Q1 2024 Guardant Health Inc Earnings Call

Kate: Good afternoon, and thank you for joining the Guardant Health Q1 2024 earnings call. My name is Kate, and I will be the moderator for today's call. At this time, all lines are in a listen-only mode and will remain so until the question and answer portion of the call. I would now like to turn the call over to Zarek from Guardant Health. You may proceed.

Good afternoon, and thank you for joining the Guardant health Q1, 'twenty 'twenty four earnings call. My name is Kate and I will be the moderator for today's call.

Zarek: At this time all lines are in a listen only mode and will be until the question and answer portion of the call I would now like to turn the call over to Zurich with Garden Health you May proceed.

Zarek: Thank you. Earlier today, Guardant Health released financial results for the quarter ended March 31, 2024. Joining me today from Guardant are Helmy Eltoukhy, Co-CEO; AmirAli Talasaz, Co-CEO; and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.

Zarek: Earlier today Guardant Health released financial results for the quarter ended March 31, 2020 for joining me today from Garden are <unk> co CEO Lee <unk> co CEO and Mike Bell Chief Financial Officer, before we begin I need to remind you that during this call management will make forward looking statements within the meaning of federal securities laws.

Zarek: This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specific items. Additional information regarding material risks and uncertainties, as well as reconciliation to most directly comparable GAAP financial measures, is available in the press release Guardant issued today, as well as in our 10-K and other filings with the SEC. Guardant disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events, or otherwise. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the call over to Helmy. Thanks, Amir.

Zarek: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specific items additional information regarding material risks and uncertainties as well as reconciliations to most directly.

Helmy: Parable GAAP financial measures are available in the press release Garden issued today as well as in our 10-K and other filings with the SEC guardant disclaims any intention or obligation to update or revise financial projections and forward looking statements, whether because of new information future events or otherwise the information in this conference call is accurate only.

Helmy: As of the live broadcast with that I would like to turn the call over to help me. Thanks.

Helmy Eltoukhy: Thanks, Erik. Good afternoon, and thank you for joining our first quarter 2024 earnings call. Starting on slide three, Guardant is a liquid biopsy leader for therapy selection with a robust pipeline of opportunities in tissue-free MRD and cancer screening. With our comprehensive suite of tests, we are transforming patient lives across the continuum of care. We are just scratching the surface of what we believe is a massive opportunity in front of us.

Helmy: Thanks, Eric Good afternoon, and thank you for joining our first quarter 2024 earnings call.

Helmy Eltoukhy: Starting on slide three garden as a liquid biopsy leader for therapy selection with a robust pipeline of opportunities and tissue free Mardi and cancer screening with a comprehensive suite of tests, we are transforming patient lives across the continuum of care.

Helmy Eltoukhy: We are just scratching the surface of what we believe is a massive opportunity in front of us.

Helmy Eltoukhy: At Guardant, every action is fueled by our dedication to serving patients and fulfilling our bold mission to give everyone more time free from cancer. In line with that mission, I'd like to share a story of the impact our tests have on patients. In March 2022, a male in his 40s was diagnosed with stage 4 non-small cell lung cancer after he visited the hospital for gastrointestinal distress and back pain. That very same day, he was given a GARDEN360 CDX liquid biopsy test at his hospital bedside, and his oncologist later followed up with a tissue test.

Helmy Eltoukhy: Ed Garden every action is fueled by our dedication to serving patients and fulfilling our bold mission to get everyone more time free from cancer in line with admission I'd like to share a story of the impact our tests can have on patients in March 2022. The malian authorities are diagnosed with stage four non small cell lung cancer.

Helmy Eltoukhy: After he visited the hospital for gastrointestinal distress and back pain.

Helmy Eltoukhy: That very same day, he was given a garden 360, <unk> liquid biopsy test that is hospital bedside and his oncologist later, followed up with the tissue test within days. The Garden 360, <unk> Dx tests results came back identifying and out genomic rearrangements.

Helmy Eltoukhy: Within days, the GARDEN360 CDX test results came back, identifying an ALK genomic rearrangement. With this information, the patient was started on melectinib, a first-line TKI treatment, just 10 days after his diagnosis. Within just two weeks after starting treatment, the patient reported that his back pain was resolved.

Helmy Eltoukhy: This information that patient who started in <unk> in the first line PKI treatment just 10 days after his diagnosis within.

Helmy Eltoukhy: Within just two weeks after starting treatment. The patient recorded is back pain was resolved, notably the announced tissue test results also confirm the positive mutation, but the results were received five weeks after the patient had already started therapy.

Helmy Eltoukhy: Notably, the in-house tissue test results also confirmed the out-positive mutation, but the results were received five weeks after the patient had already started therapy. The rapid turnaround time enabled by Guardant 360 helped result in life-saving record time to treatment. I'm pleased to share that the therapy has been successful in managing his cancer, and the patient continues to do well today. Turning to top line performance on slide four, we had a fantastic start to the year with total revenue growing 31% to $168.5 million in the first quarter of 2024. This was driven by very strong precision oncology revenue, which increased 38% in the quarter, supported by significant Garden 360 reimbursement tailwinds, as well as strong growth in clinical and biopharma volumes. Turning to slide five.

Helmy Eltoukhy: The rapid turnaround time enabled by Garden 360, <unk> helped result in lifesaving record time to treatment.

Helmy Eltoukhy: I am pleased to share that the therapy has been successful in managing this cancer and the patient continues to do well today.

Helmy Eltoukhy: Turning to topline performance on slide four we had a fantastic start to the year with total revenue growing 31% to $168 $5 million in the first quarter of 2024.

Helmy Eltoukhy: This was driven by very strong precision oncology revenue, which increased 38% in the quarter supported by significant garden 360 reimbursement tailwind as well as strong growth in clinical and Biopharma volumes.

Helmy Eltoukhy: Turning to slide five clinics.

Helmy Eltoukhy: Clinical test volume for the first quarter grew 20% year over year, reaching 46,900 tests. We achieved a record number of average tests for oncologists, driven by continued growth in both breadth and depth of ordering. Garden 360 continues to be the primary driver of clinical volume growth, with increasing contributions from newer products such as Tissue Next and Respond. Reveal also continues to grow nicely, despite our continued management of volumes ahead of broader reimbursement. Biopharma volumes were incredibly strong in the first quarter, supported by strong collaborations with our growing number of biopharmaceutical partners. We now have over 170 lifetime partners.

Helmy Eltoukhy: Clinical test volume for the first quarter grew 20% year over year, reaching 46900 tests <unk>.

Helmy Eltoukhy: We achieved a record number of average test Brown colleges driven by continued growth in both breadth and depth of ordering.

Helmy Eltoukhy: Garden 360 continues to be the primary driver of clinical volume growth with increasing contributions from newer products such as tissue next in response.

Helmy Eltoukhy: <unk> also continued to grow nicely. Despite our continued management of volumes ahead of broader reimbursement.

Helmy Eltoukhy: Biopharma volumes were incredibly strong in the first quarter supported by strong collaborations with our growing number of Biopharma partners. We now have over 170 lifetime partners.

Helmy Eltoukhy: Test volume grew 37% year over year, reaching 8,450 tests. Despite discussion of biopharma headwinds across the sector, biopharma continues to be a bright spot for Guardant. We continue to see a lot of excitement for Guardant Infinity, our newest biopharma offering powered by our smart liquid biopsy platform. This is an important leading indicator of future demand for our clinical tests. We look more closely at some of the recent highlights within our therapy selection business on slide six.

Helmy Eltoukhy: Test volume grew 37% year over year, reaching 8450 tests, despite discussion of biopharma headwinds across the sector Biopharma continues to be a bright spot for garden.

Helmy Eltoukhy: We continue to see a lot of excitement for garden Infinity, our newest biopharma offering powered by our smart liquid biopsy platform.

Helmy Eltoukhy: This is an important leading indicator for future demand for our clinical tests.

Helmy Eltoukhy: Looking more closely at some of the recent highlights within our therapy selection business on slide six.

Helmy Eltoukhy: I'm very excited to share that we generated positive free cash flow in our therapy selection business in the first quarter, supported by continuing improvements in Garden 360 ASPs. We had another significant step up in Guardant 360 reimbursement, reflecting the new crosswalk rate for Guardant 360 LVT that took effect on January 1st. This increased the Medicare rate for Guardant 360 LBT to $5,000.

Helmy Eltoukhy: I am very excited to share that we generated positive free cash flow and our therapy selection business in the first quarter supported by continuing improvements in garden 360 <unk> Asps.

Helmy Eltoukhy: We had another significant step up in garden 360 reimbursement, reflecting the new cross what's right for Garden 360, <unk> that took effect on January 1st.

Helmy Eltoukhy: This increase the Medicare rate for Garden 360, <unk> $5000. We also saw significant revenue upside from recent commercial payer coverage wins and believe that this is a tailwind that will continue to play out over the course of the year.

Helmy Eltoukhy: We also saw significant revenue upsides from recent commercial payer coverage wins and believe that this is a tailwind that will continue to play out over the course of the year. We also saw continued progress in our EMR integration efforts with streamlined orders and workflows for physicians. Notably, more than one-third of orders in the first quarter were digital, showing the effectiveness of the integration process.

Helmy Eltoukhy: We also saw continued progress in our EMR integration efforts with streamline orders and workflows for physicians.

Helmy Eltoukhy: Notably more than one third of orders in the first quarter were digital showing the effectiveness of the integration process.

Helmy Eltoukhy: We had strong growth in the quarter driven by continued Garden 360 volume growth across all cancer types, as well as contribution from Japan and the UK. At Guardant, high-quality science and data have always been the driving force behind our mission to transform patient care. To that end, I'm excited to share that we recently reached a significant milestone and surpassed 500 peer-reviewed publications, highlighting the data produced by our innovative suite of products.

Helmy Eltoukhy: We had strong growth in the quarter driven by continued garden's <unk> volume growth across all cancer types as well as contribution from Japan and the U K.

Helmy Eltoukhy: Ed Garden high quality science and data have always been the driving force in our mission to transform patient care.

Helmy Eltoukhy: To that end I'm excited to share that we recently reached a significant milestone and surpassed 500 peer reviewed publications highlighting the data produced by our innovative suite of products.

Helmy Eltoukhy: Over the years, we have deliberately made investments to develop tests based on cutting-edge science, and we are proud to have conducted some of the largest and most impactful studies ever to be performed in our field. This incredible breadth of data demonstrates the impact our technology has on both patients and the scientific community in order to improve patient outcomes and ultimately give us all more time free from cancer. We are committed to generating evidence that supports the real-world impact of our technology and its impact on patient outcomes. This will drive physician demand and favorable reimbursement as we continue to improve payer coverage, which will, in turn, expand volume and increase our ASI. Now, taking a closer look at our international progress in Slide.

Helmy Eltoukhy: Over the years, we have deliberately made investments to develop tests based on cutting edge science and we are proud that conducted some of the largest and most impactful studies ever to be performed in our field.

Helmy Eltoukhy: This incredible breadth of data demonstrates the impact our technology hasnt, both patients and the scientific community in order to improve patient outcomes and ultimately gave us all more time brie from cancer.

Helmy Eltoukhy: We are committed to generating evidence that supports that reasonable impact of our technology and its impact on patient outcomes.

Helmy Eltoukhy: This will drive physician demand and favorable reimbursement as we continue to improve payer coverage, which will in turn expand volume and increase our ASP.

Helmy Eltoukhy: Now taking a closer look at our international progress in slide seven.

Helmy Eltoukhy: We recently launched a new service at the Royal Marsoon Hospital in England to test advanced non-small-cell lung cancer patients using Guardant 360. This partnership is supporting a new national pilot with NHS England that is integrating liquid biopsy testing into routine care much earlier in a patient's treatment journey. This allows patients with suspected non-small cell lung cancer to receive the CT DNA blood test concurrently with a diagnostic CT scan, so they may benefit from even earlier biomarker identification and subsequent targeted treatment.

Helmy Eltoukhy: We recently launched a new service at the Royal Marsden, England to test advanced non small cell lung cancer patients using garden <unk>.

Helmy Eltoukhy: This partnership is supporting a new national pilot with NHS, England, integrating liquid biopsy testing into routine care much earlier in their patients treatment journey it.

Helmy Eltoukhy: It allows patients with suspected non small cell lung cancer to receive the CTD made blood test concurrent with their diagnostic scan. So they may benefit from even earlier biomarker identification and subsequent targeted treatment. We are excited about this program demonstrating the value of bringing liquid biopsy testing much earlier into the patient journey to improve.

Helmy Eltoukhy: We are excited about this program demonstrating the value of bringing liquid biopsy testing much earlier in the patient journey to improve outcomes. The NHS study has already enabled more than 2,000 patients with suspected advanced lung cancer to receive a CT DNA blood test concurrent with a diagnostic scan and is set to expand to an additional 10,000 patients by next March.

Helmy Eltoukhy: Outcomes.

Helmy Eltoukhy: The NHS study has already enabled more than 2000 patients with suspected advanced lung cancer to receive the CTD make blood test concurrent with their diagnostic scan and is set to expand to an additional 10000 patients by next March.

Helmy Eltoukhy: At our Investor Day last fall, we shared an exciting vision for a smart liquid biopsy platform, which is enabling first-of-its-kind capabilities across a myriad of applications. Last month, we presented exciting methylation fuel data for a few of these applications at the AACR annual meeting, highlighting the value of the GARDEN-INFINITY epigenomic signal to generate novel insights. This data shows how smart liquid biopsy technology provides information on not only boosting sensitivity for important drug classes such as targeted therapies and immunotherapies but also for giving unprecedented biological insight into the patient's cancer and their health as a whole.

Helmy Eltoukhy: Moving on to slide eight at our Investor Day last fall, we shared an exciting vision for our smart liquid biopsy platform, which is enabling first of its kind capabilities across a myriad of applications last month, we presented exciting methylation fuel data for a few of these applications at the ACR annual meeting highlighting the value of the garden Infinity.

Helmy Eltoukhy: The genomic signal to generate novel insights.

Helmy Eltoukhy: This data shows how smart liquid biopsy technology provides information not only boosting sensitivity from Gordon drug classes, such as targeted therapies, and immunotherapies, but forgiving unprecedented biological insight into the patients cancer and their health is a hold for example, we presented data that demonstrated that we could do more than just.

Helmy Eltoukhy: For example, we presented data that demonstrated that we could do more than just detect the tumor tissue of origin and blood by unlocking the specific tumor histological subtype, which is critical given patients can often fail therapy due to transformation of the tumor subtype. And today, these transformations are often difficult to detect, even in tissue.

Helmy Eltoukhy: <unk>, that's the tumor tissue of origin in blood.

Helmy Eltoukhy: Locking the specific tumor histological subtypes, which is critical given patients can often fail therapy due to transformation of the tumor subtype.

Helmy Eltoukhy: And today these transformations are often difficult to detect given in tissue.

Helmy Eltoukhy: Just as exciting, we presented data showing that we can predict adverse cardiac events in patients on HER2-directed therapy, including the detectability of heart risk and damage months prior to drug-induced heart failure. These are just a handful of the profound applications that our smart liquid biopsy platform will enable, setting a new bar for what physicians will expect from their testing partner. Now shifting gears to reveal on slide 9, where we are the leader in tissue-free MRD. I'm excited to share that our COSMOS CRC manuscript with data from our COSMOS colon study, looking at stage 2 and 3 patients, has been submitted for publication and is under review in a peer-reviewed journal.

Helmy Eltoukhy: Just as exciting we presented data showing that we can predict adverse cardiac events and patients in her two directed therapy, including the detectability of hard risks and damage months prior to drug induced heart failure.

Helmy Eltoukhy: These are just a handful of the profound applications that are smart liquid biopsy platform will enable setting a new bar for what physicians will expect from their testing partner.

Helmy Eltoukhy: Now shifting gears to review on slide nine where we are the leader in tissue for EMR date.

Helmy Eltoukhy: I am excited to share that our cosmos CRC manuscript with data from a Kosmos Korlym study looking at stage two and three patients has been submitted for publication and is under review at a peer reviewed journal looking ahead to the remainder of the year, we anticipate publication that will support submissions to Medicare for potential additional coverage <unk> colon and breast can.

Helmy Eltoukhy: Looking ahead to the remainder of the year, we anticipate publications that will support submissions to Medicare for potential additional coverage in colon and breast cancer. Next year, we have important clinical validity studies for additional cancers, such as lung, pancreatic, and gastric, that will support advancement of additional reimbursement. We are excited by the demand we are seeing in the market, fueled by the fact that there are more than 12 million cancer survivors more than five years out from surgery.

Helmy Eltoukhy: Next year, we have important clinical validity studies for additional cancers, such as lung pancreatic and gastric that will support advancement of additional reimbursement.

Helmy Eltoukhy: We are excited by the demand we are seeing in the market fueled by the fact that there are greater than 12 million cancer survivors more than five years out from surgery.

Helmy Eltoukhy: A tissue-free MRD solution such as Reveal will be key to addressing this significant market. That said, we are not only the clear leader in this enormous market segment but the only tissue-free MRD option in the market. Despite our excitement, we believe it is important at this time to manage volumes very closely and hence minimize cash burn until a reveal is gross margin positive. Even ahead of additional Medicare reimbursement with the impact of biomarker bills, we are starting to see improvements with the reveal ASP. 17 states have now passed biomarker bills, with several other states on deck for possible enactment this year.

Helmy Eltoukhy: Free MRV solutions, such as reveal will be key to addressing this significant market.

Helmy Eltoukhy: That said, we are not only the clear leader in this enormous market segment, but the only tissue free MRV option in the market today.

Helmy Eltoukhy: Despite our excitement we believe it is important at this time to manage volumes very closely and hence minimize cash burn until reveal is gross margin positive.

Helmy Eltoukhy: Even ahead of additional Medicare reimbursement.

Helmy Eltoukhy: <unk> biomarker bills, we are starting to see improvements with the reveal asps.

Helmy Eltoukhy: 17 States have now passed biomarker goes.

Helmy Eltoukhy: With several other states on deck for possible in that this year.

Helmy Eltoukhy: We are still early in the process, but we are starting to see some tailwinds that will bode well for future commercial coverage of our test. We are also making very good progress on our COGS reduction initiatives for Reveal. As a result, we expect that with significantly lower COGS and with improved ASPs, Reveal will be gross margin positive in 2025. This will be an important milestone in minimizing MRD cash burn and enable us to greatly accelerate volume expansion. Furthermore, over the long term, we are confident we can achieve greater than 60% gross margins for the MRD business.

Helmy Eltoukhy: We are still early in the process of starting to see some tailwind that will bode well for future commercial coverage of our tests.

Helmy Eltoukhy: We're also making very good progress in our Cogs reduction initiatives will appeal.

Helmy Eltoukhy: As a result, we expected with significant lower Cogs and with improved Asps.

Helmy Eltoukhy: The gross margin positive in 2025, this will be an important milestone and minimizing cash burn and enable us to greatly accelerate volume expansion. Furthermore over the long term, we are confident in making the achieved greater than 60% gross margins for <unk> business.

Helmy Eltoukhy: On April 29th, the FDA issued its final rule related to the planned oversight of LDT. While the regulatory team continues to work through the details of the rule, it is consistent with their expectations. The rule outlines an exemption from pre-market review for tests approved by New York State. Given the fact that our key tests are New York State approved, we would expect this exemption to allow us to continue to operate largely as we do.

Helmy Eltoukhy: On April 29, the FDA issued its final rule related to the planned oversight of <unk>, while our regulatory team continues to work through the details of the rule. It is consistent with our expectations.

Helmy Eltoukhy: The rule outline an exemption from pre market review for tests approved by New York State given the fact that our key test our New York State approved we would expect this exemption to allow us to continue to operate largely as we didn't know.

Helmy Eltoukhy: As a reminder, Guardant 360 CDX was the first FDA-approved liquid biopsy test for CGP across solid tumors. Our proven track record with FDA positions us to continue to offer high-quality tests when the final rule goes into effect. We look forward to the follow-on FDA guidance documents to help clarify the nuanced aspects of the final. With that, I will now turn the call over to AmirAli for an update on...

Helmy Eltoukhy: As a reminder, garden 360, <unk> was the first FDA approved liquid biopsy tests for CGP across all the tumors are proven track record with FDA positions us to continue to offer high quality tests. When the final rule goes into effect, we look forward to the follow on FDA guidance documents to help clarify the nuanced aspects of that.

Amirali: Final growth.

Amirali: With that I will now turn the call over to them here for an update on screening.

Amirali: And help me.

AmirAli Talasaz: We are making remarkable strides with our SHIELD blood test as we lead the way in establishing a new category within the CRC screening market. S.H.I.E.L.D.

Amirali: We are making remarks, several strides beat our shale blood test as we lead the way in establishing a new category within the CRC screening market.

AmirAli Talasaz: It continues to be the best-in-class blood test with a significant first-mover advantage, and at this time, we do not see any credible competitor in our line of sight. Turning to slide 10. Since our last earnings call, the data from our Pivotal Eclipse study was published in the New England Journal of Medicine, the world's leading peer-reviewed medical journal. This publication was a major milestone for SHIELD and a strong endorsement of the quality of the clinical data.

AmirAli Talasaz: <unk> continues to be the best in class blood test, which significant personal care advantage and at this time redoing outstanding incredible competitor in our lineup site.

AmirAli Talasaz: Turning to slide 10.

AmirAli Talasaz: Since our last earnings call the data from our pivotal <unk> study was published in the New England Journal of Medicine.

AmirAli Talasaz: <unk>, leading peer reviewed medical journal.

AmirAli Talasaz: This publication was a major milestone for shell and a strong endorsement of the quality of the clinical data.

AmirAli Talasaz: This data meets the benchmark for Medicare reimbursement, positioning us to potentially become the first FDA-approved Medicare reimbursed CRC screening blood test. Turning to slide 11, following its publication in the New England Journal of Medicine, we were very excited to see such an enthusiastic response from the media, consumer advocacy groups, and opinion leaders.

AmirAli Talasaz: This data meets the benchmark for Medicare reimbursement positioning us to potentially become the first FDA approved Medicare reimbursed CRC screening blood test.

AmirAli Talasaz: Turning to slide 11.

AmirAli Talasaz: A publication in the New England Journal of Medicine.

AmirAli Talasaz: We're very excited to see such an enthusiastic response from media consumer advocacy groups and opinion leaders.

AmirAli Talasaz: With attention from outlets such as the Associated Press, NPR, the New York Times, the Colon Cancer Coalition, and many others, the interest in and potential value of this blood test is evident. Many recognize the significance of this publication as it brings us one step closer to providing a new choice for patients and helping to close this screening gap. Moving on to slide 12, our interactive review process with FDA continues to be collaborative and positive, and we continue to make steady progress. The advisory committee panel meeting will be the next milestone of the review process and will take place on May 23rd.

AmirAli Talasaz: Without attention from outlets such as the associated press and PR than New York Times Colon cancer coalition on many others the interest and the potential value of this blood test is evident.

AmirAli Talasaz: Many recognize the significance of this publication as it brings us one step closer to providing a new choice for patients and helping to close this screening gap.

AmirAli Talasaz: Moving on to Slide 12, our interactive review process with the SBA continues to be collaborative and positive and we continue to make steady progress.

AmirAli Talasaz: Advisory Committee panel meeting will be the next milestone up their review process and we will take place on may 23rd.

AmirAli Talasaz: Our team has worked incredibly hard to get ready, and we are well prepared for this panel meeting. In parallel, we are eagerly anticipating the launch of SHIELD-IVD in 2024, shortly after expected FDA approval. Armed with two years of commercial experience from Shield LBT, we have fine-tuned our operations, including enhancements of the customer experience, seamless digital ordering, and access to national full-bottoming networks. After years of research and development, it's so exciting to prepare to make this test broadly available. Turning to slide 13.

AmirAli Talasaz: Our team has work incredibly hard to get ready and we are well prepared for this panel meeting.

AmirAli Talasaz: In parallel we are eagerly anticipating the launch of shield IBD in 2020 four shortly after I expect that FDA approval.

AmirAli Talasaz: Armed with two years of commercial experience from shell that will be.

AmirAli Talasaz: We have fine tuned our operations, including enhancements of customary experience seamless digital ordering and access to nationale Borg networks.

