Personalis, Inc. (PSNL) Earnings Call Transcript & Summary

Greetings, and welcome to Personalis Clinical Update Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rich Chen, Chief Medical Officer and EVP of R&D. Thank you, Mr. Chen.

Good morning, everyone, and welcome to our webinar today. I'm Richard Chen, Chief Medical Officer and EVP of R&D of Personalis. Also here is our CEO, Chris Hall; and our CFO, Aaron Tachibana. We are absolutely thrilled to be joined today by Dr. Charlie Swanton, Cancer Research UK's Chief Clinician and Professor at the Francis Crick Institute, world renowned for his pioneering work in cancer genomics and cancer evolution. Dr. Swanton has graciously agreed to walk us through new exciting results from their groundbreaking TRACERx lung cancer study where they use our next personal test for cancer detection. And this data was just presented a few days ago at the ESMO Conference in Madrid. So before turning it over to Charlie, I just wanted to take a second to describe the NeXT Personal test itself. With NeXT Personal, we wanted to develop a test that could begin to address some of the critical fundamental questions that patients and their physicians face during their cancer journey. For example, after surgery is the cancer still present? Or during adjuvant or immunotherapy is the treatment working? What's the risk for the cancer coming back? And as time goes on, is the patient still cancer-free? Answering these questions is absolutely critical to managing an optimal care, but are difficult to answer confidently with the current tools like imaging or other blood tests because of their limited sensitivity. So we saw the opportunity to do better, and we design NeXT Personal to detect extremely small traces of circulating tumor DNA from the blood with a blood test. To deliver 10 to 100x more sensitivity than other approaches down to a one part per million level. Now to do this, we've developed NeXT Personal that combines whole genome sequencing in our NeXT SENSE technology to identify a unique and more comprehensive genetic signature derived from a patient's own tumor. This personalized unique signature is then tracked in the patient's blood over time, defined residual or recurrent cancer with unparalleled sensitivity and with the goal of providing physicians to patients a tool to enable significantly earlier detection of cancer recurrence and a better tool for treatment monitoring. So today, with Charlie Swan, we'll be seeing how this ultrasensitive tests can help early-stage lung cancer patients. So without further ado, I'll turn it over to Dr. Charlie Swan.

Thank you very much, Richard. So as you heard from Richard, key to these assays fundamentally is optimizing limited detection and sensitivity to detect smallest amount of circulating tumor DNA in the blood whilst maintaining specificity and minimizing false positive. And I anticipate the data we're going to see today, we'll demonstrate that we've achieved a bit of detection and a sensitivity that surpasses [ LUAD ] experienced in the [indiscernible]. Just to give you a little bit of background of how we got into this field about 7 years ago, we first proposed that these personalized MRD test would enable us to optimize sensitivity for minimal residual disease detection that is a tumor-informed detection assays, which allow us to define the presence or absence in a patient's blood after surgical reception of tumor DNA specific to the patient's growing tumor. So these are [indiscernible] patient's [ MRD ] [indiscernible] and we published in 2017 and 2023 in Nature. First off, [indiscernible] on our experience with 2 different global stations in that area. First of those publications journey still was Abbosh 2017 and Abbosh 2023, and I'll leave it to you [indiscernible] to look into the [indiscernible] yourself at your leisure. So I'm going to present today from James Black in collaboration. So my name is Charlie Swanton [Audio Gap] speaking [Audio Gap] Richard's group to work with them because they have the... [Technical Difficulty]

Charlie, I'm going to interrupt for a second here. I'm having a little bit of trouble hearing you. And I don't know if that's just my connection or not, but there is a... [indiscernible]

[indiscernible] do anything about that. [indiscernible] I don't know what I can say on that.

Okay. [Indiscernible]. Yes. Yes.

So just [indiscernible] Okay. Okay. So... [Technical Difficulty]

Ladies and gentlemen, the management line has been disconnected. Please hold while we get to reconnect. Ladies and gentlemen, the speaker line has been reconnected. Please go ahead.

Sorry, Richard.

Welcome back, Charlie. Yes, no problem. And I was thinking since the connection was a little bit choppy, it wouldn't be bad to just start from the beginning again if that's okay with you.

Okay. So sorry about that, everybody. I got disconnected and then they kept me on the call for too long, so hence the delay. So my name is Charlie Swanton, as you heard from Richard. [indiscernible] Crick and University college and Hospital. We first entered this field in about 2015. We developed this idea of a patient's tumor-informed minimal residual disease assay. And we developed our experience in collaboration to commercial organizations published in Nature 2017 and Nature 2023, first of the crick's, Abbosh. I wouldn't refer to those companies, I simply refer to those papers, Abbosh et al 2017, Abbosh et al 2023. The key to this, as you heard from Richard, is optimizing limited detection. We want to be able to take the smallest quantity of circulating tumor DNA in the blood so that we can detect residual disease at the lowest tumor burden to maximize our chance of cure by escalating adjuvant therapies. We were excited to work with Personalis for the simple reason, they are taking the assays that we developed with those 2 prior commercial organizations to the next level, with an order of magnitude greater number of single new side variance tracks over a certain time in blood from patients with non-small cell lung cancer. So with TRACERx, which I'm sure you're all familiar with now, we have been working with Personalis as a plan to analyze up to 400 blood specimens [indiscernible] assay from 400 patients, several thousand blood specimens in the adjuvant disease course. Data I'm presenting today will be approximately 170 of those patients that were presented at ESMO the day before yesterday by James Black. This is his presentation that you can see on the screen, he has no conflicts of interest. Just to be clear, I am not a paid consultant with Personalis. The only conflict of interest I have with Personalis is that we have an academic collaboration and they have paid for the sequencing and analysis with us of these plasma samples. We have funded TRACERx ourselves. This is a collaboration with an academic grant from Personalis, but I do not -- certainly see on the side of the Advisory Board. I don't have equity in the company, and I'm not a paid consultant. So I don't think I have conflict of interest relevance to this talk other than the fact that I'm keen to see these data published. So what do we know about circulating tumor DNA? Well, it's a minuscule proportion of the total cell-free DNA in the blood and particularly in the minimal residual disease setting where we're trying to track a disease, very low disease burden. This is the key concept to try to get down to various kind of frequencies that are very low indeed, perhaps 0.0001 or less percent. Now we know a minimal residual disease can predict relapse prior to [indiscernible] from work from us and others. And we know ctDNA detection requirements, as I said earlier, require high sensitivity, high specificity and no input amount of DNA. And they have to be applicable across a represent -- representative sample of tumors. Now if you look at this cartoon in the top right-hand corner of the slide, you can see how very dilute frequency, the mean on all frequency of a clonal mutation will change dependent on the size and stage of the tumor. So a Tier 1b tumor measuring perhaps the total tumor volume of 1 centimeter cube, we will have to reach that of very dilute frequencies for clonal mutations to around 0.0008%. And the truth of the matter is that current assays, even tumor-informed assays struggle to get to a level of... [Audio Gap] So what is the -- what is TRACERx and what is our sampling strategy. We [indiscernible] Stage I over IIIb non-small cell lung cancer. I refer to us through 13 hospital sites, you can see here in the U.K. on the left-hand side of the cartoon, patients have their disease surgically resected. Plus or minus biopsies of analysis of the mediastinal lymph nodes, if they're positive. The queues are subject to multi-region sampling, followed by multi-region exome and RNA sequencing ,tissue micro analysis with blood taken prior to surgery immediately after surgery and then somewhere between 4 and 6 weeks after surgery for landmark announces to see whether or not there are evidence of ctDNA in the blood that could be used to stratify patients in the future for adjuvant therapies. Now in the adjuvant setting, we see patients in the clinic every 3 months. And for the first 2 in every 6 months thereafter until 5 years to either cure or relapse. And if they develop metastatic disease, we biopsy metastatic disease and ask whether the metastasizing subcon come from, and how well this is sucking tumor DNA, a population reflect that metastasizing component. The 2 papers I was referring to on the top right-hand corner, you can see that these 2 panels, the commercial assays track 16 variants and 50 variants respectively in 2017 and 2023 papers. You can see the [ neat ] very [indiscernible] frequencies we got down to at about -- between 0.01% VAS and 0.008% VAS roughly concordant with a TIB tumor that I mentioned earlier, measuring about centimeter cube in total volume. Now what we found in the recent 2023 paper is if you stratify patients to high, low and negative ctDNA outputs in the blood, then patients with high circulating tumor DNA have poor outcome that is independently prognostic in [ multi-variant ] analysis, but also patients with intermediate levels of ctDNA have an intermediate level outcome between high and negative. This has been shown by us [indiscernible] group. Now we turn to NeXT Personal for the reason that they are tracking many more mutations. You see those prior assays, we're talking -- upwards 18 to 50 mutations maximum here. We're on another level, at least 10x more new stations are being tracked per patient. The LOD, 95 of this assay of roughly 3.6765 parts per million, translating to around 0.00037% very [indiscernible] frequencies. So the simulation suggests that a limited protection less than 10 parts million with 1 nanogram DNA input with an estimated specific over 99.9%. And again, [ specific ] is absolutely crucial to maintain for a minimal residual disease assay because you don't want false positive cost if you can't sacrifice sensitivity for specificity. So the co overview that we presented before yesterday at ESMO is shown here. These are early stage lung cancer patients that I mentioned. Surgery, they will have certain cures of intent. [indiscernible] patients receive adjuvant treatment, and there was no neoantigen therapy in this cohort, and analysis of blood plasma at pre-optive time points above post-op time points. And the [ coal ] has a median follow-up in the last 5 years. So -- and that's also important to make sure that we capture the majority or all of the relapses. So what were the results? Well, certain consumer DNAs detected from 1.7 to 253,000 parts per million. [ Protector ] DNA detected 81% of long [indiscernible] numbers and all of the non adenocarcinoma patients. You can see on the graph here, if you compare that to Abbosh that was out 2023 and Abbosh that was out 2017, it compares very favorably. So we are now identifying over 4x the number of lung [ adeno ] in the preoperative stage with this assay. Again, bear in mind, this is a tumor-informed assay. So we need