Guardant Health (GH) 6 Aug 192019 Q2 Earnings call transcript

Good day ladies and gentlemen and welcome to the Guardant Health Q2 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to turn the call over to Carrie Mendivil.

begin. may You

today quarter Earlier released results financial Thank June Guardant XXth, the ended XXXX. for you. Health

If you distribution have you'd not received this news be an to to send like release added the please company's list, e-mail investors@guardanthealth.com. to or if

events remind securities like statements call involve materially uncertainties risks laws. to forward-looking These begin, are management the within that this that actual and to statements we those will you could results from Before meaning anticipated. that statements I'd make during of or cause differ federal material

Additional in information issued Statements press uncertainties regarding today. these risks Guardant the in and appears release Forward-Looking section entitled the

For a XXst, in Commission. other annual Risk company's report the more on Securities filings Form with XXXX see and the the complete and December and please XX-K Exchange section ended the description, Factors of for list year

call disclaims revise or otherwise. because new to August information, any future statements live Xth, is broadcast of any today the financial conference time-sensitive obligation intention or whether Guardant or forward-looking accurate only of contains XXXX. update events, as information and or projections This

turn I the over Eltoukhy, Guardant's to will Co-Founder Officer. and that, With Helmy? Helmy Chief Executive call

you thank quarter am for afternoon. everyone you pleased and Health's XXXX Guardant joining this to us Carrie Thanks earnings for call. welcome to second I

Joining Bertocci, me and our President today Derek is AmirAli Co-Founder; Chief and Talasaz, our Financial Officer.

our At conquer data. is Guardant with mission Health, cancer to

to commitment our the are continuum. developing care and by patients fueled are We across cancer products

and for patients for second cancer patients; individuals. advanced-stage early-stage and for survivors; First asymptomatic third

instability. spine status, nodules, and patients XX-year-old gait A bones. presented MRI lesions call brain a A with value pelvic and male scan lung Consistent in our numerous multiple and putting mental patient altered of first, the metastases, I CT with start and will indicated our with story. vertigo,

BRAF referred another and lung A subsequent for EGFR where nodules whole brain indicated cancer was was then his well therapy. oncologist The the non-small these second tumor revealed him lesions Hotspot to there negative cell radiation and for biopsy and as bone PD-LX. ALK ROSX patient scheduled with be testing cancer. tissue as to biopsy center a

time time to was same was the deletion in oncologist anti-EGFR nick to picked anti-EGFR dramatic that response biopsy GuardantXXX ordered started patient improved of a hotspot The And therapy, patient a GuardantXXX on an radiation the the not At whole also return his therapy. cancel work. brain osimertinib. up therapy lung able an quickly to symptoms his by for uncommon and tests. had him the enough to identified his immediately and The oncologist most EGFR is test. just

of This a patients national hotspot falls incomplete the story an cancer of not than include profiling often of often largely still genomic comprehensive a fails relies to is example on often and how that majority today standard-of-care standard-of-care receive guidelines; more testing. short still that

clinical practice Indeed the wide. is guidelines and clinical gap between

Fortunately, advanced-stage this that and by story non-invasively GuardantXXX demonstrates for patients. unlocking information cancer outcomes quickly this also gap genomic dramatically impact that can can nicely critical fill

continues to the and cancer products and our Adoption to two accelerate tremendous continue progress products our We advanced of with setting; commercial outpace expectations. GuardantXXX GuardantOMNI. in both make

XX GuardantOMNI X,XXX the At by strong biopharma appropriate the continuing and to same determine their therapy time, and XXX,XXX To-date programs. are oncologists with for our been targeted see times for by cancer to more patients more customers ordered demand than GuardantXXX immuno-oncology for therapy. GuardantXXX has both more we advanced than growth than

second XXX% over progress performance. $XX, the million commercial robust translated quarter finished revenue QX second We strong This with XXXX. up of to quarter the of exceptionally