AmirAli Talasaz: After years of research on that or not that it's so exciting to prepare to make this test broadly available.

AmirAli Talasaz: Turning to slide 13.

AmirAli Talasaz: There are 120 million average-risk individuals between the ages of 45 to 84, which includes 50 million on-screen individuals. Approximately 75% of CRC-related deaths occur within this on-screen population. And this is despite having a broad menu of stool-based tests available for over a decade. We believe that reaching this group is the most important opportunity to transform the CRC screening paradigm. And real-world evidence clearly shows that blood modality is best positioned to capture the on-screen opportunity.

AmirAli Talasaz: There are 120 million average risk individuals between the age of $45 to 84, which includes $50 million on a screen individuals.

AmirAli Talasaz: Approximately 75% of CRC related deaths occur within this out of the screening population.

AmirAli Talasaz: And this is with having a broad menu a stool based test available for over a decade.

AmirAli Talasaz: We believe that reaching this group is the most important opportunities to transform the CRC screening paradigm.

AmirAli Talasaz: And the real World evidence clearly shows that the blood modality is best positioned to capture the on screen opportunities.

AmirAli Talasaz: We believe screening these 50 million individuals is addressable by a blood test because nearly 87% of people age 50 and above have been seeing their doctor during the last 12 months, based on findings from an annual national health interview survey. Interestingly, 91% of that group has had a blood draw in the last twelve months. This tells us that the majority of the unscreened population is, in fact, engaged with the health care system and routinely getting blood draws, making a blood-based CRC screening test an obvious fit into their existing care.

AmirAli Talasaz: We believe screening these 50 million individuals is addressable by a blood test because nearly 87% of people age 50 and above have.

AmirAli Talasaz: Been seeing their doctor during the last 12 months based on findings from an annual National Health interview survey intra.

Speaker Change: Interestingly I know.

AmirAli Talasaz: One person out of that group has had a blood draw in the last 12 months.

AmirAli Talasaz: This tells us that the majority of the unscreened population is in fact engaged with their health care system I agree with Tammy getting blood trusts, making a blood based CRC screening tests and obvious fit into their existing carrier.

AmirAli Talasaz: More importantly, a real-world LBT experience with SHIELD for over 20,000 tests over the past two years confirms that PCPs are enthusiastically ordering this test, and when they do, patients complete the test. We continue to see an incredibly strong adherence rate of more than 90% for SHIELD LDT. Moving on to slide four.

AmirAli Talasaz: More importantly.

AmirAli Talasaz: We have all the LPTA experience with shell for over 20000 tests over the past two years confirms that tcp's are enthusiastically ordering this test and when they do patients complete the tests.

AmirAli Talasaz: We are conscientious incredibly strong at Trs rate of more than 90% <unk>.

AmirAli Talasaz: Moving on to slide 14.

AmirAli Talasaz: A randomized prospective study from Kaiser Permanente showed significant improvement in CRC screening rates when participants had a choice of a SHIELD test alongside other standard of care modalities through telephone outreach to more than 2,000 previously unscreened individuals. Participants were randomized into two groups. One group was offered a fit or colonoscopy, and the second group was given the added option of SHIELD. The study demonstrated that screening compliance significantly increased by nearly threefold.

AmirAli Talasaz: A randomized prospective study results from Kaiser Permanente showed significant improvement in CRC screening rates when participants had a choice of a shale test alongside others band RF care modality.

AmirAli Talasaz: Through telephone outreach to more than 2000 previously on the screening individuals' participants were randomized into two groups.

AmirAli Talasaz: One group was offer et cetera, colonoscopy and the second group was given to add adoption up shield.

AmirAli Talasaz: We demonstrated that screening compliance significantly increased by nearly three fold.

AmirAli Talasaz: When the menu of screening options was expanded to include blood, this shows that blood has the opportunity to dramatically increase the screening rate at levels that exceed even our initial expectations. We continue to be very excited about the near-term opportunity for S.H.I.E.L.D. to transform the CRC screening paradigm and eventually address the broader cancer screening landscape with the addition of more tumor types to our S.H.I.E.L.D. platform. address. With that, I will now turn the call to Mike for more details on our finances.

AmirAli Talasaz: When the menu of screening options was expanded to include a blood test.

Mike: This shows that <unk> has the opportunity to dramatically increase their screening rates at levels that exceeded even our initial expectations.

Mike: <unk> to be very excited about the near term opportunity of course shield to transform the CRC screening paradigm and eventually to address the broader cancer screening landscape with the addition of mark humor attached our shale play.

AmirAli Talasaz: With that I will now turn the call to Mike for more detail on our financials. Thanks, Tom Roderick.

Michael Bell: Turning to slide 15, I'll start by reviewing our financial results for Q1 2024. All growth rates provided will be on a year-over-year basis, unless otherwise noted.

Mike: Turning to slide 15.

Mike: A review of our financial results for Q1 2024.

Mike: All growth rates provided will be on a year over year basis, unless otherwise noted.

Michael Bell: Total revenue grew 31% to $168.5 million, driven by very strong precision oncology testing revenue, which increased 38% to $156.2 million due to significant growth in both clinical and biopharma revenue. Decision on quality of revenue from clinical tests increased 37% to $125.7 million. We were very pleased with our first quarter clinical test volume, which grew 20% to 46,900 tests, in line with our expectations. For Guardant 360, we saw solid year-over-year volume growth across all counties in the U.S., as well as volume contributions from Japan and the UK. We also saw continued strong volume growth for both reveal and tissue neck.

Mike: Total revenue grew 31% to $168 5 million driven by very strong precision oncology testing revenue, which increased 38% to $156 2 million due to significant growth in both clinical and Biopharma revenue.

Michael Bell: Precision oncology revenue from clinical tests increased 37% to $125 7 million we.

Michael Bell: We were very pleased with our first quarter clinical test volume, which grew 20%.

Michael Bell: 46900.

Michael Bell: In line with our expectations.

Michael Bell: So down 360, we saw solid year over year volume growth across all accounts as in the U S.

Michael Bell: As well as volume contributions from Japan, and the U K.

Michael Bell: We also saw continued strong volume growth for both Brazil and tissue neck.

Michael Bell: Precision oncology revenue from biopharma tests in the first quarter totaled $30.5 million, up 40%. Biopharma test volume was particularly strong, totaling 8,450 tests, up 37 percent, which reflects the strong pipeline we entered the year with. We continue to expect our biopharma business to perform well and conservatively forecast biopharma revenue to grow in the low teens for the full year 2024, with potential upside, assuming no adverse change to the biopharma macro environment. Finally, development services and other revenue was in line with our expectations and totaled $12.3 million. Turn to slide 16.

Michael Bell: Precision oncology revenue from Biopharma test in the first quarter totaled $35 million up 40%.

Michael Bell: <unk> pharma test volume was particularly strong.

Michael Bell: <unk> 8450, <unk> of 37%, which reflects the strong pipeline, we entered the year with.

Michael Bell: We continue to expect our biopharma business to perform well and conservatively forecast biopharma revenue to grow in the low teens for the full year 2024 with potential upside assuming no adverse changes to the biopharma macro environment.

Michael Bell: Finally development services and other revenue was in line with our expectations and totaled $12 3 million.

Michael Bell: Turning to slide 16.

Michael Bell: Since mid-2023, we've seen consistent improvements in clinical reimbursement and ASPs, and we have had an incredibly strong start to the year. Firstly, on January the 1st, our Guardant 360 LDT Medicare rate increased to $5,000 following the CMS crosswalk review process last year. Secondly, we're now seeing the impact of the Guardant 360 commercial coverage wins we had in 2023.

Michael Bell: Since mid 2023, we've seen consistent improvements to clinical reimbursement and ASP.

Michael Bell: And then Patrick incredibly strong start for the year.

Michael Bell: Firstly on January the <unk>.

Michael Bell: <unk> hundred 60, <unk> Medicare rate increase of $5000. Following the CMS Crosswalk review process last year.

Michael Bell: Secondly, we are now seeing the impact of the government and 360 commercial coverage wins, we had in 2023.

Michael Bell: In Q1 2024, cash collected for tests performed last year was significantly higher than we had previously accrued, which resulted in an approximate $8 million revenue upside in the quarter. In addition, due to this improved commercial reimbursement trend, we increased our Guardant 360 ASP for Q1 to be in the range of $2,900 to $2,950, which is higher than the forecasted range of $2,850 to $2,900. We expect the Guardant 360 ASP for the full year to be in this new higher range.

Michael Bell: In Q1 2024 cash collected for test performed last year was significantly higher than we had previously accrued.

Michael Bell: Which resulted in an approximate $8 million revenue upside in the quarter.

Michael Bell: In addition, due to the improved commercial reimbursement trend, we increased our <unk> III. The ASP for Q1 to be in the range of $2900 to 2950, which is higher than the forecasted range of 2850 to $2900.

Michael Bell: We expect the garden <unk> the ASP for the full year will be in this new higher range.

Michael Bell: Finally, we also received better-than-expected commercial reimbursement for reviews to who next in response in the first quarter of 2024. Although we still need to see a more consistent reimbursement trend for these tests, the reimbursement received in Q1 points to potential ASP upside in future quarters. Although it's still early days, we feel we're on track to achieve the long-term ASP targets we presented at our investor day earlier than originally anticipated.

Michael Bell: Finally, we also received better than expected commercial reimbursement for reveal two <unk> funds in the first quarter of 2024.

Michael Bell: While we still need to see a more consistent reimbursement trends for these tests.

Michael Bell: The reimbursement received in Q1 point to potentially pay up side in future quarters.

Michael Bell: Although it's still early days, we feel we're on track to achieve the long term ASP targets, we presented at our Investor day earlier than originally anticipated.

Michael Bell: This should help us achieve our top-line target, as well as potentially bring forward our timeline to reach company-wide cash flow breakeven. Moving on to non-GAAP financial measures on slide 17. Our non-gap gross margin excluding screening, which reflects our therapy selection and MRD businesses, was 64% in the first quarter of 2024, an improvement compared to 63% in Q1 2023. As Helmy mentioned, we are carefully managing revealed test volume ahead of broad reimbursement as it currently carries a negative gross margin.

Michael Bell: This should help us achieve our topline targets as well as potentially to bring forward our timeline to reach company wide cash flow breakeven.

Michael Bell: Moving onto the non-GAAP financial measures on slide 17.

Michael Bell: Our non-GAAP gross margin, excluding screening, which reflects our focus selection and MRP businesses was 64% in the first quarter of 2024, an improvement compared to 63% in Q1 2023.

Michael Bell: It's how do we mentioned we are constantly managing reveal test volume ahead of broad reimbursement.

Michael Bell: Currently carries a negative gross margin.

Michael Bell: Even with a larger proportion of field testing in Q1 2024 compared to Q1 2023, we were able to improve our lumped gap gross margin driven by strong guidance received from ASPs and reimbursement we received in the first quarter of 2024. Non-GAAP operating expenses were $176.5 million, a reduction of $11.8 million compared to the prior quarter.

Michael Bell: Even with a larger proportion of severe test in Q1 2024 compared to Q1 2023.

Michael Bell: Able to improve our non-GAAP gross margin driven by strong guidance, we seek to Isps and reimbursement we received in the first quarter of 2024.

Michael Bell: non-GAAP operating expenses were $176 5 million.

Michael Bell: Reduction of $11 8 million compared to the prior year quarter.

Michael Bell: This decrease was primarily driven by lower clinical study costs following the completion of Eclipse enrollment in Q3 last year. With increased revenue, improved gross margins, and lower operating expenses, our adjusted EBITDA improved significantly from a loss of $101.0 million in Q1 2023 to a loss of $61.1 million in Q1 2024. Moving on to slide 18, cash firms. Free cash flow for the first quarter of 2024 was negative $37 million, which improved significantly year over year compared to negative $82 million in Q1 2023. I'll just read from the slide.

Michael Bell: This decrease was primarily driven by lower clinical study costs. Following the completion of eclipse enrollment in Q3 last year.

Michael Bell: With increased revenue improved gross margins and lower operating expenses, our adjusted EBITDA improved significantly from a loss of $101.0 million in Q1, 2023 to a loss of $61 1 million in Q1 2024.

Michael Bell: Moving on to slide 18, and cash burn.

Michael Bell: Free cash flow for the first quarter of 2024 was negative $37 million.

