Personalis, Inc. Q2 FY2024 earnings call

Growth Engines - Win-in-MRD: Focus on cancer types like lung, breast, and IO therapy monitoring with NeXT Personnel. Progress includes 561 clinical tests in Q2, 66% increase from Q1, and partnerships with Royal Marsden, Valdarna, etc., to build clinical evidence for reimbursement. - Biopharma Business: Grew 117% y-o-y, driven by demand for tumor profiling product and NeXT Personnel. Engaged with top biopharma companies. - Tempus Partnership: Key partnership to commercialize NeXT Personnel using Tempus' 200-plus salespeople channel, with Personalis responsible for lab processing and reimbursement. ### Corporate Updates: Completed cross-license agreement with Myriad Genetics and settled litigation with Foresight, providing IP protection and royalty benefits.

Total company revenue for the second quarter 2024 was $22.6 million, an increase of 35% compared with $16.7 million for the same period of the prior year. The increase in revenue was driven by higher volume from biopharma and personalized cancer vaccine customers. Biopharma revenue grew 17% compared to the same period last year, and the growth was primarily from the ImmunoID NeXT. Gross margin expanded to 35.6% for the second quarter compared with 28.7% for the same period of the prior year. The year-over-year increase of 6.9 percentage points was primarily due to product cost reduction and operating leverage from the 35% increase in revenue.

For the third quarter of 2024, expected total company revenue in the range of $21 million to $22 million. For the full year, revenue guidance increased to $79 million to $81 million, up from prior guidance of $76 million to $78 million. Cash and short-term investments at $87 million, with more than one and a half years of cash runway through Q1 2026.

Q: About Moderna's PCV potential upside and if another sequencing vendor could start to sequence for Moderna once approved?

A: Chris Hall stated they're ecstatic about the Moderna relationship, value Personalis' platform, and it's up to Moderna to discuss specifics but they feel confident about the future.

Q: With Tempus launching their own MRD solution, how to ensure they are incentivized to market NeXT Personnel?

A: Chris Hall said Tempus' product is different (tumor-naive vs. Personalis' tumor-normal), products are positioned differently, and both work together to accelerate growth in the marketplace.

Q: On NeXT Personnel reimbursement, thoughts on crosswalk or gap-fill?

A: Chris Hall mentioned the test is more resource-intensive, expecting similar pricing to other players, working on ADLT status, and Tempus relationship helps reduce sales/marketing costs.

Q: On Moderna expanding PCV indications and longer term pharma outlook?

A: Chris Hall said Moderna is in Phase III clinical trial with melanoma patients, volume in Phase III outpaces earlier phases, and they're working on additional cancer types but specifics come from Moderna.

Q: On gating Tempus efforts and pacing reps?

A: Chris Hall said it's a graduated approach with Tempus reps, volume gates in the agreement, and aligned to manage burn rate and clinical traction.

Q: On NeXT Personnel reimbursement publications and CMS submission timing?

A: Chris Hall said investigators are working on papers, optimistic they'll be submitted soon, and will submit to Medicare once published.

Q: On unreimbursed clinical test costs and future revenue?

A: Chris Hall said they bill insurance but don't expect payment, these weigh down gross margins but progress on margins is made.

Q: On NeXT Personnel use case in clinical setting for immunotherapy eligibility?

A: Chris Hall said MRD assays are key for monitoring immunotherapy as imaging can be misleading, with multiple data sets supporting its use.

Q: On revenue breakdown beyond breast, lung, IO therapy monitoring and future plans?

A: Aaron Tachibana said focused on current cancer types for now, with biopharma growth being key driver for future revenue.

Q: On Myriad deal and IP strategy change?

A: Chris Hall said the Myriad deal is about patient access and creating value for IP, shifting to a model that benefits patients and builds the market while protecting IP.