X,XXX tests. same biopharmaceutical Over volumes XXX% clinical the XX% and to grew grew volumes XX,XXX period, clinical tests to

billion States innings are more we United a roughly translating the than XXX,XXX in growth, market still tremendous of $X in in early patients this with market, the the adoption advanced opportunity. to Despite believe a we cancer

by grow Today, clinical this patients of and comprehensive by still opportunity to market. receiving profiling of adoption kind a any is build either This massive we in of or that mid-single-digits genomic fewer the estimate XX% than tissue only GuardantXXX liquid. with presents

are than X,XXX more to patients collective also the where getting started need biopharma on there and over just growing. side We annually a trials are with enroll XXX,XXX

year, In be liquid we the were adoption critical for points advanced setting, to to three biopsies. that the the market shifting key we to we adoption. the At stage believe we blood-first cancer focus of proof of a accelerating genotyping, continue paradigm beginning on to which further believe such this outlined will

of coverage. our approval finally, As GuardantXXX a NILE with from reminder readout tumor the second, pan-cancer label; study; were: a FDA and profiling Medicare those First, pan-cancer

half of particularly progress. This begun to meeting first around Oncology proof paradigm demonstrated have was of GuardantXXX setting. we in shift first-line made the blood-first Clinical headway June, and our significant of a in the of there these see commercial growing American have acceptance blood-first points as Society XXXX, at perception use palpable excitement out In important by the of an was evident in the metastatic where the early building

approval We cancer therapies PIXK with genomic therapy of targeted of towards shift profiling both lung will in believe and only types. the developments inhibitor the in in KRAS-directed across first recent progress breast further paradigm comprehensive the space the colorectal the accelerate multiple cancers cancer and

led XXX high-impact with publication more landscape has reimbursement peer-reviewed studies to GuardantXXX publication, XXX in now covered on cancer. than focus lung the our including in Additionally, for lives yesterday's momentum than MSI clinical more million

to other our blood-first two We strategy. components of the also continue advance

this be progress application and Our year. in issued Medicare good believe final team we GuardantXXX to make for LCD that a continues our very later FDA pan-cancer could

are Shifting make we programs. to with progress gears, advanced continue only excellent we for but our making stage projects cancer, LUNAR our with great progress not

our tools a for a we $XX reminder, survivors, approximately program early-stage billion. focused developing market be LUNAR-X on patients cancer to estimate is and cancer As opportunity potential

In market average-risk for screening technology approximately months, we a early Our LUNAR-X Initially, included cancer opportunity cancer recent billion. viable and on have market population market target believe opportunity with brings associated for has with market application $XX for LUNAR-X addressable individuals identified combined products grown and our this program only the pipeline products program detection. total the as This total addressable from our over a now associated to over $XX billion. the our of program is billion. the our We focused at we current high-risk addressable estimate considerably. encompassed $XX of colorectal in products LUNAR-X that

business. with are encouraged by making by customers and Softbank Finally, our we parts the that in clinical the adoption pleased pharmaceutical we In our with Japan growth strong both of of and in be very continue to joint our venture is tests sum, progress other accelerating Asia. across

we expect $XXX XXXX for in be million, XX% now revenue to reflecting $XXX over As of the of to XXX% range a progress, to result of XXXX. million this growth

to AmirAli more clinical will that, LUNAR our AmirAli? With details in call the now I program. developments for over and turn

Thanks, Helmy.

to In our evidence. addition market-leading of to robust our technology commitment developing key differentiators clinical one is Guardant's

deliver Helmy demonstrated our continuing to on commitment are scientific the peer-reviewed we in this of support by platform. As growing of number mentioned, and as abstracts publications

from reported using methods, to of Along GuardantXXX the MSI largest records. detect in yesterday can are status Research tissue mined concluded standard-of-care MSI the X,XXX accurately of compared to Clinical these microsatellite traditional published taken GuardantXXX medical result blood-based testing Cancer researchers samples testing lines, results results comparison that tissue instability. In

Less samples. all this of testing solid GuardantXXX of advanced And an immunotherapy predict important regardless the are half type. response tumors, from to in biomarker same biomarker. is the results with to were in colon MSI important as test used tumor of than across XX.X% standard-of-care cases. we currently working to tissue the The patients far is cancer challenges tested lower for tissue suspect all due rate part of

to able patients be of should who and we appropriate benefit increase results, these from the this incorporating information get By number immunotherapy.

