Conference Transcript - GH 2026-06-03

Tycho Peterson, Analyst — Life Science team

Thanks. We're going to kick it off. I'm Tycho Peterson for the Life Science team. It's my pleasure to introduce Garden. We've got Mike and Zarek with us today. Maybe to kick it off, Mike, I'll flip it over to you to just do a quick recap of 1Q. Obviously, you know, impressive relative to the street on screening and oncology. Just talk about some of the momentum you have coming out of the core.

Mike Bell, CFO

Yeah, thanks, Tycho. Yeah, and Q1 was a great start to 2026 for us. Our overall revenue growth was 48% a year over year. It's the fastest revenue growth we've seen for the last five years, of course, off a much bigger base, so we're really pleased at that. And we tripped the sort of trailing 12-months, billion-dollar revenue run rate, so I think all bodes well for us there. You know, we saw broad-based strength in Q1. Oncology was very strong. You know, the volume growth was 47%. That's the best we've seen in the last three years. And, again, that was broad-based. Garton 360 did extremely well. That's growing 30%. Tissue did well. It's our second-fastest growing oncology. And Reveal was a real highlight. That grew over 100%. So we've seen a lot of traction on Reveal in MRD and also with therapy monitoring. And then, yeah, on screening, a very good start to the year. 44,000 tests. We saw really good momentum in March in exiting the quarter. I think initiatives like our Quest collaboration and direct-to-consumer initiatives that we're starting now are really starting to play into the numbers. So we were really pleased with the start, and, yeah, it sets us up well for the rest of the year.

Tycho Peterson, Analyst — Life Science team

And you obviously took up the guide on both, you know, oncology and screening. I guess as we think about, you know, whether it could be upside and maybe even going forward a year, is it more from, you know, the guideline updates, from NPIs, from some of the partnerships you just mentioned?

Mike Bell, CFO

Yeah, you know, I think we had a lot of confidence coming out of Q1 with the traction that we saw on the oncology side of the business, you know, with the smart apps continuing to really drive volume on the liquid side. Again, you know, therapy monitoring, new product that we launched in Q4 of last year. We've seen really good uptake of that and that gave us a lot of confidence to up the guide. And again, I mentioned on screening, the momentum we saw in Q1 and our expectation for Quest and the impact of DTC was really baked into that guide uplift. You know, a couple of things that we said weren't included in our guide and have since come to sort of fruition in the last couple of weeks was the FDA approval for Garden360 Liquid and then the ACS guidelines. So both of those hit just in the last couple of weeks. They weren't in our guide, so, you know, we sat here with even more confidence in the numbers we put out.

Tycho Peterson, Analyst — Life Science team

And on screening, it's great to finally get the ACS guidelines going through last week. Just talk about how you think about uplift there on volumes this year and next, and what is timelines now look like for commercial coverage?

Mike Bell, CFO

Yeah, I think on the ACS guidelines, I mean, first of all, we were really pleased with the guidelines. The way that they're written with respect to, you know, for those patients who don't want to do a colonoscopy or a stool-based test, it effectively mirrors the way that we've, you know, the sales team has been selling S.H.I.E.L.D. And it's really how we've positioned that, which is, you know, there's a 50 million unscreened population out there, We've been going into doctors and really, you know, targeting those patients that, yeah, don't want to do any other modalities or in the past those modalities have been ordered and the patient hasn't followed through with them. And so we think those guidelines just back up how we're selling that and they give us a lot of, you know, additional validity around the test. So I think we see those ACS guidelines on a national basis just helping with the sales message and helping continuing to drive the volume across the U.S. Of course, there are roughly a dozen states where it's mandated for commercial payers to cover the test once they're in ACS guidelines. And so in those states in particular, I think two things. One, you know, we'll now open up the volume to the under 65 to that commercial payer patient population. We've been sort of holding back in the rest of the U.S. on that to date. So we can open that up. That can be a volume driver. And then, of course, you know, we'll be pushing as hard as we can with the commercial payers to start to update their coverage policies to cover the test and to start paying us. We know, we expect it's going to take, you know, potentially up to sort of 12 months to really get to a place where we want to be with commercial payers. I think initially we'll get quite a number of, you know, denials. But as we sort of speak to them and work with the commercial payers, we'll show that they're going to be updating their coverage policies. So, you know, we see ACS having a positive impact on volume for the remainder of 26 and then probably more of a revenue impact from those ACS states in 27.

