Guardant Health (GH) risk factors, FY2025 10-K

Risks related to our business and strategy

1. 01We have incurred significant losses since inception, we may continue to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability47% rewritten
2. 02We may not be able to generate sufficient revenue to achieve and maintain profitability and our current or future products may not achieve or maintain sufficient commercial market acceptance
3. 03Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
4. 04New product development and commercialization involve a lengthy and complex process and we may be unable to develop or commercialize new products on a timely basis, or at all
5. 05Our current revenue is primarily generated from sales of our tests and we are highly dependent on them for our success
6. 06If our products do not meet the expectations of patients and our customers, our operating results, reputation and business could suffer
7. 07If we are unable to support demand for our current and future products, including ensuring that we have adequate capacity to meet increased demand, or we are unable to successfully manage our anticipated growth, our business could suffer
8. 08If we cannot maintain our current relationships, or enter into new relationships, with biopharmaceutical companies, our revenue prospects could be reduced
9. 09Our payer concentration may materially adversely affect our financial condition and results of operations
10. 10If we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue or to achieve and then sustain profitability
11. 11The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate
12. 12The precision oncology industry is subject to rapid change, which could make our current products and any future products we may develop, obsolete
13. 13If we continue to experience challenges attracting and retaining qualified personnel due to competitive labor markets, we may be unable to manage our future growth effectively, all of which could make it difficult to execute our business strategy
14. 14We may not be able to market, sell or distribute our products and tests, and other products we may develop effectively enough to support our planned growth. We currently sell to clinicians in the United States through our own sales organization and to biopharmaceutical companies through our business development team
15. 15We rely on a limited number of suppliers or, in some cases, sole suppliers, for some of our laboratory instruments and materials and may not be able to find replacements or promptly transition to alternative suppliers
16. 16If our existing laboratory facility becomes damaged or inoperable or we are required to vacate our existing facility, our ability to perform our tests and pursue our research and development efforts may be jeopardized
17. 17We are dependent on third parties for the collection of blood samples for our tests
18. 18We rely on commercial courier delivery services to transport samples to our laboratory facility in a timely and cost-efficient manner and if these delivery services are disrupted, our business will be harmed
19. 19We currently have limited international operations, but our business strategy incorporates potentially significant international expansion
20. 20We could be adversely affected by violations of the FCPA and other anti-bribery laws

Risks related to our highly regulated industry

1. 21We conduct business in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our results of operations and financial condition, and harm our business
2. 22Certain of our tests are currently marketed as LDTs, and future changes in FDA enforcement discretion for LDTs could subject our operations to much more significant regulatory requirements
3. 23In addition, the FDA and Congress have, for over the past decade, considered a number of proposals to end the FDA’s enforcement discretion policy for LDTs and subject LDTs to additional regulatory requirements
4. 24In order to sell our products in member states of the EU, our products must comply with the essential requirements of the new In Vitro Diagnostic Regulation (IVDR) 2017/746 issued and implemented by the European Union (EU) in May 2022
5. 25Any delay or failure to obtain necessary regulatory approvals or clearances or certifications would have a material adverse effect on our business, prospects, financial condition and results of operations
6. 26Changes to FDA Regulation of Companion Diagnostics Could Adversely Affect Our Business and Competitive PositionNew
7. 27Modifications to our FDA-cleared or approved products may require new 510(k) clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained
8. 28If third-party payers, including commercial payers and government healthcare programs, do not provide coverage of, or adequate reimbursement for, our tests, our business and results of operations will be negatively affected
9. 29Our products may in the future be subject to product recalls. A recall of our products, either voluntarily or at the direction of the FDA or another governmental authority, or the discovery of serious safety issues with our products, could have a significant adverse impact on us
10. 30Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and studies may not be predictive of future study results
11. 31We may experience delays in our clinical studies for a number of reasons, which could adversely affect the costs, timing or successful completion of such clinical studies
12. 32Interim, "topline" and preliminary data from our clinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
13. 33Even if we receive regulatory approval or certification of our products, we will continue to be subject to extensive regulatory oversight
14. 34Any of these sanctions could also result in higher than anticipated costs or lower than anticipated sales of our products and have a material adverse effect on our reputation, business, results of operations and financial condition
15. 35Failure to comply with federal, state and foreign laboratory licensing requirements and the applicable requirements of the FDA or any other regulatory authority, could cause us to lose the ability to perform our tests, experience disruptions to our business, or become subject to administrative or judicial sanctions
16. 36We are subject to numerous federal and state healthcare statutes and regulations; complying with such laws pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties and a material adverse effect to our business and results of operations
17. 37If the validity of an informed consent from patients regarding our test was challenged, we could be forced to stop offering our products or using our resources, our business and results of operations will be negatively affected
18. 38We may be subject to fines, penalties, licensure requirements, or legal liability, if it is determined that through our test reports we are practicing medicine without a license
19. 39Our billing and claim processing are complex and time-consuming, and any delay in submitting claims or failure to comply with applicable billing requirements could hinder collection and have an adverse effect on our revenue
20. 40Changes in healthcare laws, regulations and policies could increase our costs, decrease our sales and revenues and negatively impact reimbursement for our tests

