Guardant Health Stock

Guardant Health, Inc. operates as a precision oncology company focused on guarding wellness and giving every person more time free from cancer.

The company is transforming patient care by providing critical insights into what drives disease through the company's advanced blood and tissue tests and real-world data. The company's tests help improve outcomes across all stages of care, including screening to find cancer early, monitoring for recurrence in early-stage cancer, and helping doctors select the best treatment for patients with advanced cancer. For patients with advanced-stage cancer, the company has commercially launched Guardant360 laboratory developed test, or LDT, and Guardant360 CDx, the first comprehensive liquid biopsy test approved by the U.S. Food and Drug Administration, or the FDA, to provide tumor mutation profiling with solid tumors and to be used as a companion diagnostic in connection with non-small cell lung cancer, or NSCLC, and breast cancer. The company has also launched the Guardant360 TissueNext tissue test for advanced-stage cancer, Guardant Reveal blood test to detect residual and recurring disease in early-stage colorectal, breast and lung cancer patients, and Guardant360 Response blood test to predict patient response to immunotherapy or targeted therapy eight weeks earlier than current standard-of-care imaging.

The company also collaborates with biopharmaceutical companies in clinical studies by providing the above-mentioned tests, as well as the GuardantOMNI blood test for advanced-stage cancer, and the GuardantINFINITY blood test, a next-generation smart liquid biopsy that provides new, multi-dimensional insights into the complexities of tumor molecular profiles and immune response to advance cancer research and therapy development. Using data collected from the company's tests, it has also developed its GuardantINFORM platform to help biopharmaceutical companies accelerate precision oncology drug development through the use of this in-silico research platform to unlock further insights into tumor evolution and treatment resistance across various biomarker-driven cancers.

For early cancer detection, in May 2022, the company launched the Shield LDT test to address the needs of individuals eligible for colorectal cancer screening. From a simple blood draw, Shield uses a novel multimodal approach to detect colorectal cancer signals in the bloodstream, including DNA that is shed by tumors. In December 2022, the company announced that the ECLIPSE study, a registrational study evaluating the performance of the company's Shield blood test for detecting colorectal cancer in average-risk adults, met co-primary endpoints. In addition, in March 2023, the company submitted a premarket approval application, or PMA, for the company's Shield blood test to the FDA. The FDA's Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee intends to review the PMA. The company also expects to expand into lung and multi-cancer screening with the company's investigational, next-generation Shield assay.

Strategy

The company's strategies are to:

Increase awareness of the company's products by building awareness of liquid biopsy and pioneering a blood-first paradigm for genotyping cancer patients; educating biopharmaceutical companies, key opinion leaders, or KOLs, and advocacy groups; advocating for inclusion of the company's tests in treatment guidelines; and expanding access to the company's products globally through direct investment and by leveraging the company's global network of partners.

Expand clinical utility and increase reimbursement for the company's products by working with private and public payers to establish coverage and reimbursement for the company's tests; investing in clinical evidence directly and through relationships with academia and biopharmaceutical companies to establish expanded indications for use; demonstrating improved clinical utility and health economics from use of the company's tests to patients, physicians and payers; and pursuing FDA and other regulatory approval internationally of the company's tests to facilitate reimbursement and global market access.

Strengthen the company's relationships with customers by demonstrating the utility of the company's products in connection with standard of care treatments thereby encouraging clinical adoption; developing and seeking approval of the company's products as companion diagnostics for targeted therapies and immuno-oncology therapies; and providing earlier insights into emerging clinically relevant biomarkers.

Expand the company's product portfolio by using the company's commercial engine as a force multiplier of returns on research and development investment to generate data and analytical insights to enable development of new products; taking a disciplined and systematic approach to product and market development, by starting with therapy selection and then expanding sequentially towards early cancer detection; utilizing the company's data, sample biobank and insights into biology of circulating tumor-related biomarkers in blood to develop the company's new products; building on the company's regulatory and commercial infrastructure to accelerate new product launches and drive commercial efficiencies; and using the company's strategic relationships, including the company's partnerships with cancer centers, research organizations and laboratory companies in Europe and Asia, to drive global commercialization of the company's products.

