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

Greetings. Welcome to Personalis's First Quarter 2025 Earnings Conference Call. Please note, this conference is being recorded. [Operator Instructions] I would now like to turn the call over to Caroline Corner. Please go ahead.

Thank you, operator. Welcome to Personalis's First Quarter 2025 Earnings 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. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements within the meaning of the U.S. securities laws. For example, any statements regarding trends and expectations for our financial performance this year and longer term, cash runway and liquidity position, revenue expectations and timing, reimbursement goals, size and booking of orders, products, services, technology, expansion of clinical volume, future publications, the outcome and timing of reimbursement decisions, expectations for our existing and future collaboration activities, cost expectations, market size and our market opportunity and business outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. We encourage you to review our most recent filings with the SEC, including the risk factors described in our most recent filings. Personalis undertakes no obligation to update these statements, except as required by applicable law. Our press release with 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. 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 5:00 p.m. Pacific Time today. Now I'd like to turn the call over to Chris for his comments on our first quarter.

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 this quarter and also delivered over 2,000 molecular tests. I can't express how proud I am of the entire Personalis team for hitting those milestone numbers. I'm thrilled with our progress, and the whole organization is geared up to win in 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 cancer patients. Personalis is a leader in the fast-growing MRD or Minimal Residual Disease testing market, which uses a blood draw instead of imaging or invasive biopsies to monitor therapy effectiveness and to detect cancer recurrence. The MRD market is expected to mature into a $20 billion market. And with our ultrasensitive MRD test, NeXT Personal, we believe Personalis is positioned for success. Our technology is able to detect cancer when there's only about 1 fragment of tumor DNA circulating in 1 million DNA fragments in blood. Our tumor profiling platforms and tests are cutting-edge. 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 biopharma companies to improve clinical trial results, personalized treatment, and power a new generation of therapies. We're pushing hard this year on our win in 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 3 sectors of our business. Our Biopharma 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 its highest quarterly revenue to date. Our cash and cash equivalents at the end of the quarter are $185.7 million, which gives us a comfortable runway to drive our growth objectives. We are reiterating our guidance of $80 million to $90 million in revenue for 2025, 30% to 40% quarter-over-quarter growth in molecular results, and the achievement of reimbursement at least 2 indications in 2025. Now let's dive into the business by outlining progress metrics key to our win in the MRD strategy. First is clinical usage. We are making great strides in driving NeXT Personal into the nation's oncology community. We're following a unique partner-centric strategy to commercialize NeXT Personal by working with Tempus, one of the country's leading labs, leveraging their approximately 200-person sales force to bring our assay to market. We delivered 2,184 molecular tests this past quarter, which is an increase of 52% compared with 1,441 molecular tests delivered in the fourth quarter of last year. 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 the MRD strategy is working. 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 ultrasensitive range, 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 and monitoring therapy, and importantly, the ability to have more confidence in a negative MRD result. We believe that our win in MRD strategy will be powered by combining better data with a strong experience, and we're spending time in this phase of our win in MRD strategy on being best-in-class in terms of customer care and a robust experience. The second dimension of our strategy is deepening clinical evidence and achieving reimbursement. Our early evidence generation is focused on 3 indications: breast cancer, lung cancer, and IO therapy monitoring. We've previously summarized the findings from investigators at Royal Marsden for breast cancer, VHIO for IO therapy monitoring, and TRACERx for lung cancer. These 3 indications and their results are powering 3 different Medicare submissions. In March, the Royal Marsden paper was published, and we submitted to Medicare for breast cancer reimbursement. When the VHIO and TRACERx papers are accepted for publication, we plan to submit for Medicare for reimbursement for immunotherapy monitoring and lung cancer, respectively. We continue to be confident that we will achieve reimbursement in at least 2 of the indications in 2025, and I look forward to updating you as the year progresses. 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 the lion's share of MRD clinical data and significant reimbursement to date has been developed in this indication. 