Cancer-detection pioneer shines with machine learning, big data & analytics

Cancer-detection pioneer shines with machine learning, big data & analytics

Hitting new highs this week was Guardant Health (GH), which I profiled positively for my Tech Trend Trader subscribers on Feb. 7.

My pitch was rooted in the long-term potential of its liquid biopsy. Early testing for cancer with a simple blood test is a great idea.

The marketplace clearly agrees. Guardant reported excellent fourth-quarter financial results on Tuesday evening.

Not only is the Redwood City, Calif., company making good clinical progress, but its business is also growing much faster than anyone anticipated. Shares shot up 27% in Wednesday trading.

My subscribers have already seen their position double in value. As of this morning we are tracking a 127.8% open gain. We just put a trailing stop-loss in place to protect those gains.

Shares are up 151% year-to-date. And they can go much higher.

Even if the bears decide to swarm this stock, it should only be temporary. That’s because Guardant’s business is unique.

Machine learning and big data are the future of business. Genomic sequencing has become synonymous with advanced medicine.

Under the direction of co-founder and CEO Helmy Eltoukhy, Guardant is forging a business at the intersection of all three disciplines, with a dash of analytics.

In the fourth quarter, this business potential came into full view …

  • Sales shot up 64%, to $32.9 million.
  • Precision oncology revenues surged 98% as test volume increased, and average prices climbed.
  • Tests for drug companies increased 65%.
  • And reimbursement from Medicare officially began during the quarter.

Full-year revenue increased 82% year-over-year, to $90.6 million. More important, the company expects fiscal 2019 sales in the range of $130 million to $135 million, an increase of 43% to 49%.

Guardant is also making real progress toward its holy grail blood test for cancer.

AstraZeneca, the giant British pharmaceutical firm, will extend support to its Guardant360 and Guardant OMNI assays. Meanwhile, results from the NILE study, a comparison between Guardant360 and traditional invasive tissue biopsies, have been supportive. These findings will go a long way toward more clinical research. Near term, this will drive the stock price.

Guardant shares are now up 151% in 2019. The market capitalization has swollen to $8.1 billion. The stock trades at 70x sales.

This is way ahead of my wildest projections during the time frame. If it cools down enough to offer another entry level, I plan to let you know.

For ongoing guidance on Guardant — along with timely new buy signals in other techs and biotechs that are changing the world and the way we interact with it — tune in to your twice-weekly Tech Trend Trader issues. Not a member yet? Click here to get started today.

Best wishes,
Jon D. Markman

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Comments 1

Ronthekanuk March 15, 2019

Time will tell if this is another “THERANOS”