Products and Development Program

The company has launched various products and programs using the company's digital sequencing technology, which is enabled by robust, high-efficiency biochemistry at the front-end, next-generation sequencing and a machine learning augmented bioinformatics pipeline. The company's product portfolio could address the full continuum of cancer care for selected indications, and has utility in both the clinical and biopharmaceutical markets.

Therapy Selection

Guardant360 CDx Test

The company's Guardant360 CDx test was the first comprehensive liquid biopsy test approved by the FDA, and is the market leading comprehensive liquid biopsy test, based on the number of tests ordered. The company's Guardant360 CDx test is a 55-gene test to provide tumor mutation profiling to be used by qualified health professionals in accordance with professional guidelines in oncology for cancer patients with any solid malignant neoplasm. The company's Guardant360 CDx test has also been approved by the FDA for use as a companion diagnostic to identify NSCLC patients who may benefit from treatment with TAGRISSO (osimertinib), RYBREVANT (amivantamab-vjmw), LUMAKRAS (sotorasib) and ENHERTU (fam-trastuzumab deruxtecan-nxki), and breast cancer patients who may benefit from treatment with ORSERDU (elacestrant), marketed by biopharmaceutical companies. Additional gene content and immune-oncology biomarkers (e.g. microsatellite instability, or MSI) are reported in a professional services compendium to the FDA approved CDx report. Results are typically delivered within seven days following receipt of sample and delivered by a clinical report.

Guardant360 LDT

The number of personalized therapy options for advanced cancer patients continues to grow, giving patients who may have cycled through standard of care therapies additional options. The company's Guardant360 LDT test measures 80+ cancer-related genes and supports new guideline-recommended biomarkers, to help inform which therapy may be effective for advanced stage cancer patients with solid tumors, without the need to obtain archival tissue or subject the patient to another invasive biopsy. Results are typically delivered within ten days following receipt of sample and delivered by a clinical report.

Guardant360 Response Test

The company's Guardant360 Response test is the first blood-only liquid biopsy that enables doctors to view molecular response, or changes in circulating tumor DNA, or ctDNA, levels, from a simple blood draw to potentially gain early insight regarding patient response to treatment. For doctors, knowing early and confidently if a patient's treatment is working is critical in deciding whether to continue, stop, or explore other options. Studies across cancers and therapies show the Guardant360 Response test predicted treatment response eight weeks earlier than current standard-of-care radiological and imaging scans.

Guardant360 TissueNext Test

To complement the company's liquid biopsy-based products, Guardant360 TissueNext, the company's first tissue-based test, is designed to identify patients with advanced cancer who may benefit from biomarker-informed treatment. Tissue genotyping is widely available to physicians and patients. Many tissue genotyping products available to physicians and patients have experienced long delays in getting results to physicians and high failure rates because of the inability to obtain enough tissue or high-quality DNA for analysis. Such delay or inability to produce results from tissue genotyping can adversely affect providing the right treatment to patients at the right time. The company's Guardant360 TissueNext test, together with its liquid biopsy-based products, have the potential to help address the challenges with tissue genotyping products in the market.

Recurring Monitoring / Minimum Residual Disease

Guardant Reveal Test

In the management of early-stage cancer, current tools do not identify all high-risk patients who will benefit from adjuvant therapy or detect recurrence early enough when it is most curable. The company plans to address this need, first in early-stage colorectal, breast and lung cancers, with the company's Guardant Reveal test for residual disease and recurrence monitoring. The Guardant Reveal test has the potential to enable oncologists to improve the care of early-stage cancer patients by correctly identifying more high-risk patients than clinicopathologic review alone and by detecting recurrent disease months earlier than current standard of care methods like imaging carcinoembryonic antigen tests. The Guardant Reveal test can improve turnaround by simultaneously interrogating both genomic and epigenomic signals from a single blood draw without the need for tissue. Similar to the company's data development effort for its Guardant360 tests, the company is investing heavily in establishing clinical validity and utility for the use of Guardant Reveal in adjuvant treatment settings. The company's Guardant Reveal test may help biopharmaceutical companies identify new drug development opportunities. In return, these relationships could help the company establish clinical utility for the company's tests and create new testing opportunities related to emerging therapies.