patients. DNA address screening building challenges cancer of oncology, additional to advanced in progress to such for setting, In cell-free our detecting expertise we and addition residual or disease our as early-stage are in recurrence in evidence cancer cancer on

use Our being LUNAR of is for currently launched guiding adjuvant to XXXX or in assay as LUNAR-X decision-making monitoring research recurrence applications our part related program. for new late and adjuvant used only

the well validation an with – exploring benefit a early circulation. to setting assays This LUNAR because Presentation little undergone included of colorectal ESMO as intent. at and after analytical undergoing study pilot adjuvant no evidence early at to patients June particularly identify an Guardant's of have gone may residual who clinical LUNAR patients, very typically curative ASCO assay, in circulating who therapy of July cancer blood, who DNA and intervention have as from shedding disease, early-stage detection tumor GI for in low challenging ability curative DNA have is intent interventions, tumor

are by end of by version the release and of track trials for prospective We to encouraged progress in the a remain clinical assay CLIA-validated use year. on this this

at our recap, combines single to single related part to is simultaneously genomic fragmentomics is program. detect used low detection as but also of a To two methylation only LUNAR detection, LUNAR-X being applications Our dimensions of levels LUNAR extremely assay approaching assay somatic alteration into epigenomic of early signals and assay. able our separate detection not for molecule

utility, Guardant, to relevant and superior something At tests clinical patient will meaning committed that for offer we care. that's are useful commercializing

to GuardantXXX, our spite a cancer using applicability with in approach strategy platform focused types. similar multiple our of technology in broad the So, are of for we detection early

We case. colorectal cancer are selecting in this

ideal cancer patterns. this our a believe integrated of need. and In considered epigenomics aberrant reimbursement presents cancer a and performance, early indication cost, detection, including selecting landscape because for cancer initial for colorectal yet we as homogeneous factors of colorectal unmet technical detection, number We broad somatic epigenomic an target relatively presents

in has of Moreover, colorectal shedding level circulation. tumor reasonable cancer

cancer believe exploratory colorectal represents for this performance detection. of In fact, the assay most at to-date clinical for compelling detecting of cancer. shared recently patients approach, initial AACR colorectal early we around for blood-based use with our diagnosed the data We data cancer some presented LUNAR in

assess also screening compliance Beyond other factors, the such existing methodologies. these parameters as we of

about on follow available cancer with do means fully the sensitivity with get or This getting screening still patient, that, with high average-risk and/or stool-based even tens millions through screened individuals that of can colorectal not colorectal For not detect based of who USPSTF screened. of specificity tests. technologies should comply are available of degrees one-third guidelines,

significant of Our screening high-performance third test value the individuals, be of patient we believe office reach compliance, would can who and early conversations of to a blood-based added gets to the significant the to logistical compliant. have screening tests with that blood-based visit. providers improve could add regular to Therefore, A a an ease way pave are market. the blood-based during that suggest impact not a that test tests menu

announced prior to of study to individuals call, that collect samples screening study On our blood our last an is between a from average-risk plan colorectal ages prospective of XX start This the study we XX to over observational will patients. ECLIPSE XX,XXX screening colonoscopy. earnings named

screening trials. the in first enrolled of will that year, We this trial be with QX previous to be the patient expect line the of and of in duration

the We directly expect with build-outs total to $XXX high-throughput $XX facility laboratory between trial indirectly associated including currently to trial million a costs million, to and the this samples. of process

successful critical assay if FDA. ECLIPSE are in vitro the a approval that, preparing our in an with believe of component package parallel be We product. the And diagnostic we will accordingly, as

well team are the progress excited stakeholders positive by receive is space. important to the rapid making, we very from We continue the as the reception in as

details the With now Derek? turn over Derek more financials. on our that, will to call I Bertocci for

for Thank per the Revenue and of you, the prior prime from both revenue revenue. customers volume $XX for XXX% increase the in XXXX year the the to second contributed totaled Growth $XX.X of Higher clinical was the in quarter. quarter also tests in million, performed of increase average pharmaceutical test revenue. driver AmirAli. in million up

totaled XXX% and due higher overall from in from million, the oncology tests to $X.X prior Precision ASP. quarter the $XX.X clinical million quarter increased second in year revenue demand up

up second per from quarter. Second quarter $X,XXX in precision totaled the XX,XXX in revenue Average recognized quarter prior prior was up tests in test XX% year year tests, the clinical the XX% $X,XXX, X,XXX quarter. oncology volume from clinical

earned from to cancer payments Medicare XXXX. This Access increases in of tests in that lung for Medicare and were starting XXXX commercial revenue by affected by increase the QX was Protecting reimbursed due Act patients payer to of beneficially

million $X.X Precision million, biopharmaceutical totaled second quarter companion $XX.X and the tests in year up overall associated from diagnostic the demand XXX% with due prior oncology to increased in higher from revenue studies quarter ASP.

