Personalis, Inc.

Greetings. Welcome to the PersonAlysis first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the call over to Caroline Corner. Please go ahead. Thank you, operator. Welcome to PersonAlysis First Quarter 2025 Earnings Call. Joining today's call are Chris Hall, Chief Executive Officer and President, Erin Toshibana, 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 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 of 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 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 an 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 ultra-sensitive MRD test, Next Personal, we believe Earth's analysis position for success. Our technology is able to detect cancer when there's only about one fragment of tumor DNA circulating in a 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 and 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 three 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 to 90 million in revenue for 2025, 30 to 40% quarter over quarter growth in molecular results, and achievement of reimbursement at least two indications in 2025. Now, let's dive into the business by outlining progress metrics key to our win and MRD strategy. First is clinical usage. We are making great strides in driving NexPersonal into the nation's oncology community. We're following a unique partner-centric strategy to commercialize NexPersonal 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 WinMRD 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 ultra-sensitive 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 in 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 three indications, breast cancer, lung cancer, and IO therapy monitoring. We've previously summarized the findings from investigators at Royal Marston for breast cancer, VHIO for IO therapy monitoring, and TracerX for lung cancer. These three indications and their results are powering three different Medicare submissions. In March, the Royal Marston 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 at least two 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 post-surgical 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 VICTORY. The BC Cancer dataset 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 two to eight weeks post-surgery, with the majority of those detections in the ultra-sensitive range that we unlock with our assay. Additionally, 100% of metastatic relapses were detected by the assay, including all distant lung metastasis. 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 NextPersonal 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 3 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 four weeks after surgery. The test was positive and it was in the ultra-sensitive 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 in examples like this where ultra-sensitive tests can positively impact a patient's journey that motivates 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'll 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 three indications, breast, lung, and IO therapy monitoring, to be presenting results in future conferences and these studies to continue to fuel a robust publications roadmap. 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 career on an approximately 100-patient early-stage triple-negative breast cancer, and with MD Anderson. In iotherapy monitoring, we're working with UKE at two different melanoma studies, with Duke in a study of gastric cancer patients, and with UCSD in a pan-cancer iotherapy study across eight 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 DARWIN2. As the data from these studies begin to enter the public domain, we expect it to highlight the importance of our ultra-sensitive approach to detecting CT DNA and allow physicians to better manage and treat patients with cancer. The third area we are tracking is progress with our biopharma customers. The ultra-sensitive 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 three to 400% in MRD revenue from biopharma customers. Importantly, We've landed two 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 an MRD. Our employees, collaborators, and partners are working hard to improve the journey for cancer patients with an ultra-sensitive 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 ultra-sensitive 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 Erin 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 VAMVP 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 recognize $0.3 million of revenue from our clinical tests NextDX, and NextPersonal. Gross margin was 35% in the first quarter compared to 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 obtained reimbursement coverage and achieved 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 Tempest and were outstanding as of the first quarter of the prior year. Excluding the non-cash 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 to $20.5 million, revenue from pharma tests and services and all other customers in the range of $13 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 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 to 64 million. Population sequencing plus enterprise customers in the range of 15 to 16 million. Clinical revenue in the range of 3 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. That 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 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?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. First question, Thomas Clayton with Lake Street Capital. Please go ahead.

Hey, good afternoon, guys. Thanks for taking the questions. Hey, 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?

Yeah, thanks. Great question. Good to hear from you. Yeah, 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 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 Tempest 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, you know, of the 2,100 that you did this past quarter, how many of those were from, you know, doctors that have previously used it? Is it all new docs? Just any kind of color on the docs would be great.

Yeah, 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. You know, clearly in a high-growth phase where especially Tempest's 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, 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 for personnel. It's 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 the strategy is is working the way we expected it to.

Thanks. Appreciate the call. Thanks, guys.

Next question, Bill Bonolo with Craig Howland. Please go ahead.

Hey, guys. 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 Tempest are just sort of, you know, peddling the metal on trying to get new customers and whatnot. So how do we kind of think about that? you know, the growth and the marketing efforts today compared to what they might look like post-reimbursement?

Yeah, I mean, I think we were metering it, Bill. So we could certainly, you know, push faster with Tempest. 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 three, four people in the field calling on physicians. And that's been working with a group of physicians that we had ourselves and complementing Tempus. And the lever to go significantly faster is to deploy more reps out. 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% to grind a little faster than even we had planned or had targeted before. doing internally, which is really great. But we could shift into higher gears 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 tightrope the best

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

Yeah. So, hey, 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, Salesforce, 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 Tempest 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 forward from the subsequent standpoint. On the Tempest side, Tempest 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. And, you know, 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, you know, working collaboratively in places where we can. So, you know, 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, you know, try to make sure the physician gets, you know, gets, you know, gets, 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, to be managed through the Tempest architecture. So that's whatever works well for the customer, because you remember they have all the EMR linkages and all they have all that built as a, It's 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.

