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Guardant Health Reports Third Quarter 2022 Financial Results

Guardant Health Reports Third Quarter 2022 Financial Results

By AP News
Published - Nov 03, 2022, 04:11 PM ET
Last Updated - Jun 23, 2023, 08:12 PM EDT

PALO ALTO, Calif.--(BUSINESS WIRE)--Nov 3, 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, today reported financial results for the quarter ended September 30, 2022.

Recent Highlights

  • Revenue of $117.4 million for the third quarter of 2022, an increase of 24% over the corresponding period of 2021
  • Reported 32,400 tests to clinical customers and 6,750 tests to biopharmaceutical customers in the third quarter of 2022, representing an increase of 42% and 40%, respectively, over the third quarter of 2021
  • Expanded Guardant Reveal™ , the only tissue-free liquid biopsy test for detection of residual and recurrent disease, to include early-stage breast and lung cancers in addition to colorectal cancer
  • Introduced GuardantINFINITY™, a next-generation smart liquid biopsy assay that provides broad genomic and epigenomic insights into the complexities of tumor molecular profiles and immune response to advance cancer research and therapy development
  • Received FDA approval for Guardant360 ® CDx liquid biopsy test as a companion diagnostic for ENHERTU ® for treatment of non-small cell lung cancer patients with activating HER2 mutations
  • ECLIPSE readout and PMA submission for Shield assay both expected during the fourth quarter of the year

“Volume growth accelerated sequentially in clinical oncology, propelling us to new records in revenue and volumes. We made additional strides with Guardant Reveal, expanding its use into multiple cancer indications that now include colorectal, lung and breast cancers. In addition, Guardant Infinity, our first smart liquid biopsy offering, has seen a rapid uptake with our biopharma partners. That said, counter to our expectations earlier in the year, clinical volumes continue to be impacted by a challenging backdrop with lingering access restrictions and provider staffing shortages.” said Helmy Eltoukhy, co-founder and co-CEO.

“During the quarter we made great progress on the ECLIPSE study and are very close to locking our study database with about 70 CRCs. In parallel, our Shield LDT screening test continues to be well received by physicians and patients and has demonstrated outstanding levels of patient adherence,” said AmirAli Talasaz, co-founder and co-CEO. “This positive early response to Shield LDT gives us increased confidence in our ability to develop Shield into a leading non-invasive cancer screening methodology.”

Third Quarter 2022 Financial Results

Revenue was $117.4 million for the three months ended September 30, 2022, a 24% increase from $94.8 million for the three months ended September 30, 2021. Precision oncology revenue grew 29%, driven predominantly by an increase in clinical testing volume and biopharma sample volume, which grew 42% and 40%, respectively, over the prior year period. Development services and other revenue slightly decreased by 1%.

Gross profit, or total revenue less cost of precision oncology testing and cost of development services and other, was $76.9 million for the third quarter of 2022, an increase of $12.9 million from $64.0 million for the corresponding prior year period. Gross margin, or gross profit divided by total revenue, was 66%, as compared to 67% for the corresponding prior year period.

Operating expenses were $221.5 million for the third quarter of 2022, as compared to $171.3 million for the corresponding prior year period, an increase of 29%. Non-GAAP operating expenses were $200.5 million for the third quarter of 2022, as compared to $135.1 million for the corresponding prior year period.

Net loss attributable to Guardant Health, Inc. common stockholders was $162.0 million for the third quarter of 2022, as compared to $107.5 million for the corresponding prior year period. Net loss per share attributable to Guardant Health, Inc. common stockholders was $1.58 for the third quarter of 2022, as compared to $1.06 for the corresponding prior year period. Non-GAAP net loss was $120.8 million for the third quarter of 2022, as compared to $70.5 million for the corresponding prior year period. Non-GAAP net loss per share was $1.18 for the third quarter of 2022, as compared to $0.70 for the corresponding prior year period.

Adjusted EBITDA loss was $112.8 million for the third quarter of 2022, as compared to a $65.2 million loss for the corresponding prior year period.

Cash, cash equivalents and marketable debt securities were $1.1 billion as of September 30, 2022.

2022 Guidance

Given the continued challenging backdrop and reimbursement delays impacting the clinical oncology business, Guardant Health now expects full year 2022 revenue to be in the range of $440 million to $450 million, representing growth of 18% to 20% compared to full year 2021. This compares to previous full year 2022 revenue guidance of $460 million to $470 million.

Webcast Information

Guardant Health will host a conference call to discuss the third quarter 2022 financial results after market close on Thursday, November 3, 2022 at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at http://investors.guardanthealth.com. 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, fair value adjustments on marketable equity securities, impairment of other 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.

