FREMONT, CA - Personalis, Inc. (NASDAQ:PSNL), a provider of advanced genomic sequencing and analytics, has secured a new task order valued at up to $7.5 million from the U.S. Department of Veterans Affairs (VA) for its Million Veteran Program (VA MVP).
The order, effective September 30, 2024, contributes to a cumulative value of approximately $210.7 million that the company has received under its contracts with the VA MVP.
The VA MVP is a national, voluntary research program conducted by the VA Office of Research & Development. It aims to study how genes affect health, intending to improve health care for veterans. The task order's value is contingent on the receipt of samples from the VA MVP and the performance of services by Personalis.
Personalis, headquartered in Fremont, California, specializes in services for medical laboratories. The company's involvement with the VA MVP reflects its ongoing commitment to supporting large-scale genomic studies that can potentially lead to significant advancements in personalized medicine.
The recent announcement is considered a forward-looking statement and, like all such statements, is subject to various risks and uncertainties. These include the timing and quantity of samples received from the VA MVP, the extent to which Personalis realizes revenue from the contract and task orders, and the enrollment and ongoing demand of the VA MVP for Personalis' services. The company's filings with the Securities and Exchange Commission provide further details on associated risks.
In other recent news, Personalis, a pioneer in advanced genomic sequencing, has seen significant developments. Lake Street Capital Markets doubled its price target for Personalis to $8, maintaining a Buy rating, following the recent investment by Tempus, a technology company focused on personalizing cancer care. Tempus's investment is seen as a significant endorsement of Personalis' NeXT Personal Dx technology, a minimal residual disease (MRD) detection tool.
Other analyst firms, including TD Cowen, BTIG, and H.C. Wainwright, also maintained a Buy rating for Personalis, with BTIG raising the company's stock price target to $7.00, and H.C. Wainwright increasing it to $9.00. These adjustments followed the company's strong performance, which included a 35% year-over-year revenue increase to $22.6 million for the second quarter, mainly due to a 117% expansion in its biopharma business.
Tempus increased its stake in Personalis to 19.3% through a $36 million investment. This substantial investment is expected to further the commercialization of Personalis's MRD test, NeXT Personal. The two companies plan to intensify their joint efforts due to the strong demand for the NeXT Personal test.
Personalis plans to submit applications for reimbursement approval for NeXT Personal products to the Centers for Medicare & Medicaid Services towards the end of 2024 or the beginning of 2025.
InvestingPro Insights
As Personalis, Inc. (NASDAQ:PSNL) continues to expand its footprint in the genomic sequencing arena, its financials and market performance provide a window into the company's operational health. Notably, Personalis holds a market capitalization of $334.51 million, reflecting its position within the industry. Despite the company's rapid revenue growth over the last twelve months, with a 19.2% increase and a significant quarterly bump of 35.22%, it's still navigating through challenges, as indicated by a negative operating income margin of -101.13% for the same period. This suggests that while sales are growing, profitability remains elusive.
Investors may find solace in the fact that Personalis has been managing its cash wisely, with more cash than debt on its balance sheet—an InvestingPro Tip that indicates a stable financial footing. This is particularly relevant given the company's cash burn rate, which is a point of attention for stakeholders. Additionally, while the company's stock price has shown volatility, it has also delivered a strong return over the last three months and an impressive price uptick over the last six months, underscoring potential investor optimism.
For those keeping an eye on analyst expectations, two analysts have recently revised their earnings upwards for the upcoming period, suggesting that there may be positive developments on the horizon. However, it's worth noting that analysts do not anticipate the company will be profitable this year, which aligns with the negative P/E ratio of -3.61. Moreover, Personalis does not pay a dividend, which might influence investment decisions for those seeking regular income streams.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available that further explore Personalis' financials and market performance. These insights can be found on InvestingPro's platform and could provide valuable context for the company's future in light of its recent contract with the VA MVP.
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