a [indiscernible] sample. The reason we think this is so important is because we know, and our share in the next graph that pre-optic DNA detection is a pork prognostic side. And I showed you that in the 2 slides ago, but actually new data from NeXT Personal that corporates and substantiate staff association. Why is that important? Well, if you look -- if you take Stage I tumors, for example, we currently do not give Stage I, Stage Ia, certainly, adjuvant chemotherapy. Now if you look at the graph here, we're now detecting 52% to Stage I non-small cell lung cancers as opposed to 13% and 14% in our previous experience in ABOS 2017 and 2023, respectively. So we're now detecting many more lung adenocarcinomas preoperatively than we have been with prior assays. So why is this important? Well, it's important because we can stratify outcome based on preoperative circulating tumor DNA, which gives us as an oncologist and new opportunity to escalate treatment in these patients with stage I disease who we'd otherwise not give adjuvant chemo for. So that's shown here. You can see that patients who have a ctDNA, ctDNA-positive have a very much worse outcome than patients who are intermediate or have no ctDNA detected. With very much worse [indiscernible] or out and overall file outcomes have seen levels that have been high in these assays. And if you then look at the [ non-LUAD ] account, these are mainly squamous carcinomas. What you see is if you can stratify patient outcome by the million ctDNA levels divided by high and low patients and high [indiscernible] have a worse outcome worse or [indiscernible] free survival than patients with low productive ctDNA. Now what's interesting is that the [ Cognis ] is much more sensitive we have the ability now to ask a fundamental question. In the patients we've previously seen as negative by prior assays, are some of these patients now positive. Now we've not been able to compare the identical samples because we haven't got any samples left for those patients previously trialed on the 2017 and 2023 papers. But what we can do now is confidently say, given the sensitivity of these assays that there are a proportion of non-shedding adenocarcinoma numbers, we think. And these normal ctDNA [indiscernible] not detected degree have a phenomenally good outcome. In contrast to those where the ctDNA is detectives, that have a much worse outcome as you can see here. So this gives us the opportunity now to offer patients escalated therapies in the adjuvant setting, the disease, which we know has a pretty high chance of returning. So if you look at this at 5 years, if you're ctDNA-positive, then you have an adenocarcinoma, you have about a 75% chance of relapsing by year 5. That is the equivalent outcome to IIIb tumor, and we can now basically stratify disease within stages using this assay for escalation of therapy to tend to improve outcome in these what we think are born to be bad tumors. So what are our future plans together with NeXT Personal and Personalis. Well, we plan on analyzing a total of [ 450 ] patients. We've analyzed at 170 so far. Approximately 4,200 [ persons ] samples are being analyzed as we speak. 250 tumor-specific subclonal mutations will be tracked in each patient as well as the clonal ones. And there'll be a future expand analysis that we'll focus on clinical performance, currently reaching through treatment and the use of NeXT Personal to inform the acquisition of treatment resistance and factors governing ctDNA sharing. On the right-hand side, you can see the positive predictive values and sensitivity and specificity for this assay at a landmark time point that is about 4 to 6 weeks after surgery. It feel positive at this stage, you're about a 90% chance of developing disease recurrence within the next 2, 3 years. High negative predictive values, high sensitivity that compares favorably with competitors and maintain specificity. So what about moving beyond the landmark time points and the [ preoperative ] it delay positivity. Again, bear in mind a landmark time point is what we refer to as a point after surgery, roughly 4 weeks -- 4 to 6 weeks after surgery, where we look with the ctDNA assay to see if they're positive or not indicative of whether there's minimum residual disease in the patient's blood. Well, we have been using the landmark performance now to look at outcome and the number of days of median lead times to recurrence, which was NeXT Personal is estimated at about 331 days as opposed to our recent experience in Abbosh 2023 of 228 days. So this gives us really impressive real time over [ imaging ] detection in landmark positive patients with an 11-month median lead time over imaging. And I would say though, it's important to take all of these data around lead time from any provider with a grain of salt for the simple reason that it really depends how often one scans patients. If we were to scan patients more often, you would obviously reduce the lead time. Now we scan patients 4 times in the first year, 4 times in the second year. It's unusual to do any more than that, but I just -- I would just caveat direct lead time comparisons as other companies will want you to do because a lot of it depends on how often patients were scanned. Yearly scanned -- you only scan a patient once every 2 years, your lead time is going to be phenomenal for obvious reasons. And I think TRACERx has an exceptionally good follow-up program in the context of CT imaging. So I'm quite confident with figures. What about the longitudinal performance? What does that mean? When it's negative and landmark time point, what happens if you're positive at a subsequent time point up to the next after the following 5 years, well here in these patients, about 173 million days to recurrence, which compares to really with Abbosh '23 and Abbosh '17 of 119 and 70 days, respectively. There's a strong PPV of 94% and negative [ rep ] value of 89% and [indiscernible] with a spec maintain. Again, it's important to focus as well on the follow-up times in the cohort. But cohorts shortfall follow-up times are going to have very limited relapses. Our cohorts have a million cohort time of 5 years. So in summary, I presented results today, which we're excited about from NeXT Personal and Personalis led by Richard and colleagues of an [indiscernible] ctDNA detection tool that can identify productive cTDNA and 81% of patients with lung adenocarcinoma, including 52% of Stage I. High ctDNA to [ predict ] core OS and relapse-free survival in lung adenocarcinoma and relapsed resurvival in [ non-ads ]. We think that this added sensitivity is currently meaningful, but it's across [indiscernible] detection below 80 parts per million is important and stratified. This ctDNA-positive lung adenocarcinoma which is worse outcome and relapsed resurvival compared to those that are on shedders. The full study will explore the impact of added technical sensitivity on performance and our preliminary data, albeit very extensive, I would argue of 170 patients, which compare favorably or [indiscernible] 2 prior publications. To highlight the promise of an ultrasensitive approach of [indiscernible] disease detection. So perhaps I can hand it over to the floor now and back to Richard for questions.

