Ran across this item on Seeking Alpha just this morning. See below…
Guardant Health’s (NASDAQ:GH) liquid biopsy, Guardant360, will be a covered benefit for the members of the health plans associated with eviCore, a technology assessment company.
The test will be considered medically necessary to assist in selecting therapy for patients with advanced lung cancer.
This will increase total lung cancer coverage for Guardant360 to more than 15M Americans, including for all Medicare beneficiaries, members of Cigna, Blue Shield of California, UPMC Health Plan, BCBS FEP (Federal Employees Program), and many others.
Shares are up 3% premarket.
Due solely to the this board and it’s members excellent diagnosis and discussions concerning Guardent Health I have been trying to gather as much of this company’s stock as is safely within my personal rules. Although there is always some risk with any and all issues, I have been enriched beyond my normal returns ever since I literally stumbled upon this board and especially Saul R.'s writings from the start. It is a humble attempt to repay all for the time, effort and diligence of this board, it is spectacular as are the frequent contributors; Saul R. Is a gift to us all.
Daddyblame
Just a correction caused by me not checking the spell checker as well as the previous post quoted Guardent Health (not Guarentee Health)added 15 million additional people, correct number is more like 150 million people eligible. Up nicely this session.
So if 150 million people get the test, the company is looking at revenue of roughly 1 trillion dollars?
Gawd I feel dumb. This must be wrong. 1/10th of the market would give them a revenue of 100 billion dollars, which merit somewhere around a 500 billion market cap. That’s just nuts.
Am I wrong about the cost of the test? Is the possible patient count seriously overestimated? Please embarrass me and let me know why x is a more realistic revenue expectation for Guardant. Otherwise I will have no other choice than to buy a whole bunch tomorrow.
The S-1 will have their TAM. You’re assuming every possible person gets a cancer test once a year at that rate. We’re not looking at the total number under coverage as the TAM. That number will go up as more and more insurers join in and cover the tests.
“Medicare reimbursement decision, and Guardant Health will be reimbursed at $3,500 per lung cancer patient in California who uses the test. The average lung cancer biopsy costs Medicare $14,000 once you factor in frequent complications, which suggests this test could eventually save taxpayers billions each year.”
The above was taken from motley fool article dated March 12.
Another interpretation of the 150M Americans eligible…this is the current number of Americans with coverage related to eviCore. Not all 150M Americans though will have this test. I don’t believe this is a “preventive health” test such as a BMP or CBC that your physician would order at a routine annual physical. I expect usage of these tests (such as Guardant360) as one of the initial options for patient who have a lung nodule identified on CT imaging that proves to be PET+. It is for this patient population that image-guided biopsies are performed, and the Guardant360 would be an alternative to supplant biopsy procedures. So 150M Americans would be covered for this test, but surely not all 150M Americans will have a diagnosis code to justify the test.
“I don’t believe this is a “preventive health” test such as a BMP or CBC that your physician would order at a routine annual physical.”
Here the thing, take Cologuard for example.
It’s my experience that my MD talked me out of the Cologuard test and to have an actual colonoscopy.
The Cologuard is a slight risk because it may miss polyps that won’t be missed visually. Also with a traditional colonoscopy if a polyp is found it will be removed right then. If Cologuard finds a polyp, not even sure how it actually does it, then a patient still has to have it removed.
In my case I have very good health insurance. So maybe folks without the right insurance or uninsured, maybe it’s their only alternative. A cheaper alternative, but with some risk.
I’m not sure liquid biopsy is comparative, but if it’s not as thorough as a tissue biopsy, I’d always opt for having a tissue biopsy done considering my health insurance covers either one.
Which ever gives the most accurate test results is what I’d go with. For all those folks with no insurance or insurance with high deductibles, I can understand why they are looking for alternatives.
Of course if a liquid biopsy can give as thorough results as a tissue biopsy, then id obviously feel comfortable going the easier route.
I expect usage of these tests (such as Guardant360) as one of the initial options for patient who have a lung nodule identified on CT imaging that proves to be PET+.
As it is now the test is only useful in replacing repeat biopsies when the original biopsy is not adequate for desired genetic testing. Which is a small percentage of patients with lung cancer. They did not show any data on diagnosing cancer in a patient with no diagnosis. It seems they are working on something that will actually diagnose cancer, but it remains to be seen whether the sensitivity and specificity can be high enough to be worth using. What’s the point of a screening test if it doesn’t pick up almost everything? Or if it creates enough false positives that even more patients have to get a biopsy?
I was just curious how much revenue these 150 million people might represent. The article below states that each Guardant360 test costs $6800. So if 150 million people get the test, the company is looking at revenue of roughly 1 trillion dollars?
Hi bob, You aren’t thinking about that correctly. Those are people who have insurance that would cover this test if it was indicated.
NIH says you can expect about 47 new cases of lung cancer per 100,000 people. So you could expect 70,000 new cases in those 150 million people covered. If a quarter of them received this test (a very rough guess, based on nothing), that would be 17,500 tests, and that would give revenue of roughly $119 million dollars, assuming 100% coverage (which will never happen, if they charge $6800 list price, they’d probably be overjoyed to actually receive $5,000 average, which would give $87.5 million per year).
If Cologuard finds a polyp, not even sure how it actually does it, then a patient still has to have it removed.
Cologuard doesn’t find polyps … it detects the presence of cancer. Most of the polyps removed in colonoscopies are not cancerous. Cologuard is for people with no history of negative colonoscopies. Its BIG advantage is that people will do the Cologuard test because it is minimum fuss while they may skip the colonoscopy.