Screening

Shield Test

There is a critical need to develop products to expand precision oncology to earlier stage cancer settings. These products could enable clinicians to precisely detect, and intervene in the disease evolution when the disease is more likely to be curable, key to significantly improving patient clinical outcomes.

In order to systematically address this need, in May 2022, the company launched the Shield LDT test to address the needs of individuals eligible for colorectal cancer screening. From a simple blood draw, Shield uses a novel multimodal approach to detect colorectal cancer signals in the bloodstream, including DNA that is shed by tumors. The company's research and development results to date indicate that somatic signatures alone may be insufficient for the detection of early-stage cancers with high sensitivity. For this reason, the company has incorporated epigenomic signatures to enhance the performance of the company's Shield assay in these settings. In December 2022, the company announced that the ECLIPSE study, a registrational study evaluating the performance of the company's Shield blood test for detecting colorectal cancer in average-risk adults, met co-primary endpoints. The test demonstrated 83% sensitivity in detecting individuals with colorectal cancer. Specificity was 90% in both individuals without advanced neoplasia and in those who had a negative colonoscopy result. These results exceed the performance criteria set forth by the Centers for Medicare and Medicaid Services, or CMS, for reimbursement. This test also demonstrated 13% sensitivity in detecting advanced adenomas. Based on these study results, in March 2023, the company submitted a PMA for its Shield blood test to the FDA. The FDA's Molecular and Clinical Genetics Panel of the Medical Devices Advisory Committee intends to review the PMA.

The company also expects to expand into lung and multi-cancer screening with the company's investigational, next-generation Shield assay. To clinically validate the performance of the company's next-generation Shield blood test in detecting lung cancer in high-risk individuals ages 50-80, in January 2022, the company enrolled the first patient in a nearly 10,000-patient prospective, registrational study, which the company refer to as the SHIELD LUNG study.

Developing a blood test for early detection of cancer requires a vast amount of molecular and clinical data across all stages of the disease in order to better understand the biology and clinical relevance of tumor-specific biomarkers in blood. While the benefits of early detection on clinical outcomes are widely known, early detection may also benefit biopharmaceutical companies by identifying a much larger at-risk population who may benefit from early therapeutic intervention or from preventative medicines.

Biopharmaceutical Offerings

GuardantOMNI Test

The company's GuardantOMNI test covers 500 genes, including genes associated with homologous recombination repair deficiency and biomarkers for immuno-oncology applications, such as tumor mutational burden and microsatellite instability. The test has a significantly larger genomic panel footprint than the Guardant360 LDT test and has achieved comparable analytical performance in clinical studies, with the implemented additional enhancements to the assay efficiency and bioinformatics analysis to improve the sensitivity of the company's GuardantOMNI test. These enhancements are critical in the context of using the GuardantOMNI test in the retrospective testing of clinical study samples for translational science applications in collaboration with biopharmaceutical customers, as those samples are often available with only a limited volume of plasma. Validation data indicates that the GuardantOMNI test exceeds the Guardant360 LDT test's sensitivity for detecting clinically actionable biomarkers. At the same time, broader panel-wide performance of small variants is roughly similar to that of Guardant360 LDT test. In addition, the broad genomic footprint of the company's GuardantOMNI test enables accurate measurement of tumor mutational burden.