year $X,XXX precision oncology revenue up due was the X,XXX the GuardantOMNI second $X,XXX, test. the biopharmaceutical volume biopharmaceutical per up quarter X,XXX quarter to XX% Second prior XXX% totaled for tests, Average from the quarter higher-priced test in in prior demand from recognized quarter. year increased tests in

$XX.X in to were totaled due announced AstraZeneca, Development prior-year services from revenue ramp-up XXX% to in quarter, related second the a the of XXXX. December million, support programs diagnostic companion which including development up CDx those quarter to activities

was quarter. revenue this half line biopharma volumes March, with year. prior to the second to communicated we the biopharma strong guidance, in Back first in weighted likely the be that were particularly more In heavily of

While In nature can and the sequentially. to the continue half business to we lumpy programs we in the the to on testing to these long-term, expect grow vary basis result from of second earned expect biopharma revenue our biopharma of clinical over year, revenue biopharmaceutical for revenue quarter-to-quarter. grow a quarterly customers

cost Gross XXXX the profit development was $X.X for testing oncology compared the of profit quarter revenue services. year. prior million precision of is cost Gross the of in total less profit $XX.X to a gross of of second same period million and

XXXX. to in margin as XX.X% gross higher quarter the second during was and in second was margin primarily compared ASP growth The XX.X% revenue. the development due of quarter to services Gross improvement

modified revenue standard method, the for statements. is XXXX adopted we the XXXX, ASC XXXX means reported which X, in revenue financial that January our using effective reminder, not retrospective a new XXX, As accounting restated

Instead, that completed to of opening deficit was from applying the adoption standard XXXX. as all not revenue accumulated X, recorded were resulting difference new the accumulated of as January contracts

The the The that revenue effect effect XXX would our to of have XQ of of release. was the increase press ASC ASC without reported is compared this revenue of adoption in change $XXX,XXX results XXX. by QX disclosed to been adoption

Total in from second XXXX $XX.X $XX.X XX% XXXX. $XX.X the a quarter of expenses were operating of was XXXX. second compared million, quarter second expenses $XX.X million increase of the quarter million XXXX R&D second quarter in million for to the for of the

required attributable submissions or for and primarily GuardantXXX development support approval PMA and to to under our assays testing work to for was of FDA program. increase the The LUNAR premarket our

U.S. compared to our in the $XX.X quarter and the growth million and clinical our Sales force additions support outside commercial quarter of increased to marketing U.S. team second due of in for and expansion biopharmaceutical markets XXXX and was the customers $XX.X expenses second sales activities, million XXXX. The teams on U.S. to to programs, expansion of of were clinical increase promotional focused

expenses well to incremental compared and General to public as in million, The being $X.X $XX.X second increase the of due primarily company for was were quarter legal to second costs as a million administrative XXXX. related quarter the expenses.

million. incurred of the in million of $XX.X our bringing an the $XX.X the in Health A $X.XX Health the Guardant compared compared loss million corresponding to of share non-controlling due as net second of the to for $X.XX joint Softbank, per quarter a to venture in Net Net loss XXXX, loss redeemable net to in was the attributable per to with charge in XXXX. quarter period second period loss attributable quarter Guardant stockholders was of of common million in stockholders per year. the the XXXX, common share to of prior $XX.X value $X.X second increase interest was fair share

follow-on cash of from equivalents which capitalized With our offering, We commence well late this ECLIPSE ended a the are $XXX.X for to we the of screening robust study back proceeds year. million with approximately securities. This in the half CRC includes second million in believe quarter cash, in $XXX.X we position, May. and cash net of XXXX marketable closed

million Helmy $XXX to the compares volume in for we updating previous We to revenue $XXX our year of for clinical XX% guidance This As of the be representing XXXX. full now to of the over range mentioned, expectations growth million, $XXX to to expect revenue to million $XXX XX,XXX $XXX are now XXX% planned to sample previous range the our our for $XXX million. XXXX XXXX investment million to trial range loss expect accounting our the expectations XX,XXX compared our million prospective net for million. large LUNAR to program XX,XXX. impact million of of to of tests, $XXX in of expectations we in XX,XXX to of $XXX previous the to compared Even clinical

call At closing back this Helmy comments. point, I'd like the to turn for to

stages information Thank of we throughout unique you, molecular at a Derek. In all to unprecedented we expand, have cancer's believe access disease. closing, the to opportunity Guardant

to to look progress. make on and great forward goals our updating you our We against ambitious continue strides

up that we to open With now will it Operator? questions.

