exclude that so in fact that 90%.
The F F.
<unk> Bye now read out of existence upstate could be in fact, a little bit sore, but it's far up 19% that so and we feel based on nutritional that'd be <unk>.
Hopefully we are going to get their everyday clips trial easily time, what's up.
Great I recently put out a survey where 75 per cent of docs indicated.
That they were likely to order a new blood. Please test even if it was not recommended by U S. P. S. T. F. So I guess I would be curious if you. If you think that that's reasonable relative to some of the survey work you've done and then you know there's been a lot of pushback about your 20 per cent a sensitivity can you walk us through how <unk>.
How you think you can gain uptake, notably seems like a a it's not at the front in mind of many primary care physicians. It seems like it's F. D. A approval and overall sensitivity and specificity would help us think about how you can get to a 500 dollar price and get into U S. P. S T.
F. Even if you're a a is not above what cologuard is.
Yes, actually I think that's maybe <unk>, maybe you do things at the same time so.
In terms of the P. C P. Nobody talks about our market research you know and you know the queers top paying for it and I'm a CRC performance at <unk> in terms of.
Awareness of differentiation.
Me too long your account has to be a parent me Sir but those are research based on your interest big few days into the market value.
What fears hearings today in very very early days is in fact strong confirmation of what reset so far but again. This is just an <unk> commercial activities got married and I have the same conversation screeches six months from today, we can not be more pleased with actually what we're hearing from the March and confirmation of what we.
Think it was really drive to add the option of blood tests and how much market is waiting.
For such tasks to come to their market. That's the reality in terms of the requirement for.
USPS step by trying to cover any of the prepared remarks, but the most important I think they look at St. James' one is clinical evidence that's why we are doing eclipse.
Set cafes, we kept benefit and harm.
Lack of compliance is on top of many people's minds or.
Something that if it's not that it's a high bar off education awareness around that adherence stairs without <unk> in fact, I imagine some amateur in the modeling so based on our exercise in the open air future. We capture the way the models are working or add based on what you've seen.
Same so far.
You're gonna have a very positive light. Your again offers with liquid testing the ballpark of you know other tests reasonable ballpark and then when you include adherence.
I think it's not even close.
Now, you're making mistakes so when you incorporate adherence actually blood base S.
<unk> very strongly with what we are talking about so.
That sounds <unk> understanding of USPS, if I think C. M. S. N. F. Every primary reported the bars are relatively very clear in terms of requirements and depression medicine like their primary in spite of our essays that easily Catholics are clinical trials. It's all around CRC performance I've asked I didn't know and I just can't.
Three by me in a clips trial, but very excited.
Farmers that means you don't so far that's why we even upgraded our assay with this latest and greatest asset that we have on the research side.
And now we can see about that because this is kind of stress.
Thank you.
Next question comes from Maxima Sushi of Cohen Max Your line is not <unk>.
Hi, Thanks for taking the questions just a quick follow up on unmarked question <unk>. It states that it will it will provide coverage you know for any qualifying cast either once every three years or.
At the interval designated in the F. D. A label F. The F D. A indicates a specific test interval.
So just curious if you're expecting the F D. A to recommend a specific interval when they rule on the clip stayed on if they do you know how that would have that recommendation would would plan to U S. P. S yep eventual rolling on the test <unk>.
You know based actually what I know I'll be back in the late building kind of indication that I wouldn't be surprised if they did instead of like kind of being trouble first thing. So you know this is not our expectation in terms of like you know like for the experience as we have with other products like based on <unk>.
<unk> testing of when or how or how often used <unk> those conversation never even came up it's all around save again, if you can see off the treatment and now how often to use it there are some other elements, including L to economy kind of argument that comes into the picture and.
You know the added benefit of those test your test rather than <unk>. Other test lesson you know.
The way we are looking in the main stream.
People know that lacko compliances a major issue.
People are noticing blood face cancer screening as in potential for a tremendous population anything else Bennett.
So people out there in mainstream are trying to L.
Instead of trying to make sure blood based screening test is not gonna be something that the U S would get access.
So in fact, many of stakeholders like just the Kansas City I'm not sure if you've ever had done so I'll have to find out like Nancy D. Before anybody even qualifies for it. So I think there are many efforts in the field in the mainstream who made sure patients would get access to these by.
Changing.
