Guardant Health, Inc.

Thank you for standing by and welcome to the Garden Health fourth quarter and full year 2022 financial results call. My name is Sam and I'll 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'd like to ask a question, please press star followed by one on your telephone keypad. I'll now turn the call over to Alex Clavin. Alex, please go ahead.

Thank you. Earlier today, Garden Health released financial results for the quarter and year ended December 31st, 2022. Joining me today from Garden are Helmi El-Touki, co-CEO, Amir Ali Talesez, co-CEO, and Mike Bell, Chief Financial Officer. Before we begin, I'd like to remind you that during this fall, management will make forward-looking statements within the meeting of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to maturely differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Poor Looking Statements in the Press Release Card issued 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 December 31, 2022, 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 measure may be found in today's earnings relief submitted to the SEC. Acceptance required by law, guidance 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 of February 23, 2023. With that, I'd like to turn the call over to Tom.

Thanks, Alex. Good afternoon, and thank you for joining our fourth quarter and full-year 2022 earnings call. I will start off our call today by providing an update on our progress over 2022 and go into more detail across our oncology business. I will then turn the call over to Amir Ali for an update on our screening business. And finally, Mike will provide a more detailed look at our financials and outlook for 2023. Throughout the year, we made significant progress in each area of our business, as noted in slide three. Indeed, 2022 was a pivotal year for Gardens, whereby we brought to fruition our vision of revolutionizing three significant areas of unmet need in cancer care. therapy selection, recurrence monitoring, and now screening. Our current position in just one of these areas would be quite enviable, but to be positioned today where we are defining a new standard of care for advanced cancer patients, cancer survivors, and for average risk individuals with a portfolio of breakthrough tests is truly exciting. I am so proud of our team's dedication and commitment to our mission of using the data from our powerful blood tests to help patients across all stages of cancer live longer and healthier lives. Building on this, I'm excited to share our first story related to the detection of an ESL1 mutation in breast cancer, just weeks after receiving FDA approval of GARDEN360, CDX4, or SIRDU. A breast cancer patient in her 50s had undergone two successful rounds of treatment, but unfortunately, she had another occurrence earlier this year. She had become symptomatic with cancer having spread to the liver and spine. The patient was out of therapeutic options. Her doctor ordered GARDEN360, which in only seven days detected a number of tumor mutations, but no historically targeted alterations. However, one of these detected mutations was an emerging critical marker, ESR1. ESR1 mutations are present in up to 40% of ER-positive HER2-negative advanced breast cancers. This finding enabled the patient to qualify for treatment with Osiris, the first ESR1-targeted therapy. With this targeted treatment, the patient now has the chance to attend her son's wedding this spring one of her greatest wishes after their occurrence. Being able to impact patients' lives in this way is what motivates all of us here at Gardens. Now, turning to our performance in slide four. We are pleased with our strong finish to the year. We ended the fourth quarter with $127 million in revenue, bringing our full year revenue to $450 million, representing growth of 20% over the prior year. Moving on to slide five, clinical test volume reached over 36,000 tests in the fourth quarter, up 41% compared to the prior year quarter, and fueled by increased depth of ordering of Garden360. This resulted in 26% year-over-year growth in clinical revenue in the fourth quarter, which was led by Garden360 with increasing contribution from new products. Turning to slide six, I'm more excited than ever about the growing potential of our Garden360 franchise, We are still in the early days of building this $10 billion therapy selection market with less than half of newly diagnosed metastatic patients receiving some form of comprehensive genomic profiling. Garden360 is the established liquid biopsy leader with more than two of every three non-small cell lung cancer liquid biopsy tests being in Garden360. In fact, over the past year, despite new entrants in the field, we have continued to maintain, if not expanded, our market share. Our hundreds of publications, CDX approvals, and best-in-class commercial teams have proven to be high competitive barriers. Progress continues for Garden360 with a number of significant milestones