Personalis Reports 24 Percent Dip in Q2 Revenues, Cuts Full-Year Sales Guidance

Original from: 360dx

Personalis reported after the close of the market on Tuesday a 24 percent year-over-year drop in second quarter revenues, missing analyst expectations and prompting the company to slash its full-year sales guidance.

For the three months ended June 30, the Fremont, California-based cancer genomics company tallied $17.2 million in revenues, compared to $22.6 million a year ago and below the Wall Street estimate of $20.1 million.

The company said that Q2 results were driven by an expected $5.6 million decline in revenues from an enterprise sales contract with Natera. This was compounded by a 17 percent decline in pharma test and service revenues to $11.0 million from $13.2 million a year ago but partially offset by more than doubled population sequencing revenue of $3.3 million compared with $1.3 million a year ago.

In an aftermarket conference call with investors, Personalis President and CEO Christopher Hall also pointed to other macroeconomic factors creating headwinds over the quarter. 

"Political changes in the healthcare sector and the uncertainty of tariffs have impacted our customers' translational research projects, resulting in revenue from a few significant contracts shifting out of Q2 and an overall weakness the rest of the year," Hall said.

Personalis noted that it delivered 3,478 clinical tests in Q2, a 59 percent increase over the first quarter as it implements its so-called "Win in MRD" strategy to drive adoption of its NeXT Personal minimal residual disease testing platform.

"Demand for our MRD technology is robust with growing adoption of NeXT Personal for MRD by our biopharma customers," Hall said.

During the quarter, Personalis expanded a NeXT Personal commercial partnership with Tempus AI, adding colorectal cancer to breast cancer, lung cancer, and solid tumor immunotherapy monitoring.

Hall noted that the partnership with Tempus is a key part of Personalis' plan to drive up clinical adoption of NeXT Personal. He credited the partnership with Tempus for helping the firm deliver 3,478 tests this quarter, a 59 percent increase from the first quarter.

The company also presented data in June at the American Society of Clinical Oncology (ASCO) annual meeting from the Phase III CALLA trial in partnership with AstraZeneca, showing that NeXT Personal detected cervical cancer progression up to 16 months earlier than standard imaging. The company also presented results at ASCO from the PREDICT and SCANDARE studies showing NeXT Personal's ability to predict therapy response in breast cancer, with nearly half of all positive detections in the ultrasensitive range.

Hall called these results an important part of the company's efforts to generate clinical data needed for Medicare reimbursement. He said that Personalis has submitted its immuno-oncology monitoring dossier for Medicare coverage and that the company remains on track to gain coverage in lung cancer. Hall also said that pursuing further biopharma partnerships is a key part of Personalis' strategy to boost revenues.

"While total biopharma revenue of $11.1 million reflects the project delays … we project total biopharma revenue will rebound to between $11 million and $13 million in the third quarter," he said. "Our expectations are much higher for the fourth quarter, typically the best quarter of the year."

Personalis' Q2 net loss swelled to $20.1 million, or $.23 per share, from a net loss of $12.8 million, or $.24 per share, in Q2 2024. The company used approximately 88.5 million shares to calculate per-share loss in the recently completed quarter compared to approximately 52.4 million shares a year ago. On average, analysts had expected a Q2 loss per share of $.24.

The firm's Q2 R&D spending dipped 5 percent to $12.4 million from $13.0 million a year ago, while its SG&A spending jumped 18 percent to $14.2 million from $12.0 million.

The company finished the quarter with $53.4 million in cash and cash equivalents and $119.9 million in short-term investments.

Personalis now expects full-year revenue of $70 million to $80 million compared to prior guidance of $80 million to $90 million. Revenue from pharma tests and services as well as all other customers is expected to be in the range of $52 million to $58 million compared to a prior range of $62 million to $64 million, due to variability with biopharma projects and timing of sample receipts. Revenues from reimbursed clinical tests is expected to be between $3 million and $6 million, compared to a previous range of $3 million to $10 million.

For the third quarter, Personalis expects total revenue of $12 million to $14 million, with pharma test and service revenue of $11 million to $13 million and population sequencing and enterprise revenues of approximately $1 million.

Source: Personalis Reports 24 Percent Dip in Q2 Revenues, Cuts Full-Year Sales Guidance