Guardant Health, Inc.

Hello, everybody, and welcome to the Garden Health Q1 2025 earnings call. My name is Elliot, and I'll be your coordinator today. If you would like to register a question during today's event, please press star 1 on your telephone keypad. I would now like to hand over to Zarik Khurshid, Vice President of Investor Relations. Please go ahead.

Zarik Khurshid Thank you. Earlier today, Garden Health released financial results for the quarter ended March 31, 20, 25, joining me today from gardens are co CEO, America's 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 meaning of federal securities laws. 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 the non-GAAP financial reconciliation to most directly comparable GAAP financial measures are available in the press release GARDEN issued today, as well as in our 10-K and other filings with 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, except as required by law. The information in this conference call is accurate only as of the live broadcast. With that, I would like to turn the call over to Helmy.

Thanks, Derek. Good afternoon, and thank you for joining our first quarter 2025 earnings call. Starting on slide three, we started the year with strong momentum across our portfolio. fueled by groundbreaking product upgrades introduced in 2024, which leverage our smart liquid biopsy platform, as well as the launch of SHIELD. We continue to successfully execute on our long-term vision to support patients throughout their entire cancer journey, from early detection, monitoring of recurrence, to treatment selection. By delivering critical insights at every stage of cancer care, we empower clinicians to deliver timely, actionable insights that make a meaningful difference in the lives of patients and their families around the world. As we do each quarter, I would like to start our call today by sharing a powerful story that captures the real-world impact of our garden reveal test and the difference it can make in the lives of those we serve. In September of 2022, a 55-year-old woman was diagnosed with breast cancer and later identified as having a pathogenic BRCA1 variant. She was prescribed neoadjuvant chemotherapy to help shrink the tumor prior to surgery, and a few months later, the cancer was removed successfully. In order to monitor for potential recurrence, her oncologist ordered an initial reveal test shortly after surgery, and six subsequent reveal tests have been performed over the last two years at three- to six-month intervals. All six reveal tests have returned negative results, and today the patient is enjoying life with the peace of mind that she remains cancer-free. Turning to top-line performance in slide four, we had an excellent start to the year with Q1 revenue growing 21% year-over-year to $203 million. As we discussed last quarter, we are now reporting revenue in a way that more closely aligns with how we run the business, and we believe this new reporting structure will help investors and analysts better understand our rapidly evolving business. The four revenue lines are oncology, which represents clinical therapy selection and MRD testing revenue, biopharma and data, which represents the revenue we generate from our biopharma customers from sample testing, companion diagnostic collaborations, and data services, screening, which represents shield testing revenue, and finally, licensing and other. starting with oncology business in slide five. Q1 represented another quarter of strong oncology performance, with revenue increasing 20% year-over-year to $151 million. Oncology volumes increased 25% year-over-year to approximately 59,000 tests in the first quarter, with the majority of growth driven by GARDEN360, closely followed by strong contribution from Reveal. Looking more closely at some of the recent highlights within our oncology business on slide six, we experienced continued volume growth across all oncology tests with notable strength from GARDEN360 volume, which accelerated again in the quarter following the major product upgrades leveraging the smart liquid biopsy platform last year. In addition to the strengthening product portfolio across both liquid and tissue, we continue to invest in EMR integrations which are helping to improve depth of ordering per account. I'm pleased to share that Garden 360 ASP improved again this quarter to the range of $3,000 to $3,100, driven by continued improvement in Medicare Advantage and commercial reimbursement. As a reminder, tissue Medicare pricing increased from $3,140 to $3,500 at the start of the year, and we received Medicare coverage for reveal in the zero student surveillance setting in January. This reimbursement win-for-reveal allows us to more aggressively invest in commercial efforts supporting the test, resulting in greater accessibility for patients and enabling oncologists to make more informed therapeutic decisions. In the first quarter, Reveal was gross margin positive for the first time, driven predominantly by the 50% COGS improvement we achieved exiting 2024. We continue to believe this positive gross margin inflection Along with CRC surveillance reimbursement announced in the quarter will allow us to unlock volume acceleration while meaningfully improving cash burn. Moving on to slide seven. Now I would like to highlight some of our Infinity Smart Liquid Biopsy application development work in greater depth. We have been quietly developing powerful real-world evidence platform utilizing the nearly 100,000 broad genomic and epigenomic profiles spanning more than 50 cancer types that we have assembled. Moreover, most of these profiles have been combined with rich clinical data and when analyzed with our Infinity AI learning engine, have enabled the development of the groundbreaking clinical applications we have launched and are continuing to launch this year. Specifically, a significant number of the 18 abstracts we are presenting at AACR are highlighting some of these new applications which enable features such as tumor burden quantitation, tumor subtyping, chip annotation, HRD detection, immunotherapy prediction, and many, many more to come. We believe these applications will soon set a new standard of care in oncology. Moving on to slide eight, we are pleased to announce that we have launched our upgraded tissue test, which is called GARDEN360 Tissue. GARDEN360 Tissue represents what we believe to be the first of its kind broad multi-homic tissue CGP test to incorporate comprehensive DNA, RNA, AI-powered PD-L1, and broad methylome analysis. This marks the final major product in the oncology portfolio to be upgraded to the Infinity Smart Liquid Biopsy Platform. which will enable our tissue product to leverage and accrue many of the groundbreaking epigenomic-powered features we are launching on GARDEN360 Liquid. In this way, all of our products spanning our liquid and tissue portfolio will work together synergistically to provide a differentiated physician and patient experience across therapy selection and MRD in pursuit of improved clinical outcomes. Finally, since GARDEN360 Tissue is built from the ground up utilizing our smart liquid biopsy platform, it can provide results with 40% less tissue required than most of our key competitors, enabling some of the lowest industry-wide sample requirements for next-generation sequencing. We are excited for this next generation of tissue CGP. Now shifting gears to reveal on slide 9, where we are the leader in tissue-free MRD. We are excited to announce a new breast cancer publication, clinical cancer research, highlighting the performance of garden reveal. Importantly, this is the first publication utilizing reveal in our smart liquid biopsy platform with early stage, stage 2, 3, triple negative breast cancer patients. This retrospective study evaluated triple negative breast cancer patients who were undergoing new adjuvant chemotherapy with 83% sensitivity for distant recurrence And 99.5% specificity at the sample level, this data shows that Reveal has the potential to significantly guide post-surgical monitoring and therapeutic decisions. This publication is building our data evidence for submission for Medicare reimbursement in breast cancer, which is expected this year. Turning to slide 10. Beyond CRC and breast, we have an extensive pipeline of clinical cohorts to further validity for garden reveal. We recently submitted data for publication supporting potential Medicare reimbursement for coverage in immunology therapeutic monitoring and have a number of ongoing clinical validity studies for additional cancers. We look forward to sharing updates on our progress throughout the year. Turning to slide 11, the oncology business is well positioned to continue to experience durable growth, benefiting from organic market growth, ASP tailwinds, and continued international expansion. Garden360 Liquid and Garden360 Tissue are further benefiting from recently expanded genomic and epigenomic breaths, which are unlocking greater utility and driving share gain. In MRD, a redoubled commercial focus following major COGS improvements and Medicare CRC surveillance reimbursement are helping to fuel growth. GardenReveal has seen strong uptake in breast cancer already, and we have additional publications of breast data and IO monitoring data this year that will help to further unlock demand and indications beyond CRC. Looking more closely at some of the recent highlights within our biopharma and data business in slide 12, we had another strong quarter for biopharma with first quarter revenue growing 21% year over year. We continue to see an increasing number of biopharma partnerships and growing mix of volume leveraging methylation analysis from our smart liquid biopsy platform. We recently announced a strategic collaboration agreement with Pfizer which meaningfully strengthens and expands our long-term partnership where GARDEN360 has been a preferred liquid biopsy test in various Pfizer clinical trials. We have also built a robust and growing pipeline of companion diagnostic deals. Lastly, pertaining to our GARDEN-informed real-world data business, we continue to expand our presence with large pharma partners, such as the recently announced Bayer and Concert AI collaboration, benefiting from the growing interest in our industry-leading methylation knowledge base and the expanding richness of our EMR-linked data offering. With that, I will now turn the call over to Amir Ali for an update on screening.