About Guardant Health

Guardant Health is a leading precision oncology company focused on helping conquer cancer globally through use of its proprietary tests, vast data sets and advanced analytics. The Guardant Health oncology platform leverages capabilities to drive commercial adoption, improve patient clinical outcomes and lower healthcare costs across all stages of the cancer care continuum. Guardant Health has commercially launched Guardant360®, Guardant360 CDx, Guardant360 TissueNext™, Guardant360 Response™, and GuardantOMNI® tests for advanced stage cancer patients, and Guardant Reveal™ for early-stage cancer patients. The Guardant Health screening portfolio, including the Shield™ test, aims to address the needs of individuals eligible for cancer screening.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws, including statements relating to Guardant Health’s future results, or regarding the potential benefits and advantages of Guardant Health’s platforms, assays and tests, which involve risks and uncertainties that could cause Guardant Health’s actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions, and actual outcomes and results could differ materially from these statements due to a number of factors. These and additional risks and uncertainties that could affect Guardant Health’s financial and operating results and cause actual results to differ materially from those indicated by the forward-looking statements made in this press release include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its Annual Report on Form 10-K for the year ended December 31, 2021, and any current and periodic reports filed with the Securities and Exchange Commission thereafter. The forward-looking statements in this press release are based on information available to Guardant Health as of the date hereof, and Guardant Health disclaims any obligation to update any forward-looking statements provided to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing Guardant Health’s views as of any date subsequent to the date of this press release.

Guardant Health, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Precision oncology testing

$

102,054

 

 

$

79,272

 

 

$

278,252

 

 

$

215,605

 

Development services and other

 

15,350

 

 

 

15,507

 

 

 

44,395

 

 

 

49,940

 

Total revenue

 

117,404

 

 

 

94,779

 

 

 

322,647

 

 

 

265,545

 

Costs and operating expenses:

 

 

 

 

 

 

 

Cost of precision oncology testing

 

39,434

 

 

 

29,665

 

 

 

104,493

 

 

 

78,142

 

Cost of development services and other

 

1,062

 

 

 

1,151

 

 

 

4,711

 

 

 

11,348

 

Research and development expense

 

100,017

 

 

 

70,968

 

 

 

267,229

 

 

 

190,200

 

Sales and marketing expense

 

80,370

 

 

 

50,228

 

 

 

218,405

 

 

 

132,282

 

General and administrative expense

 

41,121

 

 

 

50,055

 

 

 

126,068

 

 

 

166,366

 

Total costs and operating expenses

 

262,004

 

 

 

202,067

 

 

 

720,906

 

 

 

578,338

 

Loss from operations

 

(144,600

)

 

 

(107,288

)

 

 

(398,259

)

 

 

(312,793

)

Interest income

 

1,754

 

 

 

689

 

 

 

3,919

 

 

 

3,277

 

Interest expense

 

(644

)

 

 

(644

)

 

 

(1,933

)

 

 

(1,934

)

Other income (expense), net

 

(18,389

)

 

 

(187

)

 

 

(18,059

)

 

 

(720

)

Fair value adjustments of noncontrolling interest liability

 

 

 

 

 

 

 

(99,785

)

 

 

 

Loss before provision for income taxes

 

(161,879

)

 

 

(107,430

)

 

 

(514,117

)

 

 

(312,170

)

Provision for income taxes

 

115

 

 

 

96

 

 

 

537

 

 

 

289

 

Net loss

 

(161,994

)

 

 

(107,526

)

 

 

(514,654

)

 

 

(312,459

)

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(2,300

)

Net loss attributable to Guardant Health, Inc. common stockholders

$

(161,994

)

 

$

(107,526

)

 

$

(514,654

)

 

$

(314,759

)

Net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted

$

(1.58

)

 

$

(1.06

)

 

$

(5.04

)

 

$

(3.11

)

Weighted-average shares used in computing net loss per share attributable to Guardant Health, Inc. common stockholders, basic and diluted

 

102,289

 

 

 

101,420

 

 

 

102,065

 

 

 

101,184

 

Guardant Health, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and per share data)

 

 

September 30, 2022

 

December 31, 2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

158,310

 

 

$

492,202

 

Short-term marketable debt securities

 

799,727

 

 

 

440,546

 

Accounts receivable, net

 

86,200

 

 

 

97,652

 

Inventory, net

 

63,047

 

 

 

30,674

 

Prepaid expenses and other current assets, net

 

23,565

 

 

 

53,052

 

Total current assets

 

1,130,849

 

 

 

1,114,126

 