GuardantINFINITY Test

In September 2022, the company launched GuardantINFINITY, a next-generation smart liquid biopsy test that provides new, multi-dimensional insights into the complexities of tumor molecular profiles and immune response to advance cancer research and therapy development. The company's GuardantINFINITY assay provides a more comprehensive molecular profile of tumors than earlier assays, giving researchers access to novel genomic and epigenomic insights to provide a simultaneously deeper and more complete understanding of a tumor's biology, its system-wide interactions and the associated immune response in a range of applications, from therapy selection to molecular response and longitudinal monitoring. The assay's extensive methylome panel helps identify the unique methylation pattern that each tumor delivers, providing an important new dimension of research insights that has been largely unexplored in clinical development to date. GuardantINFINITY is available as a single modular assay with flexible configurations that can be tailored to fit a current application, along with the ability to unlock additional content modules at any time, without incurring the burden or delay of additional sample collection. The core module offers genotyping coverage of more than 800 genes with sample-level methylation detection and tumor fraction score for biomarker discovery, clinical research, therapy selection and response monitoring.

GuardantConnect

GuardantConnect is the company's integrated software-based solution designed for the company's clinical and biopharmaceutical customers, seeking to connect patients tested with the company's assays with actionable alterations with potentially relevant clinical studies.

GuardantINFORM

GuardantINFORM complements the company's core diagnostic business with aggregated data obtained through real world genomic testing matched with clinically relevant information, which enables important insights into disease progression and treatment impact that can be fed back into drug discovery and development, as well as clinical research and practice. Given the trend for oncologists to use liquid biopsy to monitor changes over time, the company's GuardantINFORM database uniquely provides longitudinal biological insight to go alongside longitudinal clinical outcomes, which is particularly valuable for a disease characterized by resistance, and for which testing will move earlier and earlier in the cancer journey.

Smart Liquid Biopsy Platform

The company's smart liquid biopsy platform drives significant research and development efficiencies and operating leverage, which supports performance improvements, cross-development of new applications, cost savings and improved turnaround time. While products continue to evolve by leveraging commonality in equipment, reagents, and staffing, this platform also provides a foundation for future product evolutions and data integration. The company expects to migrate its products to the platform and the company's smart liquid biopsy platform has the potential to unlock the power of the epigenome, broaden the view of what drives cancer biology, and provide industry leading high-sensitivity genomic and epigenomic detection at ultra-high specificity and low cost.

Guardant Galaxy

The company's Guardant Galaxy suite of advanced analytical technologies have been developed internally and through outside partnerships to enhance the performance and clinical utility of the company's portfolio of cancer tests, and to power the next generation of biomarker and drug discovery. The first application in the Guardant Galaxy suite is an AI-backed digital pathology platform developed by Lunit, for the enhanced Guardant360 TissueNext PD-L1 test, which improves detection of the cancer biomarker compared to manual pathologist interpretation in NSCLC cases. Future planned applications include deep learning-driven genomic, epigenomic and spatial biomarker discovery via collaboration with biopharmaceutical partners and integration with GuardantINFORM real-world clinical data platform.

Clinical Studies and Publications

The company is proactively pursuing studies to support the use of the company's tests as a preferred alternative or complementary to tissue testing to inform first line treatment right after diagnosis and at time of disease progression, with the intention to provide evidence that the company's tests detect genomic alterations at a similar rate compared to standard of care tissue testing and detects mutations that may not be detected by tissue based testing in the United States, Europe and Asia. Such a strategy is predicated on the tests' ability to offer accurate, reliable and fast guideline-directed comprehensive genotyping for all adult solid tumors without exposing patients to invasive biopsy procedures' risks, delays or chance of failure. The company publishes peer-reviewed studies in order to influence treatment guidelines, to educate clinicians and other oncology stakeholders about the value proposition of the company's test and to set the stage for reimbursement with private and public payers. The company has over 140 targeted therapy outcomes studies, more than 450 peer-reviewed publications and more than 900 scientific abstracts.

Commercialization

Successful commercial adoption of the company's tests by clinicians and biopharmaceutical companies is critical to the company's business. For clinicians, endorsement by KOLs, utilization by academic centers and inclusion in national treatment guidelines are important, especially for adoption in the local community setting. The company's relationships with key stakeholders across the oncology space have helped facilitate the use of the company's tests by clinicians and biopharmaceutical companies.

The U.S. Clinical Commercial Efforts

The company sells its tests to clinical customers in the United States through the company's targeted sales organization. The company's clinician-focused sales organization in the United States is engaged in sales efforts and promotional activities primarily targeting oncologists and cancer centers. The company's sales representatives typically have extensive sales-related backgrounds in laboratory testing, therapeutics and oncology. The company has supplemented the team with clinical oncology specialists with extensive medical affairs experience for molecular information support in the field.

The company's clinical commercial efforts are focused on driving adoption with academic research institutions and with community oncology practices, including through leading physician networks. As the company continues to grow its sales organization, the company is also expanding its reach to include large community practices, community oncology networks, integrated delivery/ payer-owned systems and government medical facilities that are looking for a reliable partner for comprehensive molecular information testing.

Biopharmaceutical Commercial Efforts

The company's business development team is focused on enterprise selling to biopharmaceutical companies in the United States and internationally, and the company can support its biopharmaceutical customers across many applications, including the discovery of new targets and mechanisms of acquired resistance; retrospective sample analysis to rapidly identify biomarkers associated with response and lack of response; prospective screening and referral services to accelerate clinical study enrollment; and companion diagnostic development to support the approval and commercialization of therapeutics.

The company also expects to be able to capture other commercial opportunities from the company's genomic and epigenomic data, which can be used in combination with clinical outcomes or claims data for multiple applications, including novel target identification.

International Commercial Efforts and Expansion

A component of the company's long-term growth strategy is to expand its commercial footprint internationally, and the company expects to increase its sales and marketing expense to execute on this strategy. The company offers its tests in countries outside the United States primarily through direct contacts with insurers and hospitals, distributor relationships, and laboratory partnerships. Specifically, the company has demonstrated the ability to deploy its technology to partner laboratories, such as cancer centers, research organizations and laboratory companies, for the development of test assays based on the company's technology platform. This capability will be important in accelerating adoption of the company's platform and the performance of its testing in certain countries. The company is conducting studies in various jurisdictions, and has secured and will continue the company's efforts to secure reimbursement in several countries. In addition, the company has established, and as these studies progress and the company nears commercial opportunities in these jurisdictions, will continue to seek to establish in-country laboratories and direct sales organizations.

In preparation for wider commercialization in the European Union, or the EU, the company obtained a CE mark for its Guardant360 CDx, Guardant360 LDT, and Guardant Reveal tests. In December 2020, the company signed its first public private partnership agreement with Vall D'Hebron Institute of Oncology, or VHIO, one of Europe's leading cancer research institutions, and in May 2022, the first blood-based cancer testing services in Europe based on the company's digital sequencing platform became available at the VHIO testing facility in Spain. In October 2021, the company signed a partnership agreement with The Royal Marsden NHS Foundation Trust, or Royal Marsden, a premier cancer center within the United Kingdom, or the U.K., for patient care, research and teaching of all types of cancer, and in April 2023, the blood-based cancer testing services based on the company's digital sequencing platform became available at Royal Marsden testing facility in the U.K.

In May 2018, the company formed and capitalized Guardant Health AMEA, Inc., with SoftBank, which the company refer to as Guardant AMEA, relating to the sale, marketing and distribution of the company's tests generally outside the Americas and Europe and to accelerate commercialization of the company's products in Asia, the Middle East and Africa. In June 2022, the company purchased all of the shares held by SoftBank and its affiliates, and upon completion of the transaction, the company obtained full control over operations of Guardant AMEA throughout the Asia, Middle East and Africa region. In Japan, the company has received regulatory approval of its Guardant360 CDx test as a companion diagnostic for identifying patients who may benefit from treatment with LUMAKRAS (sotorasib), Keytruda (pembrolizumab), Opdivo (nivolumab), and ENHERTU (trastuzumab deruxtecan), from Japan's Ministry of Health, Labour and Welfare, or the MHLW. In February 2022, the company received accreditation from College of American Pathologists, or CAP, and in October 2022, the company received In Vitro Diagnostic, or IVD, sample processing approval from the MHLW for the company's laboratory in Japan. In addition, in July 2023, the MHLW granted national reimbursement approval for the company's Guardant360 CDx test for patients with advanced or metastatic solid tumor cancers in Japan.