Tycho Peterson, Analyst — Life Science team

And how about the $700 ASP in your long-range plan, you know, that you put out for 2028? Does the guideline update change the thinking there at all?

Mike Bell, CFO

It doesn't change the thinking on the 28. I think the dynamics that we expect to see on ASP. So we'll open up to those under 65s in the ACS states. We know initially we'll be getting a number of zeros ahead of when we start to get paid. So we expected a little bit of a hit initially on our ASP. It's been trending over $800 today. If you look at the rest of our guidance, we wanted to set the right expectations for the remainder of 26. So our guidance for the remainder of 26 is, on average, $775. So that anticipates, you know, we'll be getting some zeros. But over time, we would expect, when we start getting paid, that to tick back up. I think in our 2028 LRP, we're expecting the same sort of phenomenon from USPSTF. Once we're in guidelines there on our base case assumption is sort of end 27, start at 28. Again, we'll open up to more commercial volume. initially that'll be sort of zero paid but then the payers will start to pay us and that'll tick back up so we look at 700 as being sort of a low watermark but as the commercial payments ramp up we you know it'll it'll be ticking back up and we think it you know longer term it'll be at least

Tycho Peterson, Analyst — Life Science team

over 800 and and you just mentioned uspscf what's kind of longer term view there we haven't seen the draft guidelines you've got you know leadership uh changing hands are you still constructive on the Idea Shield can get USPSTF inclusion?

Mike Bell, CFO

Yeah, we're still constructive. You know, we see all the noise that's happening around this, and, you know, that group's been disbanded. You know, we're hopeful that it gets put back together in the near future and that it can start its work. You know, we have a very active team in D.C. You know, I think the signals we're getting and that we're hopeful for is that, you know, that group will be put together soon and start its work. And hopefully, you know, one of the key things that they're going to focus on will be updates to CRC. So, yeah, we're still hopeful of, you know, getting there by late 27, 28. Of course, it's out of our hands, but, you know, the signals we're getting, you know, potentially this could move at some point in the near future.

Tycho Peterson, Analyst — Life Science team

And then just thinking about multi-cancer, you know, how's opt-in fared in the early days here? Is it driven a tailwind on volumes, or is it more about, you know, supplementary features for real-world data?

Mike Bell, CFO

Yeah, multi-cancer has been great. I don't know, Zarek, if you want to...

Zarak Khurshid, Head of Investor Relations

Thanks, Tycho. Yeah, we're super excited about MCD or multi-cancer detection. That feature was rolled out in Q4 of last year. We continue to see very good attachment of this opt-in from physicians and patients in kind of the last two quarters. Feedback's been great, and this is helping to populate this data collection initiative with, you know, a lot of samples that we're going to work towards a regulatory filing over the coming years. But, yeah, we think we're, you know, really well positioned to be the winner in multi-cancer over time.

Tycho Peterson, Analyst — Life Science team

And how do you think about MCD monetization, you know, given the current offerings not paid? What's the path there?

Zarak Khurshid, Head of Investor Relations

Yeah, it's something we think a lot about. Clearly, there needs to be a lot of work to develop, I think, a better or more robust framework for reimbursement for MCD. we applaud Congress for kind of this first step, which is the MCD bill, which creates kind of the first phase for reimbursement for MCD. We're going to continue to kind of work to improve that over time. And, you know, we're in parallel. Yeah, we're running, you know, through the data collection initiative, we're collecting samples and fine tuning the assay so that we can get towards FDA approval and uh and monetizing the effort uh over time how about just competitive dynamics you've

Tycho Peterson, Analyst — Life Science team

got some you know rising competition in crc and and and you know um mcd overall as we think about kind of more you know uh entrance into the market is there a need for shield 3.0 you know at some

