FDA Watch: Could Guardant Health’s Colon Cancer Assay Be a Blockbuster?

Prozac^®, Wegovy^®, and Biktarvy^® are blockbuster drugs. Does Guardant Health have a blockbuster in its Shield^™ test for colorectal (and possibly) other cancers?

Shield is a blood test screening for colorectal cancer in individuals at average risk of the disease who are age 45 and older. The test is being positioned by Guardant to address the huge swath of people who have not been screened for colorectal cancer, a condition that generally responds well to treatment in earlier stages of the disease, but is often diagnosed in its later stages when patients finally get checked after displaying symptoms.

According to the American Cancer Society, the five-year survival rate for the disease is 91 percent if caught and treated early, but 73 percent if it has metastasized, and only 13 percent if it has spread to distant parts of the body.¹

“The persistent gap in colorectal cancer screening rates shows that the existing screening options do not appeal to millions of people,” said Daniel Chung, MD, a gastroenterologist at Massachusetts General Hospital and a professor at Harvard Medical School, in a Guardant press release. “The FDA’s approval of the Shield blood test marks a tremendous leap forward, offering a compelling new solution to close this gap.”²

Key issues with current gold standard screening options

The lack of palatability may be linked to the current gold standard for colorectal cancer screenings: a colonoscopy. Although the procedure only takes about 30 to 60 minutes to perform, it requires a thoroughly unpleasant experience using powerful laxatives prior to the procedure, and usually requires general anesthesia while it is underway.³ And, though colonoscopies are covered by many insurers—with free coverage mandated for policies regulated by the Affordable Care Act—some individuals still have to pay thousands of dollars to be screened in this manner.⁴

A secondary method of testing has been a stool sample test. Kaiser Permanente, for example, sends such tests to its members aged 45 to 75 annually, but this method still requires a distasteful collection process for the samples, which are then sent through the mail. Anomalies detected in such tests will invariably lead to a colonoscopy.⁵

“There are 50 million people who, based on guidelines, need to get screened but they are not getting screened…76 percent of the people who die with colorectal cancer are coming from that 50 million people,” said Guardant co-founder and chief executive officer AmirAli Talasaz during the UBS Genomic Medicine Summit on August 14. “So, it’s a huge unmet need.”⁶

Aggressive marketing plans for recently approved test

Guardant—which has sold Shield as a laboratory-developed test since 2022—now has the test approved for Medicare coverage. Its pricing hasn’t been approved yet, but Talasaz said during a recent conference call that after the gap-fill process is completed, the company is hoping for around a $500 reimbursement rate.⁷

The company appears to be leveraging every advantage to make Shield a cash cow. Guardant held an hour-long conference with securities analysts right after the test received FDA approval—an unusual move even for larger publicly-traded laboratory companies such as Quest Diagnostics and Labcorp.

Talasaz made it clear during that call that Guardant is going all-in on marketing Shield as aggressively as possible.

During the analyst call, Talasaz noted that Guardant has been actively recruiting a large national sales force for the test, with a goal of having 100 sales reps nationwide by the end of the year, and more hires after that.

“We have expanded the team in a very meaningful way already,” he said, adding that the sales reps “are well trained, [and] they are going into the field very, very soon.”⁷

Meanwhile, Guardant has already had what Talasaz termed as “great conversations” with the American Cancer Society about it including the Shield test in its recommended cancer screening guidelines. That would be crucial in getting commercial payers to cover the product, he added.⁷

Shield expected to provide a big revenue boost

The FDA approval temporarily boosted Guardant’s stock. It rose from about $33 a share just prior to the July 29 announcement to about $36 a share immediately afterward. However, is has since dropped to around $28 per share at the time of writing.

Nevertheless, Guardant has issued some very robust guidance for the remainder of 2024 with revenue projected to be between $690 to $700 million, up 22 percent to 24 percent over 2023. And that does not even include any projects of revenue that Shield may generate this year.⁸

Moreover, Guardant is also exploring expanding Shield’s capacity to include early detection of other cancers, including lung cancer.

“We are looking into the pathways to expand the indication of Shield to really a multi-cancer detection device, and hopefully, we’re going to have some exciting updates about that” sometime in 2025, Talasaz remarked during the UBS summit.⁶

Meanwhile, Talasaz is confident that just by capturing a small percentage of the Americans who currently do not undergo any colorectal cancer screening, Shield could generate $500 million in revenue by 2028.

“This market is very deep, and to get to about 1 million annual tests when there are 50 million in the unscreened patient population—there is a very big opportunity in front of us,” he said during the analyst call.

References:

1. https://www.cancer.org/cancer/types/colon-rectal-cancer/detection-diagnosis-staging/survival-rates.html
2. https://investors.guardanthealth.com/press-releases/press-releases/2024/Guardant-Healths-Shield-Blood-Test-Approved-by-FDA-as-a-Primary-Screening-Option-Clearing-Path-for-Medicare-Reimbursement-and-a-New-Era-of-Colorectal-Cancer-Screening/default.aspx
3. https://www.mayoclinic.org/tests-procedures/colonoscopy/about/pac-20393569
4. https://www.cancer.org/cancer/types/colon-rectal-cancer/detection-diagnosis-staging/screening-coverage-laws.html
5. https://lookinside.kaiserpermanente.org/not-too-young-for-colorectal-cancer/
6. https://event.webcasts.com/starthere.jsp?ei=1684043&tp_key=b8c2f1606b&tp_special=8
7. https://events.q4inc.com/attendee/112598948
8. https://s26.q4cdn.com/594050615/files/doc_financials/2024/q2/Guardant-Health-Q2-2024-Earnings-Presentation-Final.pdf

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Key laboratory test approvals and Emergency Use Authorizations (EUAs) in the past month by the FDA include the following decisions:

New CE Marks and Global Certifications

Significant EU and/or global approvals announced during the period: