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Personalis Q3 Revenues Up 47 Percent

NEW YORK – Genomic sequencing firm Personalis reported after the close of the market on Wednesday that its third quarter revenues were up 47 percent year over year, driven by a single sequencing contract.

In its second earnings report after going public in June, the company said it recorded total revenues of $17.2 million compared to $11.7 million in Q3 2018, beating Wall Street analysts' consensus estimate of $15.8 million.

According to Personalis, its ongoing contract with the US Department of Veterans Affairs was the main driver for this quarterly growth.

In Q3 2019 the Million Veteran Program accounted for $12.9 million, or 75 percent, of the company’s revenues, with the remaining $4.3 million coming from pharmaceutical, biotech, and other customers.

For its ongoing MVP work, Personalis received a new $38.1 million task order from the VA during the quarter, increasing its unfulfilled orders with the VA MVP to approximately $82.5 million and "cumulative orders received to date … to approximately $145 million," CEO John West said in a statement.

According to the company, Q3 also saw the genesis of significant new customer and partner relationships, including agreements with Invectys and the University of New Mexico.

West added that existing biopharma customers and prospective new customers have been giving "resoundingly positive" feedback on the firm’s recently released ImmunoID NeXT platform. "We continue to anticipate ramping revenue volume of the NeXT platform increasingly throughout 2020," he said.

In a call with investors to discuss the quarterly results, West said that despite this growing excitement, Personalis did see a decline in its biopharma revenues sequentially from Q2. He and other executives argued that this reflects "choppiness" or "lumpiness" in sample processing inherent to the genomics research space, where the nature of retrospective studies leads to surges and lulls in sequencing.

For example, revenue from the firm's number one biopharma partner, Pfizer, dropped from making up 23 percent of the company's overall revenue in Q2 to just 11 percent in Q3.

According to West, Personalis is currently in discussion with four new potential large pharma customers, and the firm is confident that diversification of its customer base will reduce this choppiness over time.

Although this is unlikely to become a significant driver of revenue in the near term, West also highlighted Personalis' launch yesterday of a cancer whole-genome sequencing service, which he said was prompted, at least in part, by outside interest.

"We thought this was further in the future," he said during the call.  "But [we've found] that customers are out there that want to develop datasets with a long future ahead of them.

"We don’t want to set any great expectations," West added, but interest in whole-genome services does appear to be emerging sooner than the company might have initially expected.

Personalis' net loss for the quarter was $6.9 million, or $.22 per share, compared with $3.6 million, or $1.19 per share in the same period last year. Analysts, on average, had expected a loss of $.25 per share.

The company's R&D expenses were $5.3 million, up 47 percent from $3.6 million in the same quarter last year. Its SG&A spending more than doubled, to $6.1 million from $2.7 million in Q3 2018.

As of June 30, 2019, Personalis had $87 million in cash and cash equivalents and $40.3 million in short-term investments.

The firm updated its full year 2019 guidance to project revenues between $64.5 million to $65.0 million.

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