PSNL - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2019 Personalis Earnings Conference Call. At this time, all participants' lines are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ms. Westwicke. of Corner Caroline

ma'am. begin, may You

Caroline Corner

Thank you, call. quarter earnings Personalis' Welcome to third XXXX Operator.

Joining West, Clinton are Executive call me today's on John Officer. Tachibana, Financial Business Office; Chief President Officer; Chief and Musil, Aaron Chief and

market. This position call statements markets for sizes, which Personalis' in for products, market financial statements in services operate, expenses potential trends and expected regarding our of including demand the we trends include will forward-looking the including expectations and and performance, technology, products.

are risks materially ended cause our you to statements the actual described our results recent current encourage risk could These uncertainties that particularly in most XX-Q subject and We with XX, our to from to quarter filing September XXXX. SEC factors third filings for differ review expectations. our

we during future and expectations including projections statements based our forward-looking today. call, provide reasonable for on this as beliefs are performance The of

by undertakes obligation as to update these except statements applicable required Personalis' law. no

our is of Our about our release on additional results. includes section our press under XXXX financial details third results the and investor available website quarter www.personalis.com

X which Pacific has will available filings, recording by latest our SEC of you be encourage Our website website review. also today's to today. our call time we on A PM

call the comments highlights. turn to to quarter like of I'd John for his over third Now, and business

John West

our Caroline, quarter you, everyone earnings to and third Thank welcome call.

quarter with approximately generated same our XXXX, As the increasing million, you from million. can MVP VA the see year. third million MVP release, revenues VA to our of largest unfulfilled in we $XX.X ever in from quarter our press We XX% order $XX.X the orders $XX.X received up last

another of revenue our set growth. overall record, revenue In was quarter and sequential XXth consecutive QX, it Personalis

XXXX projecting revenue growth the full XX% and XXXX. over are raising revenue guidance for We are our for XXXX over year

we the opportunity. from to Before an where our area as I'd progress like dive further into a address see clear biopharma our business quarter, it's I long-term

it declined in revenue to time QX record, an $X.X QX, $X.X was all million in million. biopharma Our but

trials. variation of our in revenue a of pharma in quarter-to-quarter is part consequence This clinical the groups

call campaigns might biopharma waves or customers. by conducted them large our You

individual of Given for at to campaigns our customer us concentration, lead these process. samples to customers surges

As based increase number noted we retrospective and the our of revenue decrease received historically, or have prior projects. IPO, biopharma on can from samples customer we seen large to

Customers us performing customers often or year retrospective and for two, clinical then which the surges results send while they streams revenue enroll in storage, batches over revenue. large in as steadier studies performing samples those and a of prospective of trials, of resulting projects often from in of patients gaps, steadily course samples the

Given our but customer concentration, for basis from a large by quarter only retrospective the us on as well. not periods quarter choppiness longer customers affects

our our QX, our XX% As previous at level XX-Q, in biopharma than revenue customer lower you will total largest see generate of above to quarters. continued Pfizer in and

We step in see is Pfizer, particular for engagement revenue analysis contracted continue trials clinical to strong driven our services. down from with and previously sequence believe the the of by

in exceeded third in our converting not I'm as to demonstrate four multinational in customers discussions continue customers announce to current to companies, to note biopharma advanced interest orders biopharma who with important newest are that we new continue quarter XXXX. strong were to the It's and that our platform, from glad revenue adopt. customers

over base large diversifying and will winning drive customer our choppiness customers time. and expected We growth additional reduce

contributing us shipments pilots decreasing patients of clinical potential to samples then particular work validation extensive related customers They of revenue. customer's because the It do. any to from trials, for of revenue growth, additional processing amounts up are and they Long-term sequence for projects clinical data optimistic single us. time and to very the and the material for we to choppiness before of send in will quarterly customers to about of typically sign the samples complete trials take we need new recognize

expansion large team, which our a ImmunoID time is IPO, initiated the we cells This our has of aided cancer focused our comprehensively commercial cells on a on sample. pharma. particularly platform, about including new of initiative development single and capabilities NeXT a Starting record by both tumor in the significant to level new outreach, immune the business tiny

and field, Foundation at increased of Gardens the have by some and Medicine, with companies commercial Kaiser. experience of size over our XX%, group the We sales staff including our Illumina, business new hiring top development in

Moving VA We part orders we growth. approximately $XX.X have in on order our VA with that our happy million. to increasing report population unfulfilled the sequencing performance ever a MVP to largest MVP received our exciting seen of business, our I'm to

revenue this a to to expect convert half. the over and next year We

Our source opportunity MVP VA since the MVP to XXXX, has we represents VA revenue. largest started single of substantially together in the our such working serve grown now as

largest Growth samples. XX,XXX orders of task year. enrollees from the $XXX approximately to-date with approximately XXX,XXX is sequenced our as collections The to at has rate VA in MVP VA Since received a million. efforts of to one has the population Personlis order With value in project of increased task sequencing a well newest continue XXXX, to appears positioned VA continue. history XXX,XXX date, of hand, our MVP MVP over the VA cumulative MVP

growth a driver a significant with us. MVP VA business sequencing to population be Our for continues

business margins, We given value significant gross and long term potential. the tremendously this

important their ambitious enabled they maintaining information, to MVP deliver scale and deliver allowing MVP, the considerable Our engagement MVP to forward and automation, with other relationship the us technology to as the genomic We build with continue on us quality and VA goals. invest VA customers. high both to VA to in our has look

We spent us on potential production in our In this financially genome has VA QX business attractive United sequencing including the well laboratory for cancer. whole three in years and sequencing the us This put great sequenced in compete for commercial MVP XX,XXX Next, and automation to to scale believe would States. whole volume position our and business example, genome I methods in large the data systems cancer. scale one large sequencing highest with the volume large developing like over a touch whole for made a additional and of genomes. centers DNA makes we management human

our genome to non sequencing and oncology VA of looking Some increasingly whole analysis. are MVP customers

with our genome the customer. have happy optimal customers sequencing in MVP a experience genome that extensive Our an studying I'm for our experience we using genome whole cancer product us technology announce and VA to offer first whole begun to data for partner. sequencing to sequencing whole sending and makes we are advanced attractive

background, quarter in goals. from third detail that can some have Now outline our provided and progress I I our discuss important the

we quarter As XX% noted, third send last was I in quarter grew XXXX, VA orders the revenue year. the Growth mentioned larger us we as to MVP, platform. same expand which of over by our we sequencing continues have driven population the

we by VA in second business Our was less where had offset somewhat than MVP the QX in the biopharma the growth from revenue quarter.

However, I'd continue third the platform interest as like to demonstrate in continues biopharma adopt. to new and exceeded converting customers from quarter strong customers our orders current to to reiterate revenue, our newest

take personalized quarter high adoption source with to new to time. more to Within customers should our time business, therapy generally order Many will strong continue to our customers customers, prospective volumes. flow. customers less be it orders create beginning which are prospective convert quarter over who place to strong a analysis early of do volatility of biopharma our Despite

of growth As expect see VA be Aaron line XXXX move in driven expect top biopharma pharma will biotech XXXX revenue as larger primarily through the and accelerating the we later more With our product. large into discuss to and call moderate and liquid launch we biopsy revenue NeXT by pharma pilots new to complete we MVP. customer's growth,

for translate revenue through We XXXX. increasingly the growth expect NeXT, flow is order that to will materializing

many to products, right drive guiding in ensure the to. growth are have people underway We initiatives the and we infrastructure, place have to we

few of update now. Let those me a you on

to First of our and adoption to expanding and and continue customers work establishing new both customers. platform by relationships foremost, with biopharma current we drive

grown development Our group has by business over XX%. and sales

in engaging new pharma are multinational are the platform. in customers companies we who NeXT XXXX Importantly, with not

our of be by now launch to diagnostic which will biopharma used believe the customers are we before year-end. clinical in We completing trials, validation

of genes are XX,XXX on biopsy to remains cancer. XXXX. for from view with patients in comprehensive working This biopharma a track development customers launch samples our accelerate plasma of liquid offering using We product

Interest conversations with biopsies our grow, use to about liquid customers of continues biopsies in complement initial are and the to data positive. product from our tissue

growing We know-how, also continue our to very add automation as capacity in we manner. efficient scale operational a

three commercial and platform. commercial had SITC presentations Our compelling a exhibit the evidence and strong of our teams of scientific with scientific and posters, presence a value at recently demonstrating

and September Eastham the operations biotech added primarily And three companies, to of previously quarter, has finally, a with Illumina we XX over pleased member Board in She Geron years. XXXX, experience, sciences that during a Karin our for to joined report XX companies. years was for I'm financial Karin member Board of and public she including management Directors. third Therapeutics, currently Nektar and approximately Corporation of life Board is Veracyte. Also, us additional

continue and of forward all our to build to look thrilled are as welcome expertise leveraging Karin to We her we business.

our together would business, an emphasize whole, like I management the profitability to focus on closing, of and and combination. eventual our biopharma integrated that MVP is growth In as the VA work that of parts

in our generate that Given big our large very the total able studies, to we and incredible in the that for whether scale research, or is customers, data The are we medical revenues pharma grow. confident will our see pieces together, are analysis, value orchestrate two to diagnostics. ability to of continue genomic picture population business we

our and guidance. it hand on will that, With I to now results more financial Aaron for details over

Aaron Tachibana

new million third same The the up Thank $XX.X XXXX high $XX.X XX% the period the a record $XX.X you, for million were John. year. from was prior Revenues of revenue. for of million quarterly quarter in

for was quarter analytical offset the to partially increase revenue growth MVP, volume a in in driven volume. services by third VA biopharma and testing an by provided The decrease

from quarter, or the $XX.X $X.X remaining the In third mix of XX% or VA the customers. total of primarily for and million XX% MVP million was revenues, accounted biopharma the

a call, flow that of to process. months we VA MVP mentioned during the need our of As the sample acceleration over several last sample last created backlog

same quarter, MVP VA quarter, the revenue than was for For $X.X year. the $XX.X billion higher last higher of last period million XX% XX% $X.X than million third and

third quarter our announced all upon to based compared the of convert half. for and second next other current the for period a of XXXX and X.X MVP We over past the and to we orders for revenues $X.X the with to of unfulfilled $XX.X ended of VA contract. quarter to the last up we year accounted the from million third receipt same for million and VA expect customers orders quarter, $XX.X million the under estimates, Recently, million million unfulfilled MVP current quarter Biopharma revenue year. $X.X third

the potential new biopharma QX higher QX continues of of customer to in sequential of both pipeline the year the new X.X during to were for our XXXX. ordering orders for And of projects and third middle XXXX QX due As see revenue customers quarter, XXXX year a we reported. samples revenue orders The the new first million processing. mentioned, the half lumpiness of of from also John over were during decline customers in XXXX, grow. few part significantly In we and in we was large which and processed to and in sample received up than

did not process third many as samples large the in projects. quarter, we from While

others take the last to of process were XX.X% prior while average XX.X% in can as offering particularly two three margins months the gross reported automated quarter can and take the period and been The require noted, have we As biopharma. MVP samples, with and as little MVP some the place with compared margin orders prospective was for third same projects third XX.X% year. volume compared corporate Gross solid for in higher longer. quarter, of to revenue to does the significant being of one orders, a amount service much the higher quarter. not than The for and VA conversion has VA labor

biopharma processes MVP over leveraging knowhow to VA manual from and we the business. the And capability expect time automate

primarily was and volume the biopharma of due and within the The the lower direct under third utilization overhead biopharma. from quarter of customer to decrease margin gross labor projects mix also

inefficiencies cost higher addition, biopharma run, led smaller resulted sample which the in In volume the production to lower in quarter also per costs. from

the few we gross receipt, a to with as sample X.X and that year. was of I capacity variability, R&D to for from utilization there processing R&D equipment. customer quarter, in The development. new increase lab expenses going was margin supplies comparable and mention the X.X labor for X.X period continue such volume, are quarter forward, Operating may to the million of attributed last compared like as third see same moving third and expense million parts, sample were headcount million for $XX.X the growth linearity product million the would prior in same the majority period in year. the of

to We order to new heavily invest in continue in expeditiously. bring products R&D market to

the excited the million headcount expense John last about in XXXX same to product in that X.X company. primary for we’re area. third the launch increase of mentioned, expenses invest public liquid compared with related being a As period the was for and our in million related was X.X reason quarter, to SG&A year. The continue and to growth, biopsy