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. They also want a test that can spot the cancer even when it recurs in a distant organ, such as the lung. And lastly, they tell us they want to be more confident in a negative MRD result. Delivering on these needs will better guide patient management in the postsurgical CRC setting. At the AACR meeting this past week in Chicago, our collaborators at British Columbia Cancer showed early analysis from a prospective study called VICTORI. 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. Importantly, 87% of the cancer relapses were detected in the early landmark window of 2 to 8 weeks post-surgery, with the majority of those detections in the ultrasensitive range that we unlock with our assay. Additionally, 100% of metastatic relapses were detected by the assay, including all distant lung metastases. The improved performance from our approach, we believe, could enable a better way to manage CRC patients in the future. Now, during the last call, I discussed how a physician using NeXT Personal 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. Today, I'd like to spotlight a patient that has Stage III colorectal cancer that was diagnosed last summer. His physician treated him with neoadjuvant chemotherapy and then surgically removed the tumor. At that point, the physician had the option to either observe or treat the patient with adjuvant chemotherapy based on clinical guidelines. To help make that decision, the oncologist ordered a NeXT Personal test approximately 4 weeks after surgery. The test was positive, and it was in the ultrasensitive range, which suggested the patient was at a high cancer recurrence risk, prompting the physician to immediately start adjuvant chemotherapy for the patient. The physician then used the NeXT Personal test to monitor response to therapy. Reassuringly, subsequent tests showed clearance of circulating tumor DNA after starting chemotherapy, suggesting a good response to treatment for the patient. It's examples like this where our ultrasensitive test can positively impact a patient's journey that motivate our work. 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. Working to mature the data, we will 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. As a reminder, we expect our collaborators within our first 3 indications, breast, lung and IO therapy monitoring to be presenting results at future conferences and these studies to continue to fuel a robust publications road map. In breast cancer, we're working with Vanderbilt, John Hopkins and other institutions on the PREDICT study, which is an approximately 180-patient study in early triple-negative breast cancer and HER2-positive breast cancer, and we have an ongoing prospective study called Be STRONGER-1 in Triple-Negative Breast Cancer that's now enrolled approximately 100 patients from approximately 30 sites. We also have ongoing studies with Dana-Farber on HER2-positive patients, the Institute Curie, approximately 100-patient early-stage Triple-Negative Breast Cancer and with MD Anderson. In IO therapy monitoring, we're working with UKE in 2 different Melanoma studies, with Duke in a study of gastric cancer patients and with UCSD in a pan-cancer IO therapy study across 8 different cancer types. In early-stage lung cancer, we're continuing our work with the TRACERx team, and we're pushing forward on an additional study called DARWIN II. As the data from these studies begin to enter the public domain, we expect it to highlight the importance of our ultrasensitive approach to detecting ctDNA and allow physicians to better manage and treat patients with cancer. The third area we are tracking is progress with our Biopharma customers. The ultrasensitive approach we are pioneering provides Biopharma customers the ability to accelerate clinical trials with greater accuracy and can translate to significant savings for our Biopharma customers by getting answers sooner. The past quarter, our revenue from this segment was $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 Biopharma customers. We saw record revenue in MRD, and we are tracking to generate year-over-year growth of 300% to 400% in MRD revenue from Biopharma customers. Importantly, we've landed 2 large additional customers and expect each of them to generate annual revenue in the $5 million range this year. Those wins are attributed to the decision by those clients to adopt NeXT Personal. Our second platform, ImmunoID NeXT remains the platform of choice for biopharma companies developing immunotherapies and is also utilized by Moderna in its individualized neoantigen therapy programs. Market demand for ImmunoID remains strong, and we continue efforts to broaden our tumor profiling product portfolio with new versions developed to capture additional business from Biopharma that have grown to trust Personalis as a partner. The year is off to a strong start at Personalis, and we are laser-focused on our strategy to win in MRD. Our employees, collaborators and partners are working hard to improve the journey for cancer patients with an ultrasensitive MRD approach. And in the process, we're creating a special company. We're grateful for all of our investors that are part of our journey to pioneer this ultrasensitive MRD testing market. 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. With that, I will now turn it over to Aaron to review our financial results.

