Q1 2025 Personalis Inc Earnings Call

Speaker Change: Greetings. Welcome to the Personalis' first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference.

Speaker Change: Please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the call over to Caroline Corner, please go ahead.

Caroline Corner: Thank you, operator. Welcome to Personalis' first quarter, 2025 earning call. Joining today's call are Chris Hall, Chief Executive Officer and President, Aaron Tachibana, Chief Financial and Chief Operating Officer, and Rich Chen, Chief Medical Officer, and EVP R&D.

Cass Runway, in liquidity position.

Revenue Expectations and Timing, Reimbursement Goals.

Caroline Corner: Size and booking of orders, product services, technology, expansion of clinical volume, future publications, the outcome and timing of reimbursement decisions, expectations for existing and future collaboration activities, cost expectations, market size and our market opportunity and business outlook.

Caroline Corner: These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

Caroline Corner: Our press release of the first quarter 2025 results is available on our website, www.personalis.com under the Investors section and includes additional details about our financial results.

Caroline Corner: Our website also has our latest SEC filings, which we encourage you to review. A recording of today's call will be available on our website by 5pm Pacific Time today. Now I'd like to turn the call over to Chris for his comments on our first quarter.

Chris: Thank you, Caroline. Good afternoon, everyone, and thank you for joining us today. We had a great first quarter here at Personalis, and I'm excited to update you on our progress. We achieved revenues of over 20 million dollars this quarter and also delivered over 2000 molecular tests.

Chris: I can't express how proud I am of the entire personalist team for hitting those milestone numbers. I'm thrilled with our progress and the whole organization is geared up to win an MRD. Let me back up a bit for those of you new to our story to explain what we're doing to improve outcomes for patient cancer patients.

Chris: Personalis is a leader in the fast-growing MRD, or a minimal residual disease testing market, which uses a blood draw instead of imaging or invasive biopsies to monitor therapy effectiveness and detect cancer recurrents.

Chris: The MRD market is expected to mature into a $20 billion market, and with our ultra-sensitive MRD test next personal, we believe personalis is positioned for success.

Chris: Our technology is able to detect cancer when there's only about one fragment of tumor DNA circulating in a million DNA fragments and blood.

Our Tumor Profiling Platforms and Test are cutting edge.

Chris: We're able to see more with high sensitivity and as a consequence, our platforms and tests are used by many of the world's top biopharmate companies to improve clinical trial results, personalized treatment, and power a new generation of therapies.

Chris: We're pushing hard this year on our winning MRD strategy and our first quarter continued the strong momentum established in 2024. Our revenue was $20.6 million in the first quarter and resulted from solid progress across all three sectors of our business.

Chris: Our biofarmer revenue grew to 13.6 million driven by strong growth in the use of next personal. Our enterprise and VA revenues were also robust, and our clinical diagnostic business had at highest quarterly revenue today.

Chris: Art Cash and Cash Equivalence at the end of the quarter are $185.7 million, which gives us a comfortable runway to drive our growth objectives.

Chris: We are reiterating our guidance of 80-90 million in revenue for 2025, 30-40% quarter-over-quarter growth in molecular results, and achievement of reimbursement at least two indications in 2025.

Chris: Now, let's dive into the business by outlining progress metrics key to our winning MRD strategy.

Chris: First is clinical usage. We are making great strides in driving next personal into the nation's oncology community.

Chris: We're following a unique partner-centric strategy to commercialize next-personal by working with Tempest, one of the country's leading labs, leveraging their approximately 200-person sales force to bring our assay to market.

Chris: We delivered 2,184 molecular tests this past quarter, which is an increase of 52% compared with 1,441 molecular tests delivered in the first quarter of last year.

Chris: Now, to underscore this progress further, we've grown our molecular test usage approximately 650% over Q1 of 2024. We believe this performance is very encouraging evidence that our win in MRD strategy is working.

Chris: As physicians order the test on patients and use the results to direct patient care, feedback has been positive and retention is high. Approximately 40% of our MRD positive results are in the ultra-sensitive range.

Chris: and our physicians are telling us this is an important differentiator. This allows for a leap forward in earlier detection of cancer recurrence, more discrimination in monitoring therapy, and importantly, the ability to have more confidence and a negative MRD result.

Chris: We believe that our winning MRD strategy will be powered by combining better data with a strong experience and we're spending time in this phase of our winning MRD strategy on being best in class in terms of customer care and a robust experience.

Chris: Our early evidence generation is focused on three indications, breast cancer, lung cancer and Iotherapy monitoring. We previously summarized the findings from investigators at Royal Marston for breast cancer, VHIO for Iotherapy monitoring and tracer X for lung cancer.

Chris: These three indications and their results are powered three different Medicare submissions.

Chris: In March, the Royal Margin paper was published and we submitted to Medicare for breast cancer reimbursement. When the VHIO and Tracer X papers are accepted for publication, we plan to submit for Medicare for reimbursement for immunotherapy monitoring and lung cancer respectively.