Thank you very much, Dr. Swan. We are thrilled to see the initial results from the TRACERx study that you just presented and I think it shows that our strong sensitivity is for early-stage lung cancer, especially in adenocarcinoma, which is one of the most common subtypes of lung cancer, but it's one that's been difficult for previous other technologies. So we're very excited about that. And as you mentioned, we saw the dramatic sensitivity improvements very clearly in the baseline pre-surgical data with 2 to 4x more sensitivity than other technologies. But probably even more importantly is that the clinical impact you spoke of that higher sensitivity, the ability to stratify patients, understand which ones are at high risk for recurrence at the early stage and then raising the potential for escalating treatments for those patients. And then the results also showed that we can detect the cancer earlier. And I think all your caveats about the lead time analysis completely agree with. It's very hard to compare between studies. With that said, with these patients in the TRACERx cohort having been kind of sampled with the same protocols or similar protocols, it's helpful to see that we have a median lead time of approximately 6 to 11 days, I mean months for ctDNA detection. That's well ahead of traditional imaging and then significantly longer than previously reported in track. So -- and I think that raises the ability to potentially identify recurrent months earlier for patients and the possibility to intervene earlier as well. So I think overall, we see that the TRACERx results raise the potential for using NeXT Personal to help inform lung cancer management, especially the early stage throughout their patient journey, starting from presurgery to post surgery, adjuvant treatment monitoring and maybe even longer-term recurrence monitoring and detecting cancer recurrence earlier. And we are very excited to continue to work with Dr. Swan and his team. This is just the start, as he mentioned and more data to come. So before opening Q&A, I would love to just thank Dr. Swanton for being here today and all the amazing work he's done, Dr. James Black, who presented this work just a few days ago at ESMO and did a terrific job. The broader TRACERx team and then the patients themselves who participated, agreed to participate in the TRACERx study, without which this wouldn't have been possible. So I'm going to stop here and open up for Q&A. And if I could ask the participants to just focus the Q&A questions on the clinical data presented that would be very much appreciated. And with that, I'll open it up.

