Snapshot

Precision medicine diagnostics companies run genomic, epigenomic, and molecular tests that tell clinicians which therapy a specific patient should receive, whether cancer has recurred after surgery, or whether a patient is at risk before symptoms appear. "Companion diagnostics" (CDx) are the subset of these tests that the FDA has approved as required or recommended before prescribing a specific targeted drug. The unit of output is a completed diagnostic test — a blood draw or tissue sample goes in, and a clinical report with actionable genomic findings comes out.

Every new targeted-therapy FDA approval creates a new companion diagnostic requirement. Each approved drug-biomarker pair expands the pool of patients who must be tested before treatment. The number of FDA-cleared CDx devices has grown from fewer than 40 in 2015 to over 60 by 2025 est.. Liquid biopsy — testing blood instead of surgically removed tissue — is making these tests accessible to far more patients and at more points in the treatment journey (screening, therapy selection, recurrence monitoring).

The product & how money is made

The core product is a molecular diagnostic test. A patient's blood sample (liquid biopsy) or tumor tissue is sent to a centralized CLIA/CAP-certified laboratory. The lab extracts cell-free DNA (cfDNA), circulating tumor DNA (ctDNA), or intact cells, runs next-generation sequencing (NGS) or PCR-based assays, and delivers a report identifying mutations, biomarkers, or molecular signatures relevant to treatment decisions.

Revenue model

• Fee-per-test: Each completed test generates revenue, paid by Medicare, private insurers, or the patient. Reimbursement rates vary widely: Guardant360 liquid biopsy ~$3,000–$3,100 per test; Guardant Shield (CRC screening) $1,495 from Medicare; Natera's Signatera MRD test ~$1,200–$1,500 per test; Myriad's hereditary cancer panels ~$250–$500 per test depending on payer mix.
• Biopharma partnerships: Pharma companies pay diagnostic labs to develop companion diagnostics for their drugs, run clinical trial assays, and provide real-world data. Guardant's biopharma segment: $45M in Q1 2025, $53M in Q1 2026. Natera receives pharma revenue for Signatera use in clinical trials.
• Licensing & data: Companies with large genomic databases license de-identified data or analytical insights to pharma for drug development and biomarker discovery.

Key test categories

• Comprehensive genomic profiling (CGP): Sequences hundreds of cancer-related genes from a tumor or blood sample to identify actionable mutations for therapy selection. Guardant360, Foundation Medicine's FoundationOne CDx.
• Minimal residual disease (MRD): Detects tiny amounts of remaining cancer DNA after surgery or treatment to predict recurrence. Natera Signatera, Guardant Reveal, Myriad Precise MRD.
• Cancer screening: Blood tests that detect cancer before symptoms. Guardant Shield (colorectal), Exact Sciences Cologuard (stool-based CRC). Multi-cancer early detection (MCED) tests are in development.
• Hereditary risk & companion dx: Tests whether a patient carries inherited mutations (BRCA1/2, Lynch syndrome) that affect cancer risk and drug eligibility. Myriad myRisk, MyChoice CDx (FDA-approved CDx for PARP inhibitors).
• Prenatal & reproductive: Non-invasive prenatal testing (NIPT) using cfDNA. Natera Panorama, Myriad Prequel. Adjacent to oncology but uses the same cfDNA technology platform.

Demand

Contracted / in-place demand

• ~2 million new US cancer diagnoses per year (AACR, 2025 estimate: 2,041,910). Each diagnosis is a potential test order for CGP, CDx, and/or MRD monitoring. Penetration of comprehensive genomic profiling in advanced cancer is estimated at 30–50% est..
• FDA companion diagnostic requirements: Over 60 FDA-cleared CDx devices link specific tests to specific drugs est.. When a physician prescribes one of these drugs, the test is effectively mandatory. Guardant alone has 26 CDx approvals across the US, Japan, and Europe (GH Q1 2026 earnings).
• Medicare coverage decisions: Medicare covers Signatera for 6 cancer types (colorectal, breast, bladder, ovarian, lung, pan-cancer immunotherapy monitoring) as of June 2025 (LCD L38779). Shield CRC screening received ADLT status with a Medicare rate of $1,495 per test.
• Colorectal cancer screening: 53–55 million US adults aged 45–75 are eligible for CRC screening est.. Roughly 40% (~22M) are not up to date. Stool-based Cologuard has been used 18 million times since 2014. Blood-based Shield: ~44,000 tests in Q1 2026, guided to 230K–245K for FY2026.
• Natera test volume trajectory: 3.06M total tests in FY2024 → 3.53M in FY2025 (+15%) → Q1 2026 annualized run rate ~4.05M. Oncology: 528K in FY2024 → 801K in FY2025 (+52%) → Q1 2026 annualized ~1.04M. Over 50% of US oncologists ordered a Signatera test in Q4 2025 (NTRA earnings call).
• Guardant test volume trajectory: 207K oncology clinical tests in FY2024 → Q1 2026 annualized run rate ~344K (+66% from FY2024). Shield: ~6,400 tests in Q4 2024 → 44,000 in Q1 2026.

