Hi Ethan, thanks for the write-up. I think the following (slightly edited) from the conference call, is the key:
Guardant360 is currently covered by Medicare and many private payers including Cigna and many Blue’s plans, which have all adopted reimbursement policies that specifically cover Guardant360 for non-small cell lung cancer. In the fourth quarter of 2018 we were endorsed by the Blue Cross Blue Shield Association, which has led to a sharp step function increase in number of Blues plans adopting positive policies for Guardant360, such as Blue Cross Blue Shield of Florida, Horizon Blue New Jersey and Blue Shield of California to name a few. As a result, we are pleased to update the number of covered lives to over 115 million up from 77 million at the end of Q3.
Saul again here: This has pretty much happened just in the last quarter. Three months ago all they were talking about was one sector of Medicare that had just approved them. That 49% increase in the number of people covered for their product by insurance wasn’t year-over-year, that 49% was sequentially (“from 77 million at the end of Q3").
And they guided to almost 50% revenue increase so they already expect probably 70% growth, at least.
This could snowball, it seems to me. It will quickly get difficult to justify opening up someone’s chest for a lung biopsy when you have a non-invasive method of obtaining the same thing. Just the way I see it.
Saul