Thanks, Helmi. Moving on to slide 13. We are pleased to see continued strong traction for Shield in the second full quarter of commercial launch. We delivered $5.7 million of Shield testing revenue in Q1, driven by approximately 9,000 tests. and exited the corridor with positive momentum. We continue to experience outstanding reception from physicians and patients. The depth of ordering for our account continues to be strong, reaffirming the market opportunities, the product-market fit, and the differentiated physician and patient experience compared to existing modalities. We are particularly encouraged by our Salesforce productivity rep. Turning to slide 14, We were very pleased last month with SHIELD receiving ADLT status, which catalyzed the increase in Medicare price from $920 to $1,495 effective April 1st. ADLT status reinforces the value that SHIELD brings to patients as a more pleasant and convenient option for CRC screening that can help increase the overall screening rate and improve CRC survival outcomes. This more favorable Medicare rate allows us to accelerate the commercial infrastructure build-up to bring SHIELD to a wider audience. Turning now to slide 15 to take a closer look at our screening highlights for the first quarter of 2025. I'm excited to share that we achieved positive gross margin for SHIELD in the first quarter, much sooner than we had originally anticipated. This was driven by cognitive improvement and a high mix of reimbursable test volumes. we received coverage from the VA Community Care Network, which brings SHIELD access to over 9 million VA beneficiaries with no copay. Importantly, the VA will cover SHIELD for all eligible individuals between 45 and 84 years old, which marks SHIELD's first coverage of patients below the Medicare age. And last week, the American Gastroenterological Association, or AGA, the leading professional organization representing top leaders in the GI space released a clinical practice update. This update mentioned the potential for SHIELD to improve adherence to cancer screening and recognized that programmatic screening every three years with this blood test is valuable for currently unscreened individuals. Lastly, a recent Harris Poll survey shows that 92% of patients would be more satisfied with their wellness visit if their provider offered an FDA-approved blood test as an option for a CRC screening. And 93% of primary care providers believe patients are less likely to avoid screening if presented with an FDA-approved blood test option. Turning to slide 16. Our goal has always been to identify and catch many cancer types early when they are most treatable. We develop our SHIELD assay as a platform capable of multi-cancer detection, or MCD. CRC screening is the first indication for our SHIELD test, and we are excited to see SHIELD CRCs gaining strong traction. We are even more excited about expanding the impact of SHIELD beyond single cancer screening. Moving on to slide 17. In early January, we announced SHIELD selection for inclusion in the National Cancer Institute's Vanguard study. The Vanguard study is a 24,000 patient pilot study to evaluate the use of MCD tests. SHIELD was one of the only two technologies selected through a highly competitive process. and inclusion not only represented validation of our platform by NCI, but we believe establishes GARNET as a leader in the field of MCD. We are pleased that FDA has completed their review of our Shield MCD device in their approval of the Investigational Device Exemption, or IDE, supporting the Vanguard study, which is expected to start in the very near future. And this week at AACR, We are excited to present the validation performance data from SHIELD-MCD that was the basis for its selection by NCI. Overall sensitivity for 10 cancers was 60%, with 35% sensitivity in stage 1-2 and 84% sensitivity in stage 3-4 cancers at a specificity of 98.5%. While SHIELD can operate at a specificity level of 99.5%, The NCI preferred 98.5% specificity to optimize for early stage sensitivity. Primary or secondary cancer site of origin or CSO accuracy was 89%. As a reminder, cancer site of origin refers to a prediction made by the test about the likely organ where a cancer signal originates. CSO accuracy was an important factor in the NCI evaluation process and our diligence suggests it is critically important to the commercial success of MCD tests. Turning to slide 18 to take a closer look at the data, sensitivity in the six most aggressive cancers with the shortest survival rates, including esophageal, lung, liver, pancreatic, ovarian, and gastric was 74%, ranging from 67 in lung cancer to 96% in esophageal and gastric cancers. This test has the opportunity to save many lives. And following the commencement of the NCI Vanguard study this year, multi-cancer detection analysis capabilities of the SHIELD test will be ready to be clinically offered. Looking ahead, we are excited about our upcoming milestones in 2025, including the potential inclusion of SHIELD in American Cancer Society or ACS guidelines, Shield CRC v2 data and potentially launching Shield v2 later this year. With that, I will now turn the call over to Mike for more detail on our financials.