Long-term marketable debt securities

 

156,741

 

 

 

698,034

 

Property and equipment, net

 

168,007

 

 

 

124,461

 

Right-of-use assets, net

 

178,747

 

 

 

189,443

 

Intangible assets, net

 

12,417

 

 

 

14,207

 

Goodwill

 

3,290

 

 

 

3,290

 

Other assets, net

 

51,728

 

 

 

60,938

 

Total Assets

$

1,701,779

 

 

$

2,204,499

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

40,911

 

 

$

17,580

 

Accrued compensation

 

57,423

 

 

 

42,496

 

Accrued expenses

 

63,367

 

 

 

45,285

 

Noncontrolling interest liability

 

 

 

 

78,000

 

Deferred revenue

 

13,423

 

 

 

11,326

 

Total current liabilities

 

175,124

 

 

 

194,687

 

Convertible senior notes, net

 

1,136,748

 

 

 

1,134,821

 

Long-term operating lease liabilities

 

216,174

 

 

 

226,053

 

Other long-term liabilities

 

6,988

 

 

 

3,933

 

Total Liabilities

 

1,535,034

 

 

 

1,559,494

 

Stockholders’ equity:

 

 

 

Common stock, par value of $0.00001 per share; 350,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 102,413,638 and 101,767,446 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

1

 

 

 

1

 

Additional paid-in capital

 

1,716,075

 

 

 

1,657,593

 

Accumulated other comprehensive loss

 

(26,852

)

 

 

(4,764

)

Accumulated deficit

 

(1,522,479

)

 

 

(1,007,825

)

Total Stockholders’ Equity

 

166,745

 

 

 

645,005

 

Total Liabilities and Stockholders’ Equity

$

1,701,779

 

 

$

2,204,499

 

Guardant Health, Inc.

Reconciliation of Selected GAAP Measures to Non-GAAP Measures

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

GAAP cost of precision oncology testing

$

39,434

 

 

$

29,665

 

 

$

104,493

 

 

$

78,142

 

Amortization of intangible assets

 

(285

)

 

 

(152

)

 

 

(582

)

 

 

(449

)

Stock-based compensation expense and related employer payroll tax payments

 

(1,377

)

 

 

(762

)

 

 

(3,782

)

 

 

(2,449

)

Non-GAAP cost of precision oncology testing

$

37,772

 

 

$

28,751

 

 

$

100,129

 

 

$

75,244

 

 

 

 

 

 

 

 

 

GAAP research and development expense

$

100,017

 

 

$

70,968

 

 

$

267,229

 

 

$

190,200

 

Stock-based compensation expense and related employer payroll tax payments

 

(7,256

)

 

 

(4,624

)

 

 

(18,857

)

 

 

(13,674

)

Contingent consideration

 

(355

)

 

 

 

 

 

(2,652

)

 

 

 

Non-GAAP research and development expense

$

92,406

 

 

$

66,344

 

 

$

245,720

 

 

$

176,526

 

 

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

80,370

 

 

$

50,228

 

 

$

218,405

 

 

$

132,282

 

Amortization of intangible assets

 

(67

)

 

 

 

 

 

(201

)

 

 

 

Stock-based compensation expense and related employer payroll tax payments

 

(6,643

)

 

 

(4,127

)

 

 

(18,267

)

 

 

(10,554

)

Non-GAAP sales and marketing expense

$

73,660

 

 

$

46,101

 

 

$

199,937

 

 

$

121,728

 

 

 

 

 

 

 

 

 

GAAP general and administrative expense

$

41,121

 

 

$

50,055

 

 

$

126,068

 

 

$

166,366

 

Amortization of intangible assets

 

(339

)

 

 

(339

)

 

 

(1,007

)

 

 

(1,008

)

Stock-based compensation expense and related employer payroll tax payments

 

(5,955

)

 

 

(26,044

)

 

 

(31,042

)

 

 

(101,154

)

Contingent consideration

 

(390

)

 

 

(970

)

 

 

(4,195

)

 

 

(1,845

)

Non-GAAP general and administrative expense

$

34,437

 

 

$

22,702

 

 

$

89,824

 

 

$

62,359

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(144,600

)

 

$

(107,288

)

 

$

(398,259

)

 

$

(312,793

)

Amortization of intangible assets

 

691

 

 

 

491

 

 

 

1,790

 

 

 

1,457

 

Stock-based compensation expense and related employer payroll tax payments

 

21,231

 

 

 

35,557

 

 

 

71,948

 

 

 

127,831

 

Contingent consideration

 

745

 

 

 

970

 

 

 

6,847

 

 

 

1,845

 