Michael Bell: Which improved significantly year over year compared to negative $82 million in Q1 2023.

Michael Bell: As you'll see from the slide.

Michael Bell: We have revised our free cash flow guidance for the full year 2024 to be in the range of negative $275 to $285 million, which represents an improvement of 60 to 70 million compared to 2023. The key drivers of this revised 2024 guidance are the improved commercial reimbursement we are receiving for Guardant 360 and a reduction in screening spend. As we have mentioned many times before, our screening spend will be gated by major milestones, the next milestone being FDA approval.

Michael Bell: We have revised our free cash flow guidance for the full year 2024, there's been a range of negative $275 million to $285 million.

Michael Bell: Represents an improvement of $60 million to $70 million compared to 2023.

Michael Bell: The key drivers of this revised 2020 full guidance on the improved commercial reimbursement, we are receiving <unk> 360 <unk>.

Michael Bell: The reduction in screening spend.

Michael Bell: As we have mentioned many times before a screening spend will be gated by major milestones the next milestone being FDA approval.

Michael Bell: While we continue to expect FDA approval for the commercial launch of SHIELD in 2024, the delay to the advisory committee panel meeting means that we've revised that operating plan and, as a result, now expect maximum screening cash flow this year to be $175 million, lower than our previously stated $200 million. On this slide, we've also included a breakdown of the screening cash flow for full year 2024 to provide additional color on the level of investments we're making in screening.

Michael Bell: While we continue to expect FDA approval and commercial launch of <unk> in 2020 for.

Michael Bell: The delay to the Advisory Committee panel meeting means that we've revised our operating plan and as a result, now expect maximum screening cash burn this year to be $175 million.

Michael Bell: Lower than our previously stated $200 million.

Michael Bell: On this slide we have also included a breakdown of the screening cash burn for full year 2024 provides additional color on the level of investments, we're making in screening.

Michael Bell: As you can see, as well as SG&A spend, we're incurring costs and a gross loss to run SHIELD's price for Medicare reimbursement coverage, and we have continued to invest in screening research and development, including our SHIELD Lung Clinical Study, making technology and automation improvements, and continuing to make progress in multi-cancer early detection. We expect the screening cash burn profile to change in 2025, as the gross loss will become a gross profit following ADLT reimbursement, and our shield lung clinical study expense will reduce significantly once enrollment is completed. This will enable us to increase the investment in our commercial operations while not exceeding a maximum net burn for screening of 200 million per year.

Michael Bell: As you can see as well as the SG&A spend we're in carrying costs and a gross loss to windshield time price and Medicare reimbursement coverage and we are continuing to invest in screening research and development.

Michael Bell: Including our shield linked clinical study, making.

Michael Bell: Making technology and automation improvements and continuing to make progress in multi cancer early detection development.

Michael Bell: We expect the screening cash burn profile to change in 2025 as the gross loss will become a gross profit following <unk> reimbursement and our shield lung clinical study expense will reduce significantly once enrollment is completed.

Michael Bell: This will enable us to increase the investment in our commercial operations, while not exceeding the maximum.

Michael Bell: The screening of $200 million per year.

Michael Bell: As we look ahead to the next few years, we're confident that by continuing to generate positive cash flow from therapy selection, driving MRV to profitability, and carefully managing the investment into screening, we can continue to lower our cash burn each year so that we reach cash flow break-even by 2028 or potentially earlier, which is achievable with our current cash balance of $1.1 billion. Now turning to our outlook and assumptions for the full year 2024 on slide 19.

Michael Bell: As we look ahead to the next few years, we're confident that by continuing to generate positive cash flow focused selection driving MLP to profitability and carefully managing the investment into screening.

Michael Bell: Can continue to lower our cash burn each year.

Michael Bell: Reach cash flow breakeven by 2028, while potentially eylea, which is achievable without current cash balance of $1 1 billion.

Michael Bell: Now turning to our outlook and assumptions for the full year 2024 on slide 19.

Michael Bell: We're pleased to be able to make improvements across all guidance metrics. We now expect full year 2024 revenue to be in the range of $675 to $685 million, representing growth of approximately 20 to 21% compared to 2023.

Michael Bell: We're pleased to be able to make improvements across all guidance metrics.

Michael Bell: We now expect full year 2020 for revenue to be in the range of 675 to 695 million.

Michael Bell: Representing growth of approximately 20% to 21% compared to 2023.

Michael Bell: This increase is primarily due to the commercial reimbursement upslides we had in the first quarter and the increase in GARNET 360 ASPs that we expect for the remainder of the year. As a reminder, this guidance doesn't include any revenue contributions from screening, which are dependent on the timing of shield FDA approval and Medicare reimbursement coverage. We'll update our revenue guide to include screening revenue when appropriate. We expect non-GAP gross margin excluding screening to be in the range of 61% to 63%, an improvement from our previous guidance of 60% to 62%.

Michael Bell: This increase was primarily due to the commercial reimbursement upsides, we had in the first quarter and the increase in Ghana III the asps.

Michael Bell: That we expect for the remainder of the year.

Michael Bell: As a reminder, this guidance does not include any revenue contribution from screening which are dependent on the timing just show the FDA approval and Medicare reimbursement coverage.

Michael Bell: Data revenue guidance range includes screening revenue when appropriate.

Michael Bell: We expect non-GAAP gross margin, excluding screening to be in the range of 61% to 63% an improvement from our previous guidance of 60% to 62% again. This is due to increased clinical commercial reimbursement.

Michael Bell: Again, this is due to improved clinical commercial reimbursement. We've lowered our non-GAAP operating expenses to be in the range of $720 to $730 million, representing a flat to 1% year-over-year decline. This decrease is due to the reduction in screening operating expenses, as I just outlined. Finally, as previously mentioned, we expect free cash flow to be in the range of negative $275 to $285 million in 2024. Finally, turn to slide 20 to review our counsellors.

Michael Bell: We've lowered our non-GAAP operating expenses to be in the range of $720 million to $730 million, representing a flat to 1% year over year decline.

Michael Bell: This decrease is due to the reduction in screening operating expenses as I just outlined.

Michael Bell: Finally, as previously mentioned, we expect free cash flow to be in the range of negative <unk> $75 million to $285 million in 2024.

Michael Bell: Finally, turning to slide 20 to review our catalyst.

Michael Bell: As we look ahead to the rest of 2024 and beyond, we have a number of upcoming milestones in each of our key business areas, including the smart liquid biopsy upgrade for JARNA 316 therapy selection, Data Publications, Maldi-X Submission for MRD, and Shield FDA Approval and Marketing. With that, we'll now open the call to questions.

Michael Bell: As we look ahead to the rest of 2024 and beyond we have a number of upcoming milestones in each of our key business areas, including the smart liquid biopsy upgrade for <unk> hundred 16 therapy selection.

Michael Bell: Publications are multi X submission for MRP and.

Michael Bell: Shield FDA approval and launch.

Michael Bell: With that we'll now open the call to questions.

Speaker Change: Thank you.

Kate: We will now begin the question and answer portion of the call. If you would like to ask a question, you may do so by pressing star followed by a one on your telephone keypad. If for any reason you would like to remove your question, you may do so by pressing the star followed by a two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question.

Speaker Change: We will now begin the question and answer portion of the call.

Kate: If you would like to ask a question you may do so by pressing star followed by a one on your telephone keypad.

Kate: If for any reason you would like to remove your question you may do so by pressing star followed by it too.

Kate: As a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question.

Kate: In the interest of time, we do ask that you limit yourself to one question.

Kate: In the interest of time, we do ask that you limit yourself to one question. Again, to ask a question, it is star followed by a one on your telephone keypad. The first question comes from the line of Mark Massaro with BTIG. Mark, your line is now open.

Kate: Again to ask a question. It is star followed by a one on your telephone keypad.

Kate: The first question comes from the line of Mark Massaro with BTG.

Mark Anthony Massaro: Mark Your line is now open.

Mark Anthony Massaro: Hey, guys, congratulations on the strong beat and raise. To limit myself to one question, obviously, you know, we're two weeks away from the FDA approval. I think a lot of people are expecting the conversation to focus on safety and efficacy, as well as some of the other benefits of SHIELD, like patient compliance or patient adherence. But I think there are some questions in the investor community that are focusing on the labeling and the topic of advanced adenomas. Do you guys have a sense for whether or not you think a label conversation will be much of a focus of this meeting? And what are you thinking about

Mark Anthony Massaro: Hey, guys congratulations on the strong beat and raise.

Mark Anthony Massaro: Myself to one question, obviously, we're two weeks away from the FDA AD Com I think a lot of people are expecting the conversation to focus on the safety and efficacy as well as some of the other benefits of shield like the patient compliant patient adherence.

Mark Anthony Massaro: But I think there are some questions in the investor community that that are focusing on the labeling.

Mark Anthony Massaro: And the topic of advanced Adenomas do you guys have a sense for.

Mark Anthony Massaro: Whether or not you think a label conversation will be much of a focus of this of this meeting and how are you thinking about.

Mark Anthony Massaro: Setup.

Mark Anthony Massaro: The tone of questions ahead.

AmirAli Talasaz: Yeah, thank you, Mark. You know, we are excited to get to this point in the review process. In terms of the topic and agenda, all those matters, actually, they're going to get published by agency a couple of days prior to the meeting, and we are just two weeks away from it. So, hopefully, those materials, when they put them in the Federal Registry and become public, will provide some more detailed insight into your question.

Speaker Change: Yes, I knew March.

Mark Anthony Massaro: We are excited to get to this point of the review process.

AmirAli Talasaz: Comes up that pitch on that.

AmirAli Talasaz: Yeah.

AmirAli Talasaz: All of those matters actually published by HFC, a couple of days prior to that meeting just two weeks away from it so.

AmirAli Talasaz: Hopefully those materials by May put it as I said our registry.

AmirAli Talasaz: Public provide some more detailed insight about your question yet.

AmirAli Talasaz: And we are going to that meeting with high confidence about the quality of the study that we've done, and the quality of the device performance that we reported and published. And our team has been working very hard to get ready to get to this point and go through this panel, and we're excited to see how that kind of conversation goes.

AmirAli Talasaz: And if you are going to that meeting with high confidence about the quality of the study.

AmirAli Talasaz: Quality of the device performance that we reported that publish.

AmirAli Talasaz: Our team has been working very hard to get ready to get to this point on a go through this fine now and we are excited to see how that conversation that we've got.

Speaker Change: Thank you.

Jack Meehan: The next question comes from the line of Jack Meehan with Nefron Research. Jack, your line is now open.

AmirAli Talasaz: The next question comes from the line of Jack Meehan with Nephron Research Jack Your line is now open.

Jack Meehan: Thank you. Good afternoon. I wanted to focus on G360 here. I have two questions.

Jack Meehan: Thank you good afternoon.

Jack Meehan: The first is on ASP, so $2,900 to $2,950. I think that was about $50 better than you were guiding. I was curious if there was anything that stood out there, or if it was kind of everything tracking the right way. And then on the volume side, I was wondering if you could peel back some of the drivers to start the year. Were there any cancer indications that stood out, and just how are you feeling about the durability of growth? Thank you.

Jack Meehan: The focus on <unk> hundred 60 here.

Jack Meehan: Two questions. The first is on ASP. So 2000, 902950, I think that was about $50 better than you were guiding.

Jack Meehan: Was curious if there was anything that stood out there or if it was kind of everything tracking in the right way.

Jack Meehan: Then on the volume side I was wondering if you could peel back some of the drivers to start the year, where there any cancer indications that stood out and just how youre feeling about the durability of growth. Thank you.

Michael Bell: Oh, yeah, I can start on that ASP Jack spike. Yeah, you know, I think we had really strong ASP and commercial reimbursement in the quarter. So we're really pleased with that. We knew that we were going to get the uplift from the Medicare increase to 5000 for Guardant 360 LDT, but we also saw really strong reimbursement and payments from commercial payers.

Speaker Change: Oh, yes, I can start on that on the ASP.

Michael Bell: Spike.

Michael Bell: Yes, I think we have we had really strong ASP and commercial reimbursement.

Michael Bell: In the quarter. So we're really pleased with that we knew we were going to get the uplift from the Medicare increased to five <unk>.

Michael Bell: But we also saw really strong.