Thank you, Chris. I will discuss our first quarter 2025 results and then cover our guidance for the second quarter and the full year. 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. The increase in revenue was driven by higher volume from biopharma customers and the VA MVP, which more than offset the expected decline in enterprise sales from Natera. 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. The accelerated growth from biopharma 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 biopharma customers. An important note about NeXT Personal tests sold to biopharma 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. We are tracking well to deliver year-over-year biopharma growth of 24% at the midpoint of our biopharma estimate, despite the headwinds from Moderna revenue declining year-over-year. In addition, we recognized $0.3 million of revenue from our clinical tests, NeXT Dx, and NeXT Personal. Gross margin was 35% in the first quarter compared with 28.1% for the same period of the prior year. The year-over-year increase of 690 basis points was primarily due to favorable customer mix from the increase in biopharma volume. In the first quarter, we saw an impact of approximately 8 percentage points to our gross margin due to unreimbursed clinical test costs. Excluding those costs, gross margin would have been approximately 43% and highlights our ability to expand margins further once we obtain reimbursement coverage and achieve scale. Operating expenses were $24.9 million in the first quarter compared with $24.4 million for the same period of the prior year. Most of the year-over-year increase was attributed to selling expenses related to our clinical test volume growth. The first quarter R&D expense was $12.6 million compared to $12.8 million for the same period of the prior year, and SG&A expense was $12.3 million compared with $11.6 million for the same period of the prior year. Net loss for the first quarter was $15.8 million compared with $13 million for the same period of the prior year. The prior year's net loss included a $4.6 million gain related to the warrants issued to Tempus and were outstanding as of the first quarter of the prior year. Excluding the noncash gain, the prior year net loss would have been $17.6 million for comparative purposes. Now on to the balance sheet. We finished the first quarter with a strong balance sheet with cash and short-term investments of $185.7 million. During the quarter, we raised approximately $17.8 million net of fees selling common 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. We continue to operate cost effectively and as mentioned during our last conference call, we expect cash usage for the full year of 2025 to increase by approximately $30 million compared with the amount used in 2024, primarily to invest in clinical test volumes in advance of reimbursement, expanding clinical evidence for NeXT Personal by conducting new studies and adding to our clinical sales team. We expect these investments to help drive NeXT Personal revenue growth post reimbursement later this year and into 2026. Now I'd like to turn to guidance. For the second quarter of 2025, we expect total company revenue in the range of $19.5 million to $20.5 million, revenue from pharma test and services and all other customers in the range of $13 million to $14 million, and revenue from population sequencing plus enterprise customers of approximately $6.5 million. And for the full year of 2025, our revenue guidance remains the same, and we expect total company revenue in the range of $80 million to $90 million. This range encompasses the variability of reimbursement timing and prices. Revenue from pharma tests and services and all other customers in the range of $62 million to $64 million, population sequencing plus enterprise customers in the range of $15 million to $16 million, clinical revenue in the range of $3 million to $10 million, gross margin in the range of 22% to 24%, which increased from our prior range of 21% to 23%. 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. Net loss of approximately $83 million, which decreased from $85 million last quarter and includes approximately $20 million of unreimbursed test costs and cash usage of approximately $75 million, which decreased from the prior range of $75 million to $80 million. 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. 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?

[Operator Instructions] First question, Thomas Flaten with Lake Street Capital.

Hi 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?

Yes. Thanks. Great question. Good to hear from you. Yes. So, we've already focused our efforts right now on breast cancer, lung cancer and IO therapy monitoring, in particular, breast and lung 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 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. When we've got clear line of sight for reimbursement, we've always said that we plan to go faster. We plan to both add in more reps ourselves, and we expect Tempus to go faster. But we're targeting into that group of physicians now and have been doing that and doing the same with lung cancer ever since we started the journey and started with those indications.

And anything you can share with respect to the doctors that have been ordering of the 2,100 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.