In June 2022, the company signed a strategic partnership agreement with Adicon Holdings Limited, or Adicon, a leading independent clinical laboratory company based in China, and in December 2023, the blood-based cancer testing services based on the company's digital sequencing platform became available at Adicon's testing facility, which offers the company's industry-leading comprehensive genomic profiling tests to biopharmaceutical companies to advance clinical research and the development of new cancer therapies in China.

Operations

The company performs its tests in the company's laboratories located in Redwood City, California, and San Diego, California. The company's Redwood City laboratory is certified pursuant to the Clinical Laboratory Improvement Amendments of 1988, or CLIA, accredited by the College of American Pathologists, or CAP, permitted by the New York State Department of Health, or NYSDOH, and licensed in California and four other states. The company's San Diego laboratory is CAP-accredited, CLIA-certified and licensed in California. In addition, the company's Palo Alto, California laboratory is operated as a center for the company's research and technology development. The company has also received CAP accreditation and IVD sample processing approval from the MHLW for the company's laboratory in Japan.

The proprietary validated methods utilize robust semi-automated workflows designed for high throughput sample testing. This methodology allows for rapid scaling of testing volume without impacting performance metrics. The company's testing process includes sample collection, laboratory processing, analysis and reporting. All major processing steps utilize quality control to ensure consistent and reproducible results.

Supply Chain

The company utilizes industry leading vendors for its supply chain. In September 2014, the company entered into a supply agreement with Illumina, Inc., or Illumina, for Illumina to provide products and services that can be used for certain research and clinical activities, including certain sequencers, reagents, and other consumables for use with the Illumina sequencers, as well as service contracts for the maintenance and repair of the sequencers. The initial term of the supply agreement, as amended, continues until January 2033, and automatically renews for additional one-year terms thereafter unless either the company or Illumina terminate the supply agreement for the other's uncured material breach, bankruptcy or insolvency-related events, or in the event a regulatory authority notifies such party that continued performance under the supply agreement would violate applicable laws or regulations.

Competition

The company's competitors within the liquid biopsy space for therapy selection include Foundation Medicine, Inc., which was acquired by Roche Holdings, Inc. in 2018; Roche Molecular Systems, Inc., Thermo Fisher Scientific, Inc., Illumina, Inc., Qiagen N.V., Invitae Corporation, Caris Life Science, and Tempus Labs, Inc. In addition, NeoGenomics Laboratories, Inc., Natera, Inc., Exact Sciences Corp., and Tempus Labs, Inc., among others, are the company's competitors in minimal residual disease testing. Additionally, the company's competitors in the early screening testing space include GRAIL, Inc., Exact Sciences Corp., Freenome Holdings, Inc., Delfi Diagnostics and InterVenn Biosciences.

Competitors within the broader genomics profiling space based on tissue include laboratory companies such as Bio-Reference Laboratories, Inc., Laboratory Corporation of America and Quest Diagnostics, Inc., as well as companies such as Caris Biosciences, Tempus Labs, Inc., Foundation Medicine, Inc., Myriad Genetics, Inc., and most if not all of the competitors within the liquid biopsy space for therapy selection, that sell molecular diagnostic tests for cancer to physicians and have develop tests that compete with the company's tests.