Thanks, Amir Ali. Turning to slide 19, I'll now discuss some select financial highlights for the quarter ended March 31st, 2025. I'll refer to year-over-year growth rates unless otherwise noted. As previously mentioned, Going forward, we'll present new revenue categories. To help with modeling and analysis, we've included supplemental information on our investor relations website that breaks our historical 2024 quarterly revenue into the new categories. First quarter total revenue grew 21% to $203.5 million and was largely driven by oncology revenue, which grew 20% to $150.6 million. Oncology volume grew 25% to approximately 59,000 tests in Q1, with the majority of unit growth driven by Garden360, closely followed by strong contribution from Reveal. Year-over-year Garden360 growth accelerated again in Q1, marking the third consecutive quarter of accelerated growth. Reveal continues to represent our fastest-growing products on a year-over-year basis. Garden 360 ASP was in the range of $3,000 to $3,100 in the first quarter of 2025, compared to approximately $3,000 in Q4 2024. This increased Garden 360 ASP was a function of continued improved reimbursement from Medicare Advantage and commercial payers. First quarter oncology revenue also benefited from an asset period upside of approximately $5 million above our normal expected level. This compares to an $8 million out of period upside that we recognized in Q1 2024. Our biopharma and data business performed incredibly well again in the first quarter, with revenue totaling $45.4 million, an increase of 21%. Our biopharma pipeline continues to shape up solidly, driven by Garden's affinity on our smart liquid biopsy platform and the recently announced multi-year strategic collaboration with Pfizer Further adds to our confidence in both the short-term and long-term business. Screening revenue totaled $5.7 million in Q1 2025, generated from a 9,000 SHIELD test that we reported in the quarter. And finally, licensing and other revenue was $1.9 million, compared to $5.2 million in the prior year period. Turning to slide 20, we're extremely pleased to be able to report that both Reveal and SHIELD became gross margin positive in the first quarter of 2025. For Reveal, we saw the full impact of the workflow changes made towards the end of last year, which have resulted in a significant reduction in cost per test. From an average cost of more than $1,000 in 2024, we've achieved a reduction of more than 50%, with the cost per test now less than $500. This, together with an improved Reveal CRC ASP of more than $600 following Medicare coverage, means that we can now unlock reveal volume acceleration while meaningfully improving cash burn. For Shield, we also saw continued reduction in cost per test driven by increased volume and by tight cost control and efficiencies across our screening operations. In the first quarter of 2025, Shield cost per test was approximately $500. With an ASP of approximately $600, Shield is also now gross margin positive. We expect the gross margin to further expand in Q2 due to the increase in ASP we'll get from ADLT status, which was effective April 1st, and from continued volume-related cost reductions. Moving on to slide 21. Our non-GAAP gross margin of 65% was above our expectations in the first quarter of 2025. The strong gross margin was primarily a result of the improved oncology ASPs, as well as the significant reveal in SHIELD cost reductions. Non-GAAP operating expenses were $199.6 million in the first quarter of 2025, an increase of 13% and in line with our expectations. Both non-GAAP R&D and G&A expenses in the quarter were approximately flat compared to prior year. which reflects the operating leverage that we are achieving throughout the business. As expected, non-GAAP sales and marketing expense increased 29% to $94.1 million in the first quarter of 2025. This increase was due to the ongoing screening commercial build-out, as well as continued investment in oncology sales and marketing. Adjusted EBITDA loss was $58.5 million for Q1 2025, an improvement of $2.6 million compared to a loss of $61.1 million in Q1 2024. We continue to be focused on cash management and reducing our burn in 2025 versus 2024. Q1 2025 free cash flow burn was $67 million compared to $37 million in the prior year period. The year-over-year increase was entirely due to the timing of the company's annual bonus payout, which this year was made in Q1 and which in previous years has been made in Q2. Adjusting for this timing difference, free cash flow burn in the quarter decreased year over year. We ended the quarter with approximately $804 million in cash, cash equivalents, and restricted cash. We continue to expect that we will reach cash flow break-even in 2028 with cumulative free cash outflow of $450 to $550 million over the next three years. Moving to slide 22 for our outlook and assumptions for the full year 2025. We're increasing our full year 2025 revenue to be in the range of $880 to $890 million, representing growth of approximately 19% to 20% compared to 2024, and an increase of $30 million compared to our prior range of $850 to $860 million. We now expect oncology revenue were approximately 18% year-over-year in 2025, compared to our prior guidance of 15%. The increase is based on stronger-than-expected volumes and reimbursement experienced in Q1 2025, and improved GARDA 360 ASPs and oncology volume now projected for the remainder of the year. Given the continued positive traction we're seeing from GARDA 360 LDT on smart liquid biopsy, the Medica CRC surveillance coverage will reveal and the recent upgrade to Garmin 360 tissue, we continue to expect volumes across all oncology products to accelerate in 2025, and we now expect total oncology volume to grow greater than 25%. We expect our biopharma business to perform well throughout 2025 and continue to expect low double-digit growth for biopharma and data revenue. We're raising our full-year 2025 SHIELD revenue guidance forecast million from our prior guidance of $25 to $30 million. Approximately $10 million of this increase is the result of obtaining ADLT status for SHIELD, which increased ASP to approximately $800 per test starting April 1st. The remaining $5 million increase in SHIELD revenue guidance is a result of higher volume, where we now expect 52,000 to 58,000 tests versus our prior guidance of 45,000 to 50,000 tests. We continue to expect full-year volume to be more back-end loaded due to the time required for recently hired sales reps to ramp productivity. With both Reveal and Shield becoming gross margin positive in Q1 2025, and with the progress we're seeing with Oncology and Shield ASPs, we're confident that we can deliver full-year non-gap gross margins in the range of 62% to 63%. We continue to monitor the tariff news closely, and as a reminder, we do not source any of our assay inputs directly from China. We've completed a thorough materials analysis in concert with our third party vendors, and based on what we know today, any tariff impact is likely to be minimal. Given the higher 2025 SHIELD revenue on the heels of ADLT pricing and increased volume, we plan to reinvest the incremental screening As a result, we now expect 2025 non-GAAP operating expenses to be in the range of $830 to $840 million, representing a 10% to 11% increase compared to 2024. We continue to expect full-year R&D and G&A expenses to be relatively flat compared to 2024, with the full-year increase in operating expenses coming mainly from investments in sales and marketing activities as we continue to drive top-line growth. Lastly, our commitment to reduction in cash burn each year in order to reach company-wide cash flow breakeven in 2028 is unchanged. For full year 2025, we still expect free cash flow burn to be in the range of $225 to $235 million, an improvement compared to $275 million for 2024. We continue to expect our cash burn in 2025 to consist of approximately $200 million related to screening as we scale our Shield business and maximize our first mover advantage. Significantly, excluding screening, we expect the remainder of the business to burn approximately $25 to $35 million during the year and to reach cash flow breakeven in the fourth quarter of 2025. Finally, turning to slide 23, We've already reached key milestones across each of our business segments, and we continue to have a rich pipeline of catalysts for the remainder of the year. With that, we'll now open the call to questions.