question follow that We first Leerink. [Operator yourself one limit question Puneet SVB Instructions] Instructions] [Operator Souda up. one you from comes to of and please ask Our

Your is open. line

the question. and the thanks AmirAli, on Helmy, for Hi, quarter, congrats of all, first

So, ask I the one, first if could guide. about

a step-up higher had have significantly here, estimates what in consensus and guide were. significant we You than what

was you hoping So the guide. out could if I first some parse of of that major components

could more some And, gave as I guide LUNAR continue a stronger understand the just testing is parts, to adjuvant volumes those it And OMNI to as setting mean, just you we us to also, contribution OMNI should grow. on if in know there's growth guide expect clinical the a the on or and well if here that. of continue from Derek But help bit in elaborate I as ASP-driven? any well? GXXX

let Maybe fundamentals business should all I'll strong We chime start across then in. Derek and see very the to board. our

that volume are nicely. champion I you I think OMNI very see is by Pharmaceutical growing. volumes, a think, can also specifically, growing clinical

see our we going very a of so, pipeline in robust terms And forward business.

I the business. the among think, fairly it's two distributed of sides equally

Puneet. Yes,

GXXX. of significant base strong pharma growth customers. higher were that won't element But both said, diagnostic business that, is to its So OMNI have think with equally we a And of -- that with by very though we We we We it's Helmy pleased driven while cautioning -- and level. we we do continue continue. mentioned with expect continue revenue. will a see it's did and are as obviously as strong that a number services distributed. level We working very development companion the OMNI price strong earlier, see

ECLIPSE XQ study. second that half, the just had some Okay last quarter so that study the was the I key activities I great. quarter the in And you understand perform trial on to but the next need of to then, LUNAR, to in us want the over know my for or highlighted XXXX. study, starting CRC you question start

is see lastly, could log. I if we in completion assays Or DeeP-C. AACR know the here is there's improvement ASCO? the in facility, assay from of beyond and And I we line I what When if provided data you the but assume, time line can high-throughput the wondering at with know, around one earliest details at saw you further provide for is, ECLIPSE? which the room

AmirAli -- do you

sure. Yes,

technical first starting standpoint. performance maybe, So, from a

with where with AACR. at and pleased I'm the of that some excited. very was are we and the shared that assay is We generate evidence

with very are happy technical the we So performance.

as we the to basically goal of of grade mentioned, IVD- have we assay be with version if study ECLIPSE an getting of that, need ECLIPSE used we the Now the those test FDA-approved in are running successful. running trial as the ultimate part at And the end samples. is to

assay, that The obviously until for is some performance position we we the is high-throughput for with. good mentioned samples timeline we would run to And those those so basically now kind of operation that feel study, good are us before we have an run a build very the that too. in to assay the of ECLIPSE IVD-grade assay, the that build collect is samples samples. of standpoint of we have us thing store study going we But the terms and observational a technical to generate in IVD-grade can to assay the as

the finishes. to could based then to around other studies way screening In finish just that in maybe publish take of at months this you be on study the after And the it we the the it out XX data -- the us maybe about In timeline, first the to it study, XXXX. kind terms mapped and expect this time of takes typically when put some of QX patient of shy we enrollment data and of study. the look together enrollment like

studies, like great. start give see adjuvant investigators and Thanks. what -- in And us early there squeeze into to should term? could a look should expect one. setting, some you. that I maybe That's longer data CLIA-approved assay could when Thank one or when potentially we see we Okay. or last some if that view On LUNAR could PI-led to data from

is cancer lung question that There So I that already kind LUNAR-X maybe assume applications in actually colorectal we the assay have. setting LUNAR of and cancer. that for we some abstracts have around are your in

some showing and collaborators start. lung the expect device we year. congresses that call, the to designed are mentioned release prospective CLIA even in to cancer. could of start colorectal You and that are in experiences the during the for and later get assay the upcoming are using And we as this assay waiting actually clinical version, track that types are of And those conferences other their on would online for the to version assay studies this they studies there already cancer

you. Thank great. Okay,

Puneet. Thanks,

next question Weinstein William comes Our of Brian Blair. from

open. is line Your

guys. Hey, Thanks questions. the for taking

here. as CRC to I to the go itself. a as trial assay want just the clear Just back on the for stuff be well about second very

guys So are the we not doing first should guys think saw is be change changes what you order of of assay on am we that in the I some commercial-grade assay the going previously? Or to get to all product? expect understand that in have and to terms what to materially you there specificity need -- a to and to anything you'll sensitivity to