Chris: We continue to be confident that we will achieve reimbursement at least two of the indications in 2025 and I look forward to updating you as the year progresses.

Chris: We were excited this quarter to unveil our first data in colorectal cancer or CRC. Now this indication is important within the oncology community as a lion share of MRD clinical data and significant reimbursement to date has been developed in this indication.

Chris: Our work is in response to feedback from physicians that there is an unmet need for a more sensitive approach in CRC. Now what that means is that doctors want to identify more patients right after surgery that are going to recur because that is a critical time to make treatment decisions.

Chris: They also want a test that can spot the cancer, even when it occurs in a distant organ, such as the lung. And lastly, they tell us they want to be more confident in a negative MRD result.

Chris: At the AECR meeting this past week in Chicago, our collaborators at British Columbia Cancer showed early analysis from a prospective study called Victory.

Chris: The BC Cancer data set presented, included 71 patients with a median follow-up of 15 months and showed next personal was able to detect 100% of recurrences prior to imaging.

Chris: Importantly, 87% of the cancer relapses were detected in the early landmark window of two to eight weeks post-surgery with the majority of those detections in the ultra-sensitive range.

Chris: The We Unlock with our assay. Additionally, 100% of metastatic relapses were detected by the assay, including all distant lung metastasis. The improved performance from our approach, we believe, could enable a better way to manage CRC patients in the future.

Speaker Change: Now during the last call, I discussed how a physician using next person was able to spot a recurrence of breast cancer and their patient was able to access therapy ahead of imaging and the impact this had on the patient's life.

Speaker Change: Today I'd like to spotlight a patient that has stage 3 colorectal cancer that was diagnosed last summer.

Speaker Change: His physician treated him with neoagement chemotherapy and then surgically removed the tumor. At that point, the physician had the option to either observe or treat the patient with hajetment chemotherapy based on clinical guidelines.

Speaker Change: To help make that decision, the oncologist ordered an ex-personal test approximately four weeks after surgery.

Speaker Change: The test was positive, and it was in the ultra-sensitive range, which suggested the patient was at a high cancer recurrence risk prompting the physician to immediately start azurement chemotherapy for the patient. The physician then used the next personal test to monitor response to therapy.

Speaker Change: Reassuringly, subsequent tests showed clearance of circulating tumor DNA after starting chemotherapy, suggesting a good response to treatment for the patient.

Speaker Change: Bits and examples like this, where ultra-sensitive tests can positively impact a patient's journey that motivates our work.

Speaker Change: Now, while the CRC data is preliminary, the results are encouraging and put us on a path to potentially submit for publication over the next year.

Speaker Change: Working to mature the data, we'll begin our drive towards reimbursement for our fourth indication and we expect success in the large CRC market to be a significant driver of revenue in the next few years.

Speaker Change: As a reminder, we expect our collaborators within our first three indications, breast, lung and Iotherapy monitoring, to be presenting results in future conferences and these studies to continue to fuel a robust publication's roadmap.

and Breast Cancer. We're working with Vanderbilt. [inaudible]

John Hopkins, and other institutions on the predict study.

Speaker Change: which is an approximately 180 patient study in early triple negative breast cancer and her two positive breast cancer. And we have an ongoing perspective study called B-Stronger One and triple negative breast cancer that's now enrolled approximately 100 patients from approximately 30 sites.

Speaker Change: We also have ongoing studies with Dana Farber on her two positive patients, the Institute Carey on an approximately 100 patient early stage, triple negative breast cancer, and with MD Anderson.

Speaker Change: In IO therapy monitoring, we're working with UKE at two different melanoma studies with Duke and a study of gastric cancer patients and with UCSD and a pan cancer IO therapy study across a different cancer type.

Speaker Change: In early stage lung cancer, we're continuing our work with the Tracer X team and we're pushing forward on an additional study called Darwin II.

Speaker Change: As the data from these studies begin to enter the public domain, we expect it to highlight the importance of our ultra-sensitive approach to detecting CT, DNA and allow physicians to better manage entry patients with cancer.

Speaker Change: The third area we are tracking is progress with our biopharmac customers.

Speaker Change: The ultra-sensitive approach we are pioneering provides biopharmac customers the ability to accelerate clinical trials with greater accuracy and can translate to significant savings for our biopharmac customers by getting answers sooner.

Speaker Change: The past quarter are revenue from this segment with 13.6 million. This was 39% growth over the first quarter of 2024 and is driven by increasing adoption of our MRD platform both by existing and new biopharmac customers.

Speaker Change: We saw Record Revenue in MRD and we are tracking to generate year-over-year growth of 300-400% in MRD revenue from BioFarma customers.

Speaker Change: Importantly, we've landed two large additional customers and expressed each of them to generate annual revenue and the $5 million range this year. Those wins are attributed to the decision by those clients to adopt next personal.

Speaker Change: Our second platform, AminoID Next, remains the platform of choice for biopharma companies developing immunotherapies and is also utilized by Moderna in its individualized neo-antigen therapy programs.