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask a question, please ensure your device is unmuted locally. Our first question comes from Mark Massaro with BTIG. Your line is open. Please go ahead.

Hey, guys. Congrats on the quarter. Thanks for taking the questions. Maybe the first one for you, Helmi. You know, you've had Garden360 in the market now for, I think this is year number 11, and yet you're raising the oncology volume to accelerate to over 25% growth. As this is accelerating, I was wondering if you could help us perhaps rank order what these opportunities are. To what extent is this epic? To what extent is this potentially competitive takeaways? And then to what extent could this be, you know, some boost from attachment to the GARDEN360 tissue?

Yeah, no, thanks for the question, Mark. We're very pleased in terms of the progress that we're making. I was looking at where we were with 360 over the last couple of years. And with the recent smart liquid biopsy upgrade, we're actually seeing some of the strongest growth we've seen in a number of years. This is the third quarter of sequential sort of accelerating growth for that product. And so we really know we've achieved product market fit with respect to the sort of liquid biopsy marketing therapy selection. So that's going to continue to be a really nice growth driver. Obviously, Reveal is growing nicely. We're seeing accelerating growth there for the last two quarters as well, and we're going to really lean into that now that we're gross margin positive on that product. And then last but not least, you know, this massive upgrade we've done on tissue where We're really taking everything that has worked so well in liquid for us, especially the last few quarters, and essentially putting all of that into the tissue product. And then everything else you mentioned that increases depth, that simplifies the ordering experience in terms of EMR and digital and so on is sort of gravy on top of all of that. So it's a really nice setup in 25 for us, and we're really excited for this next chapter.

Okay, great. And then maybe a two-parter on the screening business. Nice to see the RAISE guide. Can you walk us through the components of that? Obviously, you signed VA and Abu Dhabi. I'm curious what you're seeing on the business development side as well. Any other potential similar type systems that you're engaged with? And then as we think about the ASP assumptions of the RAISE guide, it's somewhere in the 770 range per test. Why is that the right number when your ADLT price is $14.95 and you're focusing on the Medicare population? And just curious what that Medicare mix was in Q1.

Yeah, sure. So maybe I start on the commercials. I asked Mike to maybe comment on the ASB front. So we are very excited and pleased with what we are seeing in terms of the productivity of the reps in the field. And this improved productivity is giving us more confidence that maybe we can achieve more than what we originally anticipated. On the Abu Dhabi side, you know, Q1 for them was really to get to the setup of the program. So we have to see really how quickly that program is going to set up. have limited visibility at this time. As a result, we continue to just assume a fraction of that 10,000 samples that we are contracted for this year would be part of our guide. So, really, the guide change has no impact by the upside that potential we are going to have from Abu Dhabi. We are very excited about this VA. Like, there are millions of people at age 45 and 64 who are going to also get access to this test. We kind of fine-tuned some of our targeting to even have kind of more presence in some of the areas that they have more concentration of these VA families and VA members to really extend the offering to them. And I asked Mike to talk about the ASP.

Yeah, on the ASP, of course, you know, we received the ADLT status in Q1, and that goes effective, went effective 1st of April. So the Medi-Cal rate went from 920 to 1495. And so, yeah, that's going to have a nice positive impact on our ASP. You know, for Q1, it was just north of $600. And we expect, you know, for the remainder of the year, Q2 to Q4, the ASP to be around $800. So we'll get an uplift from the ADLP. You know, you asked, Mark, around the proportion, that's Medicare. There are basically three elements to the ASP. There's obviously the Medicare fee-for-service portion. There's Medicare Advantage, and we're starting to get paid by Medicare Advantage payers, but the way that we're sort of recognizing the revenue and the ASP that we're using for that is, I'd say it's conservative at the moment, and there's room for that to improve over time as we see the collections come through. And then there is a portion, it's a relatively small portion, but there is a portion of commercial payers in that, and of course, at the moment, we're getting paid zero, so You know, you put them all together, we expect ASP, you know, again, for the remainder of the year to be about 800. And, you know, overall, getting this ADLT status from the 1st of April, that's roughly, you know, a $10 million increase from our original guidance at the start of the year. And that's, you know, part of the $30 million of lifting guidance that we've just announced today.

Great. Thank you.

We now turn to Tycho Peterson with Jefferies. Your line is open. Please go ahead.

Hey, thanks. Maybe just sticking with the guidance theme, you know, there still seems like a lot that's, you know, you're not fully baking in here, but can you give us a sense, G360 ASPs you guided flat previously, what you're baking in for G360 tissue next, and then, you know, reveal adoption in the surveillance setting, you know, where do you ultimately think you end the year on test per patient?

It's like, I mean, I can answer the, uh, the ASP on, uh, on garden 360, you know, the start of the year. We were guiding to, uh, to 3000 dollars. Um, we saw a nice uplift in, uh, in Q1, um, mainly come in again from, you know, Medicare advantage and commercial. Reimbursement being stronger than expected and we're in this new range now 3000 to. 3,100. So, you know, we expect that to continue for the remainder of the year. And so that's, you know, helped us raise our guide again. And for tissue next, you know, current ASP is around $1,700, $1,800. And so we're effectively assuming, you know, a similar rate for the remainder of the year. And we got a nice uplift at the start of the year for the Yeah, I know.

I mean, obviously, it's something we're very focused on in terms of increasing the number of tests per patient that you saw from the patient story. You know, there's huge potential there in terms of increasing that. And it's a metric that's been improving across our portfolio in terms of number of garden tests per patient quarter over quarter. And there's a lot of, I would say, work being done by the teams to make that as simple as possible in terms of the compliance and adherence with each additional test. And so we expect that to see that grow considerably throughout the year.

Okay. And then follow-up on MSED. Obviously, you know, it was a big topic at AACR. Good to see the data from you guys. You know, I guess maybe talk a little bit about roadmap from here, what you need to do to get ready for payer discussions, how, you know, what are you able to do to kind of get them comfortable? Historically, obviously, they balked at multi-cancer, so. you know, talk about some of the steps you need to take going forward.