Yes, the retention has been really, really high. I've been surprised once we get people going and we get them going in mass, they've been staying with us, which is great. We've seen really great top line growth. I mean we're not breaking out quarter-over-quarter new and current physicians, et cetera, but we've got several hundred physicians now ordering. That's been a mix of new and recurring. Clearly, in a high-growth phase where especially Tempus' field force is out calling on and talking to physicians, that's driving top line growth in terms of new physicians, but it's been good. And of course, the dynamic that we see, which is great with the MRD market is that there's a large number of subsequent samples that start to come in too from patients. So, the reorders as time passes and physicians are checking patients start to click in, and we've been really pleased with the progress on that also. And then the last leg of our strategy, where we're selling ourselves, Thomas, we integrate the CGP test into the mix. 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 on a cancer patient from Personalis, both baselining the MRD and the level of cancer in the blood with the ultrasensitive test, but also baselining the genomic profile to be able to pick the therapy from the patient. So, we feel like it's, the strategy is working the way we expected it to.

Next question, Bill Bonello with Craig-Hallum.

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 volume. Can you give us, I know this is highly subjective, but can you give us some sense of 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 Tempus are just sort of pedal to the metal on trying to get new customers and whatnot. So how do we kind of think about the growth in the marketing efforts today compared to what they might look like post reimbursement?

Yes. I mean I think we're metering it, Bill. So, we could certainly push faster with Tempus. 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 3, 4 people in the field calling on physicians. And that's been working with the group of physicians that we had ourselves and complementing Tempus and the lever to go significantly faster is to deploy more reps out. And, but we're metering that right now. We had originally said 30% to 40%. That's how we targeted this. The last couple of quarters, we've, I think, exceeded 50%. So, growing a little faster than even than we had planned or had targeted doing internally, which is really great. But we could shift into higher gears if we 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 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 taking the gross margin hit early in the business, too. And so, we're trying to walk that tight rope the best that we can.

And then maybe just to get a sense with how aggressive Tempus is being, I mean, if we think of the volume, I mean, is most of that being generated by your 3 to 4 reps? Is it kind of 50-50? How would we think about that?

Yes. So this is Aaron, Bill. 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 sales force remains pretty flat with just a handful of reps. 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 Tempus side. But what is growing, the retention rate is very high, and we're seeing the subsequent plasma time points accelerated, right? Meaning there's a lot of use going into the, going forward from a subsequent standpoint. On the Tempus side, Tempus is starting to go faster and faster because we're headed towards reimbursement, obviously. And what we're seeing there, they are accelerating and bringing in new physicians. The time points or the subsequents are growing as well. So, we're really, really pleased with how the volume is shaping up. like what Chris said, 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 would underline, too, Bill, we're also working collaboratively in places where we can. So, there isn't like a fine line 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 connected into the system and using the test. And certainly, there are some cases where we'll sell a physician and it may be better to be managed through the Tempus architecture. So that's whatever works well for the customer. Because remember, they have all the EMR 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 a whole.

Next question, Mike Matson with Needham & Company.

This is Joseph on for Mike. I guess just maybe on the VICTORI data, it was really great to see that super strong data. Just a couple of questions around that. I guess the first one, just with maybe Tempus and then 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 Tempus to start marketing for? And then specifically with the data, I was wondering if you could maybe dissect some of the, I guess, like the patient demographics in the study in the sense of cancer staging. I'm just trying to understand a little bit more how this compares with your competitors. And then I guess, maybe also just if you could compare, if you have any data on 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?

Absolutely. I'll start with the first part of the question, and then Rich can jump in. Rich is with us on this call as usual. So yes, I mean, this was the beginning of the journey on our fourth indication. We think this is a big one. It's where a lion's share of the early evidence in the MRD usage have been developed, and reimbursement is stronger, and we think the data looks really good, and it's, 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 to mature and then that go through the publication, and then we'll submit. So, it's going to take some time for all this to stitch together. But as we go along, and we're in this for the long haul, we expect this to be a nice driver over time. Right now, as a reminder, the Tempus arrangement is they have exclusivity in breast, lung and IO therapy monitoring, and that's where we are with them from an exclusive standpoint. Rich, do you want to talk about the data and those questions?

