Personalis (PSNL) Q3 2025: MRD Clinical Test Volume Up 364% as Coverage Decisions Near
Personalis’ Q3 marked a pivotal step in its MRD-led transformation, with clinical test volumes up sharply and reimbursement milestones approaching. While biopharma revenue remained volatile due to project timing and logistics, the company’s core MRD platform is seeing accelerating adoption among oncologists and biopharma partners. With three coverage dossiers under review and a strong cash position, Personalis is positioned for a potential inflection in high-margin clinical revenue as reimbursement comes online.
Summary
- MRD Clinical Adoption Surges: Clinical test volumes soared as Next Personal gained traction with over 700 physicians.
- Reimbursement Pathway Progresses: Three coverage dossiers now under Moldex review, with decisions targeted by year-end.
- Biopharma Revenue Remains Lumpy: Project timing and logistics created near-term volatility, but underlying MRD demand is robust.
Performance Analysis
Personalis’ Q3 results reflect a business in transition from legacy translational research toward high-growth, high-margin MRD (minimal residual disease) testing. Total revenue was pressured by expected declines in legacy contracts (notably Natera and Moderna), and the company’s top line is now predominantly driven by biopharma and clinical MRD volumes. Biopharma revenue fell year-over-year, primarily due to the conclusion of a major Moderna trial, but this was partially offset by rapid growth in Next Personal MRD revenue from new and existing biopharma partners.
Clinical test volumes are the clearest signal of future revenue upside, with 4,388 tests delivered—up 364% year-over-year—driven by strong adoption among oncologists and the Tempus partnership. The company has already achieved its full-year volume goal a quarter early, indicating robust demand and effective commercial execution. Gross margin compressed to 13.2% due to lower total revenue and continued investment in unreimbursed clinical testing, but management expects significant expansion post-reimbursement.
- Legacy Contract Wind-Down: Natera and Moderna exits compressed revenue, but diversified biopharma customer base is filling the gap.
- Margin Dilution Managed: Margin pressure reflects deliberate investment in clinical test volume ahead of expected reimbursement.
- Cash Discipline Holds: Cash usage guidance unchanged despite lower revenue, with $150 million in cash and no material debt.
Personalis is deliberately investing ahead of reimbursement, balancing test volume growth with margin and cash discipline to position for a future inflection in profitability.
Executive Commentary
"Q3 was another step forward in our win in MRD strategy. We delivered 4,388 clinical tests, a 26% sequential and 364% year-over-year growth, and now have 700-plus physicians ordering NexPersonal. We also submitted lung cancer for coverage, and we now have three dossiers under review by Moldex as we continue to target two coverage decisions in 2025."
Chris Hall, Chief Executive Officer and President
"The year-over-year decrease of 20.8% was expected and primarily due to the 44% lower revenue volume, which reduced the amount of fixed cost absorption and also an increase in clinical test costs in advance of reimbursement. Excluding those expenses, gross margin would have been approximately 31%. We are being prudent by balancing test volume and margin dilution."
Erin Toshibana, Chief Financial and Chief Operating Officer
Strategic Positioning
1. MRD Platform as Core Growth Driver
Personalis’ Next Personal MRD test, capable of detecting one tumor DNA fragment per million, is rapidly becoming the centerpiece of the business model. The company’s strategy is to build a large installed base of clinical users and biopharma partners ahead of reimbursement, betting on ultra-sensitivity as a clinical necessity for early recurrence detection and negative result confidence. Clinical adoption is compounding, with over 700 physicians ordering and retention rates high.
2. Reimbursement and Clinical Evidence Milestones
Three coverage dossiers (breast, IO, lung) are now under Moldex review, with Personalis targeting two decisions in 2025. Management emphasized the importance of accumulating robust clinical evidence, referencing recent Phase III data from AstraZeneca and the launch of the CATE trial with Yale, designed to demonstrate utility in breast cancer. Reimbursement is the key catalyst for a ramp in high-margin clinical revenue and margin expansion.
3. Biopharma Diversification and Pipeline Expansion
While biopharma revenue is currently lumpy due to project-based work and logistics, Personalis is signing multi-year prospective clinical trials with large pharma partners, expanding its opportunity set beyond legacy contracts. The company expects MRD biopharma revenue to triple year-over-year, with large account penetration still in early stages and order size potential well above $5 million per customer as adoption deepens.
4. Commercial Partnerships and Go-to-Market Leverage
The Tempus, clinical data and diagnostics company, partnership continues to outperform, with Personalis achieving its annual clinical volume target a quarter early. Management is scaling its own sales force to complement Tempus, preparing for a full commercial push once reimbursement coverage is secured.
Key Considerations
This quarter underscores Personalis’ deliberate pivot from legacy research contracts to a focused, high-growth MRD platform strategy. The company is investing in test volume and evidence generation ahead of reimbursement, while maintaining financial discipline and cash runway.
Key Considerations:
- Pending Reimbursement Decisions: The outcome and timing of Moldex coverage reviews will determine the pace and profitability of clinical revenue growth.
- Managing Margin Dilution: Aggressive investment in unreimbursed clinical testing is a calculated risk, with future margin expansion dependent on successful reimbursement.
- Biopharma Revenue Variability: Project timing, customs delays, and large contract wind-downs create near-term lumpiness, but underlying MRD demand is robust and pipeline is expanding.
- Cash Burn and Discipline: Cash usage guidance held steady despite lower revenue, demonstrating operational flexibility to fund strategic priorities without compromising runway.
- Commercial Execution: Physician retention and account penetration are critical as the company shifts from top-line growth to depth within existing accounts.
Risks
Personalis’ near-term outlook is highly sensitive to the timing and outcome of reimbursement decisions, which remain subject to regulatory review cycles and potential delays. Biopharma revenue is exposed to project timing and external logistics, including customs and government shutdown effects. Margin dilution from unreimbursed clinical testing is a calculated risk that could extend if reimbursement is delayed. Competitive intensity in MRD testing is increasing, and physician adoption could slow if alternatives gain traction or reimbursement is not secured as planned.
Forward Outlook
For Q4 and full-year 2025, Personalis guided to:
- Total company revenue of $68 to $73 million (reduced from prior $70 to $80 million)
- Pharma tests and services revenue of $50 to $54 million (down from $52 to $58 million)
- Population sequencing plus enterprise revenue of $16.5 to $17 million (up from $15 to $16 million)
- Clinical tests reimbursed revenue of $1.5 to $2 million (down from $3 to $6 million)
- Gross margin of 22% to 24% (unchanged)
- Net loss of approximately $85 million and cash usage of $75 million (unchanged)
Management highlighted continued discipline on cash burn, a growing MRD pipeline, and a focus on scaling commercial operations in anticipation of reimbursement inflection. Key watchpoints remain the pace of Moldex reviews, clinical evidence publication, and biopharma project onboarding.
Takeaways
- MRD Adoption Outpaces Legacy Decline: Next Personal clinical test volume growth and biopharma traction are offsetting the wind-down of legacy contracts, supporting the platform transition narrative.
- Reimbursement Is the Catalyst: Pending coverage decisions are the gating factor for margin expansion and sustainable revenue growth, with management signaling confidence in data strength and review progress.
- Execution on Cash and Commercial Depth: Personalis is balancing growth investments with cash discipline, focusing on deepening relationships within key accounts to maximize future revenue per customer.
Conclusion
Personalis’ Q3 demonstrates a business in the midst of a high-stakes transition: clinical MRD adoption is accelerating, reimbursement milestones are within sight, and operational discipline is holding amid near-term revenue lumpiness. The next quarters will hinge on reimbursement outcomes and the company’s ability to convert clinical and biopharma momentum into profitable, recurring revenue streams.
Industry Read-Through
Personalis’ results reinforce the accelerating shift in oncology diagnostics toward ultra-sensitive MRD testing as a new standard of care, with reimbursement and clinical evidence as the primary bottlenecks for market expansion. The pronounced volatility in biopharma revenue highlights sector-wide exposure to project timing, trial logistics, and contract transitions—an issue likely relevant for other platform companies serving pharma R&D. As competitive intensity rises, commercial partnerships and evidence generation will be key differentiators for all MRD and liquid biopsy players.