Speaker Change: Market demand from UNO ID remains strong, and we continue efforts to broaden our tumor-profiling product portfolio with new versions, developed to capture additional business from BioFarma that have grown to trust personnel as a partner.

Speaker Change: The year is off to a strong start at Personalis and we are laser focused on our strategy to win an MRD.

Speaker Change: Our employees, collaborators and partners are working hard to improve the journey for cancer patients with an ultra-sensitive MRD approach, and in the process we're creating a special company.

Speaker Change: We're grateful for all of our investors that are part of our journey to pioneer this ultra sensitive MRD testing market.

Speaker Change: We're running fast towards multiple milestones in 2025 and it's shaping up to be a significant year for the company as we execute on our growth drivers and most importantly a significant year for patients with cancer as we redefine the way cancer is managed.

Speaker Change: With that, I will now turn it over to Aaron to review our financial results.

Aaron: Thank you, Chris. I will discuss our first quarter of 2025 results and then cover our guidance for the second quarter and the full year.

Aaron: Total company revenue for the first quarter of 2025 was 20.6 million representing a 6% increase compared with 19.5 million for the same period of the prior year.

Aaron: The increase in revenue was driven by higher volume from biofarmacustomers and the VAMVP, which more than offset the expected decline in enterprise sales from Metara.

Aaron: Biopharma Revenue was 13.6 million in the first quarter, representing a 39% increase compared with 9.8 million for the same period of the prior year.

Aaron: The Accelerated Growth from BioFarma was due to the adoption and ramp up of next personal with several customers and the higher volume for ImmunoID next, which is used for Moderna and other BioFarma customers.

Aaron: An important note about next personal tests sold to biopharmac customers is that we get paid for all tests delivered since we are not subject to reimbursement from insurance companies like with our clinical business.

Aaron: You're tracking well to deliver year-over-year bioformer growth of 24% at the midpoint of our bioformer estimate, despite the headwinds from the DERNA revenue declining year-over-year.

Aaron: In addition, we recognize 0.3 million of revenue from our clinical tests, next DX and next personal.

Aaron: Ross Margin was 35% in the first quarter compared to 28.1% of the same period of the prior year.

Aaron: The year-over-year increase of 690 basis points was primarily due to favorable customer

Aaron: In the first quarter, we saw an impact of approximately 8 percentage points to our gross margin due to unreimbursed clinical test costs.

Aaron: Excluding those costs, Gross Margin would have been approximately 43% and highlights our ability to expand margins further once we obtained reimbursement coverage and achieve scale.

Aaron: Operating expenses were 24.9 million in the first quarter compared to 24.4 million for the same period of the prior year. Most of the year over your increase was attributed to selling expenses related to our clinical test volume group.

Aaron: The first quarter R&D expense was 12.6 million compared to 12.8 million for the same period of the prior year. And SGNA expense was 12.3 million compared with 11.6 million for the same period of the prior year.

Aaron: Netloss for the first quarter was $15.8 million compared with $13 million for the same period of the prior year. The prior year's netloss included a $4.6 million

Aaron: Excluding the non-cash game, the prior year net loss would have been 17.6 million for comparative purposes.

Now on to the balance sheet.

Aaron: We finished the first quarter with a strong balance sheet with cash and total term investments of 185.7 million.

Aaron: During the quarter, we raised approximately 17.8 million net of fees selling comments stock at an average price of $5.89 using our at-the-market offering or ATM that is in place.

The cash usage for the first quarter was 20.5 million.

Aaron: We continue to operate cost-effectively and as mentioned during our last conference call.

Aaron: We expect cash usage for the full year of 2025 to increase by approximately 30 million compared with the amount used in 2024.

Aaron: Primarily to investing clinical test volumes in advance of reimbursement, expanding clinical evidence for next personal by conducting new studies, and adding to our clinical sales team.

Aaron: We expect these investments to help drive next personal revenue growth post-reinbursement later this year and into 2026.

Now I'd like to turn the guidance.

Aaron: For the second quarter of 2025, we expect total company revenue in the range of 19.5 to 20.5 million dollars.

Aaron: Levenu, from Pharma Test & Services, and all other customers in the range of 13-14 million.

Aaron: and revenue from population sequencing plus enterprise customers of approximately 6.5 million.

Aaron: and for the full year of 2025, our revenue guidance remains the same, and we expect total company revenue in the range of 80 to 90 million, this range encompasses the variability of reimbursement timing and prices.

Aaron: Revenue from Farmate Tests and Services and all other customers in the range of 62-64 million. Population sequencing puts enterprise customers in the range of 15-16 million.

Aaron: Gross Margin in the range of 22% to 24%, which increased from our prior range of 21% to 23%

Aaron: Our gross margin guidance for the full year is expected to be lower than the 32% for the full year of 2024 due to the impact of investing in clinical test volume ahead of reimbursement.