[Operator Instructions] The first question comes from the line of Tejas Savant with Morgan Stanley.

This is Yuko Oku on the call for Tejas. Dr, I was wondering if you could elaborate on the significance of 3 months' lead time prior TRACERx studies from so clinical outcomes? .

Sorry, I couldn't hear that. Can you say that again?

Would you kindly elaborate on the significance of 3-month lead time versus prior TRACERx studies in terms of clinical outcomes?

I didn't say that. I just said that we see our patients with clinic every 3 months. And I don't want to -- I want to talk about the NeXT Personal data. I don't want to talk about any other data, if that's okay. It's -- this call is about Personal not our prior publications.

I mentioned in terms of the lead time versus imaging? You said that compared to the prior studies of TRACERx studies, you saw an improvement in detection earlier. And I was wondering that difference between the lead time is all in this study and in your prior studies, what that means for clinical outcomes?

Well, we don't know is the answer because the trials haven't been done yet. And the reason that the trials haven't been yet is -- the reason why the trial hasn't been done yet is because this technology is only recently evolving. So the industry is looking for the sensitive and specific panels that allow us to detect disease relapse as early as possible. And I believe we're getting to the point now where these trials can be done and that question can be answered. My belief is the reason why adjuvant therapy works in cures patients is because we target disease when it's at its lowest overall burden. Now as you're aware, with adjuvant therapy, one of the problems is that we cure many patients with surgery alone, and they don't need adjuvant chemo, but we don't right now have established tools that tell us who will and will not need adjuvant chemotherapy. I think these tools like the MRD tools I presented today will get us to a stage where we are going to be able to say in the near future. This patient has residual disease in their blood. They need adjuvant therapy. And they may need escalation of adjuvant therapy beyond standard of care, i.e. additional potential clinical trials to give the best chance of eradicating any residual disease.

Got it. That was helpful color. And then outside of early-stage lung cancer, what other cancer types do you believe the test will prove to be of greatest benefit to patients?

Well, I mean, I can't really speak for other cancer types in terms of the performance of this assay because we simply not looked at other cancer types. I can say broadly that any solid tumor type with an adjuvant strategy could benefit from MRD assays. Now obviously, it will be up to Personalis to demonstrate to you that the performance is equivalent in other tumor types. I -- for first principles, given that Personalis is hold you on sequencing to define patient-specific panels that you're going to have enough mutations in any tumor genome to be able to track those over time, I would not expect the performance to be any different, but I may be wrong, that would be my academic guess here. So let's say that's the case and what tumor types would be looking at when I say tumor [ times ], as I mentioned with an adjuvant paradigm, breast, gastric, colon, ovary. I mean you name it. Almost all tumor types have an established adjuvant chemotherapy, chemotherapy immunotherapy paradigm. And I guess you and others have worked out what the market size is for something like that.

Next question is in the line of Dan Brennan with TD Cowen.

Great. Maybe given the data that you just kind of presented today or just kind of reviewed with us today. What additional data would you need in kind of the broader clinical field need in order to start using NeXT in clinical practice?

Well, I mean, that's a good question. I actually don't know the answer to that because the way in which the U.S. conduct clinical practice, is rather different from the way we do in the U.K. and within the European Union. I mean if you look at an assay like [ material ], or in Visa. I guess you could probably answer that question yourself. What studies have those companies conducted that has enabled them to, I guess, roll out their assay into practice. What I can say is that our -- what I presented today and what James Black presented 2 days ago at ESMO in terms of cohort size compares very favorably with our early forays into this field, whether or not that's enough for breakthrough designated biomarker approval to the FDA. I don't know, and that will have to be a conversation you and Personalis will have to happen -- sorry. It's not an area I'm an expert in, I'm afraid.

Got it. I think one of the slides showed 96% specificity. Can you just comment on that? Obviously, the sensitivity looks to be a huge notable advantage here, but just wondering if that 96% specificity -- is that appropriate for this patient population? Or I know in some of the competitive products when other tumor types of specificity has been dialed up to a higher level? .