Guardant Health, Inc.

Good afternoon. Thank you for attending the Garden Health Q4 2024 earnings call. My name is Victoria and I'll be your moderator today. All lines will be needed during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Carrie Mendeville. Thank you. You may proceed, Carrie.

Thank you. Earlier today, Garden Health released financial results for the quarter and year ended December 31st, 2023. Joining me today from Garden are Helmi Altuke, co-CEO, Amir Ali Talaza, 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 and then the meaning of federal security flaws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. This call will also include a discussion of non-GAAP financial measures, which are adjusted to exclude certain specified items. Additional information regarding material risks and uncertainties, as well as reconciliation to most directly comparable GAAP financial measures, are available in the press release GARDEN issued today, as well as in our Form 10-K and other filings of the SEC. GARDEN disclaims any intention or obligation to update or revise financial projections and forward-looking statements, whether because of new information, future events, or otherwise. The information in this conference call is accurate only as of the live broadcast. With that, I'd like to turn the call over to Helmi.

Thanks, Keri. Good afternoon, and thank you for joining our fourth quarter and full year 2023 earnings call. I will start off our call today by providing an update on our progress over 2023 and go into more detail across therapy selection and MRD. I will then turn the call over to Amir Ali for an update on screening. And finally, Mike will provide a more detailed look at our financials and outlook for 2024. Starting on slide three, we made substantial progress in each area of our business throughout the year. Starting with therapy selection, after years of investing in our infrastructure, I'm very pleased that therapy selection reached cash flow break even at the end of the year, marking a major achievement for GARDEN. This follows a series of pivotal reimbursement wins throughout 2023. We now have coverage from all major U.S. commercial health insurers for GARDEN360, surpassing 300 million covered lives. We also surpassed 200 million covered lives for TissueNext, received national reimbursement in Japan for GARDEN360, and received Medicare reimbursement for garden response. We also exceeded 475 EMR integrated accounts as of year end, outpacing our prior targets. Moving on to MRD. I'm excited to share that we upgraded Reveal to the smart liquid biopsy platform at the end of the year, enabling even better performance. Reveal volumes came in strong with full year growth of over 90%. We also received additional commercial coverage for Reveal in CRC following Medicare reimbursement in 2022, and continued to produce compelling data across CRC and breast cancer for a reveal demonstrating high clinical performance. And finally, with screening, we completed our PMA submission for SHIELD CRC, made steady progress with FDA review, and published the first paper for SHIELD demonstrating improved adherence with blood-based CRC screening. While we continue to believe the performance of SHIELD meets the bar for FDA approval, we have already demonstrated improved clinical sensitivity with our upgraded platform, Shield V2, when compared to Shield V1, with data presented at our investor day last year. I'm so proud of our team for pushing the boundaries of what's possible as we deliver on our bold mission to give everyone more time free from cancer. In line with that mission, I'd like to share a story of the impact our reveal test has had on patients. In early 2023, a woman was diagnosed with triple negative breast cancer and underwent surgery. Her physician then ordered a series of revealed tests as part of her surveillance program, and the second test came back positive for ctDNA 30 weeks after surgery. The physician scheduled the patient for additional scans, which found a growing nodule in her lower left lung. With this discovery, she is now undergoing further treatment. This story highlights how Reveal can be used effectively in surveillance settings to identify the need for additional treatment and deliver better patient outcomes. Turning to top line performance in slide four, we had a strong finish to the year with revenue growing 22% to $155 million in the fourth quarter and 25% to $564 million for the full year 2023, coming in slightly above our pre-announced range provided in January. Turning to slide five, clinical test volume reached 46,400 tests in the fourth quarter and 172,900 tests for the full year 2023, up 29% and 39% respectively compared to the prior year periods. Garden360 has been the primary driver of clinical volume growth as we continue to enhance the customer experience with increasing contributions from newer products such as TissueNext and Response. Moving on to Biopharma on slide six. Biopharma test volume reached 9,500 tests in the fourth quarter and 29,900 tests for the full year 2023, up 16% and 15% respectively compared to the prior year periods. A major driver of this growth has been the increasing interest in our Garden Infinity Smart Liquid Biopsy platform, which now represents more than 30% of our biopharma testing volume and has become a major differentiator for our biopharma business. Looking forward, our robust companion diagnostic pipeline coupled with a backlog of deals won, positions us for continued growth in 2024. We believe our active engagement with biopharma leaders for strategic partnerships, especially in exploring the potential of epigenomics, will drive even more demand for our products and services. Now, looking more closely at some of the recent highlights within our therapy selection business on slide seven. We made great strides in improving ASBs for GARDEN360 over the last few quarters. Specifically, in November, Medicare finalized its proposal for the Garden 360 LVT price to be crosswalked to the price of Garden 360 CDX. This took effect on January 1st of this year, increasing the Medicare price for Garden 360 LVT from $3,500 to $5,000. We're also starting to see the positive impact on Garden 360 ASB from commercial payer coverage lens and believe that this is a tailwind that will continue to play out in the coming years. As a result, we expect that in the first quarter of 2024, the Garden360 ASP will increase to be in the range of $2,850 to $2,900. Turning to slide eight, we are focused on streamlining the customer experience and investing in our commercial infrastructure. To that end, we continue to make excellent progress integrating with the three largest oncology EMR systems with rapid growth of digital adoption. We believe these integrations will serve as a catalyst for increasing ordering depth per account throughout the year. Another critical growth driver is not only increasing adoption of biomarker testing bottoms up at the physician level, but top down at the large group practice level, especially in the community setting where most patients reside. Accordingly, we recently announced a collaboration with the US Oncology Network and leading community oncology practices to increase the use of biomarker testing to identify patients who would benefit from therapies that target specific cancer pathways. Notably, the US Oncology Network has more than 2,500 providers across over 600 sites, treating 1.4 million patients annually. We continue to see strong momentum as we expand our testing offering globally. Last quarter, the Royal Marsden's garden-powered laboratory was awarded an Expression of Interest by the NHS to test advanced non-small cell lung cancer patients, potentially making our technology accessible to patients across England. We also launched Garden360 in China for biopharma use and have already generated a strong pipeline of over 30 partnerships. Lifetime global biopharma partnerships exceed 165, providing a solid foundation for future growth. Now shifting gears to reveal on slide nine. As mentioned earlier, we hit a major milestone by upgrading Reveal to our smart liquid biopsy platform as of year end. With this broad methylam-wide technology, we can achieve high performance by tracking hundreds to thousands of active alterations per patient compared to 60 to 50 mutations from tumor-informed assays. Our low background methylation chemistry leads to ultra-high specificity, and we maximize overall accuracy by applying machine learning to thousands of clinical samples. Importantly, physicians will be able to use the test to track and quantify tumor fraction in the MRD setting with high precision using our epigenomics-based technology. Reveal is currently available for CRC, breast, and lung cancers, and will be expanded to other tumor types over time. Moving on to slide 10. We have already generated some promising MRD data on our smart liquid biopsy platform for CRC and breast cancers. Starting with the previously shared data from our COSMOS colon study, looking at stage two and three patients, Reveal achieved 80% surveillance sensitivity with 99% specificity. This data was presented at the ASCO GI Symposium in January. and will be included in our submission to Medicare for our surveillance indication. Moving on to breast where we have now assessed three clinical cohorts with a reveal assay and smart liquid biopsy. We achieved a blended 82% surveillance sensitivity for distant recurrence with 97% specificity on this combined sizable cohort. This data is very exciting as the performance is in line and if not favorable to other approaches in this space. We look forward to sharing more details about this data this year. This data will be included in our submission to Medicare for our breast indication. Moving on to slide 11. As we have shared, we have a strong data pipeline with many clinical cohorts for establishing validity and utility for reveals. We have almost 80,000 samples from 20,000 patients across a variety of solid tumors from our biobank and trials we are running. This rich study pipeline will be instrumental in building compelling evidence that not only supports efforts to expand reimbursement, but also has the potential to influence changes in practice guidelines. This year, we anticipate publications that will support submissions to Medicare for potential additional coverage. Next year, we have important clinical validity studies for additional cancers, such as lung, pancreatic, and gastric, that will support advancement of additional reimbursement. With that, I will now turn the call over to Amir Ali to provide an update on our screening business. Thanks, Helmy.