Aaron: Net loss of approximately 83 million, which decreased from 85 million last quarter and includes approximately 20 million dollars of unreinverse test costs.

Aaron: and Cass usage of approximately 75 million, which decreased from the prior range of 75 to 80 million.

Aaron: The majority of the increase in cash usage compared with the full year of 2024 is for investing in clinical test volume, clinical studies, and commercial capabilities for ramping up our clinical test volume before and after reimbursement.

Aaron: We look forward to updating you on our progress during the next conference call in a few months. And with that, I will turn the call back over to the operator to begin the Q&A session.

Operator

Speaker Change: Thank you. We will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participating, speak your equipment and may be necessary to pick up your handset before pressing the star keys.

Speaker Change: First question, Thomas Flaten, with Lake Street Capital, please go ahead.

Speaker Change: Hey, good afternoon, guys. Thanks for taking the questions. Hey, Chris, assuming the breast cancer reimbursement comes through this year, will you, and if so, how steer the commercial organization towards breast cancer patients in order to maximize the reimbursable volume that you do?

Yeah, thanks. Great. Great job.

Speaker Change: Good question. Good to hear from you. Yes, we've already focused our efforts right now on breast cancer.

Speaker Change: Long Cancer, and IO therapy monitor. And in particular, Preston Long with our own field force, we focused on that. And that's we've accomplished that by pushing into doctors that we think through targeting efforts, tend to, you know.

Speaker Change: Focus more on breast cancer patients, oncologists tend to treat a little bit of both, but there's certainly some concentrations.

And we've already started that effort [inaudible]

Speaker Change: When we've got clear line of sight for reimbursement, we've always said.

that we plan to go faster, we plan to

Speaker Change: Both added more reps ourselves and we expect tempest to go faster, but we're targeting into that group of physicians now and I've been doing that and doing the same with lung cancer ever since we started the journey and started with those indications.

Speaker Change: And anything you can share with respect to the doctors that have been ordering of the 2100 that you did this past quarter, how many of those were from doctors that have previously used it? Is it all new docs? Just any kind of color on the docs would be great.

Speaker Change: I've been surprised once we get people going and we get them going and asking if they've been staying with us, which is great.

Speaker Change: We've seen really great top-line growth and we're not breaking out quarter-over-quarter [inaudible]

Speaker Change: New and current physicians, etc. But we've got several hundred physicians now, we're great. That's been a mix of new and recurring.

Speaker Change: You know, clearly in a high growth phase where especially tempuses, field forces out calling on and talking to physicians, that's driving top-line growth in terms of new physicians.

Ah, but, uh...

Speaker Change: You know, a large number of subsequent samples that start to come in, too, from patients.

Speaker Change: So the Reorders is time passes and positions are checking patients

Speaker Change: Start to click in and we've been really pleased with the progress on that also. And then the last leg of our strategy, you know, we're we're selling ourselves Thomas. We integrate the CGP test into the next.

Speaker Change: And we've been really, really gratified that in more cases than not, well over 50% of the new orders that we get have the CGP appended to them, which means that the physician is choosing to get the entire baseline suite of products.

Speaker Change: on a cancer patient for personnel, both baselining the MRT and the level of cancer in the blood with the ultra-sensitive test, but also baselining the...

Speaker Change: The genomic profile to be able to pick the therapy from the patient. So we feel like it's strategy is working the way we expect it to.

Thanks, appreciate the color. Thanks, guys.

Au revoir.

Next question, Bill Bonolo with Craig Allen, please go ahead.

Bill Bonolo: Hey guys, congratulations on a good quarter. A couple of follow-up questions if I can. The first I guess just to continue on the theme of the strong sequential growth in the MRD volumes.

Bill Bonolo: Can you give us, I know this is highly subjective, but can you give us some sense of...

Speaker Change: sort of, I don't know how you want to think about it, but what gear you're driving in maybe, I mean, we're seeing really big growth, but I have to imagine without reimbursement, neither you nor tempas are just sort of

Speaker Change: Pedal of the Medal, trying to get new customers and what not. So how do we kind of think about, you know, the growth in the marketing efforts today compared to what they might look like post-grey embersment?

Speaker Change: Yeah, I mean, I think we were meanering it though, so we could certainly push faster with Tempest, and the biggest lever we have is to put more people on the street ourselves. We currently have the same number of reps that we had as we started the fourth quarter, which I actually maybe even as we started the third quarter, which is just

Speaker Change: and the lever to go significantly faster is to deploy more reps out, but we're metering that right now. We had originally set 30 to 40%, that's how we targeted this.

Speaker Change: when we're ready to do that. But we're being careful. I mean, it's always a dance in this business of how fast.

Speaker Change: Do you run to build the run rate high so that when it flips to reimbursement, you're starting to flip nice revenue growth versus, you know, taking the growth margin hit early in the business too and so we're trying to walk that tightrope

Speaker Change: And then maybe just to get a sense with, you know, how aggressive Tempest is being. I mean, if we think of the volume is, I mean, is most of that being generated by your three to four reps, is it kind of 50-50? How would we think about that?