Mike Bell, CFO

point um we don't think there's a need for shield 3.0 you know i would say um the team is you know always continues to look at improving the test. So, you know, we're continually working at that. But, you know, as Zarek mentioned, you know, we've got a differentiator with multi-cancer. We're, of course, working on lung. You know, that study is ongoing, but we would expect a readout on lung at some point in 2027. So I think, you know, there's a lot that we're doing on the development side to continue to progress Shield. On the commercial side, you know, I think we've been anticipating competition now since we launched on day one. We knew that competition is always coming down the line. I think, you know, all of the things that we've been doing over the last almost two years now in building out a very significant commercial infrastructure. We ended last year with over 300 people in the field. We see our sales productivity going incredibly well. The Quest collaboration that went live towards the end of Q1, we think that's given us a massive step up in our connectivity just on the EMR system. And very importantly, in these 8,000 blood draw centers with Quest. So, you know, that's creating a very significant moat for us. I think the DTC initiative that we kicked off in Q1 on top of the HPC marketing that we've been doing for the last two years positions us very well for competition coming down the line. And I think, you know, anecdotally now, we think there's incredibly strong brand awareness of S.H.I.E.L.D. when our reps are going into new accounts to talk about S.H.I.E.L.D. for the first time. In most cases now, we're finding that, you know, the doctors have already heard of S.H.I.E.L.D. either from the HPC marketing that we're doing or, you know, patients coming in and have seen S.H.I.E.L.D. tests now with DTC. So I think, you know, from the development side and also from the commercial side, we feel in a very strong position and we know that, yeah, competition is coming down the line.

Tycho Peterson, Analyst — Life Science team

Has the consolidation that started to pick up, you know, change your view on just the commercial footprint you need?

Mike Bell, CFO

No, I think, you know, again, we've always sort of had this assumption on competition. And I think we've had our, you know, eyes and ears out for a long time understanding how the market's going to develop. You know, we've always said, you know, at scale by 2028, you know, we'd expect to have something like 600, 700 people in the field. We're making very, very good progress with that. We're moving very quickly. But, you know, we think that's the right number for that time period. You know, one thing that we're really, really happy with is that sales productivity. A lot of that is driven by the very strong adherence rates that we're seeing with S.H.I.E.L.D. You know, they're well over 90%. So, yeah, over 90% of time when the doctor orders S.H.I.E.L.D., the patient's going to get in the blood drawn, and we actually get the test and can report out a result. And so that strong adherence is a very good message, but it also makes our sales team very efficient because rather than chasing up patients to make sure they actually get the test done, they're focusing on new accounts and driving breadth of accounts as well as the depth of accounts. So yeah, we think that 600 and 700 is a good target for us to set for 2028.

Tycho Peterson, Analyst — Life Science team

And just maybe last one on Shieldy, it's been kind of a gating factor on reaching cash flow breakeven. Obviously, at a corporate level, you're talking about the end of 274Q. Anything to change that kind of trajectory, like do the guidelines maybe pull that forward or not? Yeah, I think

Mike Bell, CFO

I mean first of all on cash flow break even I would say we are at pains to point this out excluding screening the rest of the business and that's loaded with pretty much all of the G&A costs. The rest of the business now is firmly cash flow positive. It has been for the last couple of quarters and it will be for full year 26 so yeah I will focus now to get the company overall to cash flow break even and we've set a target by the end by the end of 2027 is to drive lower cash burn and drive screen towards profitability. I think what's going to get us there is once we get to scale on the commercial side. So the quicker we can do that, because we've been investing all of our incremental gross profit on the screen side back into the commercial sales and marketing line, when we get to a level of scale, then we'll start to see that gross profit drop down to the bottom line. So getting there as quickly as possible is going to help. And, of course, driving the revenue and the volume growth whilst maintaining strong gross margins is obviously going to help. So, yeah, to your point, Tycho, ACS guidelines are going to help because we see that can be an accelerator on our volume as well as all of the things that we're doing.

