Company Overview

Guardant Health, a leading precision oncology company, has emerged as a trailblazer in the dynamic field of cancer diagnostics. With a relentless focus on innovation and a commitment to improving patient outcomes, Guardant Health has carved out a unique position in the industry, propelling itself to the forefront of the battle against cancer.

Founded in 2011 and incorporated in Delaware, Guardant Health has undergone a remarkable transformation, evolving from a startup to a prominent player in the precision oncology landscape. The company's core mission is to revolutionize cancer care by providing critical insights into the disease through its advanced blood and tissue tests, as well as its comprehensive data platform. Headquartered in Palo Alto, California, Guardant Health launched its first commercial product, Guardant360, in 2014. This comprehensive liquid biopsy test provides tumor mutation profiling from a simple blood draw, marking a significant milestone in the company's history.

Key Milestones and Products

In 2016, Guardant Health expanded its product portfolio with the launch of GuardantOMNI, a liquid biopsy test designed for advanced-stage cancer patients. This addition further solidified the company's position as a leader in precision oncology. Two years later, in 2018, Guardant Health took a major step forward by going public on the Nasdaq Global Select Market, opening up new avenues for growth and investment. That same year, the company achieved another significant milestone with the launch of Guardant360 CDx, which became the first comprehensive liquid biopsy test approved by the FDA to provide tumor mutation profiling.

Guardant360 Liquid Biopsy Test

Guardant Health's flagship product, the Guardant360 liquid biopsy test, has solidified its position as a game-changer in therapy selection for patients with advanced-stage cancer. The test, which received FDA approval in 2018, has been a crucial tool in guiding personalized treatment decisions, enabling healthcare providers to identify targetable genetic alterations and select the most effective therapies for their patients.

In 2024, Guardant Health took a significant step forward by upgrading the Guardant360 to its Smart Liquid Biopsy platform. This upgrade expanded the panel of genes tested by nearly 10-fold, including all guideline-recommended genomic markers for solid tumors, and improved the sensitivity for tumor burden detection by a factor of 10. The enhanced capabilities of the Guardant360 Liquid have been well-received by healthcare providers, driving greater depth of ordering and increased testing frequency.

Guardant Reveal

Beyond therapy selection, Guardant Health has also made strides in the field of minimal residual disease (MRD) detection with its Guardant Reveal test. In 2024, the test received Medicare coverage for colorectal cancer surveillance testing, a significant milestone that will make the test more widely available to patients and oncologists. The company has an extensive pipeline of clinical cohorts to further support the validity and utility of Guardant Reveal for additional cancer types.

Financials

The company's revenue growth has been impressive, with total revenue increasing by 31% year-over-year in 2024 to reach $739 million. This growth was primarily driven by a 34% increase in precision oncology revenue, which reached $688 million. Oncology clinical test volumes grew by 20% for the full year 2024, with Guardant360 being the primary contributor to this growth.

In the most recent quarter, Guardant Health reported revenue of $201.8 million, up 30% year-over-year. However, the company continues to operate at a loss, with a net loss of $111 million for the quarter. For the full year 2024, the net loss was $436.4 million.

Guardant Health's biopharma business has also been a significant growth driver, with revenue increasing by 31% year-over-year to $145 million in 2024. The company's Smart Liquid Biopsy products, which now represent more than 50% of reported samples in new contracts, have been a major catalyst for this growth, offering improved performance and key applications such as novel biomarker discovery and signature development.

The company's precision oncology testing segment has shown strong growth, with revenue increasing 35% year-over-year to $180.6 million in the third quarter of 2024 and 35% year-over-year to $503.4 million for the first nine months of 2024. This growth was driven by increased sample volume from both clinical and biopharmaceutical customers, as well as improved reimbursement rates, particularly for the Guardant360 LDT test which saw Medicare reimbursement increase to $5,000 effective January 1, 2024.

For clinical customers, precision oncology revenue grew 36% year-over-year to $141.2 million in Q3 2024 and 34% year-over-year to $397.2 million in the first nine months of 2024. Total test volume for clinical customers increased to approximately 53,100 in Q3 2024, up from 43,900 in the same period last year. Revenue from biopharmaceutical customers grew 34% year-over-year to $39.4 million in Q3 2024 and 39% year-over-year to $106.1 million in the first nine months, primarily driven by increased sample volume, with total tests for these customers rising to around 10,500 in Q3 2024 from 7,500 in Q3 2023.

The development services and other segment generated revenue of $10.9 million in Q3 2024, up 13% from $9.6 million in the prior year period. For the first nine months of 2024, development services and other revenue decreased 8% year-over-year to $33.9 million.