Speaker Change: Yeah, so this is Aaron Bell. Thanks for the question. So in terms of the volume that's coming in the way to think about it. So Chris mentioned that our field Salesforce remains pretty flat with just a handful of reps.

Speaker Change: So what we're seeing is maybe we're not growing new doctors as much, right? It is growing but not as much as what we're going to see on the

Speaker Change: Accelerated, right? Meaning there's a lot of use going forward from the subsequent standpoint.

Speaker Change: On the Tempest side, Tempest is starting to go faster and faster because we're headed toward reimbursement, obviously. And what we're seeing there, they are accelerating and bringing in new

Speaker Change: The time point or the subsequent growing as well. So we're really really pleased with how the volume is shaping up.

Speaker Change: and, you know, like, with Chrisette, we don't have reimbursement just yet, so we're metering it to a certain level, but we can go faster if we wanted to. I'm an underlying two-mill, we're also, you know, working collaboratively in places where we can, so, you know, there isn't like a spine line.

Speaker Change: between what we're doing and what they're doing, but where we can help out, we do try to make sure the physician gets, you know, gets...

Good, you know, good.

Speaker Change: Disconnected into the system and using the test, and certainly there are some cases where it will self-position and it may be better to be managed.

Speaker Change: to be managed through the Tempest Architecture. So that's whatever works well for the customer because you remember they have all the M.R. linkages and all they have all that built as an early company. We haven't built all that out. So we're really just doing whatever makes sense for physicians and for the experience set as well.

Speaker Change: Sure. Okay, I'll hop back in the queue. Thanks so much.

No table, thanks a lot, though.

Mike Matheson: Next question, like Mattson, would need him in company, please go ahead

Hi guys, it's Joseph Con for Mike.

Speaker Change: I guess just maybe on the victory data, you know, it's really great to see that, it's super strong data. I just a couple of questions around that. I guess the first one just with maybe 10 bits and then...

Speaker Change: with your own sales force. I know it's a small amount of data and you guys are looking to expand on that, but is this another indication that you're wanting tempos to start marketing for? And then specifically with the data.

Speaker Change: was wondering if you could maybe dissect some of, I guess like the patient demographics in the study in the sense of, you know, cancer staging. I'm just trying to understand a little bit more how this compares with, you know, your competitors.

and then, you know, I get maybe also just…

Speaker Change: If you could compare, if you have any data on, you know, this high detection in the early landmark window, maybe how that compares to your competitors or what you're hearing from docs in that regard. Thanks.

Absolutely.

Rich: So I'll start with the first part of the question and Ritz can jump in, Riches.

Rich: is with us on this college usual. So yeah, I mean this was this was the beginning of the journey on our fourth indication. We think this was is a big one. It's where lion share of the early evidence in the MRD usage has been developed and reimbursement is stronger and we think the data.

looks really good and it's...

Rich: We have incremental value to add, and so we're off and running. Now this is early, so it's going to take some time for the data mature and then it's going to have to go through the publication and then we'll submit, so it's going to take some time for all this to stitch together.

Rich: But, you know, as we go along and we're in this for the long haul.

Rich: You know, we expect this to be a nice, nice driver over time. Right now as a reminder, the

Rich: That's where we are with them from an exclusive standpoint. Chris, you want to talk about the data and to answer those questions?

Rich: Yeah, no, it's a great question. And yeah, we're very pleased with the interim results of this prospective study, highly encouraging in colorectal cancer. These are patients that were stage one through four, receptable colorectal cancer.

Rich: Penso, you know, is a really nice cross section of colorectal cancer across all the different stages.

Rich: and as you noted, we're very pleased to see really, really high landmark sensitivity to date in this cohort, you know, 87%.

Rich: We're detected, of recurrences, we're detected in that two to eight week window, which is really nice to see. In comparison, very favorably to what others have reported for landmark. And then the other thing is we detected all the patients.

Rich: that recurred prior to imaging. So, 100% of those patients to date have been detected, and that's also very, very encouraging.

Rich: because you know, others have demonstrated that, you know, detecting the metastasis, metastatic colorectal can be challenging at times and we were able to detect, you know, all the recurrences including the metastasis.

Rich: in this study. So, all in all, we were happy we're going to see those results, and we're looking forward to kind of further readouts on this cohort.

Speaker Change: Ok, great, that's helpful. Yeah, it was really nice, Daniel. Maybe just a quick one.

on next personal, again.

Speaker Change: So, just trying to understand ADLT status, I was wondering if you guys just had an update on your expectation for that, but more specifically just so I can understand, you know, how award and award goes about this.

Speaker Change: Would it apply to any indication that, you know, currently has CMS reimbursement or, you know, reimbursement that CMS is a worry if you guys, or does it need to be applied for each indication?

Yeah, so I mean, I think-

Speaker Change: I think the process is you don't apply or engage with ADLT status until after you've got reimbursement, so that's...

