Personalis (PSNL) Q1 2025: MRD Test Volumes Surge 52% as Reimbursement Milestones Near
Personalis delivered a pivotal quarter as Next Personal MRD test volumes jumped 52% sequentially, confirming strong clinical adoption and biopharma traction. The company’s partner-enabled commercial strategy and deepening clinical evidence are setting the stage for reimbursement wins in key oncology indications. With a robust cash position and focused investment ahead of inflection, Personalis is positioned for accelerated growth as reimbursement decisions approach in 2025.
Summary
- MRD Test Adoption Accelerates: Next Personal delivered 2,184 tests in Q1, up 52% sequentially, reflecting robust clinical and biopharma demand.
- Reimbursement Catalysts Building: Clinical evidence in breast, lung, and immunotherapy monitoring is powering near-term Medicare submissions.
- Biopharma Momentum Drives Growth: Two new large biopharma customers and record MRD revenue reinforce the platform’s competitive edge.
Performance Analysis
Personalis reported total revenue of $20.6 million for Q1, with biopharma revenue reaching $13.6 million, up 39% year-over-year. The company’s MRD (minimal residual disease) testing platform, Next Personal, was the key growth driver, with clinical test volumes surging 52% sequentially and up roughly 650% year-over-year. This step-change in test volume highlights both expanding physician adoption and the effectiveness of the Tempus partner sales model, which leverages a 200-person field force to accelerate market penetration.
Gross margin improved to 35%, up from 28.1% a year ago, primarily due to favorable customer mix and increased biopharma volumes. However, unreimbursed clinical test costs continue to weigh on reported margins, with management emphasizing that margins could reach approximately 43% post-reimbursement and scale. Operating expenses rose modestly, reflecting investments in commercial and clinical infrastructure ahead of anticipated reimbursement inflection. The net loss for the quarter was $15.8 million, but Personalis ended Q1 with $185.7 million in cash and short-term investments, providing a strong runway to fund growth and evidence generation initiatives.
- Test Volume Expansion: Next Personal molecular tests delivered grew 52% quarter-over-quarter, signaling rapid adoption across both new and existing physician users.
- Biopharma Revenue Strength: Biopharma segment contributed 66% of total revenue, driven by increased MRD adoption and new customer wins.
- Margin Leverage Potential: Gross margin excluding unreimbursed clinical costs would have been 43%, underscoring the impact of reimbursement on profitability.
Clinical, enterprise, and VA segments also delivered robust results, with clinical diagnostics achieving its highest quarterly revenue to date. The company’s continued investment in field sales and evidence generation is expected to drive further acceleration post-reimbursement.
Executive Commentary
"We 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."
Chris Hall, Chief Executive Officer and President
"Gross margin was 35% in the first quarter compared to 28.1% for the same period of the prior year. Excluding [unreimbursed clinical test costs], gross margin would have been approximately 43%, and highlights our ability to expand margins further once we obtained reimbursement coverage and achieved scale."
Erin Toshibana, Chief Financial and Chief Operating Officer
Strategic Positioning
1. MRD Market Leadership and Clinical Differentiation
Personalis is targeting the $20 billion MRD market with ultra-sensitive ctDNA detection, enabling earlier and more confident cancer recurrence monitoring. The Next Personal platform’s ability to detect a single tumor DNA fragment among a million in blood differentiates it from competitors, especially in challenging, low-burden cancers like breast and lung. Early feedback from physicians has been strong, with high retention and increasing reorder rates.
2. Partner-Driven Commercialization with Tempus
The company’s partner-centric sales approach leverages Tempus’ expansive field force, accelerating physician adoption while Personalis maintains a focused internal sales team. This model allows efficient scaling pre-reimbursement and preserves flexibility to “shift into higher gear” once reimbursement is secured, balancing growth with gross margin discipline.
3. Evidence Generation and Reimbursement Roadmap
Personalis is executing a multi-indication evidence strategy, with pivotal data in breast, lung, and immunotherapy monitoring powering Medicare submissions. The recent VICTORY study in colorectal cancer (CRC) demonstrated 100% recurrence detection prior to imaging and 87% sensitivity in the critical 2-8 week post-surgery window, positioning the platform for future CRC reimbursement. Management expects at least two reimbursement wins in 2025, setting up a step-function in clinical revenue and margin expansion.