Guardant Health continues to invest heavily in research and development to support the development of new products and expand the capabilities of its precision oncology testing platform. R&D expenses were $87.3 million in Q3 2024, down 7% from $93.9 million in Q3 2023, primarily due to lower outside services costs related to the ECLIPSE clinical study for the Shield test as it nears completion. For the first nine months of 2024, R&D expenses decreased 8% year-over-year to $254.2 million.

Shield Blood Test for Colorectal Cancer Screening

In addition to its oncology-focused offerings, Guardant Health made a significant leap forward in 2024 with the FDA approval and Medicare coverage of its Shield blood test for colorectal cancer (CRC) screening. Shield became the first blood test approved by the FDA for primary CRC screening, providing a non-invasive and more accessible option for individuals eligible for screening. The company expects Shield to be a key growth driver in the coming years, with revenue guidance of $25 million to $30 million for 2025.

Challenges and Legal Issues

Despite the company's impressive growth, Guardant Health has not been without its challenges. In 2021, the company was embroiled in a patent infringement lawsuit with TwinStrand Biosciences and the University of Washington, which resulted in a jury verdict against Guardant Health in 2023. The jury found that Guardant Health willfully infringed two patents and awarded $83.4 million in damages. However, the company strongly disagrees with the verdict and has vowed to continue fighting the decision through post-trial motions and, if necessary, an appeal.

Additionally, in 2022, Guardant Health received a Civil Investigative Demand from the United States Attorney for the Northern District of California in connection with an investigation under the False Claims Act, adding another legal hurdle for the company to navigate.

In May 2021, Guardant Health filed a lawsuit against Natera, Inc., alleging that Natera is making false and misleading statements about the performance of Guardant's Guardant Reveal test. This lawsuit is ongoing, with trial scheduled for November 2024.

Liquidity

As of December 31, 2024, Guardant Health had approximately $944 million in cash, cash equivalents, restricted cash, and marketable debt securities. The company's debt-to-equity ratio stands at -9.56, while its current ratio is 4.68 and quick ratio is 4.36, indicating a strong short-term liquidity position.

However, the company continues to burn cash, with operating cash flow (OCF) and free cash flow (FCF) both at -$275 million for the full year 2024. This represents an improvement of $70 million compared to the $345 million cash burn in 2023. In the most recent quarter, OCF and FCF were both -$83.39 million.

Future Outlook

Looking ahead, Guardant Health remains well-positioned to capitalize on the ongoing advancements in cancer diagnostics. The company's robust pipeline of product upgrades, international expansion plans, and strategic partnerships with biopharmaceutical companies have laid the foundation for continued growth and innovation.

For the full year 2025, Guardant Health expects total revenue to be in the range of $850 million to $860 million, representing growth of approximately 15% to 16% compared to 2024. Excluding a $22 million non-recurring revenue upside in 2024, the 2025 revenue guidance implies a growth of 19% to 20%.

The company expects oncology revenue to grow approximately 15% year-over-year in 2025, excluding the 2024 non-recurring upside, which represents oncology revenue growth of approximately 20%. Total oncology clinical volume growth is expected to be approximately 25% in 2025.

Guardant Health anticipates its biopharma and data revenues to grow in low-double digits in 2025. Screening revenues from the Shield test are expected to be in the range of $25 million to $30 million in 2025, driven by 45,000 to 50,000 Shield tests.

For 2025, the company expects full-year non-GAAP gross margins to be in the range of 62% to 63%. Total non-GAAP operating expenses are projected to be in the range of $815 million to $825 million, an 8% to 9% increase compared to 2024. Free cash flow burn is expected to improve to a range of $225 million to $235 million in 2025, compared to $275 million in 2024.

The precision oncology market is expected to grow at a CAGR of approximately 12-15% over the next 5 years, driven by increasing adoption of liquid biopsy and companion diagnostic testing, providing a favorable environment for Guardant Health's continued expansion.

Conclusion

In conclusion, Guardant Health's remarkable journey in the field of precision oncology has been marked by groundbreaking achievements, unwavering commitment to patient care, and a relentless pursuit of technological innovation. As the company continues to push the boundaries of what is possible in cancer diagnostics, it stands as a shining example of the transformative power of science and the steadfast determination to conquer one of the most formidable challenges facing humanity. Despite ongoing legal challenges and continued cash burn, Guardant Health's strong revenue growth, innovative product pipeline, and strategic positioning in the rapidly expanding precision oncology market suggest a promising future for the company.