we a we believe assay, in at performance compelling for something the So very AACR shared the of I product are technical are think the the space. terms of results in

refining what be to of a around the the are diagnostics FDA-approved would intended that work around given of or to doing assay, vitro assay requirements be. terms we that the this the nature is largely upgrading is In device further in of

if I the you you review? understand here go I down to that wanted think are something was that. Are you just as mentioned to But about thinking well? guys anything don't that planning about parallel path

both FDA exact with definitely actually an But we exists, conversations agencies and dual in forward comments is path about but that here. the option CMS. interesting our provided track been we've So haven't

able to for Is it is driving a Are then later you there insight you're what force finger us is on that? that give testing additions sales here. the plans it the to switching sales think Thank that this a this force really kind for a of was are additional to -- And you clinical just second put really you Obviously, as it quarter. surge the massive in NILE what inflection we're what's If you. Okay. And driving this Is can into year? study? really adding? a seeing? little volume

combination It's factors. it Certainly, I various Brian. practice. has Thanks, us. Yes. of very And of NILE been the some uplift. resonates We're of really for a with think seeing positive realities clinical early some

were there traction we with then remember who think along and were force sales the on a if just XX. XX that sidelines for care. could expansion of some early with physicians that the a to something if wondering -- But primarily I I lot fit quite to would liquid standard while biopsy be of we were could their reps XX below made in say we expanded you

the probably We I the proof earlier be sales we it we're seeing for some seeing other uplift than is we're and reps into points of to So the process I anticipated. reimbursement we're working it's lot of on think play. as of those that need a come this to diligently pan-cancer benefits think of would really some well. why coming the FDA sustained And in. say

Peterson from Our Tycho of next JPMorgan. question comes

Your line open. is

I a of couple have clarifications.

we XXXX? get comments now readout ECLIPSE, on data in can should expect interim? on So based your Or until something the any we

the at this So grand finish to plan the enrollment together is end publish study. and package of data the the actually then whole

study that planned share not in the to information. intermediate an have We readout clinical

go Okay. ahead. -- then And

identified. to like you like few may dozen XX,XXX in know a As patients to get enroll need order XX cancer maybe patients colorectal XXX you to

to performance the confidence would too mature. So cancer need of the of wide the The the performance why out for really to be data the to figure to too very to would wait get going cohorts That's the test be. what is colorectal patient's of even assess interval small early be we test.

the Palmetto testing? And of just can you're around LCD in on remainder or repeat talk how the is particular about that thinking the included guidance then you the for excluded? to And year,

us expecting are that and the in we fourth would Palmetto the LCD benefit some So would in pan-cancer fourth issued quarter. that be to the have it quarter

MSI interpret about at this lower of And Okay. the not the we price a as the right Or how here. something way just to curious a be mean that on offered version stand-alone I is point? lastly should think then results assay it? study, the is stripped-down that could

as something that's It's today. GuardantXXX included part of

patients, has advances. quarters. benefiting think benefited paves couple is for that and as something are the drug these patients last certainly the for more tumor-agnostic And more that of pipeline something it's common that So I way becoming biomarkers the

So that is comprehensive these technologies is continue going of clinical in we one blood. to this think adoption is something that drive profiling straightforward and to something do is to that genomic not that

that And data to did setting. be was there to work provide so a lot able in this of team robust this the

Okay. Thank you.

Okay. Thanks, Tycho.

Our Doug next question comes from Schenkel of Cowen.

Your line is open.

but had coverage over Thanks did believe Doug. is questions. Maybe payer update? of a you you for covered lives million it, by missed XXX provide Wieschhaus for I quarter. end last my on Adam This taking the I

trying there? progress Just your to assess

little now million over now. we're XXX at a Yeah,

And are us. of payers. see So where we with we continue pleased what ahead we're to make I progress very and we with think

great. year seems just wanted guidance did Okay, Derek. for I to not reflect your any that like a development guidance in correct? increase clarify. It Is question revenue Maybe services your increased revenue. full

that indicated half-weighted, so slope to not QX had you get away carried We just from the that. to at be more extrapolate trying look that from services development and QX Correct. would caution are the we first and

seemly be the you you ECLIPSE every could study committee the six by meets begin USPSTF so? last complete. QX in of sounds and expect to in XX months the like reviewed study, on it or Okay. then the to terms that when considering What take about And only does years at contemplate that

it's think that at I comment early to time. on this too

Thank Okay. you.

question America. Bank Bruin of comes Derik Our from next De of

line Your is open.

afternoon. good Hi,

Hi, Derik.

