Guardant Health, Inc.

Hello everyone and welcome to the Garden Health First Quarter 2022 Financial Results Call. My name is Charlie and I'll be coordinating the call today. You'll have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypad. Please note that we'll only be taking one question and one follow up from each person. I'll now hand over to your host, Alex Kleban, Vice President of Investor Relations to begin. Alex, please go ahead.

Thank you. Earlier today, Garden Health released financial results. The quarter ended March 31st, 2022. Joining me today from Garden are Helmy Atsuki, Co-CEO, Amir Ali Talasas, Co-CEO, and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meeting of Federal Security's Law Office. 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 Garden 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 GAAP. Reconciliations and most directed comparable gap financial measure may be found in today's earnings release submitted to the SEC. Except as required by law, the Guard displays 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 comment's call contains a time-sensitive information and is accurate only as of the live broadcast May 5, 2022. With that, I'll let you turn the call over to Helmy.

Thanks, Alex. Good afternoon, and thank you for joining our first quarter earnings call. I will begin the call today by providing an update on our progress across oncology. I will then turn the call over to Amira Ali for an update on our screening program. And finally, Mike will provide a more detailed look at our financials. At Garden, we are dedicated to helping patients across all stages of cancer live longer and healthier lives with the data provided from our powerful blood test. In line with this commitment, I would like to start off with a patient story. In 2018, a 54-year-old man was diagnosed with rectal cancer and had a successful surgery to remove his cancer. About three and a half years after surgery, during a regular checkup, his oncologist ordered a garden reveal test, which detected ctDNA, signaling he had a high likelihood of disease recurrence. Because of this result, his oncologist decided to monitor him more closely, and within a few weeks, determined he had a clinical recurrence. His oncologist then ordered a GARDEN360 test, which revealed he had a number of alterations, including HER2 amplification. Given this information, the patient had a number of potential first-line treatment options targeting the HER2 amplification. He was able to start treatment immediately, and I'm happy to report that he's doing well. This is a great illustration of how the garden portfolio of products is increasingly working hand-in-hand to help inform patient treatment across the continuum of care. Now, turning to our performance in slide three, we ended the first quarter with revenue of $96 million, up 22% over the prior year quarter. Our team delivered strong clinical test volumes, reaching 27,100 tests, an increase of 47% from the prior year quarter. This was composed of a somewhat slow start in January and February due to the Omicron surge, followed by a very solid finish to the quarter in March, setting us up very nicely for the second quarter and a very strong ramp for the rest of the year. Moving on to slide four. I'm proud of our team's work to establish Garten as the leader in liquid biopsy for high performance test results and excellent customer service. Since the launch of our first product, Garden360, we have been focused on building relationships with a growing number of oncologists. We now have more than 11,000 ordering oncologists, and within this group, we are seeing our core base of customers ordering more tests and using more garden products each quarter. This is evidence of the depth we are building into these accounts, and that drives adoption of CGP and unlocks more of the TAM over time. This, in turn, allows us to expand our portfolio and field team, which positions us for long-term sustainable growth. We believe there is ample opportunity to continue growing, both in terms of comprehensive genomic profiling and liquid biopsy share. Last month, we announced a partnership with Epic, a widely used comprehensive electronic health record system in the United States, to integrate our broad portfolio of cancer tests and enable our tests to be available to over 250 million individuals with a patient record. This integration will make it easier for health systems, community healthcare providers, and retail health clinics to make our blood tests part of routine clinical care by providing direct ordering access and results delivery. We are proud of our team that is delivering on this initiative in a very condensed timeline, leveraging know-how and lessons learned from across the sector. This is just the first of a number of partnerships that we are exploring to better integrate our products into clinicians' workflows that will include additional EMR systems, among other tools. We are also making progress in the reimbursement front. In early March, we received Medicare coverage for our Garden360 Tissue Next test under the Moldex LCD. We are already seeing that reimbursement of our tissue products accelerating the positive trends we have been seeing of increased depth of ordering per account, as now more and more oncologists are ordering multiple products from Gardens. And as a result, this is deepening our touch points and amplifying our overall brand awareness in the market. Looking more closely at recurrence monitoring on slide five, we continue to be excited by the positive response to our reveal assay, especially given where we are in the product cycle. The MRD space is still in the very early ending, and we continue to hold this singularly unique space as the only commercially available blood-only solution, despite a whole host of tissue-dependent entrants. We are very pleased so far with