Forecast demand drivers

• MRD monitoring expansion: Natera estimates 30–35% of Signatera tests are in non-covered indication buckets. If Medicare coverage expands to these, management estimates "a couple hundred million dollars in gross profit and revenue" (NTRA Q4 2025 earnings call). Natera's tissue-free MRD test Latitude (submitted to MolDX for CRC) could expand the addressable population by removing the need for a prior tissue sample.
• Multi-cancer early detection (MCED): Blood tests screening for multiple cancer types simultaneously. Exact Sciences' Cancerguard and Guardant's multi-cancer Shield data (60% overall sensitivity, 98.5% specificity across multiple cancers, AACR 2025) are in development. If MCED tests gain Medicare coverage, the addressable population jumps from ~20M CRC-eligible unscreened adults to potentially 119M US adults aged 45–75 est..
• International expansion: Natera expects meaningful Japan Signatera revenue through 2027. Myriad's MyChoice CDx received Japan MHLW approval for prostate cancer. Guardant has CDx approvals in Europe and Japan.
• AI-driven biomarker discovery: Each new actionable biomarker-drug pair creates a new required test. Guardant launched the first multimodal tissue CGP test combining DNA, RNA, AI-powered PD-L1, and genome-wide methylation.

Supply

Capacity

• Centralized lab model: All four companies operate centralized high-complexity CLIA/CAP laboratories. These tests require specialized equipment (Illumina/NovaSeq sequencers, custom bioinformatics pipelines, proprietary assay chemistry) and PhD-level laboratory directors. Each company runs 1–3 main labs.
• Natera: ~1.01M tests in Q1 2026, implying annualized capacity of 4M+. Has been scaling lab throughput at ~15–19% volume growth per year while improving margins.
• Guardant: ~86K oncology tests + ~44K Shield tests in Q1 2026. Guided to 230K–245K Shield tests for FY2026. Shield cost per test declined from $520 to $420 sequentially.
• Myriad: 385K tests in Q1 FY2026, roughly flat YoY. Has capacity headroom — volumes are not growing, so the constraint is demand/market share, not physical throughput.

Bottlenecks

• Reimbursement is the binding constraint, not capacity. These labs can scale physical throughput faster than they can secure payer coverage. Medicare coverage determinations take 12–24 months est.. Private payer adoption often follows Medicare by another 6–12 months est.. Until a test has a coverage determination with a defined reimbursement rate, volume stays suppressed regardless of lab capacity.
• FDA approval cycle: CDx approvals require clinical validation studies and FDA review, typically 1–3 years per drug-diagnostic pair est..
• Data moats: Guardant's database exceeds 1 million patient samples and 500K epigenetic profiles across 100+ tumor types. Natera has published over 100 clinical studies validating Signatera. These datasets take years to accumulate.
• Distribution: Guardant launched a nationwide collaboration with Quest Diagnostics in Q1 2026. Natera's tests are ordered by over 50% of US oncologists. Building physician ordering behavior is a slow, sales-force-intensive process.

The gap

Physical lab capacity to run more tests exists or can be built in months. The bottleneck is regulatory and payer coverage — each new coverage decision unlocks a step-function increase in addressable volume. The pattern: Guardant Shield received FDA approval in mid-2024, ADLT Medicare pricing in early 2025, and test volumes jumped from ~6,400 in Q4 2024 to ~44,000 in Q1 2026.

Pricing direction is mixed by segment:

• CGP: Stable to rising. Guardant360 ASP increased to $3,000–$3,100 in 2025; Medicare reimbursement rose to $5,000 for the LDT version in 2024.
• Screening: Set by Medicare ADLT rates ($1,495 for Shield), likely stable for 2–3 years per ADLT cycle.
• MRD: Signatera ASP reached ~$1,225 in Q4 2025; management guided ~$30 further increase in 2026.
• Hereditary testing: ASPs declining due to competition and payer pressure — Myriad's overall revenue per test fell as pricing headwinds offset volume gains.