Intellectual Property

The company's patent portfolio includes owned and licensed patents and patent applications, generally falling into three broad categories:

Issued patents and patent applications relating to the company's digital sequencing platform, including claims directed to methods for sequencing cell-free DNA, identifying CNVs, SNVs, indels and fusions in cell-free DNA and techniques for enriching nucleic acid samples;

Issued patents and patent applications relating to detecting and monitoring cancer and other diseases by determining genetic variations in biological samples; and

Issued patents and patent applications relating to early-stage cancer detection.

Issued U.S. patents and their international counterparts in the company's patent portfolio that relate to various aspects of the company's technology and products are expected to expire between 2026 and 2041.

The company has filed for trademark protection in its name, logo and products globally, in the United States, Australia, South America, Europe and Asia.

Government Regulations

To renew the company's CLIA certificate, the company is subject to survey and inspection every two years to assess compliance with program standards. The company maintains a license with NYSDOH for the company's laboratory.

The company markets its Guardant360 CDx test pursuant to an approved PMA.

The company's Guardant 360 CDx test has been approved by the FDA for use as a companion diagnostic to identify NSCLC and breast cancer patients who may respond to certain therapies marketed by the company's biopharmaceutical customers.

In February 2021, Guardant Health Japan, an affiliate of Guardant AMEA, submitted an application to the MHLW, for regulatory approval of Guardant360 CDx. In December 2021, the MHLW granted regulatory approval of Guardant360 CDx in patients with advanced solid cancers. The Guardant360 CDx test was also granted approval as a companion diagnostic to identify patients with microsatellite instability-high (MSI-High) solid tumors who may benefit from Keytruda (pembrolizumab) and patients with MSI-High advanced colorectal cancer who may benefit from Opdivo (nivolumab). The MHLW additionally granted regulatory approval of the Guardant360 CDx liquid biopsy test as a companion diagnostic for identifying patients with metastatic NSCL cancer who may benefit from treatment with LUMAKRAS (sotorasib), a KRAS G12C inhibitor developed and manufactured by Amgen.

To be sold in Japan, most medical devices must undergo thorough safety examinations and demonstrate medical efficacy before they are granted approval, or 'shonin.' The Japanese government, through the MHLW, regulates medical devices under the Pharmaceutical Affairs Law, or PAL. Oversight for medical devices is conducted with participation by the Pharmaceutical and Medical Devices Agency, or PMDA, a quasi-government organization performing many of the review functions for the MHLW. Penalties for a company's noncompliance with PAL can be severe, including revocation or suspension of a company's business license and criminal sanctions. The MHLW and PMDA also assess the quality management systems of the manufacturer and product conformity to the requirements of the PAL. The company is subject to compliance inspections by these agencies.

The company is subject to federal fraud and abuse laws such as the federal Anti-Kickback Statute, or AKS, the federal Eliminating Kickbacks in Recovery Act, or EKRA, the federal prohibition against physician self-referral, or Stark Law, and the federal false claims law, or the False Claims Act, or FCA. The company is also subject to similar state and foreign fraud and abuse laws.

Other federal fraud and abuse laws to which the company is subject include but are not limited to the federal civil and criminal false claims laws including the FCA, which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government, and the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary's selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies. Under the FCA, private citizens can bring claims on behalf of the government through qui tam actions.

In addition, the Physician Payments Sunshine Act imposes, among other things, reporting requirements on manufacturers of certain devices, drugs and biologics for certain payments and transfers of value by them and in some cases their distributors to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care providers such as physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians (as defined by the statute) and their immediate family members. Manufacturers must submit reports by the 90th day of each calendar year. Because the company manufactures its own LDTs solely for use by or within the company's own laboratory, the company is exempt from these reporting requirements.

In January 2022, the company received a civil investigative demand, or CID, from the United States Attorney for the Northern District of California in connection with an investigation under the False Claims Act. The CID requests information and documents regarding billing government-funded programs for the company's panel of genetic tests known as Guardant360. The company is fully cooperating with the investigation.

Research and Development

The company's research and development expenses were $367.2 million for the year ended December 31, 2023.

History

Guardant Health, Inc. was incorporated in Delaware in 2011.