Speaker Change: That's the way to think about it, but no update there. We told investors consistently and will still reiterate that we build our economic models as soon as we get.

Speaker Change: We're able to get reimbursement that's consistent with what?

Speaker Change: is in the marketplace. We think there's a couple dots shots on goal, one of which is that a whole genome sequencing with 1800 variants is a way more sophisticated and resource intensive assay than anything CMS is priced for. So we think that that's one way reimbursement could be higher and we believe that's easier shot at goal, we have the best chance.

and the secondarily, we think that we're offering something new.

Speaker Change: Deacon Differentiated, and potentially can qualify for ADLT status. Both of those are upside. We built the model to thrive if we do not achieve either one of those two drivers.

Speaker Change: Arcaugues are about 40% of the reimbursement, which we think is...

Speaker Change: It puts us in a 60% growth margin, and then we've been able to secure with tempest sales of marketing costs down in the 2025% range, and so we think we've got this set up to be really economically.

Thank you.

Speaker Change: Compaling for investors, even if the reimbursement is based on what had been priced before, with a couple of shots on goal but because...

Speaker Change: because always I think in this business you want the model to work, assuming the worst case reimbursement, and then anything above it is gravy, you don't want the model to only work.

F.

if you get the best case.

Christopher Hall: and that's the way we've attacked it, and that's the way we've told people to build their models.

Ok, perfect, congrats on the strong core you guys.

Thanks for those who shared it.

Mark Massaro, with BTIG. Please proceed.

Christopher Hall: Thanks for visiting on from Mark. Thanks for taking the questions. Maybe just one quick one on the model. Were there any one-timers in the quarter just as-

Christopher Hall: Zero Decision, not to raise the full-year guidance. Is that just conservatism given that the range is a bit wider this year? And is there any seasonality dynamics to call out there? Thanks.

Aaron: Hi Vivian, this is Aaron. No, no, one-timers, so to speak, so in terms of what was in our guide of 17 to 18 million for Q1?

Aaron: Most of that beach was coming from Biopharma, Biopharma was 13.6 million, the guide there was 10 to 11 million.

Aaron: Incorporated in the guide. We did assume we were going to fulfill the BA contract, the 7.5 million that we had received in September of 2024. That's going to be fulfilled in the first two quarters of 2025. So other than that, there's no one-timers or anything of that nature.

We will call out to as we look forward.

Aaron: We are seeing that a lot of the government trade issues with tariffs and things, it is weighing on the pharmaceutical market, so we are seeing that a lot of our pharmaceutical partners and customers are, you know, starting to defer certain projects and...

Aaron: You know, even tighten things up or constrict the size of some of them and so...

Aaron: You know, we're seeing something in the range of $3 to $5 million out in time, you know, from an impact standpoint.

Aaron: We're not changing our guidance, our guidance is still 80 to 90 million dollars because we still have a very very large funnel that continues to build for next personal with biopharmacusters.

And so we're still executing well there.

Thanks for the color there.

Aaron: and then I know there's a prior question on BRC but maybe just ask a different way. Could you just discuss the need for a more sensitive MRD tech in BRC?

Aaron: I think in the past you discussed that next personal really shines in a lower burden cancers such as breast cancer, but can you just talk about how you feel you're differentiated there? Thanks.

Aaron: Yeah, yeah, happy to answer that and it's a great question, you know, in colorectal cancer, you know, our collaborators and I think other kales, the space have really identified.

No.

Aaron: that there's a need for sensitivity in that landmark window, and so landmark window is really the first, you know, two to eight weeks, two to ten weeks after surgery for colorectal cancer patients, and the reason that window is...

Aaron: So important is that that's a window when physicians are trying to make a decision about how to manage the patient and the patient's treatment.

Aaron: And so I think one of the key areas that we demonstrated really strong performance here, differentiative performance is our sensitivity in that landmark window between two and eight weeks.

Aaron: Where we show that we're able to at least to date detect 87% of the patients that eventually prefer in that very early window.

Aaron: The fact that we have a highly sensitive test. And so that's, I think, one way it, it's definitely

Aaron: The ultra-sensitivity matters. I think the other area is in the longitudinal sensitivity, so be able to pick up all the patients before they show up on imaging. As we have in this study, I think it's a...

Aaron: is an indicator of the fact that the sensitivity really does better there, especially in picking up some of the...

Aaron: Patience with distant metastasis, which hasn't been easy in the past, but so far we've been able to pick up all those patients as well, including lung metastasis. That's recognized to be an area where it can be challenging for CDDNA detection.

Yeah.

Aaron: I would just note that we started in the breast and long where the signal is the weakest and it's the one that we could shine the light on the brightest but what we really learned from that experience is the patience really also value.

You know, the having confidence in the negative MRT results.

Aaron: and having all this sensitivity is key to being able to do that.

