Interview – Guardant Health takes $50m to make biopsy a thing of the past

There is much excitement around the concept of liquid biopsies – tracking cancer development by sequencing tumour DNA taken from a patient’s blood sample – so it is not surprising that a company claiming first-mover advantage would attract funding. But the $50m series C announced by Guardant Health in early February is the largest VC round this year by some way.

“The recent convergence of genomics and big data and healthcare has created a resurgence in the venture community,” Guardant’s CEO, Helmy Eltoukhy, tells EP Vantage. “We’ve been beneficiaries of that timing.”

Guardant’s $50m haul is all the more impressive given that the group raised $30m in a series B less than a year earlier; not bad for a company just three years old.

Guardant’s test, Guardant360, is an advance on current sequencing-based cancer diagnostics, Mr Eltoukhy says. It “supercharges” current sequencing technology, enabling identification of trace fragments of tumour DNA circulating in a patient’s blood. Tests of this kind already exist, Mr Eltoukhy says, but these rely on sequencing just a few points in the genome – maybe five or 10 spots, whereas Guardant’s test looks at 150,000.

“It is the first comprehensive test that uses next-generation sequencing for this application,” Mr Eltoukhy says. It has been sold in the US as a lab-developed test since June 2014 and may be used for all advanced solid tumours. Guardant360 is not used to diagnose cancer. Instead it is used to track the tumour’s progress, and to guide therapy.

Faster, cheaper and more comprehensive

Guardant360 returns results within 14 days, Mr Eltoukhy says, roughly twice as fast as traditional tissue biopsies. But it also permits a more complete look at a patient’s disease, Mr Eltoukhy says.

“We’re not sampling a single site as you’re forced to do with a tissue biopsy, so we’re seeing contributions from the entire tumour mass.” Sometimes, he says, information that could lead to new therapeutic options can be missed even by a second biopsy if the doctors are sampling the wrong site.

The test has another persuasive advantage: cost. Mr Eltoukhy says the median cost for a lung biopsy procedure – as an example – is about $3,800, but thanks to the expense of complications such as collapsed lungs the mean price is closer to $14,000. Sequencing the DNA in the lung tissue costs a further $5,000.

“We replace biopsy with a blood draw, which costs maybe $12 at most,” Mr Eltoukhy says. The $5,000 sequencing cost still applies, but the procedure cost has been all but eliminated, meaning that the full process with Guardant’s test costs around a quarter of the mean price for lung tissue biopsies.

Even assuming that other tumour types offer a smaller cost differential it is reasonable to conclude that Guardant’s test will always work out more cheaply than tissue biopsy.

“We replace both the cost of the biopsy and the impact on quality of life and the complication rate with a simple blood draw – and the worst complication is Band-Aids,” Mr Eltoukhy says.

Guardant is working towards reimbursement by both private payers and Medicare, with Mr Eltoukhy saying that discussions have been “very positive so far”.


So-called liquid biopsy is an area of feverish research thanks in part to its utility for pharma companies as well as test manufacturers themselves. It can function as a kind of companion diagnostic; if a patient is found to be Her2-positive, a course of Herceptin would likely be prescribed.

The fact that many tumours mutate constantly also adds to the utility of liquid biopsies – doctors using Guardant360 see about three genetic alterations per patient on average, Mr Eltoukhy says – as they are more easily repeated than tissue excision. This could present more of a problem for reimbursement, though, testing payers' willingness to pay for repeated tests.

Qiagen is active in this area, and is researching liquid biopsy technologies in collaboration with AstraZeneca (Interview – Qiagen set to benefit from increased test regulation by the FDA, November 10, 2014). Mr Eltoukhy says companies including Illumina, Roche and Genomic Health are also waking up to the potential, and could have a research product ready this year.

If genomics technology represents the convergence of healthcare and data it is worth examining the latter aspect as well as the former. Guardant can track the testing data and analyse it to draw conclusions regarding which combinations of drugs work best for which cancer genotypes. These analyses will of course be of great interest to pharma companies.


Guardant will put its $50m towards expanding its infrastructure so it can handle the demand for the test, Mr Eltoukhy says. But the VCs who forked over that $50m will want their exit, and despite Mr Eltoukhy’s protests that Guardant has “found venture firms with a long-term focus”, they will not be patient for ever.

Any company with a marketed product in a hot area is surely a takeover target. But Mr Eltoukhy is keeping mum on the company’s strategy.

“I think it’s TBD on those kinds of conversations. We’re committed to building the best company possible and I think exits come as a byproduct of that.”

With the forthcoming changes to the regulation of lab-developed tests such as Guardant360, a purchaser would have to be alive to the possibility of having to drag the test through the FDA approval process (Vantage point – Prenatal blood test market pregnant with possibility, February 13, 2015). Even so, the right buyer – and it may be noted that Roche has a history of doing this sort of thing – could definitely make Guardant’s technology pay.

Top 5 medtech VC rounds of 2015 to date
Company Investment ($m) Round Date
Guardant Health 50.0 Series C February 3, 2015
Veryan 28.2 Series B January 15, 2015
EarlySense 20.0 Series F January 20, 2015
Obalon Therapeutics 20.0 Series D January 14, 2015
Atlas Genetics 20.0 Series C January 29, 2015

To contact the writer of this story email Elizabeth Cairns in London at [email protected] or follow @LizEPVantage on Twitter

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