Tycho Peterson, Analyst — Life Science team

And maybe speaking of accelerators on volume, shifting over to G360, you know, the new liquid assay FDA approval, how do we think about any incremental volume, you know, uptick in the near term? I think you said that wasn't contemplated

Mike Bell, CFO

in guidance. Yeah, that wasn't contemplated in guidance. I think, again, you know, with the FDA approval, this is something that our sales team is incredibly excited about. You know, we think there are a few volume levers to pull that. You know, first of all, on the Garnet 360 liquid side, You know, we've had, you know, you could call it a relatively complicated request ordering form. We've had a GARDEN 360 CDX, an FDA-approved version of the test, which is the smaller panel. We've also had the LDT version of the test, which is on the larger smart platform panel with all of the smart apps. And so for doctors just to understand what they're ordering, often they want an FDA-approved test, but they want all of the smart apps, bells and whistles. and that's been relatively confusing and maybe just held back a little bit of volume. Now we've got this FDA-approved best-in-class test with all of the smart apps and the epigenomic data just in one simple-to-order test. I think that can help drive volume with this best-in-class test. You know, secondly, we've talked a lot about, you know, potential attachment of tissue and how this can help our tissue volume. Again, we've been a bit restricted on oncologists being able to order tissue together with a liquid test, which is in guidelines, for example, for lung. And the reason being with our smart platform LDT version of the test, we weren't allowed to bill if tissue is available. And now we have a very simple requisition form. It's an FDA-approved test. No tissue insufficiency clause on that. And the attachment rate for tissue with the liquid, we hope or we expect, should be a lot stronger than it was in the past. So we think there's a two-fold impact on volume, one on liquid, but then two on the tissue pull-through.

Tycho Peterson, Analyst — Life Science team

And can you maybe just walk through the process of going from FDA approval to achieving ADLT pricing designation? What are the puts and takes when you're setting a Medicare rate for the first nine months of coverage? And when could we expect to hear more on official timing and pricing?

Mike Bell, CFO

Yeah, so, I mean, first of all, we've set the cash pay price now for the FDA-approved version of the test. It's $8,455, so an uptick from the $5,000 where the current rate is. And, you know, we see that rate reflecting really the value that we're now providing with this much larger panel with all of the smart apps and an FDA-approved product. So that price is in play. To get ADLT status, of course, now this is a new test, it's FDA approved, that enables us to go through that process. There's some admin in the background. We need to pull a specific PLA code for the test. When we've got that, then we'll apply for the ADLT. So, you know, we would expect this to come into play in the first half of 2027, Just as a comparison, SHIELD, for example, got approved in August, and the ADLT rate went live on the following 1st of April. So that's the sort of timeline we're expecting, so sometime in the first half of 27. And yeah, when we get that, then that will lead to an immediate increase in our Medicare rate. So yeah, we're very excited to be able to do that.

Tycho Peterson, Analyst — Life Science team

And how should we think about, you know, different payer types, you know, Medicare fee-for-service, Medicare Advantage, commercial? How does the pricing upload flow through each, and how should we think about overall capture? Is 60% of this, you know, fair assumption?

Mike Bell, CFO

Yeah, you know, I think if you look now where we are, our Medicare price for Gardner 360 over the last few years has been, you know, $5,000. We're sort of realizing across all the mix of Medicare, Medicare Advantage, commercial, and there's some international volume in there as well. But we're realizing, you know, $3,000 approximately, which is 60%. So I think, you know, we see a pathway to get to that 60% of $84,55. It's going to take some time. You know, we think probably it's probably a two-year timeline from when we get ADLT. The steps are, of course, yeah, as I just mentioned, Medicare fee-for-service would go immediately. what we've seen in the past when we've had a Medicare price increase where Medicare Advantage payers need to follow that price it can take up to 12 months for all of that to sort of flow through and for the payers to update the price in the system so that'll take some time and then on the commercial side there'll be some blocking and tackling that we know we need to do we've got contracts with payers this is a new test We'll have to, you know, add the new test to those contracts. There's payers with coverage in place. When we don't have contracts, you know, they generally pay off the list price, so we expect that that might flow through a little bit quicker. I think the other thing is what we've seen in the past with Garnet 360 is when we've had an FDA-approved version and an LDT version, We've often got paid, or our coverage is wider with the FDA-approved version of the test. So, you know, we expect that we might have an upside on the commercial coverage, with now pretty much all of our volume will be on the FDA-approved version of the test. So I think there's multiple things that we need to work on on the commercial side. And that, you know, again, that could take sort of 12, 18 months or so to flow through. But, yeah, we're pretty confident that by the end of 28, you know, we should be achieving, you know, around about $5,000 ASP, which is about 60% of that Medicare rate.

