Guardant Health, Inc.

Hello and welcome to today's Garden Health second quarter 2022 financial results. My name is Bailey and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Alex Claiborne. Alex, please go ahead.

Thank you. Earlier today, Garden Health released financial results for the quarter ended June 30th, 2022. Joining me today from Garden are Helmi El-Touki, co-CEO, and Marilee Talasaz, 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 securities laws. These statements involve mature 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. Reconciliation to the most directly comparable GAAP financial measures may be found in today's earnings or lease submitted to the SEC. Except as required by law, Garden disclaims 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 live broadcast August 4, 2022. With that, I'd like to turn the call over to Helmi.

Thanks, Alex. Good afternoon and thank you for joining our second quarter 2022 earnings call. I will begin the call today providing an update on our progress across oncology, including quarterly trends, reimbursement, and upcoming product launches. I will then turn the call over to Amir Ali for an update on the Eclipse timeline, the Shield LVT launch, and multi-cancer screening. And finally, Mike will provide a more detailed look at our financials and guidance for 2022. At Gardent, we are dedicated to helping patients cross all stages of cancer, live longer and healthier lives with the data provided from our powerful blood tests. In line with this commitment, I would like to start off with a patient story. In 2018, a woman in her 50s was diagnosed with advanced stage rectal cancer. Following her diagnosis, she received radiation, surgery, and adjuvant chemotherapy and responded very well to treatment. About three years following her initial diagnosis, she began to experience some new pain in her hip. Her oncologist ran a number of tests in search of the cause, including a colonoscopy, CT scans, blood work, and a full urology workup. All tests' results were normal. Perplexed, her oncologist decided to order garden reveal. Garden reveal detected CT DNA, which indicated an increased risk of recurrence. This result from a reveal led him to order a bone scan, something uncommon for rectal cancer as it rarely spreads to the bone. The bone scan detected a lesion in her hip bone of less than three millimeters and a PET scan confirmed the malignancy in the bone. Because the lesion size is so small, radiation therapy was directed at the hip and the patient is now cancer-free. She is receiving chemotherapy as a precaution and is back to living a pain-free life. This patient story is a great example of how garden reveal can detect ctDNA years after resection when accessing tissue can be difficult. Now, turning to our performance in slide three, we ended the second quarter with record revenue of $109 million, up 19% over the prior year quarter. Within this, precision oncology grew by 27% thanks to continued traction with oncologists. Clinical test volume reached 29,300 tests, up 40%, and biopharma volume reached 6,000, up 65%, all on a year-over-year basis. Moving on to slide four, our team continues to extend our leadership in liquid biopsy through our high-performance tests and commitment to customer service. Diving into the underlying Q2 dynamics, volume growth was strong, but a bit below our original forecast as we continue to navigate macro headwinds. We started the quarter very nicely, but saw periods of softness throughout May and June when we had anticipated stable growth throughout the quarter. Put simply, we expected a stronger recovery from COVID-related disruptions, and we see similar lingering effects across other sector indicators we monitor. That said, there were a number of positive takeaways during Q2, that bode well for accelerating growth for the remainder of the year. Our business continues to gain strength in both breadth and depth as we again reach a record number of ordering oncologists. These oncologists are ordering about 30% more garden tests on average versus this time last year. Since last year, we also saw a large increase in the number of oncologists ordering multiple garden products. In addition to Garden360, This is driven by very strong growth in new products, including Reveal, TissueNext, and Response. And finally, we continue to lead the industry in terms of share of voice with our customers. Turning to slide five and what should help us accelerate our clinical volumes in the second half. So far in July, we have seen volume pick back up nicely in the early weeks. In addition, we are very excited by a number of critical tailwinds that will start to have an impact in the remainder of the year. Starting with MRD, we are pleased to announce that we have received reimbursement for garden reveal for Moldex. As we disclosed earlier this week, it'll be the first blood-only MRD assay to be reimbursed by Medicare for patients with stage two or three colorectal cancer. We believe this gives us an excellent tailwind to gain even stronger volume momentum in the second half. We are also in the advanced stages of preparing for our Reveal multi-cancer launch, which will make Reveal available for use in breast and lung in addition to colorectal cancer. We have been making great progress and are targeting a second half launch. Finally, we are on track for completing our announced Epic EMR integration in the second half of this year, which should serve as an important catalyst for our business across a variety of our products. Moving on to biopharma on slide six. We delivered 6,000 tests in the second quarter, representing 65% growth year over year. To date, we have partnered with more than 130 biopharma companies as we continue to grow and diversify our customer base. This was evident at ASCO where the power of the full garden platform facilitated strong customer engagement. Furthermore, we are pleased to announce we have successfully launched our smart liquid biopsy assay in early access for research use. We have signed a number of agreements and started processing customer samples at the end of Q2. With a healthy pipeline of discussions, including for smart liquid biopsy, we believe we have a strong setup heading into the back half of the year. On to slide seven. Outside of the United States, we continue to make progress in our strategy of achieving global scale with a focus on large core markets. Most notably for this quarter, in Europe, our partner lab in Belgarbon in Spain is now open for business. In EMEA, we completed our planned purchase of the Garden Health EMEA joint venture. Focusing in on Japan, we received regulatory approval of Garden360 CDX earlier this year and expect to receive reimbursement later this year. And in China, we signed a strategic partnership with Atacon, one of the largest lab companies in China, to offer CGP to biopharma customers. All of this takes us another step closer to ensuring all cancer patients across the globe receive access to our technology. I will now turn the call over to Amir Ali to provide an update on our screening program.