Personalis(US:PSNL)2024-02-28 21:15Revenue Growth - Total revenue increased by 13%, or $8.4 million, in 2023 compared to 2022, driven by higher revenue from enterprise sales and pharma tests [348]. - Revenue from enterprise sales was $31.7 million in 2023, up 19% from $26.6 million in 2022; revenue from pharma tests was $31.9 million, an 8% increase from $29.6 million [348]. - Total revenue for 2023 was $73,481,000, representing a 13% increase from $65,047,000 in 2022 [364]. - Revenue from pharma tests and services increased by 8%, or $2.4 million, driven by new customer growth [365]. - Enterprise sales revenue rose by 19%, or $5.1 million, with a 55% increase in samples processed for Natera [366]. - Population sequencing revenue increased by 11%, despite a nearly 50% reduction in selling prices [368]. - Revenue from Natera, Inc. accounted for 43% of total revenue in 2023, up from 41% in 2022, indicating a strong reliance on this customer [440]. - Revenue from international customers represented 10% of total revenue in 2023, up from 9% in 2022 and 8% in 2021 [480]. - Revenue from Pharma tests and services was $31,904,000 in 2023, up from $29,552,000 in 2022, reflecting a growth of 7.9% [480]. - Enterprise sales revenue increased significantly to $31,729,000 in 2023, compared to $26,641,000 in 2022, marking a growth of 19.5% [480]. Financial Performance - The company incurred a net loss of $56.3 million in operating activities for the year ended December 31, 2023, an improvement from a loss of $70.2 million in 2022 [389]. - Net loss for 2023 was $108,296,000, a slight improvement from a net loss of $113,315,000 in 2022 [416]. - Cash flows used in operating activities decreased to $56.258 million in 2023 from $70.233 million in 2022, indicating improved cash management [425]. - The company recognized $8.1 million in restructuring charges due to workforce reductions and closure of operations in China [378]. - The accumulated deficit grew to $468,706,000 in 2023 from $360,410,000 in 2022, an increase of 30% [414]. - Total liabilities increased to $95,658,000 in 2023 from $74,561,000 in 2022, marking a rise of 28% [414]. - The company has incurred net losses since inception and anticipates that current cash and cash equivalents are sufficient to fund near-term capital and operating needs for at least the next 12 months [385]. Cost Management - Cash burn was reduced by nearly 50% through workforce reduction, resulting in estimated annual cost savings of $35 million [349]. - Selling, general, and administrative expenses have decreased significantly and are expected to remain at lower levels over the next couple of years [356]. - Research and development expenses are expected to decrease due to workforce reductions and the closure of operations in China [354]. - Selling, general and administrative expenses decreased by 22%, or $14.2 million, primarily due to workforce reductions [374]. - Research and development expenses remained flat at $64,776,000, with increases in clinical evidence generation costs offset by workforce reductions [372]. Cash and Investments - As of December 31, 2023, cash and cash equivalents totaled $114,179,000, down from $167,658,000 in 2022 [362]. - The company plans to fund its material cash requirements with existing cash and cash equivalents, which amounted to $114.2 million as of December 31, 2023 [392]. - The company reported a decrease in cash provided by investing activities of $39.4 million in 2023 compared to 2022, primarily due to lower net proceeds from short-term investment maturities [390]. - The total cash, cash equivalents, and restricted cash at the end of the period was $58.774 million, down from $90.918 million at the end of 2022 [425]. - The company generated $13.099 million in net cash from investing activities in 2023, compared to $52.537 million in 2022 [425]. Strategic Partnerships and Developments - Medicare coverage was received for NeXT Dx, and a partnership with Tempus was established to commercialize NeXT Personal Dx in clinical settings [349]. - The company is focusing on three key indications: breast cancer, lung cancer, and immunotherapy monitoring, collaborating with leading cancer centers and academic institutions [346]. - The company has invested significantly in its NeXT platform, introducing new products and capabilities to support growth [350]. - The Company entered into a Commercialization and Reference Laboratory Agreement with Tempus, which includes potential fees of up to $12 million for development activities [508]. - The Company received $6 million in Market Development Fees from Tempus upon achieving the first clinical validation milestone [514]. Workforce and Operations - The Company initiated a reduction in workforce affecting nearly 100 employees in January 2023, incurring $3.1 million in one-time termination benefits [519]. - A second workforce reduction affecting approximately 60 employees was initiated in December 2023, with expected costs of $4.0 million in termination benefits [520]. - The Company terminated its operations in China during the first half of 2023, incurring $0.9 million in expenses related to closure activities [522]. - The company has terminated its operations in China and dissolved its subsidiary, Personalis (Shanghai) Ltd., in February 2024 [430]. Legal Matters - The Company filed a patent infringement complaint against Foresight Diagnostics Inc. on August 2, 2022, asserting four patents related to personalized genetic testing and analysis [540]. - An amended complaint was filed on August 17, 2022, adding a fifth patent, with the Company seeking injunctive relief, damages, and costs [540]. - The District Court granted Foresight's motion to stay the patent infringement action on January 24, 2023, pending the inter partes review proceedings [541]. - The USPTO granted inter partes reviews for the '394 and '033 Patents on June 13, 2023, and for the '611 and '783 Patents on August 8, 2023 [541]. - A second patent infringement complaint was filed by the Company on June 26, 2023, asserting two additional patents related to methods for using mosaicism in nucleic acids [542].