Non-GAAP loss from operations

$

(121,933

)

 

$

(70,270

)

 

$

(317,674

)

 

$

(181,660

)

 

 

 

 

 

 

 

 

GAAP net loss

$

(161,994

)

 

$

(107,526

)

 

$

(514,654

)

 

$

(312,459

)

Amortization of intangible assets

 

691

 

 

 

491

 

 

 

1,790

 

 

 

1,457

 

Stock-based compensation expense and related employer payroll tax payments

 

21,231

 

 

 

35,557

 

 

 

71,948

 

 

 

127,831

 

Contingent consideration

 

745

 

 

 

970

 

 

 

6,847

 

 

 

1,845

 

Unrealized losses on marketable equity securities

 

13,230

 

 

 

 

 

 

13,230

 

 

 

 

Impairment of other assets

 

5,261

 

 

 

 

 

 

5,261

 

 

 

 

Fair value adjustments of noncontrolling interest liability

 

 

 

 

 

 

 

99,785

 

 

 

 

Non-GAAP net loss

$

(120,836

)

 

$

(70,508

)

 

$

(315,793

)

 

$

(181,326

)

 

 

 

 

 

 

 

 

GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(161,994

)

 

$

(107,526

)

 

$

(514,654

)

 

$

(314,759

)

Amortization of intangible assets

 

691

 

 

 

491

 

 

 

1,790

 

 

 

1,457

 

Stock-based compensation expense and related employer payroll tax payments

 

21,231

 

 

 

35,557

 

 

 

71,948

 

 

 

127,831

 

Contingent consideration

 

745

 

 

 

970

 

 

 

6,847

 

 

 

1,845

 

Unrealized losses on marketable equity securities

 

13,230

 

 

 

 

 

 

13,230

 

 

 

 

Impairment of other assets

 

5,261

 

 

 

 

 

 

5,261

 

 

 

 

Fair value adjustments of noncontrolling interest liability

 

 

 

 

 

 

 

99,785

 

 

 

 

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

2,300

 

Non-GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(120,836

)

 

$

(70,508

)

 

$

(315,793

)

 

$

(181,326

)

 

 

 

 

 

 

 

 

GAAP net loss per share attributable to Guardant Health, Inc., common stockholders, basic and diluted

$

(1.58

)

 

$

(1.06

)

 

$

(5.04

)

 

$

(3.11

)

Non-GAAP net loss per share attributable to Guardant Health, Inc., common stockholders, basic and diluted

$

(1.18

)

 

$

(0.70

)

 

$

(3.09

)

 

$

(1.79

)

Weighted-average shares used in computing GAAP and Non-GAAP net loss per share, basic and diluted

 

102,289

 

 

 

101,420

 

 

 

102,065

 

 

 

101,184

 

Guardant Health, Inc.

Reconciliation of GAAP Net Loss Attributable to Guardant Health, Inc. Common Stockholders

to Adjusted EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

GAAP net loss attributable to Guardant Health, Inc. common stockholders

$

(161,994

)

 

$

(107,526

)

 

$

(514,654

)

 

$

(314,759

)

Interest income

 

(1,754

)

 

 

(689

)

 

 

(3,919

)

 

 

(3,277

)

Interest expense

 

644

 

 

 

644

 

 

 

1,933

 

 

 

1,934

 

Other (income) expense, net

 

18,389

 

 

 

187

 

 

 

18,059

 

 

 

720

 

Provision for income taxes

 

115

 

 

 

96

 

 

 

537

 

 

 

289

 

Depreciation and amortization

 

9,807

 

 

 

5,544

 

 

 

25,793

 

 

 

16,181

 

Stock-based compensation expense and related employer payroll tax payments

 

21,231

 

 

 

35,557

 

 

 

71,948

 

 

 

127,831

 

Contingent consideration

 

745

 

 

 

970

 

 

 

6,847

 

 

 

1,845

 

Fair value adjustments of noncontrolling interest liability

 

 

 

 

 

 

 

99,785

 

 

 

 

Adjustment of redeemable noncontrolling interest

 

 

 

 

 

 

 

 

 

 

2,300

 

Adjusted EBITDA

$

(112,817

)

 

$

(65,217

)

 

$

(293,671

)

 

$

(166,936

)

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20221103005971/en/

CONTACT: Investor Contact:

investors@guardanthealth.comMedia Contact:

press@guardanthealth.com

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: ONCOLOGY MEDICAL SUPPLIES MEDICAL DEVICES HEALTH PHARMACEUTICAL BIOTECHNOLOGY

SOURCE: Guardant Health, Inc.

Copyright Business Wire 2022.

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