Michael Bell: Reimbursement in payments from commercial payers.

Michael Bell: Not just for Guardant 360 but also across all of the portfolio, so that had a really positive impact on our ASP. Yeah, as we said in the prepared remarks, We've now increased our expected Guardant 360 ASP to the range of 2,900 to 2,950. So you're right.

Michael Bell: Not just forgotten and 360, but also across all of the all of.

Michael Bell: The portfolio.

Michael Bell: Really positive impacts on our Asps.

Michael Bell: Yes, as we said in the prepared remarks.

Michael Bell: We've now increased our expected.

Michael Bell: <unk> hundred 60, <unk> asps to the range of 2900 $29 50, So youre right. Its about a 50 50 is off.

Michael Bell: And test increase.

Michael Bell: It's about a $50 per test increase. We also said in the proposed remarks, you know, we had approximately $8 million in upside in Q1, and that was related to commercial reimbursement that we received in the quarter that was really out of period. So it was for tests performed in the second half of last year. But even if you strip that $8 million out, you know, still really strong ASP performance, and an increase that we now think for Guardant 360 will flow through for the rest of the year. And some of the volume.

Michael Bell: We also decided remarks, we had.

Michael Bell: Approximately $8 million.

Michael Bell: In Q1 and that was related to commercial reimbursement that we received in the quarter that was really out of period <unk> tests performed in the second half of last year. So.

Michael Bell: But even if you strip that 8 million out.

Michael Bell: So really strong ice cream performance in that increase that we now think we've got a 360 will flow through for the rest of the year.

Michael Bell: And some of the volume.

Michael Bell: Eric remarks, we saw really growth across.

Helmy Eltoukhy: All indications are for a 360. We saw growth in terms of both breadth and depth. And depth, I would say, was obviously a bigger percentage of the growth given So, I think that's essentially how widespread G360 is, but we've been very pleased with the start of the year. Obviously, we had a fantastic quarter, and I think it bodes well, especially for the second half, as some of our initiatives that are just getting started look to be really taking off in the right way. International volumes are picking up. We have the NHS engagement with 10,000 lung cancer patients.

Michael Bell: Really all indications for 360.

Helmy Eltoukhy: We saw growth in terms of both breadth and depth in depth as I would say it was.

Helmy Eltoukhy: Obviously, a bigger percentage of the growth given.

Helmy Eltoukhy: Essentially.

Helmy Eltoukhy: <unk> spread <unk> hundred 60 years, but we've been very pleased with the start of the year, obviously weather and just the quarter end.

Helmy Eltoukhy: I think it bodes well, especially for the second half as some of our initiatives.

Helmy Eltoukhy: That are just getting started look too.

Helmy Eltoukhy: Really taking off in the right way international volumes are picking up.

Helmy Eltoukhy: NHS.

Helmy Eltoukhy: Sort of engagement with the 10000 lung cancer patients and then all the EMR work. We've been doing is really just getting started we're seeing I think considerable increase in depth and those accounts as they start.

Helmy Eltoukhy: And then, all the EMR work we've been doing is really just getting started. We're seeing, I think, a considerable increase in depth in those accounts as they start getting engaged with our EMR integration. So we're picking up the pace of some of that, and I think it's going to be really nice growth.

Helmy Eltoukhy: Getting engaged with our EMR integrations.

Helmy Eltoukhy: So we are picking up the pace of some of that I think it's going to be.

Helmy Eltoukhy: Really nice growth driver for the next couple of years.

Helmy Eltoukhy: Yeah.

Daniel Anthony Arias: The next question comes from the line of Dan Arias with Stiefel. Dan, your line is:

Helmy Eltoukhy: The next question comes from the line of Dan Arias with Stifel. Your.

Daniel Anthony Arias: Your line is now open.

Daniel Anthony Arias: Afternoon, guys. Thanks for the questions here, Mike on <unk>, what do you have as a revenue target for review at this point for 2024, and then can you or how can you maybe talk to the extent to which you are holding back on reveal because of the cost headwinds that come out of that is it possible that you get to the point where.

Daniel Anthony Arias: Opening up the spigot, a bit and getting the test use becomes at least as important as safe guarding asps.

Daniel Anthony Arias: Especially since it sounds like Youre, making some cogs improvement there.

Michael Bell: Yeah, I can, I can, I can start on it. Am I to review it?

Daniel Anthony Arias: Yes, I can.

Daniel Anthony Arias: I can start on.

Daniel Anthony Arias: Our monthly revenue.

Daniel Anthony Arias: We're not.

Helmy Eltoukhy: We're not, and we're not breaking that out for 2024. You know, we said last year that the revenue for review was in the sort of low double digit millions. And obviously, we expect it to grow this year because we are growing the volume. And we are seeing nice traction with the ASP. So, that revenue will grow, but I think we don't particularly want to be breaking out the revenue by all of the different products. I don't know, Helmy, if you want to...

Daniel Anthony Arias: That we're not breaking that out for.

Helmy Eltoukhy: For 2024, we said last year that the revenue for a review of what's in the sort of.

Helmy Eltoukhy: Low double digit millions.

Helmy Eltoukhy: Honestly, we we expect it to grow this year, where we.

Helmy Eltoukhy: We are growing the volume.

Helmy Eltoukhy: And we are seeing nice traction with the asps. So so that revenue growth, but I think we don't particularly want to be breaking out the revenue by all of the all of the different products.

Helmy Eltoukhy: Yeah, no, I mean, I think we see a tremendous volume out there, as I said.

Helmy Eltoukhy: Yes, no I mean I think.

Helmy Eltoukhy: We see I think tremendous volume out there as I said in the prepared remarks, there are 12 million cancer survivors that are five years out from surgery and so they really are untapped population, we're seeing so much latent demand out there, especially in that population that there really are no tests that are suitable for them.

Helmy Eltoukhy: In the prepared remarks, there are 12 million cancer survivors that are five years out from surgery, and so they really are an untapped population. We're seeing so much latent demand out there, especially in that population, and there really are no tests that are suitable for them today. Really, the major impediment to getting that volume has really been where AHPs are and where the cause is, and all of that will likely be much, much improved once we get the surveillance. CRC Indication And once we're through some of these COGS reduction initiatives, and we see the gross margin profile looking really, really nice at 25.

Helmy Eltoukhy: Really the major sort of impediment to getting that.

Helmy Eltoukhy: Volume has really been the kind of sort of where it is or and what are the causes and all of that.

Helmy Eltoukhy: We will likely be.

Helmy Eltoukhy: Much much improved.

Helmy Eltoukhy: Once we get the surveillance.

Helmy Eltoukhy: <unk> indication and once were.

Helmy Eltoukhy: But through some of these cogs reduction initiatives and so we see the gross margin profile looking really really nice and 25 and beyond and once we are gross margin positive.

Patrick Bernard Donnelly: Unknown Speaker Once we're gross margin positive, we'll be taking the governor off and really putting the pedal to the metal in terms of that volume. And, but yeah, we feel very good in terms of our positioning now in terms of where our volumes are. And so right now, we don't see a need to necessarily burden you. The next question comes from the line of Patrick Donnelly with Citi. Patrick, your line is now open.

Patrick Bernard Donnelly: We'll be taking the governor on off and really putting the pedal to the metal in terms of that volume.

Patrick Bernard Donnelly: And but yes, we feel very good at it in terms of our positioning in terms of where volumes are.

Patrick Bernard Donnelly: And so right now we don't see a need to necessarily burn more cash.

Patrick Bernard Donnelly: The next question comes from the line of Patrick Donnelly with Citi. Patrick Your line is now open.

Patrick Bernard Donnelly: Hey, great guys. Thanks for taking the questions.

Patrick Bernard Donnelly: Help me, maybe one on the clinical volumes following up there.

Patrick Bernard Donnelly: 20% growth in the quarter could you talk about what you're seeing there just.

Patrick Bernard Donnelly: Just the volume expectations, we work our way through the year sort of be curious in terms of the Mardi impacting.

Patrick Bernard Donnelly: You guys are taking some volume while at the same time holding back a little bit just given they're not not profitable volumes at the moment.

Patrick Bernard Donnelly: Great. If you could just talk through the MLD balance of again, just that clinical volume.

Patrick Bernard Donnelly: What you saw in the quarter and the outlook as we work away through the year. Thank you.

Helmy Eltoukhy: Yeah, no, I mean, we're very pleased with the start of the year in terms of, you know, our

Patrick Bernard Donnelly: Yes, no I mean, we're very pleased with the start to the year in terms of.

Helmy Eltoukhy: Unknown Speaker We're seeing growth across all tumor types, you know, all product lines. And so we're very pleased with where that's going. I think the mix is getting nice for us, just in the sense we're managing some of those reveal volumes. And, you know, and so, like, I think the major thing for us is, I think, some of the growth initiatives we have, which are, as I said, EMR integration, and some of the international stuff.

Patrick Bernard Donnelly: Our clinical volumes across the board.

Helmy Eltoukhy: We're seeing growth across all tumor types are all product lines.

Helmy Eltoukhy: And then I think what we're very excited about, you know, I think the second half of this year, the smart liquid bias, transition. We're saying that even before that, we're doing really well in the market. Obviously, there's, you know, competition that ebbs and flows, but we're still saying that the current products we have are really best in class from a sensitivity and turnaround time. And that is really the major differentiator in terms of what liquid biopsies need to do to save patients' lives. But as we start transitioning to smart liquid biopsy,

Helmy Eltoukhy: And so we're very pleased with where that's going I think that mix.

Helmy Eltoukhy: Is getting nice for us just in the sense, we're managing some of those <unk>.

Helmy Eltoukhy: <unk> volumes.

Helmy Eltoukhy: And so I think the major thing for US is I think some of the growth initiatives, we have which are.

Helmy Eltoukhy: As I said EMR integration some of the international stuff.

Helmy Eltoukhy: And then I think what we're very excited about the second half of this year, the smart liquid biopsy transition.

Helmy Eltoukhy: We're seeing that.

Helmy Eltoukhy: Even before the we're doing really well in the market. Obviously, there is competition that ebbs and flows, but we're still saying that the current products. We have a really best in class from a sensitivity from a turnaround time and that is really the major differentiator in terms of what liquid biopsies need to do.

Helmy Eltoukhy: Patients' lives, but as we start transitioning to a smarter liquid biopsy.

Helmy Eltoukhy: <unk> seen from the pharma demand that has been a really exciting and really strong.

Helmy Eltoukhy: From the conversations we've had at ACR with some of the new data around smart liquid biopsy and epigenomics, we're really going to...

Helmy Eltoukhy: From the conversations we've had at ACR with some of the new data around smart liquid biopsy epigenomics.

Helmy Eltoukhy: That we're really going to raise the bar considerably in terms of what physicians expect from their test in terms of the capabilities and doing things that are even difficult to do in tissue as I highlighted in the call.

Helmy Eltoukhy: And we think that is going to sort of, you know, sort of put us into sort of overdrive once all of that is out in the market, especially in tumor types, whereas comprehensive genomic profiling really hasn't been that useful outside of breast, lung, and colorectal. And so we think epigenomics and smart lipid biopsy will sort of catalyze a lot of that volume that is still out there and still in its early stages.

Helmy Eltoukhy: We think that is sort of.

Helmy Eltoukhy: Sort of put us into sort of overdrive once all of that is.

Helmy Eltoukhy: He is out in the market, especially in tumor types.

Helmy Eltoukhy: Whereas comprehensive genomic profiling really havent hasnt been that useful outside of breast lung and colorectal and so we think epigenomics and smart with a biopsy.

Helmy Eltoukhy: We'll sort of catalyze a lot of that volume that is.

Helmy Eltoukhy: Still out there still in its early innings.

Sung Ji Nam: The next question comes from the line of Sung Ji Nam with Scotiabank. Sung Ji, your line is now open.

Helmy Eltoukhy: The next question comes from the line of Tim genome with Scotiabank.

Speaker Change: Your line is now open.

AmirAli Talasaz: Hey, this is Corey Rosenbaum. I'm from Sungjee.

Sung Ji Nam: Hey, this is Corey Rosenbaum for sung <unk>, thanks for taking my questions.

Corey Rosenbaum: One of your peers mentioned yesterday that the USPS TF update timing is more likely to come in 2027.