Diagnostics that'd be are very excited with that.
Got it.
Yes, yes, yeah, obviously, assuming 100 per cent adherence and some of the models support the recommendations, but they clearly acknowledged the importance of adherents in the real world. So if you're looking at cross you know health care advocacy groups guideline bought each regulators reimbursement decision makers now which of those parties do you expect to be.
And the biggest advocate for the use of adherence suggested modeling, especially one where they're determining the role that your tests can play and underserved populations. Another individuals that are in the lower income areas.
I mean, it's our relationship on our very excited with our partnership with multiple patient advocacy group in this spot this is something that.
Again like the whole mainstream on the ecosystem is trying to.
Make sure I in fact, such James changing life savings S get out there successfully <unk> increased compliance rates well over 80% with these kind of devices, but <unk> performing devices not just devices that the only thing. They can do is make stage depictions bigness of you.
Right device too I think everybody on the mainstream and stakeholders any blasters or <unk> or by U S. P. S. T F members that they're in our advisory Board, we are kind of discussing with them brainstorming, we've done about strategy.
No sauce on the top of the mind kind of makes sense to them. That's obviously <unk> Hey, you have a good life, you're kind of a gang in terms of impact and when you're trying to see their the reality of the problems today, It's just a problem of compliance problem of adherence.
You know when you incorporate those by the model and the show your white blood and add value and a very tremendous weight. So because we have a lack of adherence backup phone lines, but it's not that that's the only way to get <unk>.
Positive life your again, Sean in the model, but once you include it.
<unk> <unk> <unk>.
That's a fever and a very big way based on what we have neither muddling, so far that falls in the near future we would talk about it.
Thank you next question comes from Patrick Donnelly of City, Patrick Yolanda's now I <unk>.
Hey, guys. Thanks for taking questions I'll, just keep it to want to know where to run a little late immediately maybe just on the eclipse delay just following up on the earlier question.
Just to be clear it sounds like it's just kind of the review running long you guys are still confidence sample size is correct and then on the back of that you know how quickly can you turn the PMA submission around it sounds like you're still confident that happened 22. So the timeline in the F. D. A side doesn't sound like it's slipping just wanted to confirm that and I'm gonna get confidence level and the ability to turn that around relatively.
Quickly. Thank you.
Yeah, So maybe I I started from the last part of your question and you know based on our planning actually we still believe we can <unk> agency.
This year, there are a bunch of it and I'll, let you Cook clinical validation that stuff needs to happen based on the reality of what's happening on that.
Clinical side, you know the project plan and get that just in terms of the kind of sequence of experimentation and so forth. So we feel that this year. We can stop me into our final module around <unk> C. As I mentioned restarted the modular submission already so it's P. R. Yeah their reviews.
Started in the bag for us for some of our Andy modules.
In terms of the.
The timeline relay. This this you know.
So are many things that you are executing grades and this is something that's been obviously.
Not good to see this is this is not something we are happy you know about you know obviously there are some stuff, which is we are doing our best to increase it you know.
What's happening essentially I'd like to review board, which is outside garden.
The way to be to really go through this backlog.
Sooner than later, but it's.
These are the details of complicated trilogue pressure, we are doing our best to.
Minimize this timeline debate, we need to get into our C. R. C number the CRC number that'd be.
Have in mind for this study to be power and we are still a few more to go severe few more to go and you have to go through this back logged on that let me see so.
Yeah, many things very <unk> very nicely and I'm very excited but this is this is something that.
Really just not good but we are honor that we are doing our best to you know rectify can I get this data as soon as possible I think all of US are waiting for this for so long.
Thank you next question comes from Julia Kim <unk> J P. Morgan Julia Your line is now I <unk>.
Hi, good afternoon. So maybe just a quick follow up my shield no you made it very clear coin a bathroom <unk> compliance in terms of guidelines abused how much impact and do you think you have T. S. T F will put on a performance.
And I assume that you know <unk> evening Poof version of the asked me if I could study so I've seen the additional 11th you can pull up to further enhance the eight eight performances. While I was just wondering if you can get any color and canceled the theoretical you know how much a theoretical implement natasha.
<unk>.
Yeah, so actually be.
Yeah. Please with wherever you are in terms of the crime right off the test C. R. C like rewards on it all along but like many samples like performance by fall.
Oh, let's see what we've seen so far.