Sure. Okay. I'll hop back in the queue. Thanks so much.

No, thanks a lot, Bill.

Next question. Mike Mattson with Needham & Company. Please go ahead.

Hi, guys. This is Joseph from Mike. I guess just maybe on the victory data, You know, it was really great to see that. It was super strong data. Just a couple of questions around that. I guess the first one, just with maybe Tempest and then with your own Salesforce, you know, I know it's a small amount of data and you guys are looking to expand on that, but is this, you know, another indication that you're wanting Tempest to start marketing for? And then, you know, 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, you know, cancer staging. I'm just trying to understand a little bit more how this compares with, you know, your competitors. And then, you know, I guess maybe also just if you could compare, if you have any data on, you know, 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. Thanks. 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, yeah, 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 has been developed, and reimbursement is the stronger, and we think the data looks really good, and 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 it has to go through the publication, and then we'll submit. So, you know, it's going to take some time for all this to stitch together. But, you know, as we go along, and we're in this for the long haul, you know, 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, you know, with them from an exclusive standpoint. Rich, you want to talk about the data?

Yeah, sure. Yeah, no, it's a great question. And yeah, we're very pleased with the interim results of this prospective study, you know, highly encouraging in colorectal cancer. These are patients that were stage one through four resectable colorectal cancer. And so, you know, it was a really nice cross-section of colorectal cancer across all the different stages. And as you noted, we were very pleased to see really, really high landmark sensitivity to date in this cohort. You know, 87% of recurrences were detected in that two- to eight-week window, which is really nice to see. It compares, you know, very favorably to, you know, 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, you know, others have demonstrated that, you know, detecting the metastasis metastatic colorectal can be challenging at times. And we were able to detect, you know, all the recurrences, including the distant metastasis in this study. So all in all, we were happy. We're going to to see those results, and we're looking forward to kind of further readouts on this cohort.

Okay, great. That's helpful. Yeah, 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, you know, had an update on your expectation for that. But more specifically, just so I can understand, you know, how award, how, like, an award goes about this, would it apply to any indication that, you know, currently has CMS reimbursement or, you know, reimbursement that CMS has awarded you guys? Or does it need to be applied for each indication?

Yeah. So, I mean, I think the process is you don't apply or engage with ADLT status until after you've gotten reimbursement. So, that's... 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'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 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 built the model to thrive if we do not achieve either one of those two drivers. Our COGS are about 40% of the reimbursement. you know, which, which, which we think is, it puts us at a 60%, you know, gross margin. And then we've been able to secure with Tempest 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 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.

Okay, perfect. Congrats on a strong quarter, you guys.

Thanks. We appreciate it.

Mark Massaro with BTIG, please proceed.

Thanks for taking the question. Maybe just one quick one on the model. Were there any one-timers in the quarter just as far 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?

Thanks. Hi, Vivian. This is Aaron. No one-timers, so to speak. So, in terms of what was in our guide of 17 to 18 million for Q1, most of that beat was coming from biopharma. Biopharma was 13.6 million. The guide there was 10 to 11 million. 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 two quarters of 2025. 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 you know, starting to defer certain projects and, you know, even tighten things up or constrict the size of some of them. And so, you know, we're seeing something in the range of $3 to $5 million out in time, you know, from an impact standpoint. We're not changing our guidance. Our guidance is still $80 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.

Thanks for the color there. And then I know there was a prior question on CRC, but maybe just ask 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?

Thanks.

Yeah. Yeah. Happy to answer that. And it's a great question. In colorectal cancer, you know, our collaborators and I think other KOLs in the space have really identified that there's a need for sensitivity in that landmark window. And so landmark window is really the first, you know, two to eight weeks, two to ten weeks after surgery for colorectal cancer patients. And the reason that window is about how to manage the patient and the patient's treatment. And so I think one of the key areas that we demonstrate a really strong performance here, differentiated performance, is our sensitivity in that landmark window between two and eight weeks where we show 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, you know, enabled by, the fact that we have a highly sensitive test. And so that's, I think, one way it definitely, the ultra sensitivity 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 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... Yeah.

No, I would just note that, you know, we started in the breast and lung where the, you know, 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 ultra sensitivity 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 And we're seeing that in the data across all the cancers and indications that we're looking at.

Thanks so much for taking the questions.

Next question, Dan. Dan Brennan with Cowwood. Please go ahead.

Great. Thanks for the questions. Congrats on the print. Maybe just the first one, just on the Mold Express 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?

