PALO ALTO, Calif. - Guardant Health , Inc. (NASDAQ:GH), a precision oncology company, announced the commercial availability of its Shield™ blood test, the first FDA-approved blood test for primary screening of colorectal cancer (CRC), now covered by Medicare. The Centers for Medicare & Medicaid Services (CMS) will cover the Shield test for eligible beneficiaries once every three years, expanding access to millions of individuals at average risk for the disease.
The Shield test's FDA approval was informed by the ECLIPSE study, which included over 20,000 average-risk adults and demonstrated an 83% sensitivity in CRC detection with 90% specificity for advanced neoplasia. These rates are comparable to current non-invasive screening methods, where CRC sensitivity ranges from 74% to 92%. The study results were published in The New England Journal of Medicine.
With Medicare coverage, the test becomes a more accessible option for CRC screening, especially for those who might not comply with colonoscopy recommendations. Guardant Health co-CEO AmirAli Talasaz emphasized the test's potential to improve early detection and treatment of CRC, as well as the significant opportunity it represents for the company. He also noted the ongoing process to include Shield in clinical guidelines, which could further expand coverage to more patients.
The high patient adherence rate to the Shield test, observed to be over 90% in more than 20,000 tests ordered, contrasts with the 28-71% adherence to colonoscopy and stool-based testing. Moreover, a randomized Kaiser Permanente study found that offering Shield as an additional choice increased the number of people screened for CRC threefold.
Further underscoring the test's potential impact, a health outcome model showed Shield outperforming two guideline-recommended stool-based tests in terms of life years gained and CRC cases and deaths averted.
The Shield test detects alterations associated with CRC in the blood and is intended for individuals at average risk, aged 45 or older. It is not meant for high-risk individuals. A positive result indicates the need for a colonoscopy evaluation.
Healthcare providers can administer the Shield test during routine office visits, with results available approximately two weeks after the sample reaches Guardant Health's lab.
This news is based on a press release statement from Guardant Health, Inc.
In other recent news, Guardant Health has been the subject of several significant developments. The company's Shield CRC blood test, a primary screening option for colorectal cancer, has received FDA approval, marking a significant milestone in the liquid biopsy space. This approval came earlier than anticipated, leading BTIG to increase its price target for Guardant Health from $45.00 to $50.00, maintaining a Buy rating.
The FDA Advisory Committee has also endorsed the Shield test, potentially opening new opportunities in the cancer screening market. Following this endorsement, Canaccord Genuity raised its price target for Guardant Health to $38, reflecting increased confidence in the revenue prospects for the Shield test. Jefferies also initiated coverage on Guardant Health with a Buy rating and a price target of $32.00, acknowledging the company's strong position in the minimal residual disease market and its positive free cash flow.
These recent developments highlight the ongoing confidence in Guardant Health's market position and future growth potential. The company's innovative approach to cancer detection and treatment continues to garner attention and support from major brokerage firms and regulatory bodies alike. However, it is important to note that these are analyst expectations and should not be taken as guaranteed outcomes.
InvestingPro Insights
Guardant Health, Inc. (NASDAQ:GH) has recently reached a pivotal milestone with the commercial launch of its Shield™ blood test for colorectal cancer, now backed by Medicare coverage. This development may have a significant impact on the company's financial health and stock performance. Here are some key insights from InvestingPro:
The company's market capitalization stands at $4.3 billion, reflecting the market's valuation of its innovative approach to cancer screening. Despite the positive momentum, analysts do not expect Guardant Health to be profitable this year, which is reflected in the negative P/E ratio of -9.08 for the last twelve months as of Q1 2024. This is further emphasized by the adjusted P/E ratio of -10.58, suggesting that investors are pricing in the company's growth potential rather than current earnings.
Guardant Health's stock has shown a significant return over the last week with a 10.02% increase, and even stronger performance over the last month and three months, with returns of 24.31% and 92.39%, respectively. This could be indicative of growing investor confidence in the company's future prospects, especially in light of the recent Medicare coverage approval for the Shield test.
It's important to note that the company operates with a moderate level of debt and its liquid assets exceed short-term obligations, which may provide some financial stability as it continues to invest in research and development. However, the company is trading at a high Price / Book multiple of 62.95, which may raise questions about valuation among some investors.
For those interested in exploring further, there are additional InvestingPro Tips available for Guardant Health, which can be found at InvestingPro. These tips provide deeper insights into the company's financial health and operational performance, which could be invaluable for making informed investment decisions.
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