Earnings call transcript Q1 2023

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Operator

Greetings ladies and gentlemen. And welcome to Personalis’ First Quarter 2023 Earnings Conference Call. [Operator instructions] As a reminder this conference is being recorded.

I would now like to turn the conference over to Caroline Corner of Investor Relations.

Caroline Corner

Thank you, operator. quarter call. first Personalis' to XXXX earnings Welcome

Chief Joining Executive Tachibana, Officer today's call Rich Chief EVP Hall, Chief are Chris Chen, and and Officer; Officer Chief me Officer and and R&D. on Financial Operating Medical President; and Aaron

made of that do on U.S. of securities to not statements forward-looking call be should laws. facts considered this within statements relate matters All historical the meaning

revenue longer the expectations could for technology, for reimbursement any timing, actual our materially differ and financial term, our outlook. expectations expectations statements statements results and cash current year this clinical future market from timing example, booking runway, expectations. For and expectations our and and decisions, services, that size of collaboration These outcome activities, risks regarding cost performance products, cause existing and to of trends are orders, to business opportunities, subject and milestones, our uncertainties and

SEC, We statements, encourage risk no required review recent in our to factors Personalis most you applicable law. with by to as recent these Report update XX-Q. on including obligation described undertakes Form the except our Annual the filings

includes financial www.personalis.com, XXXX Our on details website, available first section under additional results. our and press the quarter results about our Investors release the for is

has review. latest Our website also we to which our SEC encourage you filings,

Time of recording today. Pacific website today’s p.m. A call X will our be on by available

first quarter to call for highlights. the over comments like business turn and I’d Chris Now, to his

Chris Hall

Good Caroline. you, And you Thank everyone. thank joining for afternoon us.

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level patients. the across of one part million First, Personal consistently ultra-sensitive NeXT per the down levels ctDNA detected to

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complete patients even overall negative the The XXX% positive compared lowest confirmed responders and levels detection, imaging positive findings ctDNA tumor ctDNA of increased at via survival And the patients. ctDNA had that resist third, similarly, negative had were fourth, the to detections of on criteria. XXX% ctDNA significantly were

very XXXX. end come our quarter our by made goal this data Personal important is that on in we progress have is was strategy having that to win demonstrating one that reimbursement NeXT we on of exciting indication together gratifying. the execute MRD Equally for Now and can

While key in progress indications. studies our of announcing collaborations have each that's by made focused and timeline, quarter clinical already an this we aggressive

collaboration The the TRACERx Crick expert and Institute UK, TRACERx cancer insights about study time. and Research our MRD how with Personal along provide detection consortium the in tumor cancer. to over NeXT Charles University for more Cancer biology cancer London. The jumpstarted lung changes College lung groundbreaking led lung will at initiative, teams even the efforts deploy by is First, Swanton Dr. Francis sensitive

cell TRACERx patient-specific findings both tumors and shown in mutations. mentioned, well its scan, to was Personal TRACERx testing significant consortium using patient research enable but have were there NeXT lung detectable improvement. non-small ultimately cancer in before much As about the because for cancer ability patients CT with to patient's TRACERx earlier journey. recurrent scan believe as collaborations other that able identify remained well decisions common with Prior and detection its ultra-sensitivity selected opportunity it care of they collaboration as MRD for will from We more a informed our like

the melanoma along of announced with monitoring That strong for Hamburg-Eppendorf able for foundation UCSF Duke relationships as collaboration the UKE. collaboration therapy efficacy provide known us Second, in with therapy and IO Medical Center Personal a to previously we and IO announced be the monitoring. NeXT also a to show University

patients In trial care we Personal a to XXX whether standard stages. collected engage MRD the from response, correlates Breast patient pathological samples measurements. out first MRD Consortium analysis XX is The enroll two up Third, with NeXT to carried be U.S. Academic complete approximately of clinical both with each path in that for to CR be assess trial sites. using Criterium expected to Cancer establish path at stage, will and the CR, will and

studies to breast further follow-up for to ultra laser triple we're studies clinical we involve therapy cancer. one progress biobanks make and validity expecting trials accessing announcements all continue NeXT insights of ability a look sample indications, sensitivity Personal And engaging in showcase are rich three we these in the performance and to establish patient and In We're NeXT and the decisions. and leading accelerating to for done. five-year not provide stage we to focused collaborators Personal's additional second forward negative The early-stage year. sharing through important on world as

