Guardant Health, a liquid biopsy diagnostics company that has already raised more than $500 million in venture capital funding, is looking to make its stock market debut.
In an S-1 filing with the Securities and Exchange Commission, the Redwood City, California-based company said it would seek to raise $100 million for an IPO on the NASDAQ, trading under the ticker symbol GH. J.P. Morgan and BofA Merrill Lynch are serving as the main underwriters, along with Cowen and Co., Leerink Partners and William Blair & Co.
A spokesperson for Guardant declined to comment.
The IPO filing follows a series of large venture capital raises that the company has made over the past couple of years. Last May, it secured $360 million in a Series E funding round from a syndicate of investors led by Softbank Group, represented by DLA Piper, along with participation from Singaporean sovereign wealth fund Temasek, T. Rowe Price and existing investors OrbiMed, Sequoia Capital, Khosla Ventures, 8VC and Lightspeed Venture Partners. The year before, OrbiMed led a Series D financing round worth nearly $100 million.
Liquid biopsy looks for tumor DNA circulating in the blood and has been touted as a noninvasive alternative to tissue biopsies. But adoption has lagged in the US compared with other markets, said members of a panel on liquid biopsy at the MedCity CONVERGE conference, which took place in July in Philadelphia. In addition to Europe and Canada, China and Latin America have also been faster to take up the practice than the US has, though various economic factors are at play, such as the tendency of Chinese patients to pay medical costs out of pocket and thus want quick confirmation of whether treatments are working. And liquid biopsy has not replaced tissue biopsy anywhere, one panelist pointed out.
Still, its clinical use is on the rise in the US, said Dr. Afsaneh Barzi, an assistant professor at the University of Southern California’s Keck School of Medicine in Los Angeles, who is running a clinical trial to use liquid biopsy to detect microsatellite instability in colorectal cancer patients. “That said, there is no standardization for how and when [liquid biopsies] are done, and thus the appropriate patterns of their use is not yet determined,” she wrote in an email.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
One barrier has been reimbursement, with payers wanting to see more clinical trial evidence to support liquid biopsy in order to support reimbursement. Indeed, payment for liquid biopsies does not yet have a clear path, Barzi said, and while Medicare ruled in March that it would cover next-generation sequencing of tissue and blood samples for patients with lung cancer, payment for other cancers would require FDA approval. Guardant’s Guardant360 assay does not yet have FDA approval, though the agency did grant it an Expedited Access Pathway designation in February, and the company hopes it will become the first approved comprehensive liquid biopsy test. It is also unclear how many payments will be allowed per patient because of the need for repeated testing for managing targeted therapies, at least in the case of lung cancer patients, Barzi said.
The global market for liquid biopsy is expected to reach $2 billion by 2022, according to a research report by Market Research Engine. In addition to Guardant, other players include big pharmaceutical companies like Johnson & Johnson – through its Janssen Diagnostics subsidiary – and Roche, along with QIAGEN, Biocept, Bio-Rad Laboratories, Trovagene and others.
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