Guardant Health, Inc.

Hello and welcome to today's Garden Health Q4 2021 earnings call. My name is Elliot and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I'd now like to hand over to our host, Carrie Mendeville, Investor Relations. Please go ahead.

Thank you. Earlier today, Garden Health released financial results for the quarter and full year ended December 31st, 2021. If you have not received this news release, or if you'd like to be added to the company's distribution list, please send an email to investors at gardenhealth.com. Joining me today from Garten are Helmi Altshulke, co-CEO, Amiralee Talegaz, co-CEO, and Mike Bell, Chief Financial Officer. Before I begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward Looking Statements in the Press Release Guardian Issue today. For a more complete list and description, please see the Risk Factors section of the company's annual report on Form 10-K for the year ended December 31, 2021, and in its other filings with the Securities and Exchange Commission. This call will also include a discussion of certain financial measures that are not calculated in accordance with general accepted accounting principles. Reconciliation to the most directly comparable GAAP financial measure may be found in today's earnings release submitted to the SEC. Except as required by law, Gartner claims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, February 23, 2022. With that, I'd like to turn the call over to Helmi.

Thanks, Kari. Good afternoon, and thank you for joining our fourth quarter and full year 2021 earnings call. I'll start off today's call by highlighting our progress across oncology as we continue to build on our strong position as the liquid biopsy leader. I will then turn the call over to Amir Ali for an update on our screening program. And finally, Mike will provide a more detailed look at our financials and our outlook for 2022. Starting on slide three, 2021 was a significant year for GARDENED. We launched a number of new products, surpassed 100 biopharma partners, reached target enrollment for our CLIP study, started enrolling a second registration grade study in lung cancer screening, continue to advance our technology platform, and significantly scale the organization as we prepare for future growth. Our mission at Garden is to conquer cancer with data and ultimately transform cancer care. The driving force of our work is our commitment to putting patients first. We are dedicated to bringing the absolute best products to market that will continue providing clinically actionable information to inform patient care. Before I provide an update on our progress, I would like to start off with a patient story. In 2017, a 60-year-old man was diagnosed with stage 2 rectal cancer. He quickly underwent surgery, but soon after surgery, his oncologist discovered the cancer had already spread to a lymph node. The patient immediately began chemotherapy. Fortunately, he responded well to treatment, was considered to be cancer-free, and transitioned to long-term follow-up care. This past summer, he was still feeling great and was due for a periodic checkup. His CT scan was normal, his CEA was within normal limits, so the oncologist scheduled follow-up tests, including colonoscopy, CEA, and a CT scan to be performed six months later. His oncologist also ordered a garden reveal test, which came back positive for residual disease. With these results, his oncologist immediately ordered a PET scan that detected a small lung nodule which had not been visible on the CT scan. After a biopsy, the nodule was confirmed as an isolated metastatic rectal cancer. The patient had a second surgery to remove the tumor and is recovering well. This story highlights how garden reveal can bring critical information to oncologists and patients catching cancer occurrence early in order to treat cancer before it continues to spread. Now, turning to our performance on slide four. We ended Q4 with another quarter of record revenue of $108 million, up 38% over the prior year quarter. This brought total revenue for 2021 to $374 million, up 30% over 2020. Moving on to slide five. During the year, we continued to build Our commercial organization focused on oncology, now a team of more than 250 individuals that we believe is second to none. They delivered strong clinical test volume for the fourth quarter, reaching 25,600 tests, an increase of 48% from the prior year quarter. Over the course of the year, despite continuing impacts from COVID, clinical volumes reached 87,600 tests, up 39% year over year. The products we have in the market today are in a league of their own in terms of performance, product market fit, and customer experience. Penetrating the large market for oncology tests takes more than just amazing technology. It takes clinical evidence, regulatory approvals, reimbursement, and above all, a very robust commercial channel. I continue to be proud of how well our commercial team is executing in this environment and achieving strong growth. Notably, we are continuing to make inroads in community accounts where we are growing twice as fast as in the academic centers. While we are continuing to grow in academic centers, our volume mix is becoming increasingly weighted towards the community setting, where the majority of cancer patients reside. Approximately 70% of our volume in the quarter came from the community setting, compared to 63% in the same period last year. Today, roughly 50% of our team's interactions with oncologists are face-to-face, while the remaining half are virtual. We have equipped our team with the tools needed to continue to drive adoption of our products through both virtual and in-person interactions. Across the board, we are seeing excellent traction with existing oncologists ordering more tests and new physician additions. More and more oncologists are seeing GARDEN as a whole precision oncology platform. We have the largest share of voice in the market, nearly double the number of interactions with oncologists compared to our closest CGP competitor. Looking more closely at recurrence monitoring on slide six. We are encouraged by the growing interest in early success of GARDEN REVEAL and are continuing to invest heavily in the vast opportunity ahead while leveraging our existing channel of oncologists. At the end of January, we