average basic quarter XX.X loss average $X.XX loss with and diluted last loss was the same per year. of compared compared Net for and a of share net the was for million include per third million of share period year. preferred with weighted a of year shares The count million, X.X the X.X loss count net conversion and same X.X the shares of nor from was $X.XX weighted million the for third the recent the share is quarter for net the XX.X it period Offering. and the it last X.X Initial number million stock approximately because The diluted share of basic did did significantly not include Public shares million lower last

balance term a the million. of with we and Now the sheet, onto cash sheet third and $XXX.X strong exited quarter balance investments short

repaid During the million. we quarter, cost $XX high third debt the of

X.X from million equipment capital million, we operations Third addition. for X.X quarter and a flow paid of usage cash was

business capital service order and up prepay customers a is model portion which generally of a value Our is for fee in the efficient front.

Our of next to priority the we areas runway we sufficient years. revenue increase for to couple will over in million that lead those to position is $XXX With cash top and revenue prudently biopharma invest a will growth. resources operate have of strong

for guidance providing annual be our and XXXX, guidance our onto guidance XXXX please note new only. Now will we for that

million XX% we XXXX, projected revenues of now XX in to a year million to year full increase the XX.X be at over biopharma Full to our annual range year to MVP full are the to XXXX. VA million. the projected For XX.X and XX the in have approximately of range guidance million be revenues representing increased the of XXXX of of the midpoint be million, $XX.X and

with $XX.X $XX.X to the the of we to revenues range to project be in million to million be in be the of and the the year full full XXXX, $XX.X For of $XX XXXX. revenues million the in VA to range $XX million range of million $XX.X for million biopharma year of and and MVP

will the over back Catherine session. I call begin to to turn the the Q&A Now, operator

Operator

Morgan our with Thank comes question you. first instructions] Stanley. And David [Operator Lewis from

Your line is open.

Yih-Ming Tu

is Edmund This David. for on

for ones Just two quick question, quick two me.

before will genome traction, actually details new it how provide think can in do a can First, of the biopharma your whole details of you on to terms sequencing, more And in take on you one the you that how adopting well? it as terms us longer more in? much customers product? give little are And your kicks

John West

they this do and take I'll and I I was we it in in, Hi, NeXT, to may something that of common it, I'd as well. terms possible that pleased the think first others very even shot responses think biopharma John new actually amazing, people of find to with Yes. that. traction it of our the think platform see want we're is a West. to really reception to say didn't like chime

in that regard think, impressive. I So it's

the all from immune look of understanding to the that at but broad cells at XX,XXX tumor comprehensive importance a cancer such sample. cancer of cells, in see genes single having of also also the same a a are cells, time the both We the capability

often of buy the own validation things say pharma I'd their trial to but It's where our been great setting. all So these clinical as I ins there, only important kinds has think have do to to we're in not of validation. headed a with for

So about with asked genome the you to we're there's to product go say actually that whole initial so And our the happy I'd through. business. a far, for sequencing process response there. And quite time

I future. further we think in we've had and cancer that approached, thought genome full the been area be that's actually sequencing an would

But sets long may there is are to customers we them. looking build really have what find that lifetime to who data are a a that

view possible. so, And may data from proofing future the that XX as now, years you means in want still using you much this really be build as to

build in trying often enter the something comes that's genome to that so a And has is data. where very whole lifetime long in to

application experience being we actually sequencing we've customer cancer up Because that samples, launch different that our extensive these of of ends with to see of slightly print. whole and trials and it our that So clinical very to than genome working respond analysis experience the capability. a kind been with able difficult Personalis'

Aaron Tachibana

is this Edmund, Hi Aaron.

the XXXX place that traction. second NeXT. said as the And is what that done advanced this them And throughout the increasingly Just so that believe books business customers. potential we in the our amount discussions can today with in of on response have significant traction biopharma a revenue future. there that be and part the NeXT past. follow we're And John's going potential mention we remarks, is significant minimal, we we're customers have into who customers, the orders, a of with with placed prepared We in half terms XXXX the even of far take revenue did ramp dealing customers XX was good have is NeXT up with and lead orders significant on as the to is in haven't several today of John the will we on we NeXT, so though ramp in to past believe the gain And size, business new will

