NEW YORK – Cancer sequencing firm Personalis reported after the close of the market on Tuesday that its second quarter 2019 revenues were up 80 percent year over year.
In its first quarterly earnings report after closing a $140 million initial public offering in June, the company recorded total revenues of $15.8 million compared to $8.8 million in Q2 2018, beating analysts' consensus estimate of $14.9 million.
According to Personalis, the year-over-year growth was driven by an increase in volume for testing and analytical services across its customer base, which includes pharmaceutical and biotech firms, universities, and research laboratory customers, as well as the US Department of Veterans Affairs' Million Veteran Program.
The ongoing VA project accounted for 54 percent of the company's revenues in Q2, while the remaining 46 percent came primarily from pharmaceutical and biotech customers.
Personalis CEO John West said in a statement that with the proceeds of its June IPO, the company is now "driving the build out" of its commercial infrastructure and accelerating new product programs.
The firm also plans to bolster operation capacities and infrastructure to scale to what it estimates is an approximately "$5 billion total addressable market for comprehensive tissue and liquid biopsy testing."
On a call discussing the firm's results, West said that Personalis expects the MVP project to continue to be its largest customer for the next few years.
"Our … work with them allows us to continue to operate with considerable scale and positions us for the day when whole-genome sequencing becomes the standard in cancer," he said.
That doesn't mean there won't also be growth in biopharma sales, he added. Personalis expects relative contributions from the two segments to vary over time. But considering a current backlog of MVP samples and a need for accelerated data delivery, the VA should continue to hold a substantial proportion of the company's capacity, at least for the next few quarters.
Personalis' net loss for the quarter was $5.9 million, or $.89 per share, compared with $7.3 million, or $2.39 per share in the same period last year. Analysts had predicted a lower net loss per share of $.30.
The company's R&D expenses were $4.5 million in Q2 2019, up 29 percent from $3.5 million in the same quarter last year. It's SG&A spending more than doubled to $5.5 million from $2.6 million in Q2 2018.
West highlighted Personalis' planned launch this year of a diagnostic version of its recently launched ImmunoID NeXT platform for use in clinical trials, as well as the exome-wide liquid biopsy assay the company has said it will release in 2020.
According to West, as Personalis has been working to increase its capacity and to innovate these new products, it has also tried to drive greater operational efficiency.
"We saw quarter-over-quarter improvement in gross margins, which is beginning to reflect some of these efforts, but note that we are currently focused on top-line growth and building out capacity," he said during the call.
As of June 30, 2019, Personalis had $163.3 million in cash and cash equivalents. The company received net proceeds of $140.0 million in its IPO, and issued 9.1 million shares of common stock.
The firm said it expects full-year 2019 revenues to be in the range of $60 million to $62 million, representing between 59 percent and 64 percent growth over full-year 2018.
In morning trading on the Nasdaq the company's shares were down 10 percent at $17.76.