Tycho Peterson, Analyst — Life Science team

And is there upside from FDA approval, you know, in terms of increasing the attachment on tissue? And what's the attach rate, you know, today and where could it go?

Mike Bell, CFO

The attach rate today is primarily on the CDX version, the FDA-approved version of the test, which is the minority of the Garden 360 volume. So I think just moving over to all of the volume being on an FDA approved version, that should, if that attachment rate stays the same, and it's relatively low, relatively small, below 10%, that should have an uplift. And then I think just the ability to order that together with liquid, we'd expect that attachment rate to go. I don't think we want to sit here and put a specific number on that. But we know the demands out there. Our sales reps have heard from a lot of oncologists that if they could order what we consider now a best-in-class tissue test, together with best-in-class liquid test from garden, they would want to do that. They've not been able to do that in the past. So, yeah, our expectation is that that attachment rate over time can improve significantly.

Tycho Peterson, Analyst — Life Science team

How about tests per patient? You know, 1.3, you know, today for G360, I guess, you know, how does that expand over time? What are the levers to drive adoption, you know, as a reveal for therapy monitoring rules out?

Mike Bell, CFO

Yeah, I mean, as well as the tissue attachment that we just talked about. Yeah, we're really excited about reveal therapy monitoring. You know, this is very complementary to Garden360. You know, when an oncologist orders Garden360, then they can put the patient on reveal therapy monitoring and monitoring them over time. So, you know, let's just say every two or three months, running a garden reveal, see how the therapy is working. And then if at any point in time, you know, the therapy isn't working, then immediately reflex to a garden 360 with the same blood sample from reveal, run that, and then identify, you know, a new potential new therapy for the oncologist to put the patient on. And so we launched that in Q4. We've seen really strong, really strong uptake of that. Of course, the key for us is to get reimbursement from MoldyX. We're in the process for both chemo and IO. But when that's in place, we see that can be a real potential driver. So from a revenue perspective, but also from this, you know, increasing the 1.3 test per patient, you know, we think that can go significantly higher.

Tycho Peterson, Analyst — Life Science team

And I guess, you know, Serena 6 was viewed as an upside enabler of expanded G360 tests. I mean, how are you thinking about that paradigm after the ADCOM and is revealed for therapy monitoring effectively an offset for, you know, potentially the lost upside from Serena 6?

Zarak Khurshid, Head of Investor Relations

Yeah, certainly, you know, the Serena 6 ODAC ADCOM meeting was a little bit frustrating. At least the outcome of the meeting was frustrating for us. We thought the, you know, a lot of the commentary was very encouraging for the paradigm of using ctDNA as an important surrogate marker in, you know, in these types of studies. You know, we're certainly not, you know, we're still in the game. There's potential for FDA approval still based on the empirical data. But, you know, we're not counting on anything. We look forward to that, you know, that final outcome. You know, more recently, we have been slightly more encouraged by, you know, the request for more information and the data that we saw from ASTRA yesterday showing very strong ctDNA clearance, kind of further, you know, boding well for the promise of ctDNA in the future, you know, in this area. So, yeah, we look forward to the future.