Yih-Ming Tu

go just sorry, back. to I'm

the to customers, potential to of them terms it's say roughly about, a up. year new In take ramp going

to back or to So to any the give expect us and that's be more sort forth, additional the pacing they're revenue impact to and for able whole going impact more sorry genome you this? the on and Can how color this you color XXXX jump sequencing? of on

Aaron Tachibana

so in to can of customers, new of customers take little the some bit terms a longer new Yes, typically ramp.

in customers well. are with existing we involved today as However,

on do of and handful customers and customers the Okay, have existing books orders well. from some new we as a

John West

customer to of say there's from variability also I'd a customer. lot

an extended other Some through project evaluation to may quickly revenue. customers go process more move more directly a and that will will act piloting customers and and involve substantial

XXXX all it's fits one it there So adopt who the of technology. we long will be expect are certainly not be size customers give that about you have the us us now can mind a revenue in from I have customers takes completely a of new to terms in of that sources will genome an how who also And side? that to NeXT we our idea And platform, whole customers specific I'm they that. in sorry, question had very

Yih-Ming Tu

any when that? it's actually any Yes, the additional it's or of on revenue on impact actual terms when the pacing details to happen going in on color or

John West

sequencing. in data. we're think funded break that to generally interested is going that as they with something often it whole would don't this it's are I see often but do say is biopharma. this being that kind -- And up that transcriptome something of out We that partnered separately, I is

the we that products And where of the RNA. our to analysis leveraged other so, DNA the similar both and is

for with said as take whole wave past want see any we set a think it would've a say, don't that, to but future. may being but whereas great I was of that that time. perhaps cancer, I the future in to say just in expectations we some the the genome something I'd

sooner to we now beginning only probably happen few say happening I and a think it's would actually thought have months ago. we'd than actually

Operator

And our America. from you. next Bank Thank with Bruin comes question Derik De of

Your line open. is

Unidentified Analyst

This is for for questions. Ivy Derik today. taking Thanks

wanting any in that services increase seen see attraction in customer is One of an the granularity the the wanted if you've young to the XXXX. biopharma net, Thank second one, trends see year the gross and and for see questions. of in for terms two on just whole if the amount genome the GM maybe So much with you. rest there's they of orders, of to terms sequencing margin,

John West

do if one, to the margin Why that. you Okay. to we Aaron speak firstly, gross don't want

Aaron Tachibana

on and know, are, Hi, of the more able variability. so the to come specific the process as of reported biopharma certain but we're we're in can any Ivy, of costs our you margins are we to see number, we we forward, in the very from the in terms specific because fixed the very, trends through, the variable, a not you somewhat cost there see of terms gross base so able the margins that results, of as in really as Most the, the are operation look in in terms gross are we operation VA It's volume providing the MVP solid. the through operation. level maintain tied volume to we and we process, lumpiness leverage more the orders guidance

through gross I so aggressive you and top know, there after. be And how be characterize, would slight terms too is we're some bit XXXX, be but volatile uptick focus of growth. that's our a will margins line wouldn't, what little we could in And

gets $XXX we is like million margins talked XXXX range. the focus than about, to we as now more line as top our growth. But to we've terms beyond XX% much to scale, revenue of million right In see in and gross $XXX get XXXX elevated, could

John West

it correctly, relative of you wanted relative that correct? for to first And the there, then whole of customers Is kind our if platform I question back to understood I understand think genome. the your to positioning next

Xiaoxiao Ma

Yes.