4. Biopharma Platform Expansion
Biopharma remains a core growth engine, with Next Personal and ImmunoID Next supporting leading pharma partners, including Moderna. The ultra-sensitive MRD platform enables faster, more efficient clinical trials, driving both new customer wins and deeper integration with existing partners. Two new biopharma customers are expected to contribute $5 million each annually, reinforcing the platform’s stickiness and long-term revenue visibility.
5. Robust Financial Positioning and Investment Discipline
With $185.7 million in cash and a disciplined cost structure, Personalis is well-capitalized to invest in clinical expansion, evidence generation, and commercial scaling. Management is balancing near-term investments in test volume and sales infrastructure against the timing of reimbursement, ensuring that the business can accelerate rapidly as revenue inflects post-coverage decisions.
Key Considerations
This quarter marks a strategic inflection for Personalis as clinical adoption, biopharma growth, and evidence generation converge ahead of key reimbursement catalysts. The company’s approach to commercial scaling, R&D investment, and capital allocation reflects a deep understanding of the oncology diagnostics market and the critical importance of timing in reimbursement-driven businesses.
Key Considerations:
- Clinical Evidence as a Revenue Lever: Robust data in breast, lung, immunotherapy, and now CRC underpins future reimbursement and market share gains.
- Partner Model Enables Efficient Scaling: Tempus partnership accelerates adoption without overextending internal resources pre-reimbursement.
- Biopharma Diversification: Continued strength in biopharma revenue and new customer wins offset reimbursement timing risks in clinical diagnostics.
- Margin Expansion Hinges on Coverage: Gross margin potential is significant post-reimbursement, with current results understating underlying profitability.
- Cash Runway Supports Aggressive Investment: Ample liquidity allows Personalis to fund growth and evidence-building through expected inflection points.
Risks
Reimbursement timing and pricing remain the most material risks, as clinical revenue and margin expansion are contingent on Medicare coverage in targeted indications. Biopharma project deferrals due to broader pharmaceutical market headwinds and tariffs could delay revenue recognition, though the funnel remains robust. Investments in test volume and sales infrastructure ahead of reimbursement could pressure margins if coverage is delayed or pricing is below expectations. Regulatory or competitive developments in MRD could also shift the competitive landscape.
Forward Outlook
For Q2 2025, Personalis guided to:
- Total company revenue: $19.5 to $20.5 million
- Pharma tests and services: $13 to $14 million
- Population sequencing plus enterprise: ~$6.5 million
For full-year 2025, management reiterated guidance:
- Total revenue: $80 to $90 million
- Gross margin: 22% to 24% (down from 32% in 2024 due to pre-reimbursement investments)
- Net loss: ~$83 million (includes $20 million unreimbursed test costs)
- Cash usage: ~$75 million
Management highlighted drivers including:
- Pending reimbursement decisions in at least two indications, expected to unlock accelerated growth and margin leverage
- Continued strong biopharma demand, offsetting any near-term delays in clinical reimbursement
Takeaways
Personalis is at a critical juncture as clinical adoption, biopharma momentum, and evidence generation converge ahead of anticipated reimbursement inflection.
- Test Volume Inflection: 52% sequential growth in Next Personal test volumes signals strong market demand and sets up for accelerated adoption post-reimbursement.
- Evidence Pipeline Drives Coverage: Multi-indication clinical data and Medicare submissions in breast, lung, and IO monitoring are key to unlocking future growth.
- Watch for Margin Expansion: Investors should monitor reimbursement timing and pricing, as these will determine the pace of margin and cash flow improvement in 2025 and beyond.
Conclusion
Personalis’ Q1 results confirm rapid MRD test adoption and biopharma traction, positioning the company for a step-change as reimbursement catalysts approach. The combination of robust evidence, a scalable partner model, and a strong balance sheet supports confidence in the company’s long-term growth trajectory.
Industry Read-Through
Personalis’ accelerating MRD test adoption and growing biopharma demand highlight the increasing importance of ultra-sensitive ctDNA platforms in oncology diagnostics. The company’s evidence-driven approach and partner-enabled commercialization strategy provide a blueprint for emerging precision medicine businesses navigating pre-reimbursement scaling. Biopharma interest in rapid, sensitive MRD assays underscores the shift toward integrating liquid biopsy into both clinical care and drug development, with reimbursement timing and pricing remaining sector-wide watchpoints. Competitors must demonstrate similar sensitivity and evidence depth to remain relevant as the market matures and payers demand robust clinical utility data.