NEW YORK – Personalis reported after the close of the market on Thursday that its first quarter revenues rose 36 percent year over year, driven by an increase in testing volume and analytical services provided to the US Department of Veterans Affairs Million Veteran Program (VA MVP).
For the three months ended March 31, the cancer genomics company reported revenues of $19.2 million, up from $14.1 million a year earlier, and beating the average Wall Street estimate of $17.2 million.
In Q1, the VA MVP accounted for $14.8 million, or 77 percent, of revenues while the remaining $4.4 million came from biopharmaceutical and other customers, the company said. In the prior-year quarter, the company saw $8.3 million of its revenues come from the VA MVP and $5.7 million from all other customers.
"I'm proud to say that we were able to report record revenues once again this quarter, in spite of the initial impact from the COVID-19 pandemic, and continued to see strong ordering levels from both our existing and new customers," Personalis CEO John West said in a statement. "Also, while our laboratory operations have been scaled down due to the COVID-19 shelter-in-place orders, and will be at least through May, we feel well-positioned to work through our VA MVP samples and also service our biopharma customers when they are able to send us their samples."
The company said that 26 customers had placed orders for its NeXT immune repertoire characterization platform as of March 31, with seven of those customers placing their orders in the first quarter. Personalis also said it received a new order from a customer that isn't in the oncology field, to use its proprietary technology platform for neoantigen prediction.
On a conference call with analysts following the release of the earnings, West said that although the company experienced some delays in processing samples from its biopharma customers because of the pandemic, revenues from those customers were roughly in the range of where they were expected to be. Personalis also received new biopharma orders totaling three times the biopharma revenues it saw in the quarter, including a single large order from one customer that isn't likely to repeat every quarter, he added.
West also said that the company delivered more than 14,000 full human genomes in Q1, an increase of more than 90 percent from Q1 2019, and has now delivered more than 1,000 genomes from cancer samples.
Further, since 2013, Personalis has completed sequencing on more than 60,000 VA MVP samples. It expects to complete the 100,000th genome for the VA MVP by the end of this year, though the production rate is uncertain because of the pandemic. The company has been contracted so far to sequence 116,000 samples for the VA MVP. This program is likely to continue for many years because the VA just doubled the number of veterans it wants to enroll, West added.
He also noted that the company is establishing operations in China. In January, before the pandemic began, company management went to China to start the process of establishing offices there.
The company's net loss for Q1 widened to $9.1 million from $5.7 million a year earlier. But its loss per share narrowed to $.29, calculated on 31.3 million weighted average shares outstanding, compared to a net loss of $1.84 per share, calculated on 3.1 million weighted average shares outstanding, in Q1 2019. Analysts had expected a loss per share of $.25 for Q1.
The change in the number of weighted average shares outstanding was a result of the company filing its initial public offering in June 2019. The IPO of more than 9.1 million shares netted Personalis approximately $140.8 million.
Personalis' Q1 R&D costs rose 23 percent to $6.4 million from $5.2 million a year earlier, while its SG&A expenses rose 74 percent to $7.3 million from $4.2 million.
The company ended the quarter with cash and cash equivalents of $46.7 million, and short-term investments of $73.3 million.
Due to uncertainty surrounding the COVID-19 pandemic, Personalis withdrew its 2020 guidance when it reported Q4 and FY2019 earnings in March, and said it would provide an updated outlook for 2020 during its first quarter earnings announcement. However, the company once again decided not to provide guidance, and said it will give an update during its second quarter earnings announcement, to the extent practicable, based on available information at that time.
On the call, West noted that the company is continuing the development of its liquid biopsy product line. The first product in that line is an exome-scale test that will be able to track the evolution of thousands of mutations in a single tumor, and is expected to be capable of detecting new mutations as they emerge under therapeutic pressure. Personalis still plans to launch it this year, West said.
The company's shares rose a fraction of a percent to $10.37 in Friday morning trading on the Nasdaq.