that fourth to There's clinical leader of quarter energy sense strong in terms March is next the at something standard we establish in in oncology. We Personal the MRD, Personal on by market profound NeXT NeXT market. track are of Personal our brings cusp this represents sensitivity care year. optimism doing cancer use of on for and to substantial field Personalis NeXT a in and closer a Lastly, of remain launch MRD believe leap to the the we the the of

earlier months enabling patients monitoring years cancer ongoing for many possibility imaging Beyond therapies. even recurrence of beyond the catching targeted on or than

is for in that they confidence eliminating to designed we or better and enough. the not And are NeXT was for change care and will therapies believe Personal ultra-sensitivity with patients best order better paradigm and Personal performance numbers for paradigm treatment the disease. model, needed better have be physicians this residual healthcare to incremental when to a It's managed. when inexpensive patients, super-sensitive is more patients cancer minimal actively the unnecessary, to how decisions NeXT physicians, don't escalating for new enable the in to providing system. procedures improvements The key that will usher enable from make will the smarter

The Personalis is Personal technology same oncology And enabling diagnostic also the next-generation to technology powering products. the market. product to the biopharma transform key the is NeXT of cancer

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patient's Over the that vaccine providing years, about individual each a cancer by could developed companies personalized Personalis has genomic be patient. so for worked test specifically information with the several

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exceeded I blocking for lives focus new QX, of year-over-year our treating teams power our and the growth the what to delivered by vision is executed Personal industry. enabling one tackling on we cancer patients most company, talented forecast. in to for and a We our in of the and cancer by is we Key execution over technology believe patients the XX% NeXT transform ways of

coverage runway investors and appreciate burn of We a part journey. of into XXXX. completed submitted our for our MolDx and and cash time our It's our our extend our reduce our we to being of an data NeXT Dx efforts to product, Personalis we exciting

now financial I'll over results. it our to turn review Aaron to

Aaron Tachibana

expect earlier. Chris. We our of executed beginning you, see to mentioned quarter on we win Thank we first where areas as still are the Chris benefits early, and to the although strategy well focus to in it's

results XX% provide first financial of company strong I'll the the and same detail increased quarter quarter to oncology revenue the year. prior full So quarter about second of primarily million was guidance for the XXXX with and due $XX.X performance. year, first now revenue compared Total for and our period

in increase million the of revenue prior customers period from the revenue, year. which from enterprise half and driven our oncology same year-over-year mostly revenue by increased was revenue by the of of in was $XX.X other total tests, pharma The which the volume oncology Our and XX% over increase Natera, for accounted includes quarter.

First quarter the from $X includes MVP population which VA sequencing, revenue was million.

XX.X% was due to prior quarter, X% year-over-year overhead the margin same for was the absorbed under of compared for XX.X% period decrease Gross the primarily year. costs. of first The to

half have a VA with MVP. revenue testing compared growing testing requires and Our samples and the over and samples labor to year increased support cancer lab the overhead our background, expenses last for oncology more volume for

scale the increase lost Longer Over as we continue secure we our due while margins some fluctuating rates, and oncology facility reimbursement, providing to achieve of lower variability revenue. expect expect increase to term, couple next our at our to our operating to diagnostic we growing gross test others. gross years, tests utilization new efforts by volume, for margin we

and $XX.X $XX.X the same a and million Operating period lab in of million force were associated of the one-time non-recurring our quarter restructuring $X.X of year. to the closure prior China charge in included reduction for operation compared first expenses million with

of decreased the Excluding period last operating charge year. million from restructuring $XX.X $X.X expenses the were $X.X million our million, same and

diluted net $XX.X first period for with was first million in loss first loss the for compared expense last million R&D last with compared net the for same period count the of net the compared average was for for loss of and quarter Net with period the average of the share weighted was period million was And in and prior the million of the the a year. and The $XX.X with share quarter same basic year. for per million and million basic $X.XX million $X.XX share per same year. weighted diluted count loss $XX quarter year. $XX.X a expense $XX.X SG&A $XX.X quarter, of the the $XX.X million the same share first was compared $XX.X

with we of with capital sheet, $XX short-term for reduce investments track the cash used million. is equipment remain $XXX.X to We strong first which $XX.X balance due the first million approximately compared onto full we and Now the is to In used with the the purchases. finished million quarter to quarter, loss, down balance a XXXX cash our year, and on sheet year. working use prior the significantly net $XXX needs cash capital million lower during of

to like turn I'd to Now guidance.

we sales be volume to For Revenue the to is total and XXXX, to revenue primarily approximately first quarter, enterprise to expect $XX second $XX $X the and quarter of be which million revenue population sequencing reduced to of million. than tests, lower $XX $XX from pharma customers million from million, other sample Natera company million. from due

customers pharma, $XX revenue company be change be expected to XXXX, full to there be approximately million to recognized Population no during is revenue sales revenue to $XX and we with from to other $X oncology guidance sequencing of For be million. the million our million expect first year to and $XX the three enterprise total $XX and quarters. million to

test as loss make cash usage approximately to throughout Dx, our million tuned and Personal for you approximately diagnostic future reimbursement of $XX XXXX, NeXT $XXX Net the showcasing for milestones for year. progress on completing Personal updates. clinical we updating the of of look $XX a stay evidence forward includes and we million Please from million, obtaining NeXT reduction for commercial NeXT launch. This lab

will to to back the with And operator the Q&A turn I that, call the Operator? over session. begin

Operator

question Morgan [Operator Instructions] Thank of first Stanley. comes you very Savant much, Tejas from sir. Our

Unidentified Analyst

for taking my for Tejas. on Thanks question. This Gabby is Hi.

just to segment remained this same. so of quarter, So but saw lot strength the the Pharma your Bio and a guide start,

So in conservatism just kind is the some of curious if baked guide there.

Aaron Tachibana

Gabby, Hi this Aaron. is

guide, the did in say the what from remarks. so last In in change prepared quarter it of we of not terms terms did

of personalized so cancer down, QX Natera going guide going vaccine terms Natera going volume and be which which biopharma, from increased down, the So offset QX, is offset by our to in that. QX and will is is revenue

So is that’s the time. sense? had same Does the why last make guide what as that we

Unidentified Analyst

sense. that makes in same? might that on then any revenue XXXX? thoughts yes, are updated tail remaining And Thank Yes, the off there you. on Natera, how Is

Aaron Tachibana

might tail we’ve so the XXXX. the Yes, we’re to year. that QX volume up be a of a so year said, our not revenue there bit assuming of samples terms shows from in of much what Natera standpoint, that end little in through will from XXXX But the off this It’s early at start modeling expectation terms in in all.

Unidentified Analyst

customers, Okay. customers? if delivery still Great. headwinds sample Thanks. dynamics from And seeing changed of then on are last commentary you cautious how And pharma of biotech customers? quarter? you and some are your pharma as the some has companies And given so, late, throughout biotech pharma seeing continue you the from from these And anticipate and this dynamic from with just some of to spending do still XXXX? remainder

Aaron Tachibana

Yes.

their So spending. recession being here, the is pharma obviously on prudent with

there a things some seeing being are from little perspective. we So their bit tighter

little terms of of can flow we’re in. patient the where lot speak, come variable it a the sample from when the enrollment so slower. a or most be bit for in terms timing were trials situation beyond of samples to COVID lumpy In part, always and pharma, But

beyond up. variability terms time. when But point we’re samples some in of in show that So there at this do is

Unidentified Analyst

for you. great. me. it Okay, Thank That’s

Aaron Tachibana

Gabby. Thanks,

Operator

the from comes question line Brennan Cowen next The of of & Co. Dan

Unidentified Analyst

Dan. Thanks taking for is Joe This for on questions. the

XX% revenue? of that Or margins be there QX. Just pruning unprofitable this of one-time ahead some cognizant model in we Was should of? first at was the benefits biopharma quarter came in more gross the our while around in

Aaron Tachibana

Yes.

terms that QX terms were some more there to volume of there last in year. favorable or had quarters benefits some in one-time VA in We up in QX, the from the showed mix. MVP benefits of So prior compared

margins, of be terms though, more because In new low in range it our online gross the way coming facility. primarily XX% to from expect forward of costs we the

Unidentified Analyst

of associated same million possible, the tested that if any for is the then to revenue oncology on I just for And vaccines? about for is cancer then And with of goes service Thanks. personalized pharma think testing in think implied million-ish terms that tested maybe $XX Great. service revenue, $X.XX way pharma there XXXX? versus

Aaron Tachibana

we broken in and year excited about into we’re where very that haven’t this vaccines, the of to specifically headed terms but personalized out Yes, of half so the cancer XXXX. it’s back

our In really somewhere personalized terms of, total again, has haven’t we dollar The disclosed vaccine X% and amounts. revenue. revenue of the roughly cancer X% between been cancer

at as look of of Over of Moderna. with we’ve the kind with success because primarily that’s to going project increase total or time, to way we the percent the expect had to oncology believe we large here a So it. revenue, a it’s

Unidentified Analyst

Thanks. Great.

Aaron Tachibana

Thank you, Joe.

Operator

the Thank you. of comes from The of Citi. line question next Patrick Donnelly

Unidentified Analyst

Hi.

for Lizzie got You on Patrick.

just was wondering I quarter. in happen the So fourth that’s the Personal LDT supposed to launch on NeXT

I submitting sight of mentioned first I test? some of just the commercialization Thank for thinking your Medicare You that this more you’re way XXXX. line eventual would guess color indication there line, your coverage helpful. down into but in know be like the you. what’s

Chris Hall

Sure, no thanks. – it’s we’re Chris. We

We’re planning through to by we end a the adoption select key year clinics XXXX. few will of into it grow the this launch and

we therapy early We’re one focusing indications, breast of therapy going building – And plan each that through cancer, three we’re stage gunning the IO end early those XXXX and on lung monitoring, data three monitoring for around coverage and monitoring. immunotherapy or cancer, to through now of stage way. submit and

footprint particular deepen the collaborators, in XXXX We set. probably the as go in that will we can early grow with evidence

get place. coverage field that academic and trials expect a working force have their And to be start we’ll in with clinics. post-coverage in it ramp use it quickly we prospective be and/or could could that medical to institutions Now we as registry

Dx, profiling sample a that which the positive lot sample the same to cancer at cut NeXT same of from clinician from strategy one and can for of have to be us NeXT that product a our time the so a test the is around genomic us a ordered at block. getting Personal for – send samples having time feedback tissue We’re send of set

that think That’s the billion will there. And products we So grow market work expect quickly synergistically. a $XX overall. we to revenue

at we pick expect oppressively rates post can as the dramatically imagine we that move up as that, into launch away you chip to growth coverage. just So we

Unidentified Analyst

the excuse year, for the of of half this Understood. Just And in mean me. margins sequentially we it had right the Thank the you that base? me, then way Thank benefit, I quarter. there’s you. Should off wondering one-time on just you. cost of about that given – that? second increasing to That’s think them one-time the the think XQ

Aaron Tachibana

Sure.

Lizzie, China called forward, was to one-time out and expenses of the from of we and go our So expenditures of the terms about that headcount lab. primarily closure way reduction the restructuring XX% so the in think we as the of of

the rest So if the that we remove that’ll much year, to expect. what of you get expenses and through the to, take flat pretty you

Unidentified Analyst

Thank you.

Chris Hall

Sure.

Operator

comes you. Co. the Matson Mike Needham line of The next question of from Thank &

Mike Matson

to I Thanks. modeling it's from but of kind Natera, to back perspective. Yes. keep important hate going

that or I think year you had from $XX is million didn't down hear reiterate had come I last to that you number expected as, said the this still from on the that you that? case million is the call Natera. $XX

Aaron Tachibana

we've it primarily that million Yes. of with to of less million. a the to where dollars current million Natera could little to that's down got more be It's come Mike, couple because from a $XX going $XX information go. wants than bit some

XXXX assuming like it's going away exactly then we part So XXXX, not first will little a quicker volume that. than that look the going bit and we're decline it after in that very of what then XXXX we but little thought. sure into early what And see to

Mike Matson

that to that your for last And away. Okay. you goes – you that you in felt grow be pretty completely, grow continue said to revenue think headwind you kind that's can continue Do that could offset as kind I going grow a you because of to or… even also of think to call XXXX significant

Chris Hall

Mike. personalized about very optimistic cancer vaccine. won do we've and We We're project

projects look to terms further NeXT next looking And you one releases, large that with. in and platform, well relationship That to with as as penetrate focused been with penetrated of highly AstraZeneca of as under companies deepen business and have are way our and at We're pharma. next pharmaceutical on are great into landing we've biopharma. well. personal the press a relationship in saw taking recent more we're We that Personal on doing continue other a we

that departure we So we Natera offset have to believe drivers the a are growth few other selling. whole going

Rich Chen

have in which a will to Obviously XXXX because at We laboratory the launch come be plan they’re revenue build-in but in reimbursement And base significantly point the building the be to now. time, also of be we'll be from then that more of nice reimbursed of and And business still revenue expected start expect revenue meaningful low, smaller starting be that'll be on some base, a to in we and we Personal. backside coming ordering it's through. more doctors while in also. NeXT XXXX getting the from the clinical there'll growing we're and we'll still Dx become be will we'll the NeXT

we're So year where in revenue. about next be we'll optimistic

Mike Matson

with later this be could great. reimbursement to guess I that's Dx, mean then Okay, have potentially year? And I you just NeXT going

