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Personalis Locks in Clinical Launch Plans as Oncology Testing Takes Lead Over Population Sequencing


NEW YORK – Genomic sequencing and analysis firm Personalis is approaching a major turning point in the coming year, as its revenues continue to shift toward cancer testing from population sequencing and the firm is preparing to make its first major move into the clinic.

Last week during a call discussing the firm's Q4 and full-year financial results, Personalis said that for the first time since going public, revenues from its oncology/biopharma customers exceeded those from its contract with the US Department of Veterans Affairs' Million Veteran Program.

According to CEO John West, this shift has been "long expected," but may be coming sooner and faster than anticipated. Hoping to capitalize on this, the company has cemented plans to funnel resources toward its first major foray into the clinical market.

"Given the current strong growth we have already experienced in our oncology business … and the large opportunity we see there, we plan to focus almost entirely on cancer as we go forward," he said.

In terms of transitioning into clinical testing, West said that after seeing strong adoption of its NeXT Dx cancer profiling test by pharmaceutical companies, the firm strongly believes the same test can be useful "for all cancer patients, not just those in clinical trials."

"As a result, we're taking steps to build the clinical diagnostic business for therapy selection and monitoring," a combined market potential he estimated at approximately $30 billion in the United States, which already includes companies like Guardant Health, Foundation Medicine, Caris Life Sciences, Natera, and more.

Specific moves Personalis is undertaking include new hires to build out its regulatory and reimbursement capabilities. "We have been hiring employees with clinical and medical experience within a diagnostic setting, and we'll continue to hire and invest in this area," West said. The company is also incorporating what he called "FDA compliant protocols" in the new facility it expects to move into during Q3 of this year.

On the technical front, Personalis is at work on a validation study for its NeXT Dx Test, which will support an application for New York State regulatory approval. Along with that, the firm is planning to submit data to Medicare's MolDx program for a tech assessment, hoping to receive a favorable reimbursement nod in the second half of 2022 under the program's established local coverage determination for comprehensive sequencing tests.

West also highlighted recent collaborations inked with leading medical institutions like Mayo Clinic and the Moores Cancer Center at the University of California, San Diego, in which it is providing clinical diagnostic testing alongside research sequencing.

"We have begun to test clinical patient samples and are excited about the opportunity to work with these renowned cancer centers. If we achieve a favorable reimbursement decision for our NeXT Dx Test from MolDx, we may also recognize revenue in the future from some of these collaborations," West said.

The company may face a long road toward significant adoption and market share, though, as it will be competing against established clinical sequencing companies, some of whom, like Foundation Medicine, offer FDA-approved panels.

Apart from a few exceptions, the most comprehensive of market leading tests cover panels of up to just 500 genes compared to Personalis' 20,000.

"Given the advanced nature of our NeXT Dx Test, we believe it is a good fit for high-end cancer centers, which have a dual mandate for both clinical care and research," West said. Personalis is banking on leaders at these institutions to provide a model for adoption among the larger community.

"Although we still have work to do, we believe that we will be well positioned for entry into the clinical diagnostic market using our comprehensive tissue-based NeXT Dx Test by Q2 to Q3 of this year," West said, adding that Personalis will follow this up with an LDT launch of its liquid biopsy-based NeXT Personal test, which is intended for post-surgery minimal residual disease testing and other monitoring indications.

NeXT Personal is akin to some of the early movers in the MRD market — like Natera, Inivata, and others — in that it is tumor-informed and personalized. But the company has said its whole-genome sequencing approach offers the potential to identify more variants — up to 1,800 per assay — such that its analytical sensitivity drops down to "approximately a few parts per million."

Although the company has not yet published or presented data on its performance, "this sensitivity advantage may translate into much earlier detection of a patient's cancer recurrence," West said.

He said Personalis' goal with NeXT Personal has been "a little different from some of the other MRD products where people will talk about trying to detect recurrence earlier than radiology. I mean, it's good to do that, but … ideally you would know when you do a test a few weeks after the surgery," he added.

"We've seen data from some of the earlier technologies that's been published where you see, time point after time point … that nothing is found. And then a year and a half, two years … out, recurrence is detected, [which] means the patient had cancer [that whole time] and the test just wasn't sensitive enough to pick it up."

With sensitivity at a "parts per million range for most patients," West said Personalis expects it can offer a "pretty definitive answer" in the immediate post-surgery setting.

The company also sees its test differentiated in that its breadth can offer information to guide therapeutic decisions in patients who test positive.

"Very few MRD tests are actually in a position to be able to guide [therapy] once they see recurrence of the cancer — to say what to do about it. And so, I think, part of our expansion is not only to have an MRD capability in our NeXT Personal test but to complement that also … where out of the same test you're also getting information that would guide what drug to choose," West said.

He called initial reactions among biopharma customers "pretty exciting." Most of these have been pilot projects so far, which Personalis expects will transition to retrospective studies.

"Five years ago, our sense was that not that many pharmaceutical companies had been routinely collecting cell-free DNA samples in their clinical trials, but I think that's changed pretty substantially now," West said.

From there, "I think you'll see just like our NeXT platform has ended up being increasingly ordered for prospective use," as a natural progression toward clinical adoption, he added.

As the firm branches out with its LDT version of the test, that would also "broaden out the potential for diagnostic revenue," West said, though he added that reimbursement isn't likely for the NeXT liquid biopsy assay before "well out into 2023."