Yeah, it's a very kind of exciting moment for us. Like, you know, we had this vision that SHIELD would be a multi-cancer screening detection kind of a technology. We built it that way. You know, we went through this route of CRC approval for reimbursability pathway and, like, you know, approval pathway. I think over time, we are going to figure out that this SHIELD platform that can detect not only CRC, but that can have some kind of secondary analysis for other cancer type detection would have a very strong product market fit. So we are excited with the data that we showed in AACR. Technology works, platform works. We are doing some additional data generation. I'm excited that For about 20, 25,000 patients that we tested with SHIELD, right now we correlated, actually we gathered the clinical outcome of those patients in real world. Did they have, you know, have they been diagnosed with other cancers or not? And we are in the process of now running this NSAID algorithm on those patients to see in a cohort of tens of thousands of patients, What are we going to see in terms of sensitivity and specificity? Definitely very exciting days for us. I'm looking forward to having more conversation about this throughout the year.

Thank you.

Our next question comes from Bill Bornello with Craig Hallam. Your line is open.

Please go ahead. Thanks a lot. I wanted to circle back a little bit on the tissue test and the commentary about needing 40% less tissue seemed really important. But maybe just, you know, if you could elaborate a little bit based on, you know, discussions you're having with existing accounts, sort of how you expect this to play out over time. I mean, presumably we're talking about, you know, taking share with, you know, maybe with your existing customers for liquid biopsy who are sending tissue to somebody else, but are there particular cancers where you think the advantages of your new product are going to be most distinctive? Do you think it's more about just the ease of working with one provider rather than sending tests to multiple providers, maybe the ability to reflex to blood, et cetera? Are you sort of expecting to compete there?

You answer the question in some way. We're very excited about this product because we have a lot of customers who love the sort of white glove service that we're able to provide them. And just in terms of the quality of our sales reps and really the knowledge base we have around our medical affairs team and so on. And many of them have said, if you simply add RNA to your tissue product, we're going to switch to you. We did way more than that with this product. We really built it from the ground up where we can use very limited samples. That continues to be one of the issues that many providers have is, you know, not being able to get sort of actionable results out of the limited tissue biopsy samples. We've been able to sort of solve that issue, but it's well more than that. You know, the fact that we're going deep into epigenomics, it's really the first tissue product that has a broad-based methylation backbone to it. And you see really kind of the richness of what we've been able to present at ACR and the fact that all of our products now will work together essentially with these applications all embedded in them and this continuity of information that we believe will provide a lot more actionability than any other product in the market from a clinical outcomes point of view, from a clinical decision making. And that is our North Star. Can we help provide actionable decisions for every patient more so than other tools in the market? And we believe this product absolutely does that. We're very excited by it. We have great reception at ACR in terms of unveiling the specifics around it. And I can tell you our sales team has been chomping at the bit to get access to this, to tell the world about it.

Sure. And ultimately, I mean, is your strategy to try and push for a world in where, you know, doctors are ordering both tissue and blood-based testing? Or is that just not a realistic scenario any time in the, you know, next several years?

No, I mean, the guidelines are already almost there. We have a growing number of pairs who believe in that. When you think about the fact that neither modality is perfect, neither modality has 100% sensitivity, whether it's liquid or tissue. And when you think about that decision that could be so imperative and could be the difference between life and death for a patient, isn't a patient's life worth searching both liquid and tissue for a potential life-saving outcome? We think so. I think the guidelines, you know, believe to be the case. So we believe eventually it will be the standard of care to have both for every tissue.

Okay. And then just one final one and I'll hop off, but I have to ask, is there any risk at all of sort of cannibalization of the higher priced uh you know blood-based tests just people saying hey um you know if we can get tissue we want to do tissue uh and you know now now we can use 40 percent less tissue uh you know we're more likely to be able to get a result uh in cancers where we might have just jumped right to blood no i mean the way we look at it is um they're going to be many shots on goal with liquid whether it's

in screening, MRD, or therapy selection. And then obviously, we're the one company that really has a continuum of testing across the board. So if we can also provide what we believe to be a leading modality and product on the tissue side, we think that ultimately just grows a pie for us.

OK. Hey, thank you guys very much. Thank you.

As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad now. And in order to allow everyone to ask a question, please limit yourself to one question only. Thank you. In answer to Subbu Nambi with Guggenheim Partners. Your line is open. Please go ahead.

Hey, guys. Thank you for taking my questions. Amirali, what are the potential drivers or catalysts to drive upside or downside to your shield volume guidance of 52 to 58,000?

So in terms of upside, like, you know, if we continue to outperform the productivity of our reps in the field, that could be an upside of what we are assuming right now. The other upside could be the inclusion in the ACS guidelines, any kind of guideline inclusion that has some kind of impact on the commercial adoption of the test, and although we are very optimistic about the timing for that guideline inclusion for some time this year, since we don't know when. We are not assuming that in our volume guidance. The other potential upside could be on this Abu Dhabi contract, and it's kind of a sizable contract. We're just assuming there's a small fraction of it in our numbers. And lastly is, you know, as we talked about in our preferred remark, there are additional positive gross profit that we are getting because of this sooner than expected ADLT pricing. We are reinvesting it back in building more commercial infrastructure, a lot more kind of reps in the field. You know, we are just going through that process right now. It would help us to have more reps deployed very late this year. It's mainly a 2026 kind of upside for us, but if we can bring the reps and deploy them to the field, sooner than the current plan, maybe there would be some upside there too. Downside, I think we'll see. So it's hard to say.

