Guardant Health, Inc.

Hello and welcome to the Garden Health third quarter 2022 financial results call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star one on your telephone keypad. If you'd like to withdraw your question, you may press star two. I will now hand over to your host, Alex Claiborne, Vice President of Investor Relations. Please go ahead.

Thank you. Earlier today, Garden Health released financial results for the quarter ended September 30th, 2022. Joining me today from GARDEN are Helmi Eltuki, Co-CEO, Amir Ali 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 Federal Securities Laws. These statements involve mature risks and uncertainties that could cause actual results or events that maturely differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Forward-Looking Statements in the Pressure 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 31st, 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 release submitted to the FTC. Except as required by law, the guardian 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 that is accurate only as of the live broadcast, November 3rd, 2022. With that, I'd like to turn the call over to Helmut.

Thanks, Alex. Good afternoon, and thank you for joining our third quarter 2022 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 Amir Ali for an update on our screening business, including progress with Eclipse and multi-cancer screening. And finally, Mike will provide a more detailed look at our financials and guidance for 2022. At GARDENED, we are dedicated to helping patients across 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 by sharing an example of how our recently launched SHIELD laboratory-developed test is positively impacting screening for the non-compliant population. Our SHIELD LVT test is off to a fantastic start and has vastly exceeded our expectations. With SHIELD, we have a unique opportunity to impact outcomes at both the practice and health system level. In one primary care practice, over 100 SHIELD tests were completed as of early October. These tests primarily addressed a non-compliant population who for one reason or another, had not completed CRC screening via stool tests or colonoscopy. From these tests so far, five individuals have completed a colonoscopy following a positive SHIELD result. Of these five, four individuals had polyps, including adenomas, and one of the individuals with polyps has been referred for further evaluation for potential cancer diagnosis. We developed SHIELD with the intent to reduce cancer mortality by ensuring more individuals are screened. We are very proud to see that only after a few short months, this is already becoming a reality. With time, we believe SHIELD will be a powerful tool for primary care practices and health systems to boost screening compliance in their communities. Now, turning to our performance in slide three. We ended the third quarter with record revenue of $117 million. up 24% over the prior year quarter. Within this, precision oncology grew by 29%, while development services and other revenue declined by 1%. Moving on to slide four, clinical test volume reached over 32,400 tests, up 42% compared to the prior year quarter. In line with recent quarters, growth was driven by an increase in the number of ordering oncologists and by an increase in the number of oncologists ordering multiple GARDEN products, including Reveal, Response, and TissueNext assays, in addition to GARDEN360. Importantly, we achieved this accelerated growth despite continuing challenges of staffing shortages and lingering access restrictions across a number of practices, the majority of which we had expected to resolve more quickly. Turning to MRD. Shortly after last quarter's earnings call, we launched garden reveal for multi-cancer, adding breast and lung cancers to CRC. Collectively, these three cancers affect 6 million people annually in the United States alone, but obtaining tissue in these settings can be challenging. This makes our tissue-free reveal assay a crucial option, and we are very pleased to be able to extend the benefits of our reveal test to more patients. Following this expansion, We saw significant growth in the number of reveal tests ordered. Finally, following the positive CMS reimbursement we spoke about last quarter, we are pleased to report that our Medicare reimbursement rate for garden reveal for CRC was recently increased from approximately $3,600 to over $4,900. We also made great progress with the build out of our Epic EMR integration capabilities and have the first group of practices expected to be onboarded in Q4. Turning to slide five in biopharma. Volume reached 6,750 samples, a record number of 40% on a year-over-year basis. During Q3, we saw a rapid uptake of our recently launched smart liquid biopsy, Garden Infinity, which is available for research use by biopharma partners. Infinity accounted for more than 10% of our quarterly biopharma volume just months after launch. We're very pleased with this rapid uptake and believe we are just scratching the surface of Infinity's potential, which will be a major area of focus for us heading into 2023. Additionally, we received FDA approval for GARDEN360 CDX as a companion diagnostic for N-HER2 in non-small cell lung cancer patients with activating HER2 mutations. This adds to our ever-growing list of FDA-approved companion diagnostic indications for GARDEN360 CDX. Moving to slide six, I want to take a moment to share a bit more about why we are so excited about Infinity and the capabilities it brings to our customers. We often use the cellular phone analogy to try and put the significant step changes we are delivering into perspective. In 2014, we launched Garden360 as the first comprehensive liquid biopsy, enabling oncologists to genotype their patients' tumors with a simple blood draw rather than a tissue biopsy, a test that is increasingly part of today's standard of care. That was nearly 10 years ago. We are now entering a new age, the age of the epigenome. With our smart liquid biopsy platform, Garden Infinity, we are shining a light on an area of human biology that has been largely dark and underexplored for a variety of technological reasons. Years of research pursuing early cancer detection has enabled us to develop a revolutionary new chemistry and powerful informatics pipeline that enables broad interrogation of the epigenome at very low cost. Indeed, with Infinity, we have achieved a seemingly impossible product form factor with 100 times greater breadth than Garden360 CDX and higher sensitivity at reasonable cost. Furthering the analogy, akin to the smartphone, our Infinity platform opens up countless new potential applications. Examples include predicting drug efficacy, such as from PARP inhibitors and immunotherapies, assessing drug toxicity, and tracking tumor dynamics with greater sensitivity and breadth. The possibilities do not end there. We believe our epigenomic capabilities could lead to countless future applications for liquid biopsy that may one day extend to indications even beyond oncology. We look forward to sharing additional detail with you as we continue to develop these next generation capabilities. I will now turn the call over to Amir Ali to provide an update on our screening program. Thanks, Elmi.