Risks related to our intellectual property

1. 41Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products21% rewritten
2. 42Issued patents covering our products, services or technology could be found invalid or unenforceable if challenged
3. 43We and some of our licensors have initiated, are currently involved in, and may in the future initiate or become involved in legal proceedings against a third party to enforce a patent covering one of our products, services or technology
4. 44Our license agreements impose, and we expect that future license agreements will impose, various development, diligence, commercialization and other obligations on us, including obligations to making payments to our licensors upon achievement of milestones
5. 45If we do not prevail in such disputes, we may lose the rights under any of such license agreements, the license agreements may not be meaningful for our business and operations, and we may be subject to unnecessary or additional payment obligations
6. 46We may not be able to protect or enforce our intellectual property rights adequately throughout the world
7. 47If we are unable to protect the confidentiality of our trade secrets, the value of our technology could be materially adversely affected and our business could be harmed
8. 48We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed trade secrets of their former employers
9. 49We may not be able to protect and enforce our trademarks and we could infringe others’ trademarks
10. 50We may be subject to claims challenging the inventorship or ownership of our owned or licensed intellectual property
11. 51We are and may continue to be involved in litigation and other legal proceedings related to intellectual property, which could be time-intensive and costly and may adversely affect our business, operating results or financial condition
12. 52Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
13. 53Patent terms may be inadequate to protect our competitive position for an adequate amount of time

Risks related to our common stock and indebtedness

1. 54The price of our common stock has fluctuated substantially and may do so in the future, and you may not be able to resell shares of our common stock at or above the price at which you purchased them
2. 55Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell their shares, could result in a decrease in the market price of our common stock
3. 56Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be our stockholders’ sole source of gain
4. 57Our indebtedness could expose us to risks that could adversely affect our business, financial condition and results of operations
5. 58The convertible note hedge may affect the value of the 2027 Notes and our common stock
6. 59We are subject to counterparty risk with respect to the 2027 Note Hedge transactions
7. 60Provisions in our corporate charter documents and under Delaware law could make a change in control of us more difficult and may prevent attempts by our stockholders to replace or remove our current management

General Risk Factors

1. 61We may need to raise additional capital to fund our existing operations, develop our platform, commercialize new products or expand our operations
2. 62Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
3. 63Changes in tax laws or regulations could harm our financial condition and results of operations
4. 64The loss of any member of our senior management team or our inability to attract and retain highly skilled scientists, clinicians, sales representatives and business development managers could adversely affect our business
5. 65Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
6. 66Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
7. 67If we were to be sued for product liability or professional liability, we could face substantial liabilities that exceed our resources
8. 68Our increasing usage of artificial intelligence technologies may expose us to operational, regulatory, legal, and reputational risksNew
9. 69AI technologies may generate inaccurate, incomplete, biased, or otherwise misleading outputs. If we rely on flawed or deficient AI‑generated outputs, we could experience operational errors, diminished product performance, damage to our reputation and brand, and potential regulatory penalties or legal exposureNew