Corey Rosenbaum: Would you have additional insight into that and with the delay in timing there materially impact your commercial strategy for shield following da approval. Thanks.

Corey Rosenbaum: Yeah sure.

Corey Rosenbaum: We heard about that.

Corey Rosenbaum: Finally, we tried to actually see if we can't find any confirmation I in fact, USPS DFS they've had no indication that they're intending to delay.

Corey Rosenbaum: Their process.

Corey Rosenbaum: Thanks drew.

Corey Rosenbaum: Draft Research plan.

Corey Rosenbaum: CRC screening should come out sometime this year.

Corey Rosenbaum: Thank you because I kept their website during last few weeks and a couple of new research draft.

Corey Rosenbaum: Draft Research plan, it's about actually.

Corey Rosenbaum: Published on their website.

Corey Rosenbaum: But we are not FMC my entered the field in terms of their roadmaps that we talked about in terms of our expansion.

Corey Rosenbaum: Eric look cat actually solve the milestones before we go to resolve to expand sheds.

Corey Rosenbaum: And lots of milestones for 2006 is.

Corey Rosenbaum: Get into that USPS guidelines also maybe take the opportunity on notes to the import us out.

Corey Rosenbaum: Alright, Thank capture society guideline that youre expecting hopefully sometime in 2020 five.

Corey Rosenbaum: Yes, good catalyst into Sps pent up on shop.

Corey Rosenbaum: I just saw adoption of this test also reimbursement Asps stories and states that they have sub state level.

Corey Rosenbaum: Mandates to cover CRC screening test commented by Acs.

AmirAli Talasaz: Thanks for taking my questions. So one of your peers mentioned yesterday that the USPSTF update timing is more likely to come in 2027. Would you have additional insight into that? And would a delay in timing there materially impact your commercial strategy for SHIELD following DA approval?

Corey Rosenbaum: Thanks for the info the next.

AmirAli Talasaz: Yeah, actually, so we heard about that, and we finally tried it.

Speaker Change: The next question is from the line of <unk> <unk> with Guggenheim Excuse me. Your line is now open.

AmirAli Talasaz: to actually see if we can find a confirmation. In fact, the USPSC has given no indication that they are intending to delay their process and continue to think about their draft research plan. Your CRC screening should come out sometime this year. In fact, if you look at their website over the last few weeks, you know, a couple of new research drafts, you know, draft research plans that have actually been published on their website.

AmirAli Talasaz: But we are going to have to monitor the field, you know, in terms of the roadmap that we talked about in terms of our expansion, we are going to look at actually some of the milestones before we go through some of the expansion. And one of the milestones for 26 is getting to the USPSCF guidelines. Also want to maybe take the opportunity and note the importance of American Cancer Society guidelines that we're expecting, hopefully sometime in 2025, that would be a good catalyst in this field, opening up a bunch of, I just saw adoption of this test stories and also reimbursement ASB stories in states that they have at some state level mandates to cover CRC screening tests recommended by ACF.

AmirAli Talasaz: Hey, guys. This is Brandon on for Subaru.

Speaker Change: A question.

AmirAli Talasaz: In terms of therapy selection, we got some feedback that.

AmirAli Talasaz: Some competitors are offering a combination immunohistochemistry or IAC. In addition to MTS capabilities for other markers the sides PDL one.

AmirAli Talasaz: Do you anticipate offering this kind of combined approach at the protein level with garden entity, and just any kind of general comments around the outlook there. Thanks.

AmirAli Talasaz: Yes.

AmirAli Talasaz: This is a difficult thing to add to the menu to something that is requested I mean, I think the exciting thing about infinity that it works in blood.

AmirAli Talasaz: Honestly I see the tissues.

AmirAli Talasaz: What we can do with infinity in terms of some of the applications were saying.

AmirAli Talasaz: Or even difficult to do in tissue frankly, and so we're.

AmirAli Talasaz: Youre talking about is commodity things that anyone in the world can do we're talking about breakthrough things that only garden can do in terms of what we're adding to the platform, but just like with added tissue that PDL one.

AmirAli Talasaz: Can add some of those base layers as if and when the market.

AmirAli Talasaz: Yes.

AmirAli Talasaz: Fairly simple.

AmirAli Talasaz: Thanks for the insight. The next question is from the line of Subbu Nambi with Guggenheim. Subbu, your line is now open. Hey guys, this is Brandon on Cristobu. Question. In terms of therapy.

AmirAli Talasaz: The next question comes from the line of Kyle <unk> with Canaccord Genuity Kyle Your line is now open.

Subbu Nambi: The next question is from the line of Subbu Nambi with Guggenheim. Subbu, your line is now open.

Helmy Eltoukhy: Yeah, I mean, that's not a difficult thing to add to the menu to something that, you know, is requested. And I think the exciting thing about infinity is that it works in blood. Obviously, I see the tissues and what we can do with infinity in terms of some of the applications we're seeing are even difficult to do in tissue, frankly. And so we're, you know, what you're talking about are commodity things that anyone in the world can do. We're talking about breakthrough things that only Guardant can do in terms of what we're adding.

Helmy Eltoukhy: that only Guardant can do in terms of what we're adding to the platform. But, you know, just like we've added tissue, we've added PD-L1, we can add some of those base layers if and when the market needs them.

Alex: Hi, This is Alex.

Speaker Change: First one for Carl let Tim Thanks for taking my call. One quick question. So grow obviously, there was a release their form 10 and Form 10-Kind of a build.

Helmy Eltoukhy: Pretty extensive historical information regarding solid revenue growth over time.

Helmy Eltoukhy: One one point here could you just discuss besides the obvious multi cancer or single cancer. How are you different yourselves yourself between these different multi cancer testing shield and also do you believe the gallery.

Kyle Alexander Mikson: The next question comes from the line of Kyle Mixon with Canaccord Genuity. Kyle, your line is now open. Hi, this is Ashton.

Ashton: In a way a proof point that blood based screening could in fact be successful on a wider scale. Thank you.

Kyle Alexander Mikson: Yeah.

Alexey Kisselman: Hi, this is Alexey Kisselman on behalf of Kyle Mikson. Thanks for taking my call. One quick question. So GREL, you know, obviously, they recently released their Form 10, and their Form 10 kind of revealed, you know, pretty extensive historical information regarding, you know, solid revenue growth over time. One point here, could you just discuss, you know, besides the obvious multi-cancer versus single cancer, how you differentiate yourself between these different multi-cancer tests and SHIELD? And also, do you believe that Gallery is, in a way, a proof point that blood-based screening could in fact be successful on a wider scale? Thank you.

Ashton: Okay. So.

AmirAli Talasaz: Okay, so it's, you know, it's hard to comment on other kinds of companies, you know, tend to file by in terms of the landscape. You know, scientifically, technologically, with a simple blood test, you can do multi-cancer screening and early detection. But what we do believe is you need to have a pathway to make sure that those innovations are accessible to a wide set of people to really open up those markets.

Alexey Kisselman: Yeah.

Alexey Kisselman: It's hard to comment on either kind of comp.

AmirAli Talasaz: Turning to your filing by in general in terms of the landscape.

AmirAli Talasaz: Scientifically technology suite.

AmirAli Talasaz: Simple blood test that can do multi task for screening and it take shot but what we do believe is and it's not bad.

AmirAli Talasaz: Pathway to make sure those innovation would be accessible.

AmirAli Talasaz: For wide set of population.

AmirAli Talasaz: To really open up those markets.

AmirAli Talasaz: And I think over time, we just got more confident about our strategy to start with a single cancer, like colon cancer, that there are pathways for approval, pathways for Medicare reimbursement, pathways for task force review, and then expand from that lead indication into other cancer types, like we are doing a lung cancer screening study, and we are working on some multi-cancer early detection kind of application. But CRC is going to be our entrance and the pillar point of getting to this market and really making the test accessible. I think for other AMCET tests, FDA PATH reimbursement There are many, many barriers. And we'll see over time how that strategy pans out.

AmirAli Talasaz: And I think over time, we just got more confidence about our strategy to start with a single cancer in my colon cancer that are pathways for approval pathways for Medicare reimbursement pathways for Task Force review, and then expand from that leading indication into either.

AmirAli Talasaz: <unk> likelihood of J&J lung cancer screening study, yes, we are working on some multi cancer early.

AmirAli Talasaz: Detection of kind of applications, but CRC as KBR.

AmirAli Talasaz: <unk>.

AmirAli Talasaz: Really aimed transplanted pillar points up get into this market and really making that test accessible.

AmirAli Talasaz: Thanks for either <unk>, SaaS SBA pads reimburse Matt.

AmirAli Talasaz: Any barriers and we'll see over time.

AmirAli Talasaz: That strategy would pan out.

Tejas Rajeev Savant: The next question comes from the line of Tejas Savant with Morgan Stanley. Tejas, your line is now open.

AmirAli Talasaz: The next question comes from the line of Tejas Savant with Morgan Stanley Hey, Josh Your line is now open.

Tejas Rajeev Savant: Hello, this is Yuko on the call for Tejas. Thank you for taking my questions. The recently finalized LDT regulation notes that FDA generally expects compliance with pre-market review for currently marketed LDTs if there are certain modifications that may affect the test's basic safety and effectiveness profile. Given tests like G360 go through multiple versions, improving performance over time, would changes in ALGO constitute a modification under this finalized rule? And then a quick follow-up. Also, as we think about future test development, would it be fair to assume 100 or 200 BIPs as a headwind to medium-term gross margin as the rules go?

Tejas Rajeev Savant: Hello. This is Hugo on the call for T. J Ross. Thank you for taking my questions.

Tejas Rajeev Savant: We finalized all the deregulation of the FDA generally expect compliance with pre market review for currently marketed Ldp's. If there are certain modifications that may affect us basic safety and effectiveness profile given to us like G. III 60 go through multiple versions improving performance over time with changes and I'll go Cubs.

Tejas Rajeev Savant: The tutto modification under this finalized rule.

Tejas Rajeev Savant: And then.

Tejas Rajeev Savant: Quick follow up also as you think about future test development would it be fair to assume 100 or 200 bps headwind to medium term gross margin of the rules go into effect.

Helmy Eltoukhy: You know, I think the rules that came out from the FDA are something that I think was largely expected. And if anything, maybe the bar was a little bit lower than What is usually telegraphed, you know, where we are is we have Guardant 360 CDX, which has been sort of under the framework of FDA approval, we've done multiple.

Speaker Change: No I think.

Speaker Change: The rules that came out from the FDA or something but I think it was largely expected and if anything maybe the borrowed a little bit lower than <unk>.

Helmy Eltoukhy: What is really telegraphed.

Helmy Eltoukhy: Where we are is we have gardens, 60, CTX, which.

Helmy Eltoukhy: Has it been sort of under the framework of FDA, we've done multiple upgrade software upgrades to the garden <unk> pet.

Helmy Eltoukhy: Upgrades, software upgrades to Guardant 360 CDX under sort of that FDA framework. And so we have those capabilities. We're very familiar with it. We've successfully operated under that. And so, yeah, this is really not a change in almost any way in terms of our business, and it has a very minimal impact.

Helmy Eltoukhy: Under.

Helmy Eltoukhy: Sort of.

Helmy Eltoukhy: That FDA framework and so we have those capabilities, we're very familiar with it we have successfully operated under that.

Helmy Eltoukhy: And so yes. This is really not a change in almost any way in terms of our business.

Helmy Eltoukhy: Very minimal.

Helmy Eltoukhy: Yeah.

Daniel Gregory Brennan: The next question comes from the line of Dan Brennan with TD Cohen. Dan, your line is now open. Perfect. Thank you. Thanks for the questions and congratulations.

Helmy Eltoukhy: The next question comes from the line of Dan Brennan with PD Cohen and your line is now open.

Daniel Gregory Brennan: Perfect. Thank you thanks for the questions and congrats on the quarter.

Daniel Gregory Brennan: Maybe just zooming in on my Garden 360 clinical for a moment.

Daniel Gregory Brennan: Could you just give us a sense overall.

Daniel Gregory Brennan: Clinical volumes came in a little bit above our expectations and.

Daniel Gregory Brennan: And we felt like after a really strong growth last year like you guys had set a reasonably conservative bar just wondering could you speak to any color on how going 306 clinical volumes in the quarter and.

Daniel Gregory Brennan: Kind of what Youre seeing in the marketplace.

