20250924 Guardant Investor Day AI

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Guardant Investor Day 20250924.   Deck, transcript.   Notes from UBS, Nephron.  

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Here is a detailed, expert-level synthesis of Guardant Health’s 2025 Analyst & Investor Day, combining insights from the company’s slides, transcript, and analyst reports (Nephron, UBS).

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1. Financial Outlook & Targets

• 2028 Targets Raised: Guardant now projects $2.2B sales by 2028 (up from ~$2.0B prior), driven primarily by Oncology ($1.4B), Screening ($0.5B), and Biopharma/Data ($0.3B).

• Breakeven Pulled Forward: Free cash flow breakeven is now expected in 4Q27, one year earlier than prior guidance.

• Margins: Management targets 65–70% gross margins by 2028, an expansion from today’s ~63–64%.

• Cash Position: As of 2Q25, Guardant held ~$629M in cash vs. $1.1B in converts outstanding. Screening burn remains heavy (~$200M annually in 2025–26), but Oncology growth is expected to offset losses by 2027–28.

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2. Oncology – Therapy Selection

• Core Business Expansion:

  • Market TAM increased from $3B to $10B, with blood expected to shift from ~1/3 to ~2/3 penetration due to repeat testing.

  • Guardant360 ASPs: Upgraded by CMS from $3,500 → $5,000 in 2024; forward ASP assumption lifted to $3,300 by 2028.

  • Tissue Testing: ASP assumption raised from $2,000 → $3,000, reflecting better reimbursement and broader adoption.

• Competitive Landscape:

  • Guardant volumes +20% y/y in 2Q25, but competitors are growing faster: Tempus (+26%) and Caris (+22% overall; +56% in blood).

  • Guardant leverages its Smart Platform with AI/epigenomics for higher resolution profiling, aiming to differentiate beyond mutation detection.

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3. Minimal Residual Disease (MRD)

• Current Leadership: Guardant is #1 in tissue-free MRD with Reveal (>50K tests in 2025; ~$600 ASP). But it significantly trails Natera’s Signatera, approaching $800M in 2025 sales.

• Reveal Ultra (tissue-informed): Launching to match market demand for tumor-informed approaches. Sensitivity promised to 1 part per million (ppm).

• Coverage Expansion: Already reimbursed in CRC surveillance; submissions filed for breast cancer and IO monitoring.

• Clinical Data: Upcoming PEGASUS study (ESMO 2025) will be among the first large prospective trials validating tissue-free MRD utility.

Strategic Tension: Guardant continues to assert tissue-free as the long-term winner, but Ultra signals concession that payors/physicians favor tumor-informed assays today.

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4. Screening (Shield)

• Shield CRC: FDA approved with Medicare ADLT pricing at $1,495. On track to be one of the most successful Dx launches outside COVID.

• Multi-Cancer Detection (MCD): Starting Oct 2025, Shield will report MCD results alongside CRC if physicians opt-in and patients consent to data sharing. This generates real-world evidence while billing Medicare under CRC coverage.

• Commercial Strategy:

  • Partnership with Quest Diagnostics (launching Q1 2026) expands access.

  • ACS guidelines expected by YE25; USPSTF delayed to 2027–28. Guardant is working on interim alternative quality metrics.

  • Screening revenues still targeted at >$500M in 2028.

Investor Concerns: Screening remains a high-burn franchise ($200M+ annually through 2026) with uncertain scaling profitability.

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5. Biopharma & Data

• >1M patient samples and 200+ petabytes of data amassed; expected to hit 1 exabyte within 2 years.

• Guardant’s InfinityAI learning engine leverages multimodal data (genomics + epigenomics + real-world evidence) for:

  • Faster product iteration and Smart Apps on Guardant360.

  • Biopharma partnerships for novel signature discovery and trial support.

• Biopharma/Data projected at ~$300M revenue by 2028.

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6. Strategic Themes & Tensions

• Innovation Flywheel: Smart Platform (genomics + epigenomics) → InfinityAI → new apps & products. Analogous to successive “S-curves” of electricity or semiconductors.

• Execution vs. Competition:

  • Guardant has leadership in liquid biopsy, but competitors (Tempus, Caris, Natera) are scaling aggressively.

  • Heavy Screening burn raises questions about long-term profitability despite raised targets.

• Investor Sentiment:

  • UBS: Raised PT to $80 (Buy), citing upside from oncology ASPs, Shield MCD launch, and breakeven pulled forward.

  • Nephron: Maintains Sell (PT $35), cautious on competition, product scaling, and cash burn.

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7. Key Takeaways for Experts

• Oncology (therapy selection) remains Guardant’s most credible and sustainable growth driver, underpinned by ASP expansion, repeat testing, and Smart Apps.

• MRD is a two-front war: Guardant dominates tissue-free, but Natera’s tumor-informed lead is formidable. The Reveal Ultra launch both hedges risk and complicates Guardant’s “tissue-free superiority” narrative.

• Screening (Shield) is strategically essential but financially contentious: differentiation via MCD and Quest partnership could create a moat vs. CRC-only players, but burn levels remain high.

• Data/AI moat is perhaps Guardant’s deepest long-term asset, with InfinityAI + >1M samples forming a defensible barrier to entry.

• The Bull vs. Bear divide is sharp: UBS sees upside in execution and differentiated innovation; Nephron stresses cash burn, competitive pressure, and balance sheet risk.

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