Yes. It's a great question. And yes, we're very pleased with the interim results of this prospective study, highly encouraging in colorectal cancer. These are patients that were Stage I-IV resectable colorectal cancer. And so, it was a really nice cross-section of colorectal cancer across all the different stages. And as you noted, we are very pleased to see really, really high landmark sensitivity to date in this cohort, 87% were detected, of recurrences were detected in that 2- to 8-week window, which is really nice to see and compares very favorably to what others have reported for landmark. And then the other thing is we detected all the patients that recurred prior to imaging. So, 100% of those patients to date have been detected. And that's also very, very encouraging because others have demonstrated that detecting the metastasis, metastatic colorectal can be challenging at times, and we were able to detect all the recurrences, including the distant metastasis in the 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.

Okay. Great. That's helpful. Yes, it was really nice data. And then maybe just a quick one on NeXT Personal again. 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 how a, like an award goes about this. Would it apply to any indication that currently has CMS reimbursement, or reimbursement that CMS was awarded you guys? Or does it need to be applied for each indication?

Yes. So, I mean, I think the process is you don't apply or engage with ADLT status until after you've gotten reimbursement. So, I think that's the way to think about it. But no update there. We've told investors consistently, and we'll still reiterate that we build our economic models, assuming we get -- we're able to get reimbursement that's consistent with what has been in the marketplace. We think there's a couple of shots on goal, one of which is that a whole genome sequencing with 1,800 variants is a way more sophisticated and resource-intensive assay than anything CMS has priced before. So, we think that that's one way reimbursement could be higher, and we believe that's the easiest shot on goal. We have the best chance. And then secondarily, we think that we're offering something unique and differentiated, and potentially could qualify for ADLT status. Both of those are upsides. We've built the model to thrive if we do not achieve either one of those 2 drivers. Our COGS are about 40% of the reimbursement, which we think is, it puts us at a 60% gross margin. And then we've been able to secure with Tempus sales and marketing costs down in the 20%, 25% range. And so, we think we've got this set up to be really economically compelling for investors, even if the reimbursement is based on what had been priced before, with a couple of shots on goal. But 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 if you get the best-case reimbursement. And that's the way we've attacked it, and that's the way we've told people to build their models.

The next question is from Mark Massaro with BTIG.

This is Vivian on for Mark. Maybe just one quick one on the model. Were there any one-timers in the quarter, just as your 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?

Vivian, this is Aaron. No onetimers, so to speak. So, in terms of what was in our guide of $17 million to $18 million for Q1, most of that beat was coming from biopharma. Biopharma was $13.6 million. The guide there was $10 million to $11 incorporated in the guide, we did assume we were going to fulfill the VA contract, the $7.5 million that we had received in September of 2024. That's going to be fulfilled in the first 2 quarters of 2025, right? So other than that, there's no one-timers or anything of that nature. We will call out though, as we look forward, 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 starting to defer certain projects and even tighten things up or constrict the size of some of them. And so, we're seeing something in the range of $3 million to $5 million out in time from an impact standpoint. We're not changing our guidance. Our guide is still $80 million to $90 million because we still have a very, very large funnel that continues to build for NeXT Personal with biopharma customers, right? So, we're still executing well there.

Understood. And then I know there was a prior question on CRC, but maybe just asked a different way. Could you just discuss the need for a more sensitive MRD tech in CRC? I think in the past; you've discussed that NeXT Personal really shines in a lower burden cancer such as breast cancer. But can you just talk about how you feel you're differentiated there?

Yes, happy to answer that. And it's a great question. In colorectal cancer, our collaborators and I think other KOLs in the space have really identified the that there's a need for sensitivity in that landmark window. And so landmark window is really the first 2 to 8 weeks, 2 to 10 weeks after surgery for colorectal cancer patients. And the reason that window is 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. And so, I think one of the key areas that we demonstrated a really strong performance here, differentiated performance is our sensitivity in that landmark window between 2 and 8 weeks, where we showed that we're able to, at least to date, detect 87% of the patients that eventually recur in that very early window. And so that's enabled by the fact that we have a highly sensitive test. And so that's, I think, one way it definitely the ultrasensitivity matters. I think the other area is in the longitudinal sensitivity. So being able to pick up all the patients before they show up on imaging as we have in this study, I think, is an indicator of the fact that the sensitivity really does matter there, especially in picking up some of the patients 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 ctDNA detection.