Hopefully there aren't any downside. Can I quickly squeeze a short question? How much tissue next is assumed in the guidance?

Well, without specifically breaking out, I mean, it's relatively a small portion of the oncology guidance. You know, the main drivers of oncology in that guide are obviously GARDEN360 and Reveal.

Thank you, guys.

We now turn to Puneet Sudha with LeeRinc Partners. Your line is open. Please go ahead.

Yeah, hi, Amir Ali, and the team, thanks for taking my question, Mike. First one, if I could, on the screening side, you know, Gartner's obviously met all of your products in a unique way. They're working to the top right now, but just wanted to understand from the Shield side, Um, how are you thinking about, um, you know, in this multimodal market where you're, I would love to know where you're getting the most traction, the type of patients, the type of practices, and now with, you know, ADLT and better margins, how are you thinking about the size of the Salesforce? And I have a follow-up for, um, help me.

Okay. Yeah. So, um, You know, it's definitely exciting days for us. When we look at the market, like we talked about it before, and we are now just experiencing it. Like, there are a lot of on-screen patient population out there, 50 million on-screen. We are seeing very good traction on the PCPs that we onboarded. The depth of ordering continues to be very favorable, which is an endorsement that there are many on-screen patients in the practices that we are going to, in general, you know, everywhere. So that's actually pretty good. In our steady state in terms of commercial infrastructure continues to be the same. We are planning to get to the 700 rep, you know, at some point. This additional gross profit helps us to accelerate to some extent. Like, you know, we are probably are going to have in terms of fully trained deployed sales force, probably are going to have about 200 people by end of the year. That's where we are targeting and we continue from there.

Got it. And then on the Reveal side, Helmi, you know, could you talk a little bit about where you're getting the best product fit for Reveal? Because you're coming into this market much later versus some of the tissue-informed tests out there. Can you just talk to us in terms of the adoption you're seeing today? in CRC surveillance, the way the product could grow in breast, and then beyond that, other indications where tissue might be a little bit challenged. Could you talk to us about that and the sort of the growth expectations potentially for Reveal? Thank you.

Yeah, we see the product as sort of being adopted in a pretty broad-based way. I think there are just The reality is that the anxiety of waiting three, four, five, six, seven weeks in the adjuvant setting is just too much to bear for many patients. And we believe that our product profile in terms of the performance and so on is one that I think matches up favorably in that market, in that setting. So yeah, we're seeing a lot of physicians in the adjuvant setting prefer starting to reveal we're averaging less than seven days in terms of turnaround time for that product. So it's really exciting to see the operational efficiency the team has kind of built up to. And then clearly in the surveillance setting, you know, as the patient is negative for a year or two, there's a big chance that what comes back may not be the same as what was taken out. And there's a greater confidence in something like Reveal that can have a much larger catchment in terms of catching a disease that might be slightly different that comes back. And so we're feeling very confident in terms of the trajectory, in terms of the growth that Reveal has ahead of it, especially with surveillance reimbursement and then clearly some of the other indications that we're building towards. Obviously, BREST is a huge, huge opportunity and one where having the kind of profile we have in this surveillance setting, I think, is really going to be nice.

Got it. Okay. Thank you.

We now turn to Dan Leonard with UBS. Your line is open. Please go ahead.

Thank you very much. I'll ask a two-parter on the tissue launch. For starters, I'm trying to put some context around the launch and wonder, how would you frame your market share today in tissue versus what you view as your long-term entitlement in that market? So that's the first part. And then the second part, and I'll keep this to one question. Are there any ASP implications of the new tissue product? Is there potentially a different Medicare rate than that $3,500 that might be attainable long-term? Thank you.

Yeah, maybe I'll start with the second one. You know, it's a product that, you know, I think we're eventually going to take through FDA approval, and then we'll have the opportunity to qualify for ADLP status, and I think there's the opportunity to have, you know, higher price at that point, which we've always seen for our other products here at the company. I don't want to get into specifics in terms of market share and where we think we can be, but certainly we think we can take a much greater share of the market than we have today on the tissue side. We believe our product now that compares favorably in terms of product market fit to a lot of the products that are on the market today. And ultimately, that's going to do a lot of good for patients. And when you have that kind of profile, I would say there's no ceiling in terms of where you can reach in the market. So we think there's no reason why we can't catch up to where we are on the liquid side over time.

Thanks, Helmi.

Our next question comes from Dan Brennan with TD Cohen. Your line is open. Please go ahead.

Great. Thank you. Thanks for the questions. Maybe just starting on reveal, just a two-parter. Mike, did I hear you say realized price above $600? Sorry, you went through the prepared remarks. So just any color on pricing that you shared there. And then if there is, I know there was a question asked earlier, but any additional color you can provide about just how the first quarter kind of played out in surveillance and kind of what we should think about for the rest of the year in terms of, you know, the accelerant to that business now that you've got that approval.

