Guardant ordered to pay $245.2 million in DNA patent dispute

A Delaware federal court ordered Guardant Health to pay $245.2 million for willfully infringing DNA sequencing patents, a judgment covering products that generated roughly 90 percent of the company's revenue.

"Duplex Sequencing solved an accuracy problem the sequencing field had worked on for years, and this judgment affirms the jury's finding that Guardant Health built products on that invention without a license," Chad Waite, chair of the TwinStrand board of directors, said.

The U.S. District Court for the District of Delaware entered final judgment on Aug. 21, preserving a November 2023 jury verdict that found Guardant willfully infringed two patents underlying TwinStrand's Duplex Sequencing technology. The award includes $83.4 million in original damages, $19.5 million in supplemental damages, $119.4 million in accrued royalties at a 6 percent rate, and $22.9 million in pre- and post-judgment interest. The court also ordered Guardant to pay a 6 percent royalty on U.S. sales of 11 products and services through patent expiration on March 15, 2033.

The ruling covers Guardant360 CDx, Guardant Reveal, the Shield cancer test and other genomics products that accounted for about 90 percent of Guardant's revenue during the infringement period. Guardant Health, which trades on Nasdaq under GH, had sought to overturn the verdict or obtain a new trial, but the court rejected those efforts.

TwinStrand's Duplex Sequencing technology, developed at the University of Washington, independently sequences and compares both complementary strands of each DNA molecule, achieving more than 10,000-fold greater accuracy than conventional sequencing methods. This enables reliable detection of ultra-low-frequency genetic variants that standard approaches often cannot distinguish from background sequencing errors. The technology supports applications across oncology, molecular diagnostics, genetic toxicology and drug development.

The 11 royalty-bearing products covered by the judgment include Guardant360 Lab Developed Test, Guardant360 CDx, GuardantOMNI, Guardant Reveal/LUNAR-1, Guardant360 Response, Guardant360 TissueNext, Guardant HEME, GuardantINFINITY/Sirius, Guardant LUNAR-2/Shield, Guardant COMPANION and Guardant EXPLORE. Guardant must also provide quarterly accounting of all U.S. sales of these products.

The judgment also upheld the validity of the asserted claims of both patents, U.S. Patent Nos. 10,287,631 and 10,760,127. Patent-related proceedings remain ongoing before the U.S. Patent and Trademark Office and the Patent Trial and Appeal Board, and neither patent has been invalidated. TwinStrand's intellectual property portfolio includes more than 150 issued patents and patent applications worldwide.

How the $245.2 million judgment reshapes Guardant's cost structure

The judgment represents a material financial liability for Guardant Health, a precision oncology company competing with Exact Sciences and Natera in the liquid biopsy and cancer detection market. The ongoing 6 percent royalty obligation through 2033 adds recurring costs on top of the one-time award, potentially pressuring margins on its core diagnostic products. Guardant's covered products span its entire commercial portfolio, from the FDA-approved Guardant360 CDx companion diagnostic to the Shield blood-based colorectal cancer screening test.

The court previously denied Guardant's post-trial efforts to overturn the verdict or obtain a new trial. All of Guardant's counterclaims against TwinStrand were either dismissed by the court or withdrawn before trial. TwinStrand said the products covered by the ruling accounted for about 90 percent of Guardant's revenue during the infringement period, making the royalty obligation a significant ongoing cost for the company.

The ruling also carries implications beyond Guardant. TwinStrand's Duplex Sequencing patents cover a core accuracy-enhancing method in DNA sequencing, and the company has said it collaborates with leading pharmaceutical companies, molecular diagnostics developers and academic institutions. The validation of these patents could strengthen TwinStrand's position in licensing negotiations across the genomics industry, where accuracy in detecting rare mutations is increasingly critical for early cancer detection and treatment monitoring. For Guardant, the quarterly royalty payments and accounting requirements add administrative and financial burdens that extend well beyond the initial judgment.

This article is for informational purposes only and does not constitute investment advice.