gene sequencing machines to identify the DNA variations linked to specific cancer cell mutations. But current sequencing instruments can only detect these mutant DNA chains at about one part in 20, Guardant estimates. To solve that problem, Guardant developed some technological fixes designed to cut down the “noise” masking the tumor DNA signals.
Guardant’s founders, Eltoukhy and a fellow Stanford University PhD in electrical engineering, AmirAli Talasaz, didn’t lack for experience in tackling such genomics challenges. They started the company in 2012 after holding research posts at San Diego, CA-based Illumina, (NASDAQ: [[ticker:ILMN]]) the worldwide leader in the manufacture of high-speed sequencing equipment. Eltoukhy came to Illumina after selling it a next-generation sequencing company he had founded, Avantome. Talasaz joined the sequencing giant after he had founded Auriphex Biosciences, which developed technology for the isolation and analysis of circulating tumor cells that was also sold to Illumina.
Guardant isn’t disclosing yet exactly how it can reliably detect mutations in scarce tumor DNA fragments. But Eltoukhy provided some hints about the technology Guardant calls Digital Sequencing.
“We optimize the sequencer slightly,” Eltoukhy says. But the two main solutions come before the blood sample ever enters the sequencer, and after the data emerge from it, he says. First, Guardant uses a proprietary process to modify the DNA as the blood sample is prepared for sequencing. Once the data emerges from the sequencer, the company uses bioinformatic techniques to figure out the sequence of the original DNA molecule, correcting for errors introduced by the sequencing instrument. Eltoukhy says this delivers a 100-fold to 1,000-fold improvement in the error rate.
“It’s like the difference between HDTV and rabbit ears,” Eltoukhy says.
Eltoukhy says he was inspired by the work of John Cioffi, an emeritus professor of engineering at Stanford. Cioffi is called “the father of DSL” for his role in adapting existing copper phone lines to carry digital signals. In a similar vein, Guardant uses its own genetic analysis architecture to reduce noise and distortion in the data from gene sequencers. The company says it can sequence single molecules of DNA with high fidelity.
Last year, Guardant completed a $10 million Series A fundraising round led by Sequoia Capital. Sequoia is known for backing tech companies such as Apple, Electronic Arts, Airbnb, and WhatsApp. But Warren Hogarth of the firm’s venture team says Sequoia has a strong interest in startups that blend bioinformatics with the principles of computer science. (One of Sequoia’s other healthcare bets is San Carlos, CA-based Natera, which used bioinformatics to create non-invasive prenatal blood tests to screen for genetic disorders in fetal DNA.)
Guardant presented strong data on its cancer blood test, Hogarth says. “We did quite a bit of due diligence on this,” he says. Sequoia foresees a very large market for Guardant, because many patients are taking drugs that are apparently mismatched with the traits of their tumor cells, Hogarth says.
“Seventy five percent are on treatments that are not working for them,” he says.
Guardant is focusing first on late-stage cancer patients and cancer survivors—a large US market, Eltoukhy says.
“Twelve million people are living in fear that their cancer is going to come back some day,” he says. Guardant’s eventual aim is to detect cancer at its earliest stages. “If you look at any disease that’s been cured, it’s usually through prevention.”
The company has begun a limited release of the Guardant360 test, and is converting its research collaborators at cancer centers into commercial customers, Eltoukhy says. Guardant has 15 employees, but is expanding that staff.
With the help of consultants, Guardant is familiarizing health care payers with the product. In that effort, it’s getting a boost from a potential competitor, Cambridge, MA-based Foundation Medicine, Eltoukhy says. Foundation (NASDAQ: FMI) has built a base of support among physicians for the broad panel of biomarker tests it applies to tumor biopsy samples, and is already negotiating with health plans for reimbursement.
Although Foundation is lined up to be a business rival of Guardant’s, Eltoukhy says the two companies could also have a synergistic relationship. Biopsies are still the gold standard for the initial genetic diagnostics on a patient’s cancer, he says. But Guardant could help “democratize” genetic monitoring of tumor status for patients far from large cancer centers who may lack access to tumor biopsy surgeons, he says.
Eltoukhy says the company has not yet disclosed a price for the Guardant360 test, but he expects that it will be roughly in the price range of Foundation’s genetic analysis. (The sample for a Foundation test must be obtained through a biopsy, which adds another cost.) Nor has Guardant publicly revealed much yet about its plans for clinical trials to establish the value of the Guardant360 test in treatment outcomes. This is what health plans look for when they consider reimbursement for diagnostic tests.
Other competitors to Guardant could include diagnostic companies that scan blood or tumor samples for the proteins they produce. Proteins can indicate not just which mutant genes are present in cancer cells, but which ones are active. Among those companies is San Diego, CA-based Applied Proteomics, whose future plans include analyzing blood samples for changes in more than 300,000 protein biomarkers.
Eltoukhy says physicians may come to rely on both DNA and protein-based tests to mine for vulnerabilities in an individual patient’s cancer cells.
“Complexity is always much more than anyone ever expects or imagines,” he says. “No one technique will be a panacea.”