presented new data on GARDEN REVEAL at the ASCO Gastrointestinal Cancer Symposium that demonstrated high performance for recurrence detection in early stage colorectal cancer. An interim analysis from COSMOS, a large prospective observational study, shows that garden reveal, when used after curative intense surgery for stage 2, 3 colorectal cancer, can detect MRD prior to disease recurrence with a longitudinal sensitivity of 91% and an average lead time of greater than six months. The test integrates genomic and epigenomic signatures to detect disease without the need for tumor tissues. tissue biopsies can be difficult to obtain, time-consuming, and lead to complications, all of which can delay a patient's treatment. Our blood-based tests can overcome these barriers and provide fast and actionable information to help guide treatment decisions across the continuum of care. Turning to slide seven, the opportunity for recurrence monitoring has grown from $15 billion to over $20 billion today due to increasing frequency of utilization of such tests in the surveillance setting as well as a more favorable reimbursement landscape. It should be noted that this $20 billion TAM is for blood-only approaches. Tissue-dependent or informed approaches would potentially only access less than half of this opportunity, given some of the logistical challenges of accessing tissue, especially in this surveillance setting, many years out from the date of curative resection. Turning to slide eight, outside of the United States, we are making great progress, particularly in Japan, Our lab there is up and running, and we expect to receive regulatory approval for GARDEN360 CDX in the near future. Following approval, we will turn our focus to securing public reimbursement by the end of 2022. Japan represents a very large market opportunity with about 400,000 late-stage patients compared to 700,000 in the U.S., and similar reimbursement rates for CGP. We are also investing in Europe, and our partners are currently building two labs, one in Spain with Valdebron, and another at the Royal Marsden in the UK. We expect their services to become operational over the next 12 months. These labs will be available for clinical research and clinical care, providing industry-leading next-generation sequencing to private and self-paying patients with a plan for future expansion for national health service patients in the UK. We believe this strategy of building a global network of laboratories by partnering with key academic centers is the most effective way to unlock the international opportunity. Moving on to biopharma on slide nine, we saw a healthy rebound in our biopharma business with volume of 6,600 samples, up 36% from the third quarter and up 36% year over year. We're also seeing growing interest with our biopharma partners for using Reveal in the adjuvant setting beyond just CRC indications, including lung, bladder, and breast. Our partners see significant benefit with our blood-only tissue agnostic approach and we look forward to growing usage of Reveal in the biopharma setting. In addition to increasing sample volumes, the number of customers we serve continues to grow. We reached our 2021 target and ended the year with more than 100 active biopharma partnerships. We have a healthy pipeline of discussions, and the breadth of our product offering, strong customer service, and our clinical market leadership makes us an attractive partner. We expect the number of customers to continue to grow. We recently signed two new CDX contracts with a number of others in discussion. While we continue to see strong overall demand for development services, several projects have recently been completed or are soon to be completed, and we expect some near-term lumpiness in this revenue line given the timing of project milestones. We are continuing to demonstrate the clinical utility and real-world evidence of our products, recently presenting real-world clinical outcomes data from the GARDEN-INFORM platform in both breast and colorectal cancers. In December, at the 2021 San Antonio Breast Cancer Symposium, we presented new data from the PADA-1 study demonstrating the benefits of using GARDEN-360 response for patients with advanced breast cancer to help switch therapy to a more effective option as soon as resistance to treatment emerged. Excitingly, this approach doubled progression-free survival, demonstrating the clinical utility of therapeutic monitoring via liquid biopsy. Importantly, there was no need for a tissue biopsy, which can be difficult and time-consuming, potentially delaying time to treatment. Additionally, at ASCO GI, we presented new clinical utility data that demonstrated that the GARDEN360 test detects microsatellite instability high status in patients with advanced gastrointestinal cancers at a similar frequency to tissue-based testing. MSI-HI is an important biomarker used to predict a response to immunotherapy. Moving on to slide 10. At Gardens, we have always moved at a rapid velocity, motivated by the North Star of patient care. At the JP Morgan Conference in early January, I shared our vision for a smart liquid biopsy platform, which we believe will be a quantum leap forward for liquid biopsies. Our first product from this new platform will have capabilities that are profoundly more rich than our current oncology products. Drawing on close to 10 years of research and experience from hundreds of thousands of liquid biopsies, Our smart liquid biopsy will offer a genomic footprint nearly 100 times larger than Garden360 CDX, provide even greater sensitivity, and include comprehensive analysis of genomic, epigenomic, and immune signatures, among many other capabilities. We believe this new platform will advance liquid biopsies in the same way that smartphones upended first-generation cell phones by enabling a rich ecosystem of countless applications ranging from deep analysis of tumor genomics, interrogation of the tumor microenvironment, diverse immunology applications, much more sensitive therapeutic monitoring, identification of complex prognostic signatures, and many others. We look forward to sharing more about this next chapter of our Smart Liquid Biopsy Platform Admin Vestor Day planned for the fall of this year. I will now turn the call over to Amir Ali to provide an update on screening. Thanks, Helmi.