Aaron: And so we've gotten really great feedback about that because when patients are getting tested, what they're ultimately hoping and praying for,

Aaron: is that they're cancer-free. Well, there's never guarantees in life, you know, the more sensitivity you have, the more assurance you can have than any single one of those results. It's solid, and we're seeing that, the data across all the cancers and indications that we're working.

Thank you so much for taking the question.

Next question, Dan Brennan with Cowwood, please go ahead.

Dan Brennan: Great. Thanks for the questions. Congrats. Congrats on the print. Maybe just the first one just on the mold express filing.

Remind us on the commercialization strategy. [inaudible]

Dan Brennan: Just first of all, for any feedback or any updated thoughts in terms of timing and then assuming you get a positive opinion, to what happened after that, like how quickly you're ready to go, how do we think about that commercialization push?

Yeah.

Dan Brennan: We will, we're not going to give any updates through the journey, just to be in a clearer, I mean, plus we see a reason.

Dan Brennan: We still feel confident. We're tracking ahead of schedule on our internal forecast and where we were. So we feel like we're a really good position to get two of the three that we're going for done this year and all the evidence internally.

Dan Brennan: is pointing us in that direction, so we're reiterating that and underlying our confidence on where we stand there. You know, once we get the positive decision, you remember that everything that we will have built...

Previous

Dan Brennan: To that, up until the point of the last submission, we'll be able to build, so we'll be a little bit of catch-up revenue that we'll be able to get. I think that's usually 60 days typically, from one response to the next response, it could be sooner and of course it could lag, but I think there's commitment time. We'll be able to build, we'll be able to build, we'll be able to build, we'll be able

is roughly 60 days. So there's always that. [inaudible]

Dan Brennan: That Running, and we'll be in a position once we get that.

Optus, Executin, and move faster.

Dan Brennan: move faster commercially and switch into a higher gear. But I think it's more than just breast, it's also getting breast.

Dan Brennan: You know, and another one or we're getting too, too going to really start to get critical mass. Right now we're seeing the cancers that we're seeing come in. I really scattered across those three indications and a pretty, three, three use cases, therapy monitoring, breast and IO in a pretty, well weighted way, and so we really want to. [inaudible]

Dan Brennan: We really want to really start to move into higher care, we want to get a couple of them in the review mirror, which is why that's been our goal this year.

Dan Brennan: Perfect Chris Tankson. Maybe just on some of the early feedback amongst the doctorate using the test. Just

Speaker Change: How are they using it? You know, obviously you've got the tarot on the market just wondering from the doctors are they using a complimentary, are they using it in place of just certain use cases maybe, I know it's still early, but just wondering kind of how the doctors are deciding to use your test.

Speaker Change: I think they use it. We're fine that they're using it in place. I don't think there's some complementary uses side by side, but in general, with other approaches, but in general, physicians create a baseline and probably stick with one.

Speaker Change: The parts per million was you received through therapy. Number one, number two, look for cancer, recurrence, post-treated, post-treatment, and especially, you know, right after a surgery in breast and in long. I think are the key keys cases that we're seeing.

Doing that, Richard, it's pretty much him

Speaker Change: and maybe just on Asco, I know you've got a couple of posters I think you guys have coming out of a couple of studies. Anything there to point to, just kind of walk us through expectations on, you know forthcoming data.

Speaker Change: Yeah, there's some oral presentations, maybe the one two, and also posters.

Speaker Change: Maybe the one to think note of is we have some new adjuvant breast cancer data that will be talked about with next personal at ASCO. So it's not too far away, so hopefully we'll be able to talk about it next time.

Speaker Change: That was really exciting when you just stepped back and you look at it all.

Speaker Change: that I, you know, because we've been at this now and doing these calls, is that the data, you know, when you get good results in one data said you feel good, but you hold your breath and you wait for the second one and you hope it holds.

Speaker Change: But now we just keep going, data set after data set after data set.

Speaker Change: We work with Bioforma and we see the results of those data sets and so as time goes on here, I think it's fair to say we're really building confidence in the performance of the SASA because it continues to perform well in indication use case and data set after data set and indication after indication [inaudible]

Speaker Change: and so we feel like we're really starting to pick up steam and adding value.

Terrific. Thank you.

Yuko Oku, with Morgan Stanley , please proceed.

Speaker Change: Do you think that this timing will be applicable across various tumor types or could it vary by cancer types?

Speaker Change: Yeah, thanks for your question. It will vary by cancer type. Cancer is shed at different rates and different cancer types, so you really have to look at each cancer type independently as you look at the data.

Speaker Change: Ok, that was helpful. And then I appreciate the color and strong traction you're seeing for next person all with pharma customers. Could you elaborate on the importance of pharma partnerships to demonstrate clinical utility for next person all in your development strategy? And also, would you remind me of some of the internal efforts underway?

Yeah, it's a week, you know.

Speaker Change: We've been used by most of the top biopharmate, you know.