Tycho Peterson, Analyst — Life Science team

and then on reveal mike you mentioned you know mold x coverage for for io and and breast what's the latest on on timing there and how much you know is kind of baked into uh guidance this year

Mike Bell, CFO

for the indications yeah um you know we've got we've got applications out to mold x on breast for mrd and then yeah for io and chemo in therapy monitoring um we we would hope that you know all of those can be in the relatively near future you know we're we're on this on this cycle of 60 day reviews and getting questions back and answering them um and we've been in that cycle for for quite a while particularly for for for breasts so yeah hopefully they come soon it's hard to sit here and and put a time a specific timeline on them but we would we would hope that they would come uh come

Tycho Peterson, Analyst — Life Science team

soon and then asps you know on reveal six seven hundred dollars lrp a thousand you know by 28 you You know, what has to go right to get to that reimbursement level?

Mike Bell, CFO

Really, it's this Molde-X coverage on all of the three indications that I just mentioned. I think they're really the key to move us getting towards that 1,000. Just to put it in perspective, but with Reveal CRC, which now we have Molde-X reimbursement in the adjuvant and the surveillance setting, good MA coverage and our commercial coverage is improving the ASP on CRC alone is trending very near to $1,000 so we've sort of proven it out that if we get Moldiex reimbursement we can be getting on an indication by indication basis close to $1,000 so I think again Moldiex reimbursement for those other indications is going to unlock that it won't be immediate but I think that will put us firmly on the path to this you know, $1,000 by 2028. And then, you know,

Tycho Peterson, Analyst — Life Science team

launching Tumor-Informed Reveal Ultra later this year, I guess, how should we think about go-to-market strategy, commercial investments that are needed, any cannibalization of, you know, tumor-naive?

Mike Bell, CFO

Yeah, I think, you know, from a commercial investment, I think, you know, we've already made all of that investment with respect to the commercial sales force that we have out there, the brand strength of both Garden and Reveal on the liquid side. So I don't think there's a lot of incremental commercial investment there. I think where we position this and where we're really excited about is that we've got a best-in-class tissue-free option with Reveal. We think about Reveal Ultra with one part per million sensitivity being a best-in-class tumor-informed test. And so we think being able to just offer that optionality to the oncologist to have both best-in-class from both tissue-informed and tissue-free is going to be a very, very powerful offering. So we're excited to launch that. Again, I think data is going to be key on Reveal Ultra. Reimbursement is going to be key on Reveal Ultra. We want to get there as fast as we can to really maximize the opportunity. But again, you know, we're excited and we're planning to launch Reveal Ultra later this year.

Tycho Peterson, Analyst — Life Science team

Hey, Zee, I'll give you the last one on AI, ML, you know, as a potential driver of revenues. Should we think about this as, you know, enhancing existing assays, a broader, you know, data product for biopharma? How do you think about it on the revenue side and then anything on the cost side? Could this accelerate the path to profitability?

Zarak Khurshid, Head of Investor Relations

Yeah, thanks. AI is a massive tailwind for our business. You're actually, you know, the clinical side already seeing it manifest in new products, kind of acceleration of the launch of new products and new product features across the clinical portfolio. You've seen that in G360 and tissue through multiple upgrades. And, yeah, you're seeing that also play out in the biopharma side of the business as well. And, you know, how does that work in practice? you know, we've built this massive database or data repository of over a million patients worth of genomic data in the last 10 years. We've also layered on the epigenomic tech stack, you know, across over 500,000 patients worth. Now we have shield, you know, asymptomatic patient data coming into that database, as well as kind of multiple time points, kind longitudinal data. And so this is a very rich data source and extremely valuable pool of information. And these are blood-based samples. These are very rare. And so what AI is doing is effectively increasing our ability or accelerating our ability to kind of query this database and test hypotheses and to come up with kind of new biological insights and signatures that then lead to, you know, actionable new features on, you know, across the portfolio. So really exciting times. And then, you know, to the second part of the question, I mean, it's, and Mike can speak to it too, you know, every part of the organization is leveraging it in ways to, you know, improve efficiencies and take costs out of the system. But I think, like, the key point is our competitors have a lot of these tools too, but what they don't have, again, is this data treasury built, you know, over a decade. very unique data, very hard to replicate data and that's really kind of the secret to our ability to leverage AI. Great, we'll leave it at that.