On August 4, 2022 Guardant Health, Inc. (Nasdaq: GH), a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary tests, vast data sets and advanced analytics, reported financial results for the quarter ended June 30, 2022 (Press release, Guardant Health, AUG 4, 2022, View Source [SID1234617555]).
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Recent Highlights
Revenue of $109.1 million for the second quarter of 2022, an increase of 19% over the corresponding period of 2021
Reported 29,300 tests to clinical customers and 6,000 tests to biopharmaceutical customers in the second quarter of 2022, representing an increase of 40% and 65%, respectively, over the second quarter of 2021
Received Medicare Coverage for Guardant Reveal, the first blood-only liquid biopsy test for molecular residual disease testing now covered for certain fee-for-service Medicare patients in the US with stage II or III colorectal cancer
Completed the purchase of the Guardant Health AMEA Joint Venture, creating a unified organization to expand commercialization of Guardant Health’s industry-leading liquid biopsy technology across the region
Executed a strategic partnership agreement to offer comprehensive genomic profiling tests to biopharmaceutical companies in China with Adicon, a leading independent clinical laboratory company
The Company’s Shield LDT launch was well received by clinicians and patients and with early activity exceeding expectations
Expect both ECLIPSE readout and PMA submission for Shield assay during the second half of the year
"We ended the second quarter with record revenue for Guardant Health with strong volume growth in Clinical Oncology while growing and strengthening our base of biopharma partners. We were pleased to receive Medicare coverage for Guardant Reveal, providing stage II or III colorectal cancer patients and their doctors greater access to an easy to use blood-based test for molecular residual disease testing. We expect this to help fuel continued expansion as we look ahead to future product launches in the second half of the year," said Helmy Eltoukhy, co-founder and co-CEO.
"We have had an exciting second quarter with the recent launch of our Shield LDT screening test. We have observed strong adherence to our blood-based screening test, and better than expected uptake by early clinical adopters," said AmirAli Talasaz, co-founder and co-CEO. "We continue to progress our pivotal ECLIPSE trial. We remain confident in our ambition to develop Shield into the leading non-invasive CRC screening methodology with future expansion into high-sensitivity multi-cancer screening."
Second Quarter 2022 Financial Results
Revenue was $109.1 million for the three months ended June 30, 2022, a 19% increase from $92.1 million for the three months ended June 30, 2021. Precision oncology revenue grew 27%, driven predominantly by an increase in clinical testing volume and biopharma sample volume, which grew 40% and 65%, respectively, over the prior year period. Development services and other revenue decreased 12%, owing to multiple factors. The primary drivers were the change in collaboration projects with biopharmaceutical customers for companion diagnostic development and regulatory approval services, and the discontinuation of our Guardant-19 tests in August 2021. These factors were partially offset by revenues earned from licensing our technologies during the three months ended June 30, 2022.
Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $72.4 million for the second quarter of 2022, an increase of $10.2 million from $62.2 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 66%, as compared to 68% for the corresponding prior year period.
Operating expenses were $202.7 million for the second quarter of 2022, as compared to $159.8 million for the corresponding prior year period, an increase of 27%. Non-GAAP operating expenses were $176.2 million for the second quarter of 2022, as compared to $124.7 million for the corresponding prior year period.
Net loss attributable to Guardant Health, Inc. common stockholders was $229.4 million for the second quarter of 2022, as compared to $97.6 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $2.25 for the second quarter of 2022, as compared to $0.96 for the corresponding prior year period. Non-GAAP net loss was $101.8 million for the second quarter of 2022, as compared to $61.4 million for the corresponding prior year period. Non-GAAP net loss per share was $1.00 for the second quarter of 2022, as compared to $0.61 for the corresponding prior year period.
Adjusted EBITDA loss was $94.3 million for the second quarter of 2022, as compared to a $56.4 million loss for the corresponding prior year period.
Cash, cash equivalents and marketable securities were $1.2 billion as of June 30, 2022.
2022 Guidance
Guardant Health continues to expect full year 2022 revenue to be in the range of $460 million to $470 million, representing 23% to 26% growth over full year 2021.
Webcast Information
Guardant Health will host a conference call to discuss the second quarter 2022 financial results after market close on Thursday, August 4, 2022 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at View Source The webcast will be archived and available for replay for at least 90 days after the event.
Non-GAAP Measures
Guardant Health has presented in this release certain financial information in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and also on a non-GAAP basis, including non-GAAP cost of precision oncology testing, non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to Guardant Health, Inc., common stockholders, non-GAAP net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted, and Adjusted EBITDA.
We define our non-GAAP measures as the applicable GAAP measure adjusted for the impacts of stock-based compensation and related employer payroll tax payments, changes in estimated fair value of noncontrolling interest liability, adjustments relating to redeemable noncontrolling interest, contingent consideration, acquisition related expenses, amortization of intangible assets, and other non-recurring items.
Adjusted EBITDA is defined as net loss attributable to Guardant Health, Inc. common stockholders adjusted for interest income, interest expense, other income (expense), net, provision for (benefit from) income taxes, depreciation and amortization expense, stock-based compensation expense and related employer payroll tax payments, changes in estimated fair value of noncontrolling interest liability, adjustments relating to redeemable noncontrolling interest and contingent consideration and, if applicable in a reporting period, acquisition-related expenses and other non-recurring items.
We believe that the exclusion of certain income and expenses in calculating these non-GAAP financial measures can provide a useful measure for investors when comparing our period-to-period core operating results, and when comparing those same results to that published by our peers. We exclude certain other items because we believe that these income (expenses) do not reflect expected future operating expenses. Additionally, certain items are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance. We use these non-GAAP financial measures to evaluate ongoing operations, for internal planning and forecasting purposes, and to manage our business.
These non-GAAP financial measures are not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. There are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation, and do not present the full measure of our recorded costs against its revenue. In addition, our definition of the non-GAAP financial measures may differ from non-GAAP measures used by other companies.