Chris Hall

correct. That's

Mike Matson

I of Needed the that you standalone? Or mean, real I you is is that opportunity with there of need with revenue opportunity get what's going going is revenue? of to you kind to generate a it's I meaningful Personal – be kind test, Personal mean, revenue MRD can that, really heard mentioned the a a used Is together – kind as that before there? it, do there but

Chris Hall

Well, there is.

therapies. [ph] especially to exome fusions discriminating are people think the careful what there's TAM most and there we're have competition relative provides is approach doing, of But the well marketing ahead to and particular a there way in think being baseline spin. a more we're therapy I B And discriminating we lot think the way – that in with of way front sales the most to and we to we market, and targeted have market comprehensive the we and cancer the we therapy. is measured the believe other

that is about versus gaining we're the thoughtful marketing in a revenue expense. burn, revenue/cost So sales way

And and of business field lot business. think quite. saying hold that able believe it, be We in It's we it's of throw there's a rationally. on we'll huge so in we been and back to in an being climate great leverages get a at really have an and is learning's and companies It's – force this – could the a about built do how that but business it a standalone the incremental it, a toe in it. the go we're moving we thoughtful builds incremental way that that we

Mike Matson

was it. And either academic it facilities? then is But on of those curious I funded groups, all was those companies particularly or trials Personal. those, with good hear Okay. – that the outside all – all Are you're just detail if for Personal to the bearing by Got being any involved the of costs trials?

Rich Chen

of chosen those do and the business landed. that a we've terms So relatively but why we're to is expensive, need of funding that. studies higher with end KOLs something that Mike, we've lot that's to do collaborations, the the in it's understand We

Chris Hall

time involved beauty these you the collaborations note you and prospective of is samples. the clinical would to don't trial I that have that But for pay don't to get like a the –

data important it, to be we these significantly with we doing to around expensive that doing data with to we're So build doing a deeper announced B-STRONGER that sets jumpstarted that. two our data so utility was of argue the the trial around And sets getting going to annotated But top really of I in than you're tests, it's done is of in you data to development with previously, would better the have way and less data ever do work going inexpensively. funding you're and accessing days some really sets that. too it's what are clinical and some out able and and got do you've that because folks the prospectively where ago samples while the world

that's that we're So the going approach at.

to that? you do Rich, to anything add

Rich Chen

absolutely Yes. Its it the everything true. is Chris us generation. also data thing the that accelerate helps said is other And

very years accelerate going sets data So the over the these to retrospective fact we large what happened data data accumulated generation. and many to these patients we're been sets, outcomes at have TRACERx, going really with so to be allow that is have we like know many, looking us that

Mike Matson

Okay. you. Great. Thank

Rich Chen

Mike. Thanks

Operator

Instructions] The next you. Sean Wainwright. from Lee question H.C. comes Thank [Operator of

Sean Lee

and for guys, if color regarding could question question. some timelines provide thanks studies. expected additional have afternoon my Good just taking I the you of quick a the

For stage take would versus the PCR; expend MRD where five-year Personal comparing up? with analysis the NeXT first you example, follow for long stage the you're of that how on before move to the

Rich Chen

phases, for triple patients. Consortium breast cancer Study, one the we're multi-year, doing This first think This is is two Cancer that stage at at is we're performance looking which Rich. split the into the negative Hi these Breast – where Sean. Criterium. doing for the I treatment to, you're Yes, so early referring this phase with B-STRONGER of neoadjuvant and correlation, the phase we're for Academic our prospective multi-center trial in

years And some getting looking year phase of timeframe. of through adjuvant out we'll the therapy second out data six to year-and-a-half the we'll and the out. kind that five, moving expect start and in phase, then at be to on outcomes we'll that We obviously following their second be patients

Sean Lee

all Okay. Great. for that. I Thanks That's have.

Operator

does today's Please Ladies disconnect session. further no this attending Thank reached note the Thank for end and have we your other you, you that may and and conclude now sir. in questions event. you we have question-and-answer queue the gentlemen, lines.

Chris Hall

Thank you.

Aaron Tachibana

Thank you.

Personalis (PSNL) 3 May 232023 Q1 Earnings call transcript