Guardant Health, Inc. (NASDAQ:GH) Q2 2023 Earnings Call Transcript

Helmy Eltoukhy: Yes, it’s a great question. We’ve made really great progress in terms of clinical validation core service we have clinical utility studies that have been running for some time. So we are going to present likely more data later this year in breast and colorectal cancers. I think that data, hopefully, it’s positive, we’ll published sometime next year and will allow us expand reimbursement. But yes, we’re very confident that in terms of the performance of this platform can do much better than almost any sort of issue informed approach is because of the science and the sort of ability to detect more features for we’re pleased we’re looking forward to presenting more of the background around the technology, how it works and why it works and some of the data at our Investor Day.

And yes, we’re seeing great traction. I mean, we have a test that is much faster, doesn’t require tissue. There’s a broader market that undeniable. We saw this with tissue biopsies and liquid biopsies with Guardant360 lung cancer, people asked us, why would someone use a book test instead of a tissue biopsy or tissue biopsy is the gold standard. Now there are way more patients in the U.S. getting NGS from Guardant360 liquid biopsy than tissue biopsy tests today. So once you have product market fit, that becomes the gold standard in the north star by which everyone will have to follow up Yes, we win are on the right path. But it will take some time to get there and ramp things up. But we’re very pleased with the progress at this time.

Operator: Our next question comes from Dan Brennan with Cohen.

Unidentified Analyst: It’s John for Dan. I believe the previous guidance range is based on clinical volume growth of about 35% year-over-year. With 1H tracking well ahead here. Is there enough number you’re looking for, for the year?

Helmy Eltoukhy: Sorry, is there is an updated what? What was the question again?

Unidentified Analyst: Clinical volume growth number. I think the last guidance is based on 35% year-over-year, you’re tracking pretty far ahead of that in 1H.

Helmy Eltoukhy: Yes. I think Yes. Clinical volumes obviously growing very strongly and 49% in this quarter was, I’d say, ahead of our expectations. Yes, I think as we look out for the guidance and the increase that we’ve seen, the increase that we’ve just had in our guidance, yes, I told in on the clinical volume side. So I would say, yes, now our expectation is probably trend into the high 30s, low 40% growth on the clinical volume. So yes, we’re able to have an increase from the previous 35%.

Unidentified Analyst: Got it. And then back on ASP, I guess it will take some time for the coverage rate to flow through your pricing, but is there some range that you see blended clinical ASPs going for the rates are locked in and the increase are fully realized.

Helmy Eltoukhy: Yes. I mean it’s easier to talk about the Guardant360 ASP. And I think, yes, today, it’s at the higher end of that 2600 to 2,700 range. I think if we get sort of full coverage from all of these major payers, and we can contract with those payers, then over time, we think the ASP can get north of 3,000. So potentially a significant increase, but it is going to take time. It’s harder on the blended ASP. It’s primarily — obviously, it’s due to the mix and the mix between Guardant360 Reveal, Tissue and Response. And so how that mix changes over time, it’s very difficult to sort of forecast. And then — but as each of those products get incremental reimbursement over time and we’ve got pathways for each of that to happen than I think overall for each product, though going to increase.