Guess validated with eggs lips <unk> opponents, then we've shown we believe we are gonna have been leaving.
No.
Tests for colorectal cancer screening in terms of number of cases that in <unk>.
<unk>, our tests would be the preferred I'm, leaving nasty.
<unk> said that.
Now is this the best and there's no way to kind of <unk> promised I cannot make that <unk>.
Tap into garden 360, I experienced like the way that that was eight years ago registers. Today, there are a bunch of their pharmacy improvement one advantage up having multi cube.
Have a collection of primary eclipses around S burgeoning and potential upgrades, but.
You know <unk>.
<unk>, what we've seen with the L. D T. If you'd get caught primary exosphere diving in very good shape in terms of USPS. Yeah. So it's a complicated multifactor <unk> replace April .
Advanced adding on what the injection laser all they've done early stage at adding all that <unk>, they're adhere and compliance and follow on kind of played that role and.
And I think we greet me and talks about it. So once you add that to your <expletive>.
Like I can't log base S. We believe is gonna have much argument by your game state, there's any still Chester.
Oh Penn Ultimate question comes from Matthew Slice of Goldman Sachs, Matthew Yolanda, It's not mine.
Hey, guys. This is Dave <unk>. Congrats again on the Shield March can you give us an idea of the order of magnitude shield volume you expect next year. It looks like the one multi cancer screening tests and the market is expecting around 80 or 100 thou.
<unk> and its four year.
So maybe I should give us some time for the next year guidance I can tell you that actually what you're seeing in a few days of this is actually a lot or not what you expect that's so.
But we have to see like you know.
Based on let me see it looks like there's been a bunch of under estimation on what's it would be that is such a limited commercial theme. So but yeah upgrade you at this time. So it's hard to hear about next to your guidance for sample volume on sure. If this is very new <unk> better, but so far so good I can see.
You would keep you posted.
Got it thanks.
And can tell a little more about how you arrived at the 900 dollar cash pay prices.
[laughter] [laughter].
Yes. So you know obviously, we talked about the.
Value of the tests not for the people who aren't gonna actually offers <unk>, we need to establish a list pricing at this cash pricing would be something which is kind of be important in terms of the track record of payment for us.
We go to the Adl's, yeah pricing for a G. L. C F D a approval so.
Setting some groundwork.
So please stay tuned.
Great. Thanks, Yes.
And a final question comes from Brian Weinstein of William plant, Brian . Your line is not wanted <unk>.
Hey, guys. Thanks for taking the question.
I was just gonna ask you about that about that pressing question as well it gives a substantial premium to to come a garden.
Was thinking through that I'm thinking through with the E. D. L. T. Obviously will get reviewed on their prices based off of what you're seeing on the private side do you expect that you will be able to contract with private payers ahead of inclusion in quality metrics and then I'll just have the second one right now just because it's a short one in India named <unk>.
<unk> do you guys expect it.
There'll be any kind of F. D. A panel review for this given this is kind of a new class and we're going to have I think three or more that will be coming which is kind of a short period of time. Thanks.
Maybe I can I start from the last part of your question Bryan I'm. So in terms of annual review that's F.
<unk> on what they Wanna do but I don't agree three or four devices at the same time. Let me know you are gonna be at least barters away for anybody else trying to suck me in there.
So so just a notion that there would be multiple submission at the same time and joins review.
<unk> 60, CVA extent Vega that Google, which foundation <unk> liquid like you have a month away from each other items and experience that kind of nausea, and I'll review them for a brand new links with biopsy for treatments that link sent by agency.
So we have you tried not comments on a bunch of <unk>.
Maybe to some extent.
Dumb statements, that's coming into our market from different angles. So.
<unk> actually reimbursement expectation.
You know it's the reality is M stayed with enable CMS coverage Medicare coverage. Shortly after obvious these with <unk> add for Medicare advantage outrage.
Outrage.
There's always some are the players that actually would jump on it boasts Medicare serious I think uhm, a or is that with John planet potential Acs guideline English at <unk> like you know the default expectation that would be many of the private affairs would jump jump on.
She right after U S. P. S. You have guidelines.
So that's our expectation that just.
Alright, thank you.
At this time, we have an account questions and therefore this concludes today's cool. Thank you for joining you may damp disconnect your lines.
Okay.
[music] [noise].