So, now, I would just note that we started in the breast and lung, where the signal is the weakest, and it's the one that we could shine the light on the brightest. But what we've really learned from that experience is the patients really also value having confidence in the negative MRD result, and having ultrasensitivity is key to being able to do that. And so, we've gotten really great feedback about that because when patients are getting tested, what they're ultimately hoping and praying for is that they're cancer-free. While there's never guarantees in life, the more sensitivity you have, the more assurance you can have that any single one of those results is solid, and we're seeing that in the data across all the cancers and indications that we're working.

Next question is from Dan Brennan with Cowen.

Congrats on the print. Maybe just the first one, just on the MolDXPress filing. Just remind us on the commercialization strategy. Just first off, any feedback or any updated thoughts in terms of timing? And then assuming you get a positive opinion, just what happens after that? Like how quickly are you ready to go? How do we think about that commercialization push?

Yes. We're not going to give any updates through the journey, just to be clear, I mean, unless we see a reason to update. But we still feel confident. We're tracking ahead of schedule on our internal forecast of where we were. And so, we feel like we're in a really good position to get 2 of the 3 that we're gunning for done this year and all the evidence internally has pointed us in that direction. So, we're reiterating that and underlining our confidence on where we stand there. Once we get the positive decision, you remember that everything that we will have billed previous to that up until the point of the last submission, we'll be able to bill. So, there'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 the commitment time is roughly 60 days. So, there's always that running. And we'll be in a position once we get that to execute and move faster commercially and switch into a higher gear. But there'll be I think it's more than just breast; it's also getting breast in another one or getting 2 going to really start to get critical mass. Right now, we're seeing the cancers that we're seeing come in are really scattered across those 3 indications in a pretty 3 use cases, therapy monitoring, breast and IO in a pretty equal weighted way. And so, we really want to really start to move into higher care. We want to get a couple of them in the rearview mirror, which is why that's been our goal this year.

Perfect, Chris. And maybe just on some of the early feedback amongst the doctors that are using the test. Just how are they using it? Obviously, you've got Natera in the market. Just wondering from the doctors, are they using it complementary? 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.

Yes. I mean I think they use it I mean we're fine that they're using it in place. I mean I don't think I think I'm sure 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 approach, and that's what we're seeing. And we're seeing it used both to check for therapy monitoring. So being able to wash the parts per million as you proceed through therapy, #1. #2, look for cancer recurrence post treatment and especially right after a surgery in breast and lung, I think are the key use cases that we're seeing. Doing that, Rich, it's pretty much...

And then maybe just on ASCO. I know you've got a couple of posters; I think you guys have coming out or a couple of studies. Anything there to point to? Just kind of walk us through expectations on forthcoming data.

Yes. There are some oral presentations and also posters. Maybe the one to make note of is we have some neoadjuvant 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. Yes. What's really exciting when you just step back and you look at it all that because we've been at this now and doing these calls is that the data, when you get good results in one data set, you feel good, but you hold your breath and you wait for the second one, you hope it holds. But now we just keep going data set after data set after data set. We work with biopharma, 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 this assay because it continues to perform well an indication use case and data set after data set, indication after indication. And so, we feel like we're really starting to pick up steam and adding value.

The next questions is from Yuko Oku with Morgan Stanley.

Given that VICTORI study seems to suggest earliest and optimal time for blood draw to inform decision on subsequent therapy at 4 weeks, do you think that this timing will be applicable across various tumor types? Or could it vary by cancer types?

Yes. Thanks for the question. It will vary by cancer type. Cancer shed at different rates in different cancer types. So, you really have to look at each cancer type independently as you look at the data.

Okay. That was helpful. And then I appreciate the color on strong traction you're seeing for NeXT Personal with pharma customers. Could you elaborate on the importance of pharma partnerships to demonstrate clinical utility for NeXT Personal in your development strategy? And also, would you remind me of some of the internal efforts underway?

