00:24:03 · Mark Jacobstein
[00:24:03] S1: I think another interesting example there was actually the pharma business. Daniel Simon says hello. He could not be here today. But in the very early days, there was no pharma business, right? It was a consulting project to see if there was even any pharma demand. And obviously, I don't know if you want talk about how that played out, but that felt like a pretty innovative strategy as well.
00:24:25 · Helmy Eltoukhy
[00:24:25] S0: Yeah, I would say that that's something that a lot of companies struggle with. We did, too. We said, pharma market's an important market, but it's not a $10,000,000,000 it's not a $50,000,000,000 TAM. It's a much smaller TAM. So we said, is that a distraction? Should we just focus on the clinical markets, which are the sort of bogey that we're going after, is everything else a distraction? You know we actually straddled the fence between the two and we found that working with pharma made us better. It was frankly a nice source of high gross margin sort of non dilutive funding in some ways, but we learned a lot. If you think about the market, it's, you know, you think about pharma and clinical trials, it's sort of the pre commercialization, pre commercial drug sort of side of things. So it became a leading indicator for us if we knew that they were buying signals on the pharma side, they were likely to be sort of buying signals on the clinical side as well. It allowed us to test other things much more quickly as well, so it's become, I think, a strong component of how we develop new products, how we sort of validate them, and so on. And, you know, we work with 200 pharma companies now, and yeah, they've made us, I would say, their partnership has made us better.
00:25:44 · Mark Jacobstein
[00:25:44] S1: But also felt like all these different pieces of the puzzle supported each other. By working with pharma, you ended up with more credibility with the KOLs who also worked with pharma and that gave you credibility when you went to talk to payers and if you built a companion diagnostic assay with somebody that would help you with the FDA and like this is one of the reasons, it's a very complex business, but you sort of had to execute on all those things. Maybe switching gears, you know, Guardant launched in part because of the early, early, early ML revolution. Like you couldn't do Guardant without ML, right? Was like very early, like you couldn't look at the amount of data that Guardant was looking at and make sense of it without sort of the AI revolution v one. Obviously, we're living now in like the AI revolution, and it feels extraordinarily transformative, even more so than the dawn of the internet or the dawn of mobile or the dawn of cheap omics. You're running a big company, you have a billion dollar P and L, but we're in this transformative moment. How are you thinking about that and not getting caught in innovator's dilemma? I don't know how much you can talk about what you're thinking about for the future. We talk a lot about minus one to zero here at SPC. I'm curious how you think about what's the minus one for you and for Guardant right now.
00:27:05 · Helmy Eltoukhy
[00:27:05] S0: Yeah, so it's frankly a really exciting time. Mean, one of the things we, our sort of tagline or mission statement is conquering cancer with data, which you're part of in terms of when we sort of revamped that. And we don't take that lightly. We have, I now one point three million cancer patients that we've tested. We have 700,000 epigenomic profiles, which I don't think anyone has. And we have all of that married up with a lot of real world evidence and outcomes data and so on. But the thing that we are missing, I would say, is enough bandwidth and ability to sort of do the analytics on that and drive a lot of the insights. And now with a lot of the new AI tools, it's really given us this amazing increase in velocity essentially. Every single one of our R and D individuals is now a manager of multiple agents essentially being able to go in and do all of these analyses and develop these applications on that data. There's a lot of excitement in the greater field about sort of like AI being used to cure disease or discover new drugs and so on, or foundation models for cells, and I would say that 90% of that is probably overhyped in some ways. And the reason for that is that the underlying data that's collected to essentially look at those models is very under sampled. It's looking at a lot of these cells or these processes or RNA transcripts with very low resolution. 60% of a cell is mostly housekeeping genes, and if you under sample it, all you're seeing is essentially the standard stuff, not the stuff that is actually making those cells unique. And so I think we took things the other way where we developed, I would say, very exquisite, like very deep technology to look at like a lot of those things, but we just didn't have the bandwidth to sort of analyze a little bit. And now we do. And so it's really been a, I would say, sort of a renaissance for us in terms of like, you know, the velocity of new applications we're developing. And it's really been a godsend, I would say, in terms of what we're doing. And now we're putting AI on other reports, and we're able to take stuff that I think you, like we all envisioned when you were there, that just wasn't possible technologically at the time.
00:29:40 · Mark Jacobstein
[00:29:40] S1: We had big plans in 2018. As I recall, I mean, there were a lot of issues. I mean, biology's complicated and then like, okay, we've got at the time hundreds of thousands, not millions of metastatic patients. We have a view across their genome. We've got an extra tube of blood in a freezer, but you needed phenotypic information and downstream stuff. It took a while, but play this out three, four years. What do you think? Now it's working. You got modern AI tools. You have over a million metastatic patient samples in the freezer and a lot of information on them already. What's the most optimistic scenario here? What falls out of this?
00:30:23 · Helmy Eltoukhy
[00:30:23] S0: Yeah, so I guess I can maybe go backwards and show you kind of the evolution that's happened. A story I tell is this tenth patient we sequenced, which we tested in 2014. She was a, I think, Bay Area woman, 48 year old woman diagnosed with pancreatic cancer initially. We ran a test, physicians said, this doesn't look like pancreatic cancer, maybe it's ovarian cancer. Ran a few more tests, found out it was ovarian cancer, and then put her on a drug that's been around for thirty years and shared a complete response. And our test was not designed to do that. It just gave a few clues that perhaps she was misdiagnosed. Fast forward now, our test, that same test that was ordered, can tell the physician that it is exactly this type of disease, that it's a subset of that type of ovarian cancer, that type of pancreatic cancer. It can tell the physician essentially likely response rates for certain drugs. The reports can now actually tell you the last thousand patients we tested that looked like this, seventy three percent of them were put on this drug, fifteen percent on this one, and so on, almost build you a sort of GPS of what is likely to sort of come next for that patient. And a lot of that was sort of powered by us moving from genomics to epigenomics, basically going from essentially the genetics, which you can think of as the hardware of every cell. Every cell in your body has the same DNA, yet they look very different. Your liver cells look different than your skin cells and so on, and a lot of that is because of the epigenetics. You can think of epigenetics as a software program that is actually being run on that cell, and so we're able to see that in the blood. And I think what's been exciting is that when we made that transition, not only allowed us to see the sort of phenotype of these cells or disease in much higher resolution, or cancer in much higher resolution, but it allowed us to go beyond cancer as well. And when you think about genomics, there are three areas that we've made big progress because of genomics: cancer, because the genome changes rare diseases, because you're born with mutations that maybe causes diseases and infectious diseases because by definition organisms have different DNA than human DNA. But for most other diseases, diabetes or cardiovascular disease or all this Autoimmune.