John West

comprehensive clinical trials needs. data really various are trying they of in and to specific respond working really NeXT drug. a in forth. And on pharmaceutical addressing are different say of compounds. interested including would to set folks customer The And immune platform data, we're or very looking the for a patients our respond don't so who why understand they're system often active are I

genome application interested across area perhaps are the to the focused different tend mutations on a I in and genome the whole be have the people transcriptome. think who

up customers. So they being ended different

additional the somewhat for new, a perhaps it's category us, not one thing other. So cannibalizing

Xiaoxiao Ma

a I the on next may year, guide you. wide million. million in you range. XX relatively follow the business, mentioned think Got It's up for to a If XX squeeze the biopharma

what's on Thanks. So just visibility see your that? wanted to

Aaron Tachibana

Yes.

is this So, Aaron, Ivy.

do the XX over of terms XX XXXX, in XX million little to million, going million. to So we're

seen so, order the three, that, drive past is of take Other we've business the feel does genes. it primarily most what volumes. at sample the adoption, months types it's because time several over to that of we in have looking the the as relatively four the be we months, over And able choppy, biopharma tool we've believe inning not and platform the folks learned past go is processing comprehensive lumpy, really or XX,XXX to industry. and are And

terms to for time get and evaluate, smaller of of panels that's up product tissue the And send trying heads customers it state, today to piece We're biopharma around the it, get really the time. take because sample, the and of sample itself, do they're take they're does it. using to that in end cut work. us using And it their does customers In vendors. a getting terms them to all tissue multiple to that's we to sent and of

is been our And doing we've so been sales what to adding we've force.

great discussion traction. to be have we're market And go go our tweaked strategy chief to this scientist business biopharma. level by to development we're in the getting able We've seeing adding is that with working, resources

but this some in going we're and bit our guide, work a it's guide and of feel into we terms that time adoption. little to in of of, terms of we do so It's of to the take drive going going kind that bullish just take takes to time. it some However, build time,

Operator

& question next from Cowen Company. Doug with our comes Schenkel And

Doug Schenkel

one start that Ivy's say XXXX sure to to you expect heard I I you -- did make we be? Did just question. follow-up you to actually to biopharma just want you expect want what revenue with right. it say

Aaron Tachibana

little be our is our was guide up going XX bit, million so range, $XX XXXX so XX to XX the XXXX a guidance is to to XX.X, low and

Doug Schenkel

$X fourth balance the VA? with for personalized category quarter for then revenue being we're the make biotech sure there's that assuming So guess million to pharma it the for here, getting about in mathematically, I and

Aaron Tachibana

So is to of or flattish that's range. in QX correct. Doug, kind assuming the that same we're

Doug Schenkel

building that. I So guess of off

So is for little with us about than what discussions a overall revenue a what that XXXX, year. most going we're we're ahead XX% modeling, different. bit us ahead of now line I then this a this on to mix different VA, think what a mix that's bit you year, we clearly expected target look is think as mix our maybe is Yes, be modeling, it's in of And to like XX-XX it be seems lot about based expected earlier I most with of the non-VA, around VA. to the

gives were key half pretty you you're that year that of than you Maybe you expecting going that as to back to And revenues drivers So get bit that. the to year? it clear get the on longer pharma the just taking back next what earlier you a seems confidence what expected ramp. you could walk to trajectory are through this us

Aaron Tachibana

resources we sales very right? adding development we where be to does up. private we time that And go to invest let customers in question. but been the proven what had can We've areas, our we've take did, we've me a is do. and of couple terms thanks very, before pharmaceutical to IPO, lot biopharma, Doug, a before, able capital that we were the follow what inside in business so it. drive Sure, at a it at And pass learned especially a in change because large of drive the past, now We in company, I'll of for found just we've seen win. then But of it companies. we adoption had so filings we we're large in to And over a John didn't lot you've take of shot today, different to have

the we And so of we're go inside because we're a multiple at business development and company we're to we're to today. under doing validation compared go additional investing what's they penetrated have be ACE Once the see of the through in again, platform pharmaceutical in they able have data to at believe coming where have continuously, additional out already look discussions, that accounts sales discussions platform. and data, resources next to business, the

in to the we're a piece, to And feel us to provide strongly just or change able dialogue of the say, validation, months again, where do RNA of of going not do drive do very supplier just with that months. whole and that drive It to one that piece us once something work we're trying to discussions, all or DNA work, several takes to It's through versus amount to the and adoption. one get they're want be the they we're tissue It time. them takes They two happens right? a that going going sample choosing work. a we

what so of saves time. And that's kind

John West

is question your This on angle John here. to just maybe take another

that. and about engaging see kind I of I think here. revenue were asking, how back we've so when the is we how do of been with what platform, we terms level will you I visibility do get have, their come customers. the compelling would what they to I guess, to and reaction how We of find mean in ramp interest process forth. responses their