Yes. So, we've been used by most of the top biopharma companies in the world for our next ImmunoID platform, which was used to characterize samples and built those relationships. And we've been leveraging those relationships with MRD. The use case that we're finding is valuable there among biopharma customers is, first and foremost, to get an early answer quickly on a clinical trial. NeXT Personal can help them fail a trial faster, accelerate a trial faster and that translates into bottom line dollars quickly. Secondly, it's helping them sort the right patients into clinical trials. And that would be sort of a prospective study and picking patients out of the pool that are unlikely to recur, i.e., they're ctDNA negative and they're unlikely to recur will enrich the people in 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. And then this year, we're starting to see the acceleration in revenue. You see that this quarter in the numbers. And we're working with many of the big companies now in the space to help them get to answers sooner with clinical trials or help them get to more efficacy. We've not been able to announce any big prospective studies with any biopharma companies to date. And we'll obviously keep you posted if we're able to do that, and we'll make those announcements. But that's where we stand. I think it's part of the clinical evidence piece, but I don't think it's the only piece. I think that we're working with collaborators. We're doing some prospective studies, a lot of retrospective studies. And you're starting to see that there's a whole new batch at ASCO of studies this year and at AACR with the VICTORI study. So, we continue to work with ever-increasing numbers of collaborators and studies. And biopharma will ultimately be a piece of that, but it's not the main piece of our strategy.

Got it. That was helpful color. And if I could squeeze one more in. One of the interesting points that Dr. Swanton made in his AACR presentation is that you can even stratify patients further according to their prognosis into 3 buckets using an ultrasensitive assay. How valuable has that been for biopharma?

Yes. I think biopharma are really, really interested in that data because the patient stratification, obviously, is a core piece of what they want to use the assay for. So I'd say the ability to understand which patients are most at risk and intermediate and less is an important part of that understanding for them. So yes, it's definitely of great interest.

Next question, Swayampakula Ramakanth with H.C. Wainwright.

If any of my questions in part have been answered, I apologize for asking again because I've been in and out of calls. At a high level, with all sorts of changes going on in various regulatory agencies and the federal government, how confident are you in the process where you are with them in terms of getting the reimbursement approval according to our internal timelines, because just trying to understand your confidence level there.

Now, absolutely. So, we actually don't submit to CMS officially. We submit to Palmetto, which is the Medicare contractor that is making the decisions for our Medicare area, if you will. And Palmetto is a private company. It's been that'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 having talked about an impact because of any of the changes in Washington on the process there. And they've been engaged, I think, certainly with us, but with the industry as a whole as a part of the journey. And so, we don't expect anything to be changing or put any of our timelines at risk as a result of any of the changes in Washington relative to reimbursement.

And then I have one more quick question. Regarding the CRC indication, what else needs to get done so that you can get to a point where you can develop this assay further and also look into it as an assay for reimbursement?

Now, absolutely. So, the assay is ready. It's done. The assay is a pan-cancer, all solid tumor assay, and it does not depend on the type of cancer. So, we create a personalized snapshot of a patient's tumor, and the assay doesn't care what kind of tumor it is. So, the question has been building evidence to show that we can add incremental value in individual cancers. So, if you got the test now, and I talked in the script about a patient who actually a doctor sent us his sample, and he was a colorectal cancer patient, and 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. But we're just not obviously advocating or pushing it because we don't get paid. The next steps, the data is interim. It still needs to be matured that we presented, and that then needs to be finalized, needs to be written into publication. It needs to be submitted and then it needs to be after it's been submitted for publication, has to be accepted. And after it's been accepted, then we can submit for Medicare reimbursement. So, we have way to go. I don't want to sort of misportray that that's right around the corner because that always takes some time to put that together. But I mean, we're in this for the long term and continuing to mature and build the data and having a long tail of pipeline and increasing ability to attack markets, I think, is important and should give investors' confidence that behind breast, lung and IO, there's more stuff on its way. And that's why one of the reasons why we're super excited about it.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.