Daniel Gregory Brennan: Kind of how we think about the progression throughout the rest of the year.

Michael Bell: Yeah, I can talk about the volumes for the quotes. I mean, you know, the overall clinical volume of 20% came in line with our expectations. The same is true for Guardant 360. So, you know, it fits in very nicely. And, you know, Q1 was a difficult comp for us because, in February of last year, we had the ESR1 approval, and we saw an immediate uptick in breast volume for Guardant. And we know for Q2, we're going to have an even more difficult comp.

Daniel Gregory Brennan: Yes, I can talk about the <unk>.

Michael Bell: <unk> for the quarter.

Michael Bell: We said the overall clinical volume, 20% came in with our in line with our expectations. The same is true for guidance of $3 60.

Michael Bell: So it can be a very nicely.

Michael Bell: Im.

Michael Bell: Q1 was a difficult comp for us because.

Michael Bell: In February of last year, we at the ESI, one approval and we saw an immediate uptake in the breast volume for <unk> and we know for sure.

Michael Bell: So I think, you know, we were really pleased with how the G360 volume came in the first quarter. Yeah, Q2 is going to be a harder comp, but we still think we're going to see continued sequential growth. And I think we're looking at higher year-over-year volume growth for G360 in the back half of the year.

Michael Bell: For Q2, we're going to have an even more difficult comps. So I think we will.

Michael Bell: We're really pleased with.

Michael Bell: <unk> hundred 60, <unk> came in the first quarter.

Michael Bell: Q2 is going to be hard to come but we still think we can get out going to see continued sequential growth.

Michael Bell: And I think we're looking at.

Michael Bell: Higher year over year volume growth for <unk> hundred 60 in the in the back half of it yet.

Helmy Eltoukhy: I don't know how many of them. Yeah, no, I mean, like, I think we're excited for the second half because we're just seeing a lot of initiatives we have.

Speaker Change: Yeah, No I mean, Mike I think we're excited where the second half because we're just seeing a little bit initiatives. We have I think are really going to stick in terms of as I said.

Helmy Eltoukhy: are going to stick in terms of, as I said, EMR integration, international, and smart liquid biopsy transition. So yeah, we started off, I think, better than we expected. And I think it's going to be a good year in general.

Helmy Eltoukhy: EMR integration international Smart liquid biopsy transition so yeah, we do.

Helmy Eltoukhy: Got it up I think better than we expected them.

Helmy Eltoukhy: I think it's going to be.

Helmy Eltoukhy: A good year in general.

Helmy Eltoukhy: Okay.

Eve Bernstein: The next question comes from the line of Eve Bernstein with Bernstein Research. Eve, your line is now open.

Helmy Eltoukhy: The next question comes from the line of <unk> Burstein with Bernstein research.

Eve Bernstein: Your line is now open.

Alberto Bucciolato: Hi, this is Alberto Bucciolato on behalf of Eve. Thank you for taking my question. I wanted to ask more of a long-term question. You have more than a billion dollars in convertible debt due in 2027, and we have already seen some other companies being penalized for that.

Eve Bernstein: Hi, this is a vegetable gelato encore, but thank you for taking my question I wanted to ask more of a long term question you have more of that billion dollars in convertible debt due in 2027, we already have seen some other company to be penalized for that.

Alberto Bucciolato: During your Investor Day, you showed that you don't plan to be cash flow positive.

Speaker Change: For 28.

Alberto Bucciolato: We are assuming that you will need to raise money for that so what are the options, you're considering or you have any.

Alberto Bucciolato: This discussion now and are you from.

Michael Bell: During your investor day, you shared that you don't plan to be cash flow positive before 28. We are assuming that you will need to raise money for that. So what are the options you're considering? Are you having this discussion now? And are you thinking about raising more of your expense profile ahead of that?

Alberto Bucciolato: You talked about your expense profile, how does that.

Michael Bell: Yeah, I mean, I think the first thing you would say is, "You know, our cash balance at the end of this quarter was over $1.1 billion. And, you know, I think we've been pretty consistent in saying that over the next few years, our cash balance is going to come down every year. And to get to that sort of break-even level in 2028, you know, the cash that we've got is more than sufficient to get us there.

Michael Bell: Yes.

Speaker Change: I think the first thing to say.

Michael Bell: <unk> is.

Michael Bell: Cash balance at the end of.

Michael Bell: This quarter was over one 1 billion.

Michael Bell: And I think we've been pretty consistent in saying that over the next few years.

Michael Bell: Cash burn is going to come down every year and that to get to that sort of breakeven level.

Michael Bell: In 2028.

Michael Bell: The cash that we've got is it's more than sufficient to get us and in fact with the traction that we're seeing with asps.

Michael Bell: And in fact, you know, with the traction that we're seeing with ASPs and actually the reduction in cash burn that we've just brought down for the full year just now, I think there's potential that we can get to that break-even level for the company potentially earlier than 2028. So, yeah, we're really focused on how quickly we can drive to profitability. As far as the convertible goes, yeah, I mean, we're well aware of that. You know, at the moment, you know, it's got a 0% coupon. Its maturity is at the end of 2027.

Michael Bell: And actually the reduction in.

Michael Bell: And cash burn that we've just.

Michael Bell: Brought down for the full year just now.

Michael Bell: The potential that we can get to that breakeven level for the company potentially earlier than 2028. So we're really focused on how quickly we can drive to profitability as far as the converse of OEM.

Michael Bell: Well aware of that.

Michael Bell: In a moment.

Michael Bell: It's got a zero percent coupon.

Michael Bell: Its maturity at the end of 2027 and so.

Michael Bell: And so, you know, we're feeling relatively comfortable with having that on the balance sheet at the moment. But, you know, we're continually looking at what our options are. You know, we're talking to a lot of people. We want to make sure that we make the right decision and do the right thing.

Michael Bell: We're feeling relatively comfortable with.

Michael Bell: With having that on the on the balance sheet at the moment, but.

Michael Bell: Continue to looking at whatever what our options are.

Michael Bell: We're talking to a lot of people, we want to make sure that we make the right. The right decision and do the right thing, but I think <unk> got the advantage of time on our side, but yes, it's something we're aware of and.

Michael Bell: No we need to address it at some point in the future.

Puneet Souda: The next question comes from the line of Puneet Souda with Lerink Partners. Puneet, your line is now open.

Michael Bell: The next question comes from the line of Tony <unk> with Leerink Partners. Your line is now open.

Puneet Souda: Okay, guys. Yeah, thanks for the question.

Puneet Souda: Hey, guys.

Puneet Souda: Thanks for the question so.

AmirAli Talasaz: So I know you're not providing much on the advisory committee, but just wondering, is frequency, will the frequency of assays be a consideration there? And then maybe just looking competitively across the landscape; we have seen some readouts. There are some expected readouts that are coming as well later this year. Does that change your view at all in terms of how the shield is positioned competitively in the marketplace if there is a competitor that has maybe a larger commercial presence introducing an asset down later this year? Does that change any thinking on your end as to how you're progressing with the shield?

Puneet Souda: I know youre not providing much on the advisory committee, but just wondering is frequency will be frequency of assay would be a consideration there.

AmirAli Talasaz: And then maybe just looking competitively across the landscape. We have some seen some readouts. There are some expected readouts that are coming as well later this year.

AmirAli Talasaz: Does that change your view at all in terms of how the field is positioned.

AmirAli Talasaz: Lee in the marketplace. If there is a competitor that has maybe a larger commercial presence introducing an assay down.

AmirAli Talasaz: Later this year does that change.

Speaker Change: Anything king.

AmirAli Talasaz: On your end as to how Youre progressing with.

AmirAli Talasaz: Sure.

AmirAli Talasaz: Paul.

AmirAli Talasaz: Yeah, Puneet, so in terms of the outcome, you know, we are going to that meeting very confident and excited, and in terms of really the final topic, final agenda, like it's going to get released a couple of days before the meeting by agency and potential changes that could happen at any time by them. So, we are gonna have all the final information very soon. We are literally just two weeks away from that ad con date right now. [inaudible] In terms of actual competitor data, S.H.I.E.L. D.

Speaker Change: Yes, so in terms of the AD com.

AmirAli Talasaz: We are going into that meeting.

AmirAli Talasaz: Very confident and excited travel freely.

AmirAli Talasaz: Final topic final agenda like Sky get released by a couple of days before the meeting by agency.

AmirAli Talasaz: Potential changes that could happen anytime right that so Eric I now have all the final information very soon here just literally two weeks away from that at Cod dates right now.

AmirAli Talasaz: In terms of actually.

AmirAli Talasaz: Dave.

AmirAli Talasaz: Sure.

Rachel Battenthal: It is the best in class technology, the best in class performance, and now we have further extended a kind of a first mover time advantage. And frankly, like, you know, I'm not sure if we are seeing any credible competing blood tests at this time. So we are going to continue to monitor the field, but with this time advantage performance that we have here in the very late innings of FDA approval. And we feel very comfortable with where we are competitively.

AmirAli Talasaz: Shiel is the best in class technology.

Rachel Battenthal: The best in class performance.

Rachel Battenthal: And now we deferred or extend that kind of first of all of our time advantage.

Rachel Battenthal: And frankly, I am not sure if youre seeing any credible comp kicking blood test.

Rachel Battenthal: This time, so we are going to constantly monitor our SPL, but with this time advantage performance that we have here in the very late innings of FDA approval.

Rachel Battenthal: <unk>.

Rachel Battenthal: We feel very comfortable with where we are competitively and we'll see if anybody else is going to have anything at the end of the day. So.

Rachel Battenthal: And we'll see if anybody else is gonna have anything at the end of the day. So we are even more excited about the opportunity right now than we were a few quarters ago. The next question comes from the line of Rachel Battenthal with J.P. Morgan. Rachel, your line is now open. Great, thank you. This is Casey Woodring on for Rachel. So biopharma had a strong quarter; test volumes were up.

Speaker Change: Yeah, you bet more excited about the opportunity right now.

Casey Rene Woodring: For your quarters ago.

Michael Bell: The next question comes from the line of Rachel Battenthal with J.P. Morgan.

Casey Rene Woodring: The next question comes from the line of Rachel <unk> with J P. Morgan Rachel Your line is now open.

Michael Bell: Great. Thank you this is Casey woodring onto Rachel.

Casey Rene Woodring: So biopharma had a strong quarter test volumes were up 37% I think revenue was up 40% <unk> was obviously a strong quarter from our Biopharma funding perspective. So can you just walk us through the rationale for reiterating your 2024 revenue forecast there for low teens growth and maybe how much upside there would be to that number if funding were to hold at current levels or even.

Casey Rene Woodring: Continue to improve here relative to.

Casey Rene Woodring: We're funding levels, where when you initiated the guide thank you.

Rachel Battenthal: Yeah, I can take this. Yeah, Biopharma came in incredibly strongly for us in the first quarter. You know, we had a strong pipeline coming into the year, and so that came through. You know, looking at our pipeline now, it's still very strong.

Casey Rene Woodring: Yeah I can take this.

Rachel Battenthal: Biopharma came in and credit incredibly strongly for us in the first quarter. We had we had a strong pipeline.

Rachel Battenthal: Into the year.

Rachel Battenthal: And so that came through and looking at our pipeline now it's still it's still very strong I think we said in our prepared remarks.

Michael Bell: I think we said in our prepared remarks, you know, we're sort of maintaining our overall guide for Biopharma, just really, we want to be conservative. We want to just ensure that there are no adverse impacts on biopharma funding, so the macro environment that might, you know, cause a potential reduction in the back half of the year. So, definitely, there's upside in the back half of the year for us on biopharma, although quantifying that is difficult.

Michael Bell: Maintaining our overall guide for Biopharma, just really we wanted to be conservative.

Michael Bell: Want to just ensure that there is no adverse impacts to the biopharma funding.

Michael Bell: So the macro environment that might cause.

Michael Bell: Potential reduction in the back half of DSO definitely does upside in the back half of the year for us on Biopharma.

Michael Bell: Defy that is.

Michael Bell: It's difficult.

Michael Bell: I think if you sort of back into.

Michael Bell: I think if you sort of back into our guide, where we're almost sort of guiding to sort of flat year-over-year in the back half of the year. So I think, yeah, we feel hopeful that we can have upside there. But again, it's difficult to quantify, but the pipeline is looking strong for us in the near term.