on the right we the a know steps. orders samples. visibility can until showing on it there in in the have takes of And process take use retrospective the then But can course all here up the project, see be type that decide we whether orders, we'll then, terms they have see inside that that samples. of of before we of to lag they companies, time want that those to depending that, to us or it's from perspective, But We terms time then technology. have project then

comes sense of customers we And signing end on that all the from then nothing. engagement feedback where not pipeline a it. a way. All we're going have getting they're like at And are of of so, it's along the looking which a customer projects, positioning And constantly they're from is sudden up, revenue now. the up process year at

think in, when orders come samples that. the come As from we will

increasingly timing will be on view that us that that a So and XXXX this this gives great about there's we'll the that concept gives see ramp deal tracks. sense internally, of a they, through us is there's what detail

Doug Schenkel

Just more. a couple

customers, but remarks, As a year. and they to expectation into pharma lumpy disclosed a at source to in out of to QX in QX prepared be having like customer, as going question that going back to about that sales. to start know of I guess in as are the throw percentage to that revenue. specific you want is your that going on next there. given quarter second the pick XX% from in fair your my I points, typically given is it you don't to here visibility mentioned dropped revenue is, all too XX% might be Pfizer good is Pfizer inherently the specific point I up revenue be thought that's

John West

This is John.

Obviously state a Pfizer. obviously of forward their we with guidance And But basis. by And would relationship customer we we I single working folks on know, have we them having with going the years. the engagement that. really with group them. They're have really So, a I to they're I you say, terrific look do great don't every and doing give think think business earn customer over at great things. with to something many art time I we to like work on a forward

we relationship that's think think them. it's maybe So as much about with I I've can seen, a terrific but say, I actually working as

Doug Schenkel

the the and now great. described biopsy product? or are between you to I one, on launching year, liquid it. that that need target milestones Okay. how is is for that then key be hurdles What achieved product No, in indicated that's the last again next later And you believe

John West

this is John. Yes, so

things product what comfortable some think be to we unprecedented, are with we're said we've biopsy with plasma launching DNA of liquid to at that track time do are questions for data in tiny we scientific showing trying now. samples. Obviously meaning obviously been that for what of The out on think off work that's of genes on sample. XXXX. can amounts different I probably of is there XX,XXX are come pretty I conferences progressing a the that types that we're we've in level of specificity So product And right this that's

customers. go were sure we that that the results with to can satisfied come with we working we're patients from to So variability out of samples the make before get that can

process, would samples look a of a the what data we've quite to comparing going liquid think we're sort I first shown world biopsy it's And a time. just expect in development events. a in of normally about for optimistic what you actually, So product and actually at. tissue that's kind think but a long It's pretty I

want right. get So we really to it

Operator

comes our And from question Oppenheimer. with DeGeeter next you. Kevin Thank

Kevin DeGeeter

to on as to Hey, up better Thanks of a from specifically the it I questions pharma for regard the categorized side of sales what and perspective, business I've with follow want team. taking on the good expansion of sort discussion earlier the afternoon. commercial take of question. the in some cycle of understanding different kind my a the

that us in added what that Can do kind we of commercial less of with prospective the field part of that growth when just kind we about How you quantify mentioned the XX% growth terms sort XXXX reps revenue commercial productivity then number a been of of is sales force You have increase to of interesting it a regard than that guidance the and sort of is question. sort team. for because number look of resources. more at think and in XX% biopharma perhaps a. in kind the means

the that of of time and new time sort productivity? force sales in some appreciate these productive length to terms take trying become thinking to of just I'm metrics measure over kind folks fully it So will should of we you're what of

John West

one possible. John. have might conventional organization. say were really our talk time when it's XX actually to reps sales is a people many force where IPO how in IPO we've in we little to at I a We sales the group. the you the has the wanted different would probably also I'd we substantial have. you product say in for about from a the the XX% do to that This things of pretty made range now of Sure. that It's perhaps XX of commercial tend get referred a growth roadmap increase

the of application have people but field really commercial people capability a this business field are have we've people different specialists can who our We development organization. commercial new engage recently obviously We of salespeople involved out also engaging office but from with new group actually with also added And, our of work scientifically seasoned sales inside home of kinds work with we our capability. a our who in We amazing, that level customers. lot PhD here, added customers. executives, have in a

their the with have is Again, senior thinking companies in how individual them the people, for in in, Personalis companies customers management dramatic of many ways data. absolutely about with about and crucial who particularly are going on they work of we're at the scientists engage with and they about, looking can change with in pretty levels trials. also pharmaceutical where at us a those with important But making it's working this to think kind with people are for it's ground platform talking big who to many different clinical us working to

looking complete the XX,XXX cell immuno-oncology, driver genetics on transition going you're know, immune And cancer to which really of a genes genes, focused where few is the from You genes. at mostly repertoire. hundred

substantial so a And scientific actually that's change. quite

we at to as to level so that well. able need And engage be

the of staffing selling. So this, we when think not purely model sales about just sort it's how rep we're

run customers. it's those pretty Let's before that's like engaging say broad scientific businesses insert a team with and commercial and that have

find I with right biggest IPO. selective. is very will skills actually company we people see is it the hire quite in challenge. a the go continued see our of side think to commercial going a few and since as people through you our been next we've growth challenge, always year But the Trying to

continue I quarters. to you'll that the grow coming over see think

Kevin DeGeeter

should Okay, with through I pertains my reasonably potential margin, the the the volume, about but for facilities? improvements on gross appreciate biopharma that great. Or the stepwise for gross opportunities maybe clear to improve question opportunity you've business. that's think a the in terms regard commentary, the any kind firstly I And the any of biopharma expanded certainly secondly a lab is related, been technology specifically for there think in expansion, to there potential related opportunity I question XXXX, continual then incremental to then a laboratory gross improvement? guess we automation or new to, to margin margin being

Aaron Tachibana

question, good Kevin. a that's Yes,

million were with over XXXX, of $X gross so that back terms to So, being of was XX%, margins margin, you and if in revenue. go QX over biopharma our gross

a can volume, on see significant XX% that So dropped biopharma you had terms in it margins. having impact by of

will expansion. be the lab you there of As XXXX, into go out possibility

we're, headwind expand, in bit. be so a expanding regards a areas, know, little you could You out and that of some margins. be in And some will space we into small as as

In few process to terms it did the automation, quarter. people last process so very is automated of we with VA requires $XX.X highly million a and what

we side And working XXXX. that will throughout probably on there fruition the the automation to of of as terms in are biopharma come well. business, So,

Kevin DeGeeter

your or you one the the just of product of forward those NeXT discussions XXXX either revenue with now could more time. in liquid companies biopsy think large in that goal of manner. any the you kind Is one the or to either discussions expanded relationships believe, going out I pharma sneak I into in in and driving of know, then companion visibility that get just the the that if view offering the is you with positive is that And four or question of in products important more are diagnostic are platform the of to, market or called ongoing, and line, those with regard a have you sort five, promise introduction over a

John West

we're timing of we've talked question think products -- the the pharma those. to I adoptions realistic about it might think pretty liquid products some things substantial primarily from in for XXXX. commercially terms drivers with revenue about excited biopsy, it's like and of the again, the be newer we time I build mentioned, a those more revenue of just be out in that the But of

And standpoint. concerned far that's I going to we’re a revenue think as so, yes, don't big from as set expectations

be to that getting those know, engagements us. from think of thinking an about, maybe to going we're XXXX product of be volume it,, And a year likely it guidance products, careful out about the standpoint, a to for more you but financial I is on be in trying I purely exciting initial that think event.

I happy the improvements with there. are There have think out we we're pretty products. in incremental products the

seen versions features. other where new TCR on around later platform NeXT we for alpha initially the and the added beta capability You've the TCR reported us release of the example,

I think like kinds think working I the I things adding continue on which we improvement, as platform feel need, to largely were going it. to of we on of you’re year. kind that we value next those going be the platform, have through to some incremental we see keeps with But just to of expect executing

Operator

Ladies you. this Thank for and you concludes gentlemen, conference participating. Thank today's call.

have day. Everyone disconnect. now a great may You

Personalis (PSNL) 14 Nov 192019 Q3 Earnings call transcript