On Tuesday, Guardant Health, Inc. (NASDAQ:GH) announced that Palmetto GBA, a Medicare administrative contractor that administers the Molecular Diagnostics Services program (MolDX), granted coverage for the Guardant Reveal test to monitor for disease recurrence in patients with colorectal cancer (CRC) following curative intent therapy.

Guardant Reveal, which runs on Guardant’s Smart Liquid Biopsy platform, is a blood test that uses epigenomic (methylation) analysis to detect circulating tumor DNA (ctDNA), a marker of minimal residual disease (MRD). This test predicts cancer recurrence, helping to guide clinical decisions after surgery or chemotherapy.

Also Read: FDA Clears Exact Sciences’ Next-Generation Colorectal Cancer Diagnostic Test

As a result of this decision, the Guardant Reveal test is now covered for use in the CRC surveillance setting after curative intent treatment.

This represents an expansion from the prior Medicare coverage of Guardant Reveal testing for CRC only in the early post-surgical setting.

The tissue-free Guardant Reveal test uses a blood sample, in contrast to tumor-informed approaches to MRD testing, which require a healthcare provider to obtain a physical tissue specimen of the tumor.

William Blair, with an Outperform rating, sees this development as a strong positive for the stock.

Analyst Andrew Brackmann writes that the market reaction is justified, as reimbursement should enable the company to fully capitalize on its opportunities rather than limiting volumes to control cash burn, as it had previously.

Additionally, reimbursement and ongoing workflow improvements, which reduce costs, are expected to make Reveal gross margin positive later this year. The progress could help the company increase volumes (potentially exceeding the clinical volume growth target of 20%-plus for 2025), generate more revenue, and significantly reduce cash burn.

Price Action: GH stock is up 21.1% at $44.39 at last check Tuesday.

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This article Guardant Health Gains Medicare Coverage For Colorectal Cancer Monitoring Test originally appeared on Benzinga.com

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