our progress since launch and the traction we are getting in MRD. With our unique blood-only assay, we believe we are on track and have all of the product and commercial elements necessary to be the leader in MRD. Specifically, we continue to see strong quarter-over-quarter growth and are very pleased with our launch trajectory with respect to the competitive landscape and our previous product launches. We expect to have a series of future tailwinds, including indication expansion, reimbursement, and clinical utility data arriving that sets us up well for long-term growth. Turning to slide six, outside of the United States, we are continuing to broaden our reach to deliver a new paradigm of cancer care around the world. In mid-March, we were excited to announce that the Japanese Ministry of Health, Labor, and Welfare approved the use of GARDEN360 CDX in patients with advanced solid cancers. The GARDEN360 CDX test was also granted approval as a companion diagnostic to identify patients with microsatellite instability high solid tumors who may benefit from Keytruda and patients with MSI high advanced colorectal cancer who may benefit from Updevo. This regulatory approval has taken on added significance as CRC is the most commonly diagnosed cancer in Japan, and this is globally the first liquid biopsy approval for IO therapy. This follows prior regulatory approval for GARDEN360 CDX from the Ministry of Health and Labor and Welfare in December of 2021 as a companion diagnostic for identifying patients with metastatic non-small cell lung cancer who may benefit from treatment with Lomacris. Following this approval, we are now working 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 United States and similar reimbursement rates for CGP. We are now in the process of building a commercial footprint to serve this enormous opportunity. We are also moving to quickly establish our footprint in the European market, as we are seeing early traction with hospitals and doctors with programs in the United Kingdom and Spain. In fact, this month our laboratory, in partnership with Valdebron in Spain, will launch and be officially operational. We look forward to being able to provide local access to Garden360 in the region, ensuring that no cancer patient globally is left behind. Moving on to Biopharma on slide seven. We delivered 5,100 tests in the first quarter, representing growth of 45% year over year. We ended the quarter with more than 110 active partnerships, reflecting a growing and diverse set of customers. The breadth of our product offering, strong customer service, and our clinical market leadership makes us an attractive partner. We have a healthy pipeline of discussions and expect the number of customers to continue to grow over the course of the year. We are also seeing growing interest for our Garden Inform offering, further driving our mission of being a partner of choice for Biopharma. We have now signed several deals for Garden Inform, spanning applications from translational oncology to clinical development and study planning, and have seen strong growth in the number of partners and customers we are talking to with regards to this platform. Turning to slide eight, Earlier this year, I shared our vision for our smart liquid biopsy platform. We continue to make excellent progress towards this launch and are seeing strong initial interest from our biopharma partners. We are encouraged by their early feedback and excitement on its capabilities that are profoundly more rich than any liquid biopsy oncology products in the market today. Diving a bit deeper into the platform, what defines all the diverse cell types in our body is not the genetic sequence information itself, but everything beyond that, such as epigenetics and other markers. We expect this product to redefine drug development and enabling, for the first time, a greatly expanded view into this underlying tumor biology, to which the field in general has been largely blind due to a lack of available tools. It's still early days, but we are beginning to witness firsthand the power that deep multimodal interrogation of cancer pathways will have on development of next-generation precision medicines and are very excited for the countless applications possible from this new platform. We look forward to sharing more about this next chapter of our smart liquid biopsy platform at an investor day planned for the fall of this year. Before turning the call over to Amir Ali, I would like to take a moment to talk about what drives us at Gardens. One of our most important values is participation first. Everything we do has to be led by that North Star. Another core value is Blade the Trail. With the momentous launch of our screening test shield a few days ago, we've now spent almost a decade putting these values into practice to make blood-based cancer testing across the entire continuum of cancer care a reality. We've made countless difficult decisions along the way, all to develop the right technology and product market fit to bring our vision to fruition. We learned along the way that as a company, when you blaze a trail, you have to constantly innovate and disrupt to deliver progress, often displacing incumbent technologies and companies, like we did with Garden360 eight years ago, GardenReveal last year, and this week with Shield. This generates excitement and attracts new investment to propel more innovation. We've seen this in the form of billions of dollars in capital invested by financial markets and competitors into blood-based testing. Disruption also triggers vocal reactions at times. All of this is evidence that we are very much on the right track and leading the nascent industry. I am very proud of our team, our products, and this exciting next chapter of Garden Health. I will now turn the call over to Amir Ali to provide an update on our screening program. Thanks, Helmi.