With Guardant Health ($GH) Leading the Way, the Liquid Biopsy Industry Will Be Similar To The Tech Revolution In Terms Of Size And Disruption
Having done a bit of DD on **Guardant Health** ($**GH**) I wanted to share my views on the company. As always, I appreciate any and all feedback.
While other companies are making significant strides in early cancer detection (i.e. **Exact Sciences ($EXAS)** and **Illumina ($ILMN)**, as well as Google-backed **Freenome**), I believe Guardant is a true disruptor in the life sciences industry.
Guardant is a precision oncology company with a specific focus in liquid biopsy. Unlike a traditional tissue biopsy, their liquid biopsies use a simple blood test that produces quicker results and is significantly less invasive. For example, consider screening for Colon cancer via blood draw instead of having to undergo a two-day colonoscopy. Guardant is then able to perform an analysis of the blood to detect fragments of DNA from tumor cells in the blood.
Guardant distinguishes itself from other liquid biopsy companies in a few important ways. Their CDx solution is the first FDA-Approved Liquid Biopsy for Comprehensive Tumor Mutation Profiling across all solid cancers. This is a companion to GH's flagship product, Guardant360, which is already a huge commercial success - and gives GH a competitive advantage over their competitors, i.e. 2cureX, which is working on similar solutions.
Additionally, GH has recently begun its ECLIPSE trial for the early detection of colorectal cancer in asymptomatic patients. With trial enrollment ending in Oct/Nov we will likely see some data around mid-year. Most importantly, this trial essentially serves as the backbone of GH's broader early cancer detection program, and provides a roadmap for success that I believe the other competing liquid biopsy companies currently do not have.
Finally, Guardant has a market cap of <$15bn, which compared to Illumina and Exact Science (\~$61bn and \~$21.5bn, respectively) is positioned well for substantial growth. And although Q1 earnings fell a bit short on conservative guidance, Guardant still posted nearly $287 million in full-year 2020 revenue (34% revenue growth YoY). Historically, the stock has performed extremely well, and the overwhelming majority of analysts have maintained strong buys and raised price targets (i.e., Citigroup, from $155 to $190, Cowen & Co., from $140 to $190. and Morgan Stanley, from $130 to $175).
I would love to hear if others agree/disagree. Needless to say, I am very optimistic about Guardant's achievements in early cancer detection through the development of its innovative blood tests, and see this not only as a great investment opportunity, but them as a disruptive force within the industry.
Of course, if there are other investment opportunities that folks are similarly excited about, I am always interested to hear as well!
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