NEW YORK – Personalis reported after the close of the market on Wednesday that its fourth quarter revenues rose 38 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 Dec. 31, the cancer genomics company reported revenues of $18.2 million, up from $13.2 million a year earlier, and beating the average Wall Street estimate of $17.8 million.
In the fourth quarter, the VA MVP accounted for $13.8 million, or 76 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 $6.1 million of its revenues come from the VA MVP and $7.0 million from all other customers.
"We are encouraged by the customer adoption and ramp of new orders for our NeXT platform, with orders exceeding revenues once again this quarter," Personalis CEO John West said in a statement about the company's platform, which enables analysis of both a tumor and its microenvironment from a single sample. "With the recent uptick in orders, as well as our broadening product offerings, which now include diagnostic capabilities, and with our liquid biopsy to be launched with customers this year, we expect revenues from biopharmaceutical customers to grow increasingly through the latter half of 2020."
The company said that 19 customers placed orders for NeXT in 2019, nine of them during Q4. Personalis also launched its NeXT Dx test in 2019 — a genomic cancer profiling test, which may help provide advanced composite biomarkers for cancer treatment — for biopharmaceutical customers to utilize in clinical trials.
On a conference call with analysts following the release of the earnings, West said the biopharma business is a clear long-term opportunity for Personalis. In Q4, new orders from biopharma customers significantly exceeded biopharma revenues, continuing a trend from Q3, he noted, adding that the trend is also continuing into Q1. He said that while some of that business is due to one large order from a customer that is not expected to repeat, additional customers have also been placing orders, and the company is confident in future growth from this revenue stream.
He further noted that Personalis' experience in the VA MVP can position the company to do work in other large sequencing programs, representing other possible long-term growth opportunities, and that the company is looking to capture opportunities outside of cancer, such as in inflammatory disease research.
The company's net loss for Q4 widened to $6.6 million from $3.6 million a year earlier. But its loss per share narrowed to $.21, calculated on 31.2 million weighted average shares outstanding, compared to a net loss of $1.16 per share, calculated on 3.1 million weighted average shares outstanding, in Q4 2018. Analysts had expected a loss per share of $.25 for Q4.
Personalis' Q4 R&D costs rose 72 percent to $7.4 million from $4.3 million a year earlier, while its SG&A expenses rose 73 percent to $6.4 million from $3.7 million.
For full-year 2019, the company's revenues rose 73 percent to $65.2 million from $37.8 million in 2018. Analysts had expected revenues of $64.8 million for the year.
In 2019, the VA MVP accounted for $43.5 million, or 67 percent, of revenues and the remaining $21.7 million came from biopharmaceutical and other customers. The previous year, Personalis had realized $18.6 million in revenues from the VA MVP and $19.2 million from all other customers.
The company's net loss for 2019 widened to $25.1 million from $19.9 million a year earlier. But its loss per share narrowed to $1.39, calculated on 18.0 million weighted average shares outstanding, compared to a net loss of $6.49 per share, calculated on 3.1 million weighted average shares outstanding in 2018. Analysts had expected a loss per share of $1.01 for 2019.
Personalis' 2019 R&D costs rose 57 percent to $22.4 million from $14.3 million a year earlier, while its SG&A expenses rose 96 percent to $22.1 million from $11.3 million.
The company ended the year with cash and cash equivalents of $55.0 million.
Due to uncertainty surrounding the COVID-19 pandemic, Personalis withdrew its previous 2020 guidance and said it would provide an updated outlook for 2020 during its first quarter earnings announcement and press release, based on information available at that time.
On the conference call, West said that the shelter-in-place order instituted by the city of San Francisco on March 16 meant that most of Personalis' employees have had to work from home. The company has seen a slowdown from both customers and suppliers that it has not yet had a chance to quantify. West also said that the firm can't be sure how long the slowdown will last. He noted that Personalis may not be able to maintain adequate staff on site to process customer samples, and does expect a short- and medium-term impact of undetermined size to its business because of the pandemic.
But although Personalis is acknowledging the disruption, it is also focusing on what it can control, West added, namely increasing the adoption of its platform and servicing its customers. The cash the company has on hand puts it in a position of strength, he said, and it will update investors on the impact of the COVID-19 pandemic on its business as that impact becomes more quantifiable.
The company's shares rose 14 percent to $7.98 in Wednesday after-hours trading on the Nasdaq.