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HomeMarketGuardant Claimed Success for Its Colon Cancer Blood Test. Investors Disagreed.

Guardant Claimed Success for Its Colon Cancer Blood Test. Investors Disagreed.

The data on Shield, Guardant’s blood test screening kit for colon cancer, was celebrated by the company but not by the market.

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Reporting the study results on its blood test for colon cancer, late Thursday,
Guardant Health
called the study a success. Some investors disagreed—knocking Guardant stock (ticker: GH) down 39% to $25 in aftermarket trading, while lifting shares of rival
Exact Sciences
(EXAS) 25%, to $56.

A pioneer of tests that look for DNA clues of cancer in a simple blood draw, Guardant spent three years testing 22,000 people for colorectal cancer in its Eclipse study. After Thursday’s market close, the Palo Alto, CA-based company said that its blood test demonstrated 83% sensitivity—meaning that it detected 83% of the group’s colon cancers. It showed 90% specificity—meaning that 10% of its positive findings were false positives.

That performance outdid the 74% sensitivity of the most widely used colon cancer screen, the Fecal immunochemical test, or FIT, which detects blood in a stool sample. But Guardant’s performance fell short of the big-selling Cologuard test from Exact Sciences, a stool test with 92% sensitivity.

Guardant held a conference call on its study while its shares were tanking in the aftermarket, and company executives were audibly chagrined.

“We just launched a rocket and got it to the moon,” said co-chief executive Helmy Eltoukhy. “It’s illogical, irrational, and people don’t understand the science.”

“There should be a Nobel Prize for what we’ve achieved,” he said.

Many Americans fail to get screened for colon cancer because they dislike taking stool samples or getting colonoscopies, so Guardant says that the simple blood draw of its test should increase compliance.

Guardant has had the test on the market since May, available from its in-house laboratory under the brand name Shield. Executives said the performance shown in the Eclipse study should be good enough to get the test approved by the Food and Drug Administration, and then covered by Medicare. As the first FDA-approved blood test for colorectal cancer, Shield could then be offered by other laboratories and open an “enormous” new market for Guardant, said Eltoukhy.

Guardant aims to expand its blood test to include the detection of other cancers, like lung cancer. In pursuit of a multi-cancer blood test, it is racing after a 50-cancer test already marketed by Grail—the cancer test lab whose $8 billion acquisition by
Illumina
(ILMN) has been challenged by antitrust regulators in the U.S. and Europe.

Exact Sciences is also developing a blood test for colorectal cancer that it hopes to later extend to other cancers. A possible reason why traders lifted Exact’s stock, while dumping Guardant’s, was the relatively-low 13% sensitivity of Guardant’s blood test for precancerous adenomas. Exact’s Cologuard stool test detects 42% of precancerous polyps.

Write to Bill Alpert at william.alpert@barrons.com

Credit: marketwatch.com

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