I think it should be clarified to some not familiar with the technical aspects of GH as IRdoc eluded to, that Guardant does not have a liquid biopsy that is an initial screen for cancer. Guardant 360 is used on patients who already have cancer to help identify the best treatment. This isn’t something that millions of people are going to be getting as preventative care like a routine blood test you’d get during a physical.
My understanding is there is hope through the Lunar research program to possibly develop a generic blood screen for cancer as an early detection/preventive care, but that is likely a long ways away.
NIH says you can expect about 47 new cases of lung cancer per 100,000 people. So you could expect 70,000 new cases in those 150 million people covered. If a quarter of them received this test (a very rough guess, based on nothing)
About 85% of those will be non-small cell lung cancer, and based on the NILE study the liquid biopsy would only be used in those who have advanced disease (already spread beyond the original tumor). I don’t know the statistics for how many people present with advanced disease though we are picking up a lot more simply based on the fact that CT scanning has exploded over the past couple decades. We diagnose more cancers and often discover them early before they spread, often in patients being scanned for other reasons.
There has also been a push recently to implement lung cancer screening in patients who have a history of smoking because they are such high risk. Again, with the hopes that we not only find more cancers but find them before they have spread.
“As it is now the test is only useful in replacing repeat biopsies when the original biopsy is not adequate for desired genetic testing. Which is a small percentage of patients with lung cancer. They did not show any data on diagnosing cancer in a patient with no diagnosis. It seems they are working on something that will actually diagnose cancer, but it remains to be seen whether the sensitivity and specificity can be high enough to be worth using. What’s the point of a screening test if it doesn’t pick up almost everything? Or if it creates enough false positives that even more patients have to get a biopsy?”
IRDoc. As cancers progress they will go through various mutations and treatments both now but more so in the future will heavily depend on knowing a patients true CURRENT mutational status. For this reason you will likely find a patients tumor being reassessed at multiple times during their treatment course. The original biopsy might be available but will not show CURRENT mutational status and so G360 will be invaluable in getting a quick and easy answer to a patients mutational drivers in real time without an invasive biopsy.
IRDoc. As cancers progress they will go through various mutations and treatments both now but more so in the future will heavily depend on knowing a patients true CURRENT mutational status. For this reason you will likely find a patients tumor being reassessed at multiple times during their treatment course. The original biopsy might be available but will not show CURRENT mutational status and so G360 will be invaluable in getting a quick and easy answer to a patients mutational drivers in real time without an invasive biopsy.
Sure, that may be true. As far as I can tell it hasn’t been proven. Since they are just detecting mutations, will any chemotherapy be really enough to completely eliminate a specific genetic mutation from the blood stream, particularly if it is already metastatic? Are they going to just keep doing the test waiting for the next mutation to show up? Do we have enough data to show that a patient with 3 of 7 markers will respond to a treatment targeting the 4th marker when it does show up?
I have a lot of questions which I don’t think are answered. It all may work out but the narrative seems to be that this is a replacement for biopsy. Some really don’t seem to understand what the test does and just go by the headlines – Liquid biopsy beats needle biopsy without the horrors – and extrapolate whatever insurance coverage to be all patients with cancer or all patients etc. As of now it’s only useful is a small subset of patients and it remains to be seen whether they can prove themselves useful for a broader population.
IRDoc, might be a little technical but lets try. A patient with Colon Cancer might be treated with a drug known as Erbitux if he has a non mutated KRAS gene. This is checked on his initial pathology. Patients cancer progresses and next treatment is tried. There is data that if his KRAS is still non mutated that going back to Erbitux could be effective. Previously one would need to rebiopsy. Now G360 will let you know in a few days if he has developed the mutation or not. It is not about a chemo eliminating a mutation but rather designing a treatment paradigm that takes into account as patients CURRENT mutations. Please God chemo per say will at some point become a thing of the past as we identify driver mutations and act against them with drugs aimed at attacking those mutations and in that continued progression a company like G360 should play a significant role.
I do not know whether G360 has a moat. Some have made it sound like any company offering a gene check can jump in and take over. I am not sure that that is totally true. Docs are creatures of habit and a one stop shop can become very sticky but sure GH might not have a significant moat but the drive towards more and more info being gleaned from a liquid biopsy is not a passing fad or a one use event.
You will likely find that not only will insurers cover it but with the costs of oncology drugs could even require it at some point in an effort to prove that the patient is still in need of a high priced drug.
Yes you are right- in its current formulation it will not replace initial biopsy but a patient with a regular biopsy could in the future still find the need for several repeat G360 tests as they progress through treatment.
IRDoc, might be a little technical but lets try. A patient with Colon Cancer might be treated with a drug known as Erbitux if he has a non mutated KRAS gene. This is checked on his initial pathology. Patients cancer progresses and next treatment is tried. There is data that if his KRAS is still non mutated that going back to Erbitux could be effective.
OK, that makes sense where G360 would be helpful. I was wondering the opposite – if the KRAS is mutated at some point, will the KRAS mutation ever become undetectable (thereby allowing one to assume the KRAS of any residual tumor is not mutated) or in the case of metastatic disease will there always be some mutated KRAS floating around?
There are clearly uses and a lot of potential, but from reading many posts and most online articles you would think it’s a test that is simply better than biopsy in general and going to revolutionize cancer diagnosis.