Hello, Derik.

Hi.

study? on like the throughput XXX quarter. you points year thinking Just particularly the on expected this Can as what rest for through the of like you we margin add gross better margin the was basis for year? curiosity, the Just rest in facility and the this expecting us walk pacing on of higher gross than for about the you're the

Right.

gross quarter. really as you revenue So very on development And of margin the the as the margin. reflective margin the business quarter. the as was in was very percentage. I so services see pushed this this But pharma ASP high the amount we of in increase recorded gross increase that said, can OMNI benefited up financials in is Also the this that overall quarter, high profit in the a it

the -- extremely we're of to trends we that services the stronger that should or second to and the in the of you revenue half. on continue were while So of both indicate trying this not that expect development those growth continue even to expect quarter level level business pharmaceutical

So margin least the moderate at profit we expect a bit would in would second half. gross the that

Yes.

So are this be obviously longer-term margin, gross high in but high to have not this it looking we quarter.

That's Great. what thinking. I was

clarify Just that. to want

the in pharma mentioned you ASP business. the So

So there incremental you're against on we does I there up I'm pushing -- is believe $XXXX, Where wondering increases sort look peak for? I what said should And out? that you $X,XXX just of believe. that are

GXXX. much the - our how much of driven is our on is by So how versus of driven business it depends by business OMNI

pharmaceutical We from very are good seeing of OMNI. a strong demand number customers and for

least we get would the close at to could So quarter. OMNI this getting And near-term. volume in of certainly past coming our to level from XX% the expect I that we're

line? that looking FDA moving changing blood-first the about? you're you think the Great. you using I utilization the talking of is as FDA guess, go demand approval I changes terms have how the of a about the and how Just of, what more conversations there pent-up become of where had sort first people approval aggressive and the in On can this about as GXXX for sort thinking in approach that just waiting out to approval of the guess more big that, you for sort -- to, equation. terms for approach

I separate -- say a good that's that of kind question. would questions. would I say they're

address like question about in of being fashion? I use able studies information detection to the setting I this rate? clinical compromise I to is the test are think in really going I timely that care? the clinically this get that's If What you am patient where if NILE, test compromise to challenges biomarker going I think used logistical how that Am of a think

on the in a blood-first And is doing a clinicians of really the so clinical lot terms with of stakeholders terms of and care. of paradigm educating merits that so and means we're in what work on

you a we it lot LCD this know, and that have has FDA coupled be were with reimbursements form That in will of decoupled draft that's As finalized later we're year. of issues approval. this kind initially hopeful the

us gives another it an so independent forward path. And -- path

of FDA provides so now that And what is stamp quality.

market terms take really in the any setting in think want I in they of adoption be more of will on kind you a paradigm. segments the if terms the in-transition to late in of helpful where board to risks of the final think that's approval, of the of think standard I something really FDA and kind certain some getting stages of blood-first don't some to use a and laggards think, market traditional that the meets about majority want about that the

can ask expect some when news that's give one The OUS I'll sense us just how the ramping your can -- and and internationally? front we on a And on final Great. revenues question. you

the The in still So be will will reimbursement by venture necessary to substantial we the approvals lead which growth. both Japan we is the will in ultimately the you hope pursuing market, two is be and would driven think have overtime which The market, OUS clinical market, near-term. the in ramp be the make to as Japan trials know Japan revenue progress in joint we relatively small.

Great. Thank you.

Derik. Thanks,

Our Mark question Genuity. from comes Canaccord of next Massaro

Your open. line is

great a for is lung cancer. for GuardantXXX roughly XX% ordered I My XX% it's Congratulations first tests think guys. of quarter. -- to are question Hey,

walk the ordered the to being additional cancers. are XX% those remaining in get Can we it think of for I'm through coverage decision should what percentage getting us you And just for to pan-cancer beyond? what how so to call is close trying really at So additive and revenue XXXX paid zero? about

pan-cancer the NCD. LCD will perhaps pan-cancer the So different in remember be

or XX% pan-cancer indicates not the current wording the is we that's LCD would estimate is at decision the which in same where progression. as that of national And cover volume. under So tissue our exists it the testing that coverage draft infeasible the

Local approximately lung third -- a can of think standpoint, patients Coverage look our currently I patient at the from with Medicare current So, are a covered you Determination.