Companies in the world.

for our next, uh, next Immuno ID platforms.

who was used to characterise. [inaudible]

Sam Paulson,

Speaker Change: and both those relationships. We've been leveraging those relationships with MRD. The use case that we're finding is valuable there. Among biopharma customers it's first and foremost to get an early answer quickly on a clinical trial. Next personal can help them fail a trial faster or celebrated trial.

Speaker Change: Trial Faster, and that translates into bottom line dollars quickly. Secondly, it's helping them sort the right patients into clinical trials.

That would be a sort of a prospective study and picking patients out of the pools that are unlikely to recur, I either...

Speaker Change: CTDNA negative, and they're likely to recur, will enrich the people and the clinical trial and optimize for success. That's the feedback that we've gotten, and we're working with many of the top people. Last year was really a year of pilots and tests.

Speaker Change: and then this year we're starting to see the acceleration of revenue. You see that this quarter in the numbers.

and we are…

We're working with many of, many of the-

Speaker Change: of the big companies now in the space to help them get to answer sooner with clinical trials or help them get to more efficacy. We've not been able to announce any big perspective studies.

with any biopharma companies to date.

Speaker Change: And, you know, we'll obviously keep you posted if we're able to do that and we'll make those announcements, but that's that's

Speaker Change: That's where we stand. I think it's part of the clinical evidence piece.

Speaker Change: You know, but I don't think it's the only piece. I think that we're working with collaborators, we're doing some perspective studies, a lot of retrospective studies.

Speaker Change: and you're starting to see that, you know, there's a whole new batch at Asco of studies. [inaudible]

Thank you.

Speaker Change: This year in an AACR with the Victory Studies, so we continue to work with ever increasing numbers of collaborators in studies and bio-farm ultimately be a piece of that, but it's not the main piece of our strategy.

Speaker Change: Got it. That was helpful color. And if I could squeeze one more in, one of the interesting points that I could do.

Speaker Change: Swanton Maid in his AACR presentation is that you can even stratify patients further according to their prognosis in three buckets using an ultra-sensitive assay. How valuable has that been for Biopharma?

Speaker Change: Yeah, I think, you know, well-former are really, really interested in that data because the patient's ratification obviously is a core piece of what they need to, you know, they want to use the assay for, so I'd say, you know...

Speaker Change: You know, the ability to understand which patients are most at risk and intermediate and less is an important part of that understanding for them. So yeah, it's definitely a great interest.

Marie, thank you.

Speaker Change: Next question, fly on Pocula Ramacov with HC Waitwright. Please go ahead.

Speaker Change: You know, at a high level with all sorts of changes going on, you know, in various regulatory agencies in the federal government, how confident are you, you know, in the process where you are?

Speaker Change: with them in terms of, you know, getting the reimbursement approval, you know, according to

Speaker Change: No, absolutely. So we actually don't submit to CMS officially. We submit to Paul Meadow, which is the Medicare contractor that is making the decisions for our Medicare area.

if you will, impromptu as a private company.

Let's stand up.

Speaker Change: It's got the contract to do this for CMS, and we haven't seen an impact, and I haven't heard of anyone in the industry.

Speaker Change: Having talked about an impact because of any of the changes in Washington on on the process there and you know they've been engaged I think certainly with us but with the industry as a whole is a part of the journey and so we don't expect anything.

Speaker Change: to be changing or putting any of our time lines at risk because the physical resolve of any of the changes in Washington relative to reimbursement.

That's helpful, okay.

Speaker Change: What else needs to get done so that you can get a point where you can develop this asset further and also look into it as an asset for reimbursement.

Speaker Change: Yeah, no, actually, so the assay is ready, it's done. The assay is, you know, pan-cancers all solid tumor assay.

and he does not depend on the type of cancer.

Speaker Change: So, you know, we create a personalized snapshot of a patient's tumor and the assay doesn't care what kind of tumor it is. So then the question has been, building evidence to show that we can add incremental value in individuals.

Thank you. Thank you.

Speaker Change: So, you know, if you got the test now and I talked in the script about it,

Speaker Change: A patient who actually a doctor sent us his sample and he was a colorectal cancer patient.

Speaker Change: Test Works really well, and we validated it that way. So we feel like the test is in good shape and is already being used for clinical use for CRC.

Speaker Change: and but we're just not obviously advocating or pushing it because we don't get paid. The next steps, the data is in term.

It still needs to be mature.

Speaker Change: that we presented, and that then needs to be, you know, needs to be finalized.

Speaker Change: It needs to be written into publication, it needs to be submitted, and then it needs to be, you know...

Speaker Change: But, you know, we're in this for the long term and, you know, having, continuing to mature and build the data and having a long tail of pipeline and increasing.

Speaker Change: Ability to attack markets, I think, is important and should give investors confidence that behind breast, long, and I.O. There's more stuff on its way, and that's why I'm one of the reasons why we're super excited about it.

Yes, yes. Thank you for taking my questions.

Ciao.

Speaker Change: Thank you. This concludes today's teleconference. You may disconnect your lives at this side. Goodbye. Goodbye. Thank you for your participation.