recently, including our first approval for Garden360 CDX to be used as a companion diagnostic for breast cancer, alongside a first-of-its-kind treatment in patients with ESR1 mutations. Following this approval, we are already seeing a positive impact in clinical volumes. Expanded reimbursement across the portfolio with more than 250 million covered lives after recent UnitedHealthcare coverage for lung and breast cancer, and the introduction of Garden Galaxy, our AI-enabled tissue-based testing platform to enhance the portfolio and accelerate biomarker discovery. Importantly, Galaxy has shown an over 20% improvement in PD-L1 detection. We think this will further accelerate the gains we are making in the tissue market. As we look ahead to 2023, we have multiple drivers fueling our strong growth trajectory as we approach break-even in our therapy selection business. These drivers include deployment of EMR integrations with customers as we continue to streamline ordering through our partnership with Epic, expected reimbursement in Japan later this year, and expanded utility and comprehensiveness of our therapy selection portfolio. Turning to slide seven, one of the key differentiators of Garden360 CDX is the strength and breadth of our companion diagnosis offerings. We now have seven regulatory-approved companion diagnostics covering a range of therapies, biomarkers, and tumor types in both the U.S. and Japan. Global sales of the therapeutics where we have CDX coverage are expected to surpass $35 billion in 2022. Building on our success in lung cancer, we recently received our first CDX approval in breast cancer in the U.S., and we have approvals for both Keytruda and solid tumors, and Opdivo and metastatic colorectal cancer in Japan. The value of our efforts and investments over the years is becoming apparent as payers such as UnitedHealthcare increasingly expect CDX approval to grant coverage, and our BioPharma partners look to entrust increasingly critical CDX programs with established independent players with strong track records. Moving to BioPharma on slide 8, we finished the quarter with record volumes of 24% year-over-year. We have over 150 partners supporting our growth. Garden Infinity from our Smart Liquid Biopsy platform now represents over 20% of our volume mix. Despite this strong growth in 2022, we now expect to see the impact of biopharma budgets from the Inflation Reduction Act and a more restrictive funding environment for our smaller biopharma partners, which has led to delays and cost pressures not seen in many years. Because of these pressures, we conservatively expect low double-digit growth for biopharma test volumes in 2023. That said, we do not expect these near-term headwinds to dampen the longer-term structural growth of our biopharma business with a steady trend toward more biomarker-driven therapies. our Infinity platform ramp, and the opening of a large market opportunity in China, all forming the foundation for further growth in 2024 and beyond. Now shifting gears to Garden Reveal in slide 9. Our MRD franchise is in its second year post-launch and is growing rapidly with 250% year-over-year growth in 2022. Gardens is the only company in the market with a clinically validated tissue-free MRD asset. With our industry-leading turnaround time, existing commercial infrastructure, and strong growth in CRC patients in 2022, we are just scratching the surface of this $20 billion opportunity. In 2023, we expect growth to be driven by increasing traction in key tumor types, including CRC, breast and lung, and the technology upgrade to our smart liquid biopsy platform. We are also making great progress in a number of our clinical studies designed to demonstrate the power of our platform for patients in the adjuvant and residual disease settings. Recent clinical results from our TRAC Part B study showed 92% negative predictive value and greater than two years of visual disease-free survival in CTDNA-negative patients supporting chemotherapy avoidance. Based on these exciting results, the study has expanded significantly into TRAC Part C, which will include more than 1,600 patients. The trial will evaluate the use of CTDNA to guide chemotherapy treatment decisions following surgery for Stage 2-3 CRC patients based on test results for MRD with Virgil. The study holds the potential to improve patient care and quality of life by reducing unnecessary use of chemotherapy through MRDs. We are also making excellent progress in Pegasus and Cosmos. We'll be looking to have results from the latter part of this year through the early next. Overall, we had a substantial year of development across all aspects of our business, and 2023 is off to a great start. Our efforts toward payer coverage, customer relationships, clinical partnerships, and technology upgrades will fuel our growth in oncology for years to come. I will now turn the call over to Amir Ali to provide an update on our screening business. Thank you, Helmi.