Yeah, I mean, I can address the ASP. We said in the remarks, and it's in the deck that we also shared, that our, you know, revealed CRC ASP now is over $600. And of So it's allowing us to push on the volumes. And I don't know.

Help me if you want to. Yeah, no. As I said, I think maybe in response to one of the other questions, we've seen accelerating growth over the last few quarters with a reveal. And certainly there's a lot of opportunity now in terms of pushing the surveillance testing that we're starting to pursue. So we've been very pleased to the start of the year. It's been really nice. You know, we believe that it will continue to be our fastest growing product on the oncology side, as it was in Q1.

Great. And then maybe merely just kind of back to Shields, you took the volumes of 7,000 or so. Obviously, the unscreened opportunity is pretty massive. I think there are 55,000 testing here. But can you just, I know, you know, back to Puneet's question, can you spend a little more time on just kind of what you're seeing in the field, maybe what's surprising you on the positive, anything on the negative, you know, exact talks about, you know, the frequency of doctor visits is when they start to see an uptake, maybe six or seven times visiting the doctor before they see someone do a test is, is the same thing playing out on the blood side or just any call you could share in terms of what informs this, you know, the modest raise and, um, you know, kind of how it, you know, how the launch is going versus expectations.

Um, yeah i mean we as i mentioned like we continue to hear a lot of positive feedback from the market on pcp side like you know we are a blood draw modality so we are going like you know in terms of integration of you know blood work flows into the practice and stuff it it takes some more energy from us probably than you know just dropping off a still kidding accounts uh in terms of activating accounts, but the depth of ordering we are hearing and seeing are very positive. I cannot point to any specific thing that we are hearing that we did not expect and consider it negative. Maybe if I want to highlight something, but we knew it, we expected it, is the reality of the importance of quality scores. That's very important. Once we get into a heated score, it's going to be a huge catalyst for us. But there is a lot of business for us to mine that we are focused on it, and we are growing off the place so far. I'm very excited of like the rest of this year. Still, we're in very, very early innings of this. I don't want to get ahead of our skis, but so far, better than what we thought. We'll see how it goes.

Great, thanks.

We now turn to Rachel Vattenstall with JP Morgan. Your line is open. Please go ahead.

Great. Good afternoon, and thanks so much for taking the questions. I wanted to ask another follow-up just on SHIELD and some of the volumes that you're seeing. You increased volumes by 2,600 sequentially, roughly. So if we apply that same sequential increase for the rest of the year, that really gets us near that low end of the guidance range for SHIELD volumes. So I wanted to dig into a few questions around that. First, as we look specifically to the second quarter, should we see a sequential step up above that 2,600 sequential volume increase? Or could it kind of be the same level that you guys saw this quarter? And then if we were to get towards that high end of the SHIELD volume range, at what point in the year would you expect a larger step up in the sequential, given what you're seeing in this field so far?

Yeah, I think, you know, maybe I reiterate what we mentioned in the preferred remarks. We continue to expect it to be second half loaded. And the reason for it is there are a bunch of new reps that we have. The productivity ramp of those people need to be considered when you're modeling sequential Q over Q growth. And we are continuing to hire. So we are going to end the year with more reps than the year that the number of reps that, for instance, we deployed in the field in Q1. So when you consider all this, I think you need to consider that as a result, it should be biased towards second half growth.

Maybe, guys, maybe just digging deeper on that, though, specifically on 2Q. Should we be modeling a step up sequentially relative to this 2600 you did in the first quarter? Or at this point, given the reps are still kind of getting deeper ingrained into their territories, should we assume a similar step up to what you had?

Yeah, I think maybe what I can comment is like we exited Q1 with just marginally a little bit more reps than the number of reps that we started with Q1. I don't want to get into like a lot more details of the exact number of reps than what we are seeing, but I think you should consider that. And the reality of diagnostics, it takes 12, you know, 12 to 18 months to get to the full productivity. When you add the reps within the first three months, you shouldn't expect anything really. Six months, maybe, you know, some material contribution. So I think if you consider all this, you're going to get to some reasonable numbers.

Fair enough. That's it for me. Thanks, guys.

We now turn to Luke Sergots with Barclays. Your line is open, please go ahead.

Hey, thanks for the questions, guys. I just wanted to ask about the Serena 6 trial with Astra and kind of how that's ramping and how we can think about those volumes as it goes through and as that trial keeps progressing.

Yeah, obviously it hasn't gotten approved yet. It's still something that we're waiting for. The trial is done in terms of enrollment and so on. I believe some of that data may be presented later this year. That's up to our pharma partner in terms of their timelines. We're not going to comment on that, but it's something we're very excited about in terms of the paradigm that it means in terms of being able to test patients, look for essentially molecular changes in a patient's genotype. We think this is really the way of the future in terms of where, you know, many drugs will start being developed, really the first sign of molecular progression, being able to switch therapies. And so, you know, it's something that we're coordinating, I think, very closely on and we're very excited for in terms of the potential that it means for uptake in terms of liquid biopsy volume, garden 360 volume in the future. And so yeah, I would just say maybe stay tuned over the remainder of the year. But yeah, certainly we think it could present some nice upside for liquid biopsy testing and garden 360 testing in the future. I think we're out of time.

Ladies and gentlemen, that concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect.