Personalis ((PSNL)) has held its Q4 earnings call. Read on for the main highlights of the call.
Personalis’ recent earnings call presented a balanced sentiment, highlighting both significant achievements and notable challenges. The company reported substantial revenue growth in its biopharma segment and strategic partnerships, particularly with Moderna, which are expected to drive future growth. However, the call also addressed challenges such as a decrease in quarterly revenue and lower gross margin expectations for 2025.
Full Year Revenue Growth
Personalis reported a full year 2024 revenue of $84.6 million, marking a 15% increase over 2023. This growth was primarily driven by a remarkable 60% year-over-year increase in the biopharma segment, showcasing the company’s strong performance in this area.
Strong Partnership with Moderna
The company has extended a long-term agreement with Moderna to support ongoing clinical trials. This partnership is expected to be a significant driver of future revenue growth, highlighting the strategic importance of collaborations in the biotech industry.
Significant Capital Raised
In 2024, Personalis successfully raised approximately $115 million net through strategic investments, including a notable $50 million investment from Merck. This capital influx is poised to support the company’s growth initiatives and operational needs.
Increased Clinical Test Volume
Personalis delivered 1,441 molecular tests in Q4, representing a 52% increase from the previous quarter. This surge in test volume underscores the company’s expanding capabilities and market demand for its testing services.
Breast Cancer Submission for Medicare Reimbursement
The company has submitted for Medicare coverage for breast cancer testing, achieving this milestone ahead of internal expectations. This submission is a critical step towards expanding access to Personalis’ testing services.
Positive Physician Feedback
High retention rates of physicians using NeXT Personal indicate strong satisfaction with the test, reflecting positively on the company’s product offerings and market acceptance.
Decrease in Quarterly Revenue
Despite overall growth, Q4 2024 revenue was $16.8 million, a 15% decrease compared to the same period in 2023. This decline was primarily due to lower volumes from Natera and the VA MVP, posing a challenge to the company’s financial performance.
Lower Gross Margin Guidance for 2025
Personalis has provided a lower gross margin guidance for 2025, expecting it to be between 21% and 23%, down from 32% in 2024. This decrease is attributed to unreimbursed test costs, impacting the company’s profitability.
Expected Decline in Revenue from Natera
The company anticipates a decline of about $20 million from Natera’s business in 2025, which is expected to affect overall revenue figures. This forecast highlights the challenges in maintaining revenue streams from existing partnerships.
Net Loss for Full Year 2024
Personalis reported a net loss of $81.3 million for 2024, though this was an improvement from the $108.3 million loss in 2023. The reduction in net loss indicates progress in managing expenses and improving financial health.
Forward-Looking Guidance
Looking ahead, Personalis has projected total revenue for 2025 in the range of $80 million to $90 million, despite the anticipated decline from Natera’s business. The company expects to grow its test volume by 30% to 40% each quarter until achieving reimbursement. Cash usage for 2025 is projected at $75 million to $80 million, with a net loss of approximately $85 million, including $20 million of unreimbursed test costs. The company aims to achieve Medicare reimbursement for at least two indications by the end of 2025.
In conclusion, Personalis’ earnings call reflected a balanced sentiment with significant achievements in revenue growth and strategic partnerships, tempered by challenges such as declining quarterly revenue and lower gross margin expectations. The company’s forward-looking guidance indicates a focus on expanding test volumes and achieving Medicare reimbursement, positioning it for future growth despite current challenges.