Volume growth across oncology testing is 25–55% annually for growth-stage companies (Natera oncology +54% in Q1 2026, Guardant oncology +47% in Q1 2026). Hereditary cancer testing (Myriad's largest segment) is growing in low-to-mid single digits.

The players

Sources: GH Q1 2026 earnings (May 7, 2026); NTRA Q1 2026 earnings (May 7, 2026); MYGN Q1 FY2026 earnings (May 5, 2026); Abbott press release (Mar 23, 2026); yfinance for current prices.

The price of exposure

EXAS is no longer tradeable. Abbott completed the $21B acquisition on March 23, 2026, at $105/share. Exposure to Cologuard, Oncotype DX, and Cancerguard now requires owning Abbott (ABT), a $220B+ diversified medical device conglomerate where Exact Sciences is a fraction of total revenue.

GH — Guardant Health

• Market cap: $16.8B. Enterprise value: ~$17.4B (~$1.1B convertible debt, offset by ~$1.2B cash).
• FY2026 revenue guidance: $1.30–$1.32B. At midpoint, EV/revenue = ~13.3x.
• Guided FCF burn of $185–$195M in FY2026; company-wide FCF breakeven targeted for end of 2027. Ex-screening oncology business expected FCF positive in FY2026.
• 52-week range: $40.35–$133.97. Current price $127.
• At $127, the implied math: ~$16.8B for ~$1.3B revenue at ~65% gross margins, still burning ~$190M/year. Breakeven would require ~$1.5–$1.6B revenue at current cost structure est..

NTRA — Natera

• Market cap: $30.3B. Enterprise value: ~$29.5B (net cash ~$1.0B minus $80M debt).
• FY2026 revenue guidance: $2.74–$2.82B. At midpoint, EV/revenue = ~10.6x.
• Generated +$108M cash in FY2025, +$12M in Q1 2026. GAAP operating loss ($94M) in Q1 2026 due to $211M R&D and $328M SG&A.
• 52-week range: $131.81–$256.36. Current price $212.
• Implied revenue per test: ~$687 blended (FY2025). Oncology (Signatera) ASP ~$1,225; women's health tests are lower ASP but high volume.

MYGN — Myriad Genetics

• Market cap: $415M. Enterprise value: ~$265M (cash $124M, debt $120M, net cash ~$4M).
• FY2026 revenue guidance: $860–$880M. At midpoint, EV/revenue = ~0.3x.
• Adjusted EBITDA guided $37–$49M, but GAAP net loss ($34M) in Q1 FY2026 and ($366M) in FY2025 (including $319M in impairments). Adjusted FCF ($20M) negative in Q1.
• 52-week range: $3.53–$8.59. Current price $4.40.
• Revenue barely growing (+2% in Q1 FY2026). Prenatal volume declining (-12% in Q1). GeneSight (mental health) lost UnitedHealthcare coverage, creating ~$30M+ annual revenue headwind est.. New products (Precise MRD, AI-enabled Prolaris, FirstGene prenatal) launching but have not yet moved revenue.
• $319M goodwill impairment in FY2025. Book value $338M; stock trades at 1.2x book.

What to deep-dive next

• Reimbursement trajectory: MolDX/LCD coverage decisions for Signatera in additional cancer types (Natera estimates 30–35% of tests are non-covered), and Shield's progress toward ACS guideline inclusion and private payer coverage. Each coverage decision is a step-function revenue event.
• Guardant360 Liquid FDA review: Guardant is seeking FDA approval for Guardant360 as a CDx (currently marketed as an LDT). FDA approval could expand commercial payer coverage. No public timeline.
• MCED economics: Multi-cancer early detection tests could be the largest TAM in diagnostics — 119M eligible US adults est.. Reimbursement is unresolved: CMS pricing, clinical evidence thresholds, and coverage timing are all unknown.
• Myriad cash runway: At 0.3x EV/revenue with ~$124M cash and (~$20M)/quarter FCF burn, cash becomes a concern within ~6 quarters absent improvement. Key variable: whether Precise MRD and AI-enabled Prolaris generate enough incremental revenue to offset GeneSight/prenatal headwinds and reach adjusted EBITDA guidance ($49M high end).
• Natera operating leverage: R&D guided $800–$900M for FY2026 (~31% of $2.78B revenue). SG&A guided roughly flat. If revenue grows 20%+ and opex grows <10%, GAAP breakeven could arrive in late 2026 or 2027 est..
• Abbott integration of Exact Sciences: Whether Abbott maintains Cologuard/Oncotype DX growth trajectory post-acquisition.

Sources & confidence