Michael Bell: Our guide.

Michael Bell: We're almost sort of guiding to sort of flat year over year in the back half of the year. So I think.

Michael Bell: Yes, we feel we feel hopeful that.

Michael Bell: We can have upsized up again, it's difficult to quantify but.

Michael Bell: The pipeline is looking strong for us.

Michael Bell: In the midterm.

Matthew Carlisle Sykes: The next question comes from the line of Matthew Sykes with Goldman Sachs. Matthew, your line is now open.

Michael Bell: The next question comes from the line of Matthew Sykes with Goldman Sachs. Matthew Your line is now open.

Will Ortmeier: Hi guys, good afternoon. Thanks for taking our questions. This is Will Ortmeier on behalf of Matt.

Matthew Carlisle Sykes: Hi, guys. Good afternoon. Thanks for taking our questions. This is <unk> on for Matt.

Will Ortmeier: Great to see the gross margin rate to start the year sounds like the higher I S. T was probably a big driver there, but can you give us some more color on any other drivers or moving pieces, you're seeing and what are your expectations for phasing on gross margin for the rest of the year. Thank you.

Will Ortmeier: Yes, no we were really pleased on the gross margin and the real driver there.

Will Ortmeier: What was the ASP.

Will Ortmeier: Great to see the gross margin raised to start the year. Sounds like the higher ASP was probably a big driver there. But can you give us some more color on any other drivers or moving pieces you're seeing? And what are your expectations for phasing out gross?

Will Ortmeier: And so.

Will Ortmeier: As we said in our prepared remarks.

Will Ortmeier: Great.

Will Ortmeier: Expectation of Asps.

Will Ortmeier: Asps have gone up to 60 for the remainder of the year.

Will Ortmeier: We also saw goods.

Will Ortmeier: Good commercial reimbursement on reveal and tissue next as well so if that was to continue through the potential.

Will Ortmeier: Potential.

Will Ortmeier: Upside there on the gross margin.

Will Ortmeier: We do want to.

Will Ortmeier: Offsetting that a little bit.

Will Ortmeier: By the mix.

Will Ortmeier: Managing our reveal volume mix, if we went to <unk>.

Will Ortmeier: The source of the brake on reveal that could have an impact.

Will Ortmeier: Those are the different mix impacts as well that we track that we tried to manage but overall, we're really pleased.

Michael Bell: Yeah, no, we were really pleased with the cross-margin. The real driver for this course was the ASP impact. And so, you know, as we said in the prepared remarks, we raised our expectation of ASP for Guardant 360 for the remainder of the year. We also saw good... good commercial reimbursement on Reveal and Tissue Next as well.

Michael Bell: Margins are improving we see a line of sight to higher asp's and potentially even higher gross margin. So I think we started the year.

Michael Bell: So if that was to continue through the year, I think there's been a potential upside there on the gross margin. But we sort of do want to, you know, offset that a little bit by the mix. You know, we're managing our Reveal volume mix. If we were to take the first of the break on Reveal, you know, that could have an impact. And there's other different mix impacts as well that we try to manage.

Michael Bell: Well from that perspective.

Michael Bell: The next question comes from the line of Doug Schenkel with Wolfe Research.

Michael Bell: Your line is now open.

Michael Bell: But, you know, overall, we're really pleased gross margins are improving. We see a line of sight to higher ASPs and potentially even higher gross margins. So, yeah, I think we started the year off very well with that.

Speaker Change: Thank you so much I appreciate you taking my questions. So I wanted to talk about two things. One is shield and then two is really R&D spend and prioritization as we look ahead.

Douglas Anthony Schenkel: The next question comes from the line of Doug Schenkel with Wolf Research. Doug, your line is now open. Thank you so much.

Michael Bell: On field.

Michael Bell: Asking an earlier question a different way.

Douglas Anthony Schenkel: Do you think the realistic range of outcomes for AD Com later this month too.

Douglas Anthony Schenkel: Thank you so much. I appreciate you taking the time to answer my questions. So I want to talk about two things. One is SHIELD, and then two is, you know, really R&D spend and prioritization as we look ahead. On S.H.I.E.L.D., you know, maybe asking an earlier question another way, what do you think the realistic range of outcomes is for ADCOM later this month? Recognizing that you've consistently said you believe this is a three-year testing interval product, If you happen to be wrong, and this is an every-one-year test, do the economics work? And then what is your expectation for USPSTF timing as There's been some commentary from others that this is seemingly being pushed out.

Douglas Anthony Schenkel: Recognizing that you've consistently said you believe.

Douglas Anthony Schenkel: This is a three year testing interval product.

Douglas Anthony Schenkel: If you happen to be wrong and this isn't every one year test to the economics work and then what is your expectation for USPS TF timing as we sit here today, there's been some commentary from others that this is seemingly being pushed out a little bit.

Douglas Anthony Schenkel: I'll come back and ask about R&D in Osaka.

AmirAli Talasaz: Yeah, so in terms of Adcom, several questions, so you know, kind of combined together. So in terms of Adcom, you know, the typical question in terms of safety, efficacy, and benefits risk is going to be discussed in the panel, and the range of outcomes is that advisors are kind of looking into our data and everything and decide what they want to vote on in terms of those questions. But we are very confident with all the profiles of the data that we have to study that we've done and the reported device performance that we reported and published, and the same kind of performance is kind of presented there. So, let's see how that ad hoc goes. We feel very good about it.

Douglas Anthony Schenkel: Yes, sorry in terms of outcome several questions.

AmirAli Talasaz: Kind of collapsed here I'd say in terms of AD com.

AmirAli Talasaz: Yeah.

AmirAli Talasaz: Probably the typical question in terms of safety.

AmirAli Talasaz: We can see in the benefit risk is going to be discussed.

AmirAli Talasaz: Now in the range of outcomes as advisors are kind of looking into our data everything has to decide what they run out of both timing in terms of those questions. But we are very confident that with all of the profile of the data that would be after study that we've done on the reported device performance that the report does not publish that.

AmirAli Talasaz: The same kind of hurt our sky had presented there.

AmirAli Talasaz: But as Bill said in terms of how that goes we feel very good about it.

AmirAli Talasaz: In terms of the US via in terms of the interval and three-year test. I mentioned this before, if, you know, The interval test for S.H.I.E.L.D. becomes even more frequent than every three years. In fact, it's going to be an upside for us. So, in a land where FDA-approved diagnostic test pricing is going to get set, Medicare pricing is going to get set, you know, through an ADLT process. You know, every, every year testing, frankly, would be an upside in terms of our P&L. We believe, based on the modeling that we've done, it's an overutilization of SHIELD. But, you know, annual testing is an upside, not a downside. The last one was... That's it.

AmirAli Talasaz: Uh huh.

AmirAli Talasaz: In terms of the USPS in terms of the interval at three year testing.

AmirAli Talasaz: I mentioned this before.

AmirAli Talasaz: No.

AmirAli Talasaz: The interval tests for shield, because you've gotten more frequently than every three years and in fact, it's going to be an upside for us. So in a land that FDA asked for a diagnostic test.

AmirAli Talasaz: Pricing is kind of gift sets Medicare pricing gets set a VLC process.

AmirAli Talasaz: Every at every year testing frankly, it would be even an upside in terms of our P&L. We believe based on the modeling that we've done it's over utilization of shield.

AmirAli Talasaz: But anyhow.

AmirAli Talasaz: Annual testing is an upside downside.

AmirAli Talasaz: The last one was behind.

Speaker Change: That's it okay.

AmirAli Talasaz: Yes.

AmirAli Talasaz: Oh.

Mason Carrico: The final question will come from the line of Mason Carrico with Stevens. Mason, your line is now open.

AmirAli Talasaz: The final question will come from the line of Nathan <unk> with Stephens Nathan Your line is now open.

Mason Carrico: Hey, guys. Thanks for the questions here. Sorry, this has been jumping between a few tonight.

Mason Carrico: Hey, guys. Thanks for the questions here sorry, if this has been discussed jumping between a few tonight. So.

Mason Carrico: So, in terms of your expectations for SHIELD, you've talked about how this second label is still a big opportunity, and your commitment to screening as long as it continues to fall in line with your expectations of the opportunity. So, assuming you get a second, a second line label, you know, as we look into next year, what is a realistic adoption hurdle for you guys? They sold 100,000 Cologuard tests, I believe, in their first year after FDA approval. Maybe you guys are in a bit of a better position commercially than they were at that time. Maybe you're not.

Mason Carrico: In terms of your expectations for shield, you've talked about how.

Mason Carrico: Second label is still a big opportunity your commitment screening as long as it continues to fall in line with your expectations of the opportunity. So.

AmirAli Talasaz: But is there any sort of hurdle or framework you can give for expectations next year where volumes may fall?

Mason Carrico: Assuming you get a second a second line label as we look into next year, what is a realistic adoption hurdle for you guys.

AmirAli Talasaz: Exactly a 100000 cologuard tests I belief in their first year after FDA approval.

AmirAli Talasaz: Maybe you guys are in a bit of better.

AmirAli Talasaz: Position commercially than they were at that time, maybe you're not but.

AmirAli Talasaz: Is there any sort of hurdle or framework you can give.

AmirAli Talasaz: For expectations next year, where volumes may call.

AmirAli Talasaz: In general, our expectation of going through outcome and after that follow-on F conversation with FDA is to take SHIELD to the finish line and get FDA approval. That would be the definition of success for S.H.I.E.L.D. from our perspective, we have a huge opportunity in front of us, and a failure is obviously if we cannot convince FDA to approve it. It could be very unexpected, but we'll see what happens. In terms of the second line,

AmirAli Talasaz: Yeah in general our expectation I'm going try calling after it thus far a lot F conversation with FDA is to take shale to the finish line and get FDA approval.

AmirAli Talasaz: That's what you did this finished shops access for shale from our perspective to have a huge opportunity in front of us and a fed areas. Obviously, if we cannot cognex FCA to outgrow this test.

AmirAli Talasaz: We'd be very unexpected, but we'll see what happens.

AmirAli Talasaz: In terms of head count a lot.

AmirAli Talasaz: You know, the biggest opportunity for blood-based CRC screening and the biggest opportunity, in general, for non-invasive CRC screening is this 50 million patients on the screen right now. And that market segment is completely open for a second line indication. So, that's why we continue to be excited to go to market with SHIELD, even with the second line indication. Having said that, we have milestones, we have some assumptions in terms of volume ramp and revenue contribution, and this time, we are going to monitor the commercial execution and see if the market is still as exciting as what we think it is right now.

AmirAli Talasaz: Debt.

AmirAli Talasaz: BJ Stockbridge, Thank you for blood based CRC screening and the biggest opportunity in general for noninvasive CRC screening.

AmirAli Talasaz: This $50 million on the screen patient population, which are out there right now.

AmirAli Talasaz: Yeah.

AmirAli Talasaz: That market segment is cop 50 off that for a second line indication.

AmirAli Talasaz: So that's why it'd be conscientious would be excited to go to market with shield event with the second line indication that having said that we have milestones we have some assumption in terms of <unk> revenue contribution and it sounds like you're kind of monitoring to commercial execution.

AmirAli Talasaz: It's still that market is as exciting as what we think it is right now.

AmirAli Talasaz: In terms of setting specific guidance for next year, we would talk about it at the right time, you know; it depends on the timing of FDA approval and some other factors. I'm pretty sure we would talk about it in the future sometime in 2024.

AmirAli Talasaz: Setting a specific guidance for next year, we would talk about it at the right time it depends on the timing of FDA approval and some other factors I afraid.

Speaker Change: Sure we would talk about it.

AmirAli Talasaz: And future sometime in 2024.

Kate: Thank you. That is all the time that we have for questions today. I will turn the call back over to you for any final concluding remarks.

Speaker Change: Thank you.

Speaker Change: That is all the time that we have for questions today I'll turn the call back over for any final concluding remarks.

Unknown Executive: Thank you so much for everybody's interest.

Speaker Change: Thank you so much for everybody's interest.

Unknown Executive: Have a good day on that.

Kate: That concludes today's call. Thank you all for your participation, and you may now disconnect your line.

Speaker Change: That concludes today's call. Thank you all for your participation and you may now disconnect your lines.