By Deena Beasley
(Reuters) -Guardant Health Inc said on Thursday a pivotal trial of its DNA blood test showed it detected 83% of colorectal cancers and 13% of advanced adenomas, a cancer precursor, but the results fell short of a rival stool-based test, sending the company's shares sharply lower.
The results "were much lower versus our expectations," SVB Securities analyst Puneet Souda said in a research note, adding that the findings "are likely to disappoint investor expectations."
Cologuard, a stool-based DNA test, identifies 92% of colorectal cancers and 42% of pre-cancerous polyps, according to data from Exact Sciences (NASDAQ:EXAS), which markets the test.
Guardant's shares, which closed at $41.26, were down 35% at $26.93 in after hours trading. Shares of Exact Sciences were up 23% at $55 after hours.
"We are showing for the first time that a blood test can really detect colorectal cancer with high sensitivity," AmirAli Talasaz, Guardant's co-chief executive officer, said in an interview.
Guardant said a subsequent colonoscopy ruled out colon cancer in 10% of people who tested positive with its DNA blood test.
About 70% of adults aged 50 to 75 years are up-to-date with colorectal cancer screening based on all current testing types, according to the U.S. Centers for Disease Control and Prevention.
"This is a huge unmet clinical need," Talasaz said of a blood test for detecting colon cancer. "There are still 50 million people out there who are not complying with colorectal cancer screening."
He said Guardant expects to finish submitting its data to the U.S. Food and Drug Administration (FDA) early next year, and "hopefully we get FDA approval in the very early part of 2024."
Guidelines from the U.S. Centers for Medicare and Medicaid Services say the agency will reimburse for blood-based biomarker colorectal cancer screening tests with a minimum sensitivity of 74% if they are approved by the FDA.
Guardant is one of several companies, including Exact Sciences and Illumina (NASDAQ:ILMN)'s Grail unit, aiming to eventually secure FDA approval for DNA blood tests that can detect early-stage cancer. It is currently enrolling patients in a different trial of its DNA blood test for detecting lung cancer, Talasaz said.