it be be it would but would know With significantly. the what pan-cancer, it would probably up up. exactly We be, don't

which us the the volume. about FDA XX% then pan-cancer patients move would of would of And be to coverage total our national Medicare determination result a And approval patients. XX% Medicare represent of approximately

a in new of As private terms bit technology. They it take to adopting time. far will payers, the as lag tend

over time. a period probably is of evolution So, that an extended slower

get by GuardantXXX FDA? Great. I your XXXX? to you ask housekeeping. Have wanted the is And more it this or like of it to expectation submitted end approval is the also for year early to

So, progress application. progress previous we mentioned particularly our QX. in we actually in call, are good are on earning submit we FDA to And -- planning our as making good

we hopefully, have So, earnings this. would next about in the additional call, updates some

the your have just you And relates down in at acquired CRC the out yet? would that version? lockdown that read better to that hope you've is it the expectation locked your and that And as combination Okay. AACR it you sensitivity assay your to with clarify your be it's specificity assay, that of markers

So, see maybe would differently not. this help little to to a me bit let or it question try if answer

side. of the analogy on entrants think GuardantXXX I

the GuardantXXX DLT have are happy very We we with. performance and technology

go to GuardantXXX that the process device. to version IVD-grade reagents IVD order then as really performance the an kind that through have and had to we same technical We assay go have same version manufacture but to the the And to if have of was had changes develop of kind in to generate make we the and we of that different product. documentation have some CDx and IVD of

stands the in we we the LUNAR that the some internally, some assay with we technology happy the showed of And So, are additional very we data with where with have AACR performance. data that where happy is. are

to FDA LUNAR to -- we the assay. submit potential generate approval, an approval clinical FDA the readout our as IVD-grade for application LUNAR need validation basically as since ECLIPSE going But for of -- assay a the are actually we version of

them. So, And store have process the using that run since have we the collect that we studies of we the sample, IVDization IVD-grade, that assay the of can And we observational, are device. assay have. time we when in ECLIPSE the can basically we

that's Okay, helpful. you. Thank

And obviously of about the the loss you has we future. the commentary CRC Your million margins layer if cost in came is ECLIPSE spread been Obviously, $XX profitability But anyways, gross net were strong when take study, a million help just sense made. do we better just cost years? program, $XX about little we in consensus think over lay your as to bit be could our out sort couple achieving of of in the years? give of about us potentially the it in can and you of than us of screening talking that you Derek, model. to next should a not-too-distant we the strip the where on out the and couple now top about million $XXX can on a spending

Yes.

run. two that So, of often take we've million type $XXX the the range. estimated to the million in of years $XX trial to trials And cost

because, an on obviously, two-year you we upfront period good is were that have enrollment the just to -- that's money take over we're But period. that actually to a two-year that if working we So, as starting is trial. going. will the the over lot time spread of the estimate get give. we're costs of It's as There can lower that that probably do trial

that will trial. would in costs. start-up period And across as the trials grow put do recognized as two-year I enrollment upfront So, probably cost most the then over

if for know And moment. launch at really to an a cancer pharma-type one you [ph], research to LUNAR-X as ask Obviously, I can you they It's this launched more. give a Natterazot us Okay. promising the I Can update program at ASCO. is initiative. when expect patients?

just will be sense give So you into launched think this us when clinic? on can the you a

Yes.

that we've think approach activities to the any kind on kind well many other customers setting. centers We get and that's we're of update around with biopharmaceutical very systematic We're that the our is I LUNAR-X. taking program broadly given believe guidance. other our as as not researchers of something adjuvant something to to working ultimately most of academic expedient the reimbursed way be in to conducting are with going

I for. the that be the acquiring large of it's paying think, and right about providing they clinical the value health can payers provide hurdle kind and convince that assays system something data, show they so that thinking types care of these outcome is, to should

most either half now -- product trials as clinical And utility believe that indications. the prospective way get -- clinical second on to that going be by ultimately to efficient a next this reimbursed in so, a year widely said is taking then variety strategy we're we of and of the right I to working to retrospectively is working

Makes Thanks so you. Thank much. sense.

Eltoukhy I'd to any There to are no call questions. turn further closing remarks. over like Helmy the back for

connecting Okay. thank Yes everyone. you to everyone We forward quarter. look next with

all Everyone gentlemen, thank day. great participating program does in may conclude This you for have and Ladies you and a today's disconnect. conference. the