Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Personalis Inc (NASDAQ:PSNL) reported a 15% increase in full-year revenue for 2024, reaching $84.6 million, driven by a 60% growth in biopharma revenue.
- The company has a strong partnership with Moderna, extending their agreement for ongoing clinical trials, which is expected to be a key revenue driver in the next decade.
- Personalis Inc (NASDAQ:PSNL) successfully raised approximately $115 million in 2024, strengthening their cash position to $185 million, providing a strong liquidity position.
- The company is on track to achieve CMS reimbursement for at least two indications in 2025, with submissions for breast cancer already made.
- Personalis Inc (NASDAQ:PSNL) has seen significant traction in the clinical marketplace, with a 52% increase in molecular tests delivered in the fourth quarter compared to the third quarter.
Negative Points
- Total revenue for the fourth quarter of 2024 decreased by 15% compared to the same period in the prior year, primarily due to lower volume from certain customers.
- Gross margin for 2025 is expected to be lower, in the range of 21% to 23%, due to the impact of investing in clinical test volume ahead of reimbursement.
- The company anticipates a net loss of approximately $85 million in 2025, including $20 million of unreimbursed test costs.
- Personalis Inc (NASDAQ:PSNL) faces uncertainty in the timing of reimbursement decisions, which could impact revenue and gross margin projections.
- The company is experiencing a decline in revenue from certain enterprise customers, which could affect overall revenue growth.
Q & A Highlights
- Warning! GuruFocus has detected 6 Warning Signs with PSNL.
Q: Can you clarify the guidance for enterprise sales and the VA MVP program? Are there continuing revenues from Natera, or is there a different enterprise customer involved? A: We have grouped both together in our guidance, so there will be revenue from both. The VA contract is $7.5 million, so you can assume $7.5 to $8 million for the VA, with the balance coming from enterprise customers. - Erin Tashiban, Chief Financial and Chief Operating Officer
Q: How many customers are currently using the Next Personal DX test, and what is the reorder rate for physicians? A: We are closing in on about 300 doctors using the test, and the retention rate is high, with a reorder rate in the high 90s. The value of our ultra-sensitive approach is being recognized, with about 40% of positive results in the ultra-sensitive range. - Chris Hall, Chief Executive Officer and President
Q: How should we think about the phasing of revenue for 2025? A: For 2025, we expect revenue to be split roughly half in the first half and half in the second half. Biopharma revenue will likely be 40% in the first half and 60% in the second half, while enterprise revenue will be the opposite. Clinical sales, guided at $3 to $10 million, will mostly occur in the second half, pending reimbursements. - Erin Tashiban, Chief Financial and Chief Operating Officer
Q: What impact will building a commercial team have on SG&A expenses in 2025? A: We plan to maintain a small team, primarily relying on Tempus. The investment in our commercial team will be relatively small over the next year or two, with more aggressive growth as we have a clearer line of sight on reimbursement. - Chris Hall, Chief Executive Officer and President
Q: With cash usage projected at $75 to $80 million, do you anticipate needing to access capital markets this year? A: We have sufficient capital on the balance sheet to reach cash flow break-even. While there is no specific need to raise capital currently, we will evaluate opportunities if further investment is needed in areas like evidence generation. - Erin Tashiban, Chief Financial and Chief Operating Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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