On Friday, H.C. Wainwright adjusted its outlook on shares of Personalis (NASDAQ: NASDAQ:PSNL), raising the price target to $11.00 from the previous $9.00, while maintaining a Buy rating on the stock.
The stock has shown remarkable momentum, with InvestingPro data showing a 37.7% gain in the past week and an impressive 327.6% surge over six months. The revision comes after Personalis announced an update on its ongoing collaboration with Merck (NS:PROR) (MSD) and Moderna (NASDAQ:MRNA), neither of which are rated by the firm.
The update highlighted that Merck has committed to acquiring approximately $50 million of Personalis common stock, which equates to an ownership stake of around 16.5%. This substantial investment by Merck is seen as a vote of confidence in Personalis’ business potential and its NeXT Personal ultrasensitive minimal residual disease (MRD) testing business, along with the ImmunoID NeXT platform. According to InvestingPro data, Personalis maintains strong liquidity with a current ratio of 4.68, indicating robust short-term financial health.
According to H.C. Wainwright, Merck’s equity investment is expected to extend Personalis’ cash runway into the second half of 2027, which is an improvement from the initially projected first half of the same year. The firm views this financial boost as a significant endorsement of the company’s growth prospects and the strategic direction under CEO Chris Hall’s leadership.
The analyst at H.C. Wainwright believes that the equity investment from Merck not only provides financial stability but also validates the new business strategy that Personalis’ management has been implementing. The increased price target to $11 reflects the positive developments and adjustments made to their financial model based on the recent business activities.
In other recent news, Personalis, Inc. has reported significant developments. The company has secured an investment from Merck and extended its collaboration with Moderna. The partnership focuses on the use of Personalis’ ImmunoID NeXT Platform® in the ongoing development of an investigational individualized neoantigen therapy (INT), a novel approach to cancer treatment.
In financial news, Personalis reported a substantial 41% increase in year-over-year revenue for the third quarter of 2024, amounting to $25.7 million. This growth was driven by a 96% surge in biopharma sector revenue, attributed to the demand for their tumor profiling products and the NeXT Personal MRD assay. Moreover, the company raised its full-year revenue guidance to between $83 million and $84 million.
However, Personalis expects a decline in Q4 revenue to between $15 million and $16 million, mainly due to a decrease in revenue from Moderna and Natera (NASDAQ:NTRA). Additionally, the net loss for Q3 was reported at $39.1 million, influenced by a $26 million non-cash expense related to warrant accounting.
Despite these challenges, the company saw an improvement in gross margin to 34% in Q3, up from 19.1% year-over-year. These are the latