Guardant Health, Inc. (GH): Business Model Canvas [10-2024 Updated]

Discover how Guardant Health, Inc. (GH) is transforming cancer diagnostics with its innovative business model. By leveraging advanced genomic sequencing technology and strategic partnerships, Guardant Health is not only providing non-invasive liquid biopsy tests for early cancer detection but also supporting biopharmaceutical companies in their quest for new therapies. Dive into the components of their business model canvas to understand how they create value and drive growth in the precision oncology market.

Guardant Health, Inc. (GH) - Business Model: Key Partnerships

Collaborations with biopharmaceutical companies

Guardant Health collaborates extensively with biopharmaceutical companies to enhance precision oncology testing and drug development. As of June 30, 2024, precision oncology revenue from tests for biopharmaceutical customers reached $66.7 million for the six months ended June 30, 2024, marking a 42% increase from $46.9 million during the same period in 2023. The total number of tests for biopharmaceutical customers increased from approximately 12,850 in the first half of 2023 to about 18,925 in the first half of 2024.

Partnerships with independent clinical laboratories

Guardant Health has established partnerships with independent clinical laboratories to expand its testing capabilities and market reach. As of June 30, 2024, the company reported that total tests for clinical customers increased to approximately 96,300 for the six months ended June 30, 2024, compared to approximately 82,600 for the same period in 2023. This growth is attributed to heightened demand for its Guardant360 tests, which have seen increased reimbursement rates, notably from Medicare, with the reimbursement for the Guardant360 LDT test rising to $5,000 effective January 1, 2024.

Strategic alliances for international expansion

Guardant Health is strategically expanding its international presence through alliances and partnerships. The company generated $9.1 million in international revenue for the three months ended June 30, 2024, compared to $7.9 million in the same period in 2023, indicating a growing international market. Additionally, the company has received In Vitro Diagnostic sample processing approval from Japan's Ministry of Health, Labour and Welfare, enhancing its capabilities in the Asian market.

Partnership Type	Revenue (6 Months Ended June 30, 2024)	Revenue (6 Months Ended June 30, 2023)	Growth (%)	Tests Conducted (2024)	Tests Conducted (2023)
Biopharmaceutical Collaborations	$66.7 million	$46.9 million	42%	18,925	12,850
Clinical Laboratory Partnerships	N/A	N/A	N/A	96,300	82,600
International Revenue	$20.3 million	$17.7 million	15%	N/A	N/A

Guardant Health, Inc. (GH) - Business Model: Key Activities

Development of precision oncology tests

Guardant Health focuses on the development of precision oncology tests that utilize advanced genomic technologies. For the six months ended June 30, 2024, the total revenue from precision oncology testing was $322.7 million, representing a 35% increase from $238.6 million in the same period of 2023. The company has experienced a significant rise in sample volumes, with approximately 96,300 tests conducted for clinical customers during the same period, up from approximately 82,600 tests in 2023.

Conducting clinical studies for product validation

Guardant Health actively conducts clinical studies to validate its products. Research and development expenses for the six months ending June 30, 2024, totaled $166.9 million, a decrease of 9% from $183.5 million in the same period of 2023. Notably, the company saw a reduction in outside services costs, primarily due to decreased expenses related to the ECLIPSE clinical study. The investment in clinical studies is crucial for ensuring that the precision oncology tests meet regulatory standards and provide reliable results for patients and healthcare providers.

Regulatory submissions for companion diagnostics

Guardant Health is involved in regulatory submissions for companion diagnostics, essential for obtaining approvals from health authorities. The company has made significant progress in this area, with net losses of $217.6 million for the six months ended June 30, 2024, compared to $206.3 million in the same period of 2023. This indicates ongoing investments in regulatory pathways and product development to enhance their portfolio of companion diagnostics.

Activity	Details	Financial Impact (2024)
Precision Oncology Testing Revenue	Revenue generated from precision oncology tests for clinical and biopharmaceutical customers.	$322.7 million (up 35% YoY)
Clinical Studies	Investment in clinical studies for product validation and regulatory compliance.	$166.9 million (R&D Expenses)
Regulatory Submissions	Submissions for companion diagnostics to ensure compliance and market access.	Ongoing costs reflected in net loss of $217.6 million

Guardant Health, Inc. (GH) - Business Model: Key Resources

Advanced genomic sequencing technology

Guardant Health has developed cutting-edge genomic sequencing technology that enables non-invasive cancer detection through blood samples. This technology supports the company's primary product, the Guardant360 test, which analyzes circulating tumor DNA (ctDNA) to identify mutations across multiple cancer types.

As of June 30, 2024, the revenue from precision oncology testing reached $166.5 million for the second quarter, representing a 33% increase compared to $125.2 million in the same quarter of 2023.

Skilled research and development team

Guardant Health employs a highly skilled research and development team focused on advancing its genomic technologies and expanding its test offerings. The research and development expenses were $166.9 million for the six months ended June 30, 2024, down from $183.5 million in the same period of 2023, indicating a strategic shift towards enhancing efficiency.

This team is crucial for maintaining Guardant's competitive edge in precision oncology and for the continuous improvement of existing products, ensuring that they meet the evolving needs of healthcare providers and patients.

Accredited laboratories in the U.S. and Japan

Guardant Health operates accredited laboratories in the United States and Japan, which are essential for the execution of its testing services. The laboratories in Redwood City and San Diego, California, are certified under the Clinical Laboratory Improvement Amendments (CLIA) and accredited by the College of American Pathologists (CAP). The Japan laboratory has also achieved CAP accreditation and In Vitro Diagnostic (IVD) sample processing approval from Japan's Ministry of Health, Labour and Welfare.

As of June 30, 2024, the company's total revenue reached $345.7 million for the first half of 2024, up 30% from $265.9 million in the same period in 2023.

Key Resource	Description	Financial Impact
Advanced Genomic Sequencing Technology	Non-invasive cancer detection through ctDNA analysis	Revenue of $166.5 million in Q2 2024, 33% increase YoY
Skilled R&D Team	Focus on advancing genomic technologies and expanding test offerings	R&D expenses of $166.9 million in H1 2024, decreased from $183.5 million in H1 2023
Accredited Laboratories	Accredited facilities in the U.S. and Japan for testing services	Total revenue of $345.7 million in H1 2024, up 30% YoY

Guardant Health, Inc. (GH) - Business Model: Value Propositions

Comprehensive genomic profiling for cancer treatment

Guardant Health offers comprehensive genomic profiling through its flagship product, Guardant360, which is a liquid biopsy test that detects genomic alterations in solid tumors. For the three months ended June 30, 2024, revenue from precision oncology testing was $166.5 million, representing a 33% increase from $125.2 million in the same period in 2023. The total number of tests for clinical customers rose to approximately 49,400 in Q2 2024, compared to 43,500 in Q2 2023. The increase in testing volume was driven by enhanced adoption of the product and improved reimbursement rates, including an increase in Medicare reimbursement for Guardant360 to $5,000 effective January 1, 2024.

Non-invasive liquid biopsy tests for early cancer detection

Guardant Health's liquid biopsy tests, such as Guardant Reveal, are designed for the early detection of cancer and monitoring of recurrence. The company reported that precision oncology revenue from tests for clinical customers was $130.3 million for the three months ended June 30, 2024, up 30% from $100.2 million in the same period in 2023. This growth reflects the increasing acceptance of non-invasive testing methods among healthcare providers and patients. The company performed approximately 96,300 tests for clinical customers in the first half of 2024, up from approximately 82,600 in the same period in 2023.

Support for biopharmaceutical companies in drug development

Guardant Health provides crucial support for biopharmaceutical companies through its development services and companion diagnostics collaborations. Revenue from precision oncology tests for biopharmaceutical customers was $66.7 million for the six months ended June 30, 2024, reflecting a 42% increase from $46.9 million in the same period in 2023. The number of tests performed for biopharmaceutical customers increased to approximately 18,925 in the first half of 2024, compared to 12,850 in the same period in 2023. The company’s development services revenue, however, decreased to $22.98 million for the six months ended June 30, 2024, from $27.23 million in the same period in 2023.

Metric	Q2 2024	Q2 2023	Change (%)
Precision Oncology Testing Revenue	$166.5 million	$125.2 million	33%
Tests for Clinical Customers	49,400	43,500	12.4%
Revenue from Biopharmaceutical Tests	$66.7 million	$46.9 million	42%
Total Tests for Biopharmaceutical Customers	18,925	12,850	47%
Development Services Revenue	$22.98 million	$27.23 million	-15.9%

Guardant Health, Inc. (GH) - Business Model: Customer Relationships

Direct engagement with healthcare providers

Guardant Health maintains robust relationships with healthcare providers through direct engagement initiatives. In the second quarter of 2024, the company reported precision oncology testing revenue of $166.5 million, a 33% increase from $125.2 million in the same period of 2023. This growth was driven by an increase in sample volume, with total tests for clinical customers rising to approximately 49,400 from 43,500 year-over-year.

Ongoing support and education for biopharmaceutical partners

Guardant Health provides continuous education and support to its biopharmaceutical partners, which is reflected in the 45% increase in revenue from biopharmaceutical tests, reaching $36.2 million in Q2 2024 compared to $25.0 million in Q2 2023. The total tests for biopharmaceutical customers also grew to approximately 10,475, up from 6,700 in the previous year. This engagement is critical for enhancing product adoption and ensuring that partners are well-informed about the capabilities and benefits of Guardant's testing solutions.

Customer feedback integration for product improvement

Guardant Health actively integrates customer feedback into its product development process. This is evidenced by the company's commitment to refining its testing services based on user experiences and preferences. The company recorded $217.6 million in net losses for the first half of 2024, a slight increase from $206.3 million in the same period of 2023. Despite the losses, the focus on customer feedback is expected to drive future improvements and potentially higher revenue streams as products evolve to better meet market needs.

Metrics	Q2 2024	Q2 2023	Change (%)
Precision Oncology Testing Revenue	$166.5 million	$125.2 million	33%
Revenue from Biopharmaceutical Tests	$36.2 million	$25.0 million	45%
Total Tests for Clinical Customers	49,400	43,500	13.5%
Total Tests for Biopharmaceutical Customers	10,475	6,700	56.5%
Net Loss (First Half)	$217.6 million	$206.3 million	6.3%

Guardant Health, Inc. (GH) - Business Model: Channels

Direct sales to clinical customers and biopharmaceutical firms

Guardant Health generates significant revenue through direct sales to clinical customers and biopharmaceutical firms. For the three months ended June 30, 2024, precision oncology revenue from tests for clinical customers was $130.3 million, representing a 30% increase from $100.2 million for the same period in 2023. The total number of tests for clinical customers also increased to approximately 49,400 from approximately 43,500 year-over-year.

Additionally, revenue from tests for biopharmaceutical customers reached $36.2 million in the same quarter, up 45% from $25.0 million in 2023. The total tests for biopharmaceutical customers rose to approximately 10,475 from approximately 6,700.

Online platforms for test result delivery

Guardant Health utilizes online platforms to deliver test results to both clinical and biopharmaceutical customers efficiently. This digital approach enhances the speed and accessibility of test results, which is crucial for patient care. As of June 30, 2024, the company reported total revenue of $177.2 million for the quarter, a 29% increase from $137.2 million in the same quarter of 2023. The integration of online platforms into their service delivery is expected to reduce operational costs and improve customer satisfaction.

Partnerships with hospitals and oncology centers

Guardant Health has established numerous partnerships with hospitals and oncology centers to enhance its market reach and service offerings. For the six months ended June 30, 2024, the company reported total revenue of $345.7 million, a 30% increase from $265.9 million in the prior year. Revenue from development services and other decreased slightly to $22.98 million from $27.23 million, indicating a shift towards more direct testing services.

The partnerships allow Guardant Health to leverage existing networks in the healthcare system, increasing the adoption rate of their precision oncology tests. The company's efforts to collaborate with biopharmaceutical firms also contribute to their revenue growth, as they provide testing services crucial for drug development.

Channel Type	Q2 2024 Revenue (in millions)	Q2 2023 Revenue (in millions)	Year-Over-Year Growth
Clinical Customers	$130.3	$100.2	30%
Biopharmaceutical Customers	$36.2	$25.0	45%
Total Revenue	$177.2	$137.2	29%
Development Services	$10.7	$11.9	-10%

Guardant Health, Inc. (GH) - Business Model: Customer Segments

Cancer patients requiring precision oncology testing

Guardant Health primarily serves cancer patients who require precision oncology testing. The company’s flagship product, the Guardant360 test, is designed to analyze circulating tumor DNA (ctDNA) in patients' blood samples to identify genetic mutations associated with various cancers. For the three months ended June 30, 2024, Guardant Health performed approximately 49,400 tests for clinical customers, an increase from approximately 43,500 tests during the same period in 2023. This growth reflects the rising demand for non-invasive testing options among cancer patients.

Metrics	Q2 2024	Q2 2023	Change (%)
Tests performed	49,400	43,500	13.8%
Revenue from clinical tests	$130.3 million	$100.2 million	30%
Average reimbursement per test	$5,000	Not disclosed	Increase effective January 1, 2024

Biopharmaceutical companies developing new therapies

Guardant Health also targets biopharmaceutical companies that are developing new therapies. The company collaborates with these organizations to provide precision oncology testing that assists in the development of targeted therapies and companion diagnostics. For the three months ended June 30, 2024, revenue from tests for biopharmaceutical customers was $36.2 million, a 45% increase from $25.0 million in the same quarter of 2023. The total tests for biopharmaceutical customers rose to approximately 10,475, up from about 6,700 tests year-over-year.

Metrics	Q2 2024	Q2 2023	Change (%)
Tests performed	10,475	6,700	56.5%
Revenue from biopharmaceutical tests	$36.2 million	$25.0 million	45%

Healthcare providers seeking diagnostic solutions

Healthcare providers are another key customer segment for Guardant Health. The company’s diagnostic solutions are aimed at enhancing the decision-making process for oncologists and improving patient outcomes. The increase in reimbursement rates for Guardant tests, particularly the Guardant360 LDT test, further incentivizes healthcare providers to utilize these services. For the six months ended June 30, 2024, revenue from clinical testing was $256.0 million, a 34% increase from $191.7 million in the same period of 2023, reflecting the growing adoption of Guardant's testing solutions among healthcare providers.

Metrics	H1 2024	H1 2023	Change (%)
Revenue from clinical tests	$256.0 million	$191.7 million	34%
Total tests performed	96,300	82,600	16.5%

Guardant Health, Inc. (GH) - Business Model: Cost Structure

High research and development expenses

Research and development expenses were $166.9 million for the six months ended June 30, 2024, compared to $183.5 million for the same period in 2023, reflecting a decrease of $16.6 million, or 9%.

For the three months ended June 30, 2024, R&D expenses totaled $83.1 million, down from $90.4 million in the prior year, a decrease of $7.3 million, or 8%. The reduction was primarily due to:

• A decrease of $7.1 million in outside services costs, mainly from reduced ECLIPSE clinical study costs.
• A decrease of $4.0 million in material costs.
• Increased personnel costs by $3.2 million.

Operational costs for laboratory testing

The total cost of revenue for Guardant Health was $137.7 million for the six months ended June 30, 2024, compared to $106.9 million for the same period in 2023, an increase of $30.8 million, or 29%.

Within this, the cost of precision oncology testing was $125.0 million for the six months ended June 30, 2024, up from $94.5 million in 2023, an increase of $30.6 million, or 32%. This increase was driven by:

• A $23.4 million rise in material costs.
• A $4.9 million increase in production labor and overhead costs.
• A $1.8 million increase in other costs, including collection kits, freight, and professional services.

For the three months ended June 30, 2024, the cost of precision oncology testing was $65.7 million, compared to $49.4 million in the same period for 2023, an increase of $16.4 million, or 33%.

Marketing and sales expenditures

Sales and marketing expenses reached $162.3 million for the six months ended June 30, 2024, compared to $147.2 million for the same period in 2023, a rise of $15.1 million, or 10%. For the three months ended June 30, 2024, these expenses were $81.9 million, an increase from $71.0 million in the prior year, representing a 15% increase.

This increase was primarily associated with:

• A $9.0 million rise in personnel costs.
• A $5.1 million increase in information technology infrastructure costs.
• A $2.3 million increase in marketing activity-related costs.

Expense Type	Q2 2024 (in millions)	Q2 2023 (in millions)	Change (%)
Research and Development	83.1	90.4	-8%
Sales and Marketing	81.9	71.0	+15%
Cost of Precision Oncology Testing	65.7	49.4	+33%
Total Cost of Revenue	72.4	53.8	+34%

Guardant Health, Inc. (GH) - Business Model: Revenue Streams

Sales of precision oncology tests

For the six months ended June 30, 2024, Guardant Health reported precision oncology testing revenue of $322.7 million, an increase of 35% from $238.6 million in the same period of 2023. This significant growth was driven primarily by an increase in sample volume and higher reimbursements for their tests. The total number of tests conducted for clinical customers rose to approximately 96,300, compared to 82,600 in the prior year.

Specifically, revenue from clinical customers was $256.0 million for the six months ended June 30, 2024, up 34% from $191.7 million for the same period in 2023. Meanwhile, revenue from biopharmaceutical customers reached $66.7 million, reflecting a 42% increase from $46.9 million in the previous year.

Period	Clinical Revenue	Biopharmaceutical Revenue	Total Testing Revenue
6 Months Ended June 30, 2024	$256.0 million	$66.7 million	$322.7 million
6 Months Ended June 30, 2023	$191.7 million	$46.9 million	$238.6 million

Development and regulatory service fees

Revenue from development services and other for the six months ended June 30, 2024, totaled $23.0 million, a decrease of 16% compared to $27.2 million for the same period in 2023. This decline was primarily attributed to a reduction of $3.1 million from partnership agreements and a decrease of $2.9 million in royalty revenue. However, revenue increased by $3.0 million due to milestone payments related to companion diagnostics collaboration projects.

Period	Development Services Revenue	Change (%)
6 Months Ended June 30, 2024	$23.0 million	-16%
6 Months Ended June 30, 2023	$27.2 million	N/A

Licensing of digital sequencing technologies

Guardant Health also generates revenue through the licensing of its digital sequencing technologies. While specific revenue figures for licensing were not disclosed in the latest financial statements, it is an integral part of their business model, contributing to the overall revenue from development services. The company evaluates the terms of contracts with biopharmaceutical customers to ensure proper revenue recognition for these services, which are often bundled with precision oncology testing. This approach enhances the company's total revenue and solidifies its position in the market.

As of June 30, 2024, Guardant Health's total revenue was $345.7 million, up 30% from $265.9 million in the same period in 2023.