Yeah, we will.

We're not going to give any updates through the journey, just to be clear. I mean, unless we see a recent update. But we still feel confident. We're tracking ahead of schedule on that. our internal forecast of where we were. And so we feel like we're in a really good position to get two of the three that we're gunning for done this year. And, you know, all the evidence internally is pointing us in that direction. So we're reiterating that and underlining our confidence on where we stand there. You know, 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 their 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 two 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 three indications in three 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. Thanks. And maybe just on some of the early feedback amongst the doctor to using the test, just how are they using it? You know, obviously you've got, you know, the terror on the market. Just wondering from the doctors, are they using it complimentary? Are they using it in place of? Just certain use cases maybe.

I know it's still early, but just wondering kind of, you know, how the doctors are deciding to use your test.

Yeah, I mean, I think they use it. I mean, we're finding that they're using it, you know,

I mean, I don't think – I'm sure there's some complementary uses, you know, 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 watch the parts per million as you proceed through therapy. Number one. Number two, look for cancer recurrence post-treatment, and especially, you know, right after a surgery in breast and lung, I think are the key use cases that we're seeing.

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

Yeah, there's some oral presentations, maybe the one to, 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.

Yeah, what's really exciting when you just step back and you look at it all that I, you know, because we've been at this now and doing these calls is that The data, you know, when you get good results in one data set, you feel good, but you hold your breath and you wait for the second one and 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, you know, 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 in indication, use case, and data set after data set, indication after indication of the And so we feel like we're really starting to pick up steam and adding value.

Terrific.

Thank you. Yuko Oku with Morgan Stanley. Please proceed.

Hello. Thank you for taking my question. Given that Victoria study seems to suggest earliest and optimal time for blood draw to inform decision on subsequent therapy at four weeks, Do you think that this timing will be applicable across various tumor types, or could it vary by cancer types?

Yeah, thanks for your question. It will vary by cancer type. You know, cancer is shed at different rates and 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 I appreciate the color and 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?

Yeah, so we, you know, we've been used by most of the top biopharma, you know, companies in the world for our Next ImmunoID platform, which was used to characterize, you know, samples and built those relationships. And we've been leveraging those relationships with MRD. The use case that we're finding is valuable there, you know, among biopharma customers is first and foremost to get an early answer quickly on a clinical trial. Next personal can help to fail a trial, 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. That would be a sort of a prospective study. And picking patients out of the pool that are unlikely to recur, i.e., they're, you know, 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, you know, 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, you know, 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, you know, there's a whole new batch at ASCO of studies. this year and at AACR with the victory study. So we continue to work with ever increasing numbers of collaborators and studies. And BioPharm will ultimately be a piece of that, but it's not the main piece of our strategy.

Got it. That was helpful, Cutler. 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 three buckets using an ultra-sensitive assay. How valuable has that been for Biopharma?

Yeah, I think, you know, Biopharma are really, really interested in that data because the patient stratification obviously is a core piece of what they need to, you know, they want to use the assay for. So I'd say, you know, you know, the ability to understand which patients are most at risk and intermediate and less is an important part of that understanding for them.

So, yeah, it's definitely of great interest.

Great.

Thank you.

Next question. with HC Wainwright. Please go ahead.

Thank you. Good afternoon, Chris and team. I really appreciate taking my questions. If any of my questions in part have been answered, I apologize for asking again because I've been in and out of calls. You know, at a high level, with all sorts of changes going on, you know, in various regulatory agencies and the federal government, How confident are you, you know, in the process where you are with them in terms of, you know, getting the reimbursement approval, you know, according to our internal timelines? Because just trying to understand your confidence level there.

No, 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 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, you know, 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. Is that helpful, RK?

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

Yeah, no, absolutely. So the assay is ready. It's done. The assay is a, you know, pan-cancer all-solid tumor assay, and it does not depend on the type of cancer. So, you know, we create a personalized snapshot of a patient's tumor, and the assay doesn't care what kind of tumor it is. So then the question has been building evidence to show that we can add incremental value in individual cancers. So, you know, 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 the test works really well, and we validated it that way. So we feel like... 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, you know, needs to be finalized, needs to be written into publication. It needs to be submitted, and then it needs to be, you know, needs to be after it's been submitted for publication, it has to be accepted. And after it's been accepted, then we can submit for Medicare reimbursement. So we have a ways 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, you know, I mean, we're in this for the long term. And, you know, having 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 one of the reasons why we're super excited about it.

Yeah, yeah. Great. Thank you for taking my questions.

Sure. Thank you. This concludes today's teleconference. You may disconnect your lines at this time.

Goodbye.

Thank you for your participation.