FREMONT, Calif.--(BUSINESS WIRE)--Personalis, Inc., a leader in advanced genomics for precision oncology (Nasdaq: PSNL), disclosed a reduction in headcount impacting approximately 20% of the company’s staff. By consolidating several functions for efficiency, this reduction is expected to reduce operating expenses by approximately $14 million annually. This action, along with the recently announced Tempus collaboration, is expected to extend the cash position of the company into 2026.
“Continuing to optimize our resources, as well as building new relationships, have been goals for us this year as we position Personalis to be a clinical testing leader,” stated Chris Hall, President and CEO of Personalis. “The headcount reductions along with the ~$30 million we anticipate receiving over time from the Tempus relationship should extend our cash well into 2026 and provide runway for us to achieve Medicare reimbursement for NeXT Personal® Dx.”
The company entered into a strategic collaboration with Tempus last week designed to significantly accelerate commercialization of the company’s NeXT Personal Dx ultra-sensitive MRD test in a cost-effective manner. This exclusive relationship with one of the largest oncology testing labs in the U.S. provides additional capital for Personalis to continue developing clinical evidence to achieve reimbursement while working closely with Tempus to provide oncologists and their patients with much greater access to the test, integrating NeXT Personal Dx into Tempus’ testing menu and leveraging its infrastructure to promote success. To align incentives, the company provided warrants to Tempus to purchase approximately 9.2 million shares of the company’s common stock at an average price of $2/share. Assuming those warrants are cash exercised, and all milestones are met, the relationship will provide approximately $30 million to the company exclusive of any payments to Tempus for the fair market value of sales, marketing, and sample logistics services.
“We have been successfully executing our 2023 goals in support of our ‘Win-in-MRD’ strategy that we laid out earlier this year and are targeting even more aggressive goals in 2024,” added Hall. “Next year, we plan to develop clinical evidence across ~10 clinical studies, progress toward our long-term goal of achieving 60%-plus gross margins, submit for Medicare reimbursement for NeXT Personal Dx, and drive early commercial success for NeXT Personal Dx with Tempus.”
About Personalis, Inc.
At Personalis, we are transforming the active management of cancer through breakthrough personalized testing. We aim to drive a new paradigm for cancer management, guiding care from biopsy through the life of the patient. Our highly sensitive assays combine tumor-and-normal profiling with proprietary algorithms to deliver advanced insights even as cancer evolves over time. Our products are designed to detect molecular residual disease (MRD) and recurrence at the earliest timepoints, enable selection of targeted therapies based on ultra-comprehensive genomic profiling, and enhance biomarker strategy for drug development. Personalis is based in Fremont, California. To learn more, visit www.personalis.com and connect with us on LinkedIn and X (Twitter).
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can generally be identified by terms such as “anticipate,” “assume,” “estimate,” “expect,” “if,” “may,” “project,” “target,” “will,” “should” or similar expressions. These statements include statements relating to: expected cash runway; expected annual cash expense reduction resulting from the reduction in headcount; other benefits of the reduction in headcount; the activities and benefits of Personalis’ collaboration with Tempus; the assumption that Tempus will exercise all of its warrants for cash; the assumption that all milestones under the collaboration with Tempus will be achieved; the estimated cash runway being sufficient to achieve Medicare reimbursement for NeXT Personal Dx; the company’s plan to develop clinical evidence across ~10 clinical studies and its long-term goal of achieving 60%-plus gross margins; and other statements that are not historical facts. Such forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from any anticipated results or expectations expressed or implied by such statements, including risks, uncertainties and other factors that relate to: Personalis’ ability to successfully implement the reduction in headcount; the actual charges in implementing the reduction in headcount; changes to the assumptions underlying the estimated annual cost savings resulting from the reduction in headcount; unintended consequences from the reduction in headcount; competition; changes in the macroeconomic environment that impact Personalis’ business; Personalis’ ability to demonstrate attributes, advantages or clinical validity of NeXT Personal Dx; there is no guarantee that Personalis will be able to achieve Medicare reimbursement for NeXT Personal Dx, even if the cash runway assumptions set forth in this release turn out to be correct; Personalis’ achievement of milestones set forth in the collaboration agreement with Tempus; the success of Tempus’ sales and marketing efforts; the adoption and use of the NeXT Personal Dx test by oncologists; Tempus may not exercise all or any of its warrants if the warrants are not in-the-money at the end of the respective terms of the warrants; if Tempus exercises some but not all of its warrants, the average price per share may be less than $2.00 per share; under certain circumstances, Tempus may net exercise its warrants on a cashless basis, in which case Personalis would receive less proceeds and less additional cash runway than projected above; the anticipated $30 million to the company from the relationship with Tempus, which assumes all milestones are achieved and that Tempus exercises all of its warrants for cash, is net of up to $9.6 million that Personalis may pay to Tempus under the collaboration for the fair market value of sales and marketing, and is also net of other fair market value compensation that Personalis may pay to Tempus on a per-test basis for sample logistics services; the realization of any of the risks and uncertainties described above, as well as other risks, may result in the company’s cash runway being shorter than anticipated in this release; and there is no guarantee that Personalis will achieve the gross margins set forth in this release due to various risks and certainties, including, without limitation, costs outside of the company’s control such as the costs of labor and supplies, and investors should not rely on the gross margin goal statement in this release as an assurance that the company will achieve the targeted gross margins set forth in this release on any particular timeline, or at all. These and other potential risks and uncertainties that could cause actual results to differ materially from the results predicted in these forward-looking statements are described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Personalis’ Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (SEC) on February 23, 2023, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 7, 2023. All information provided in this release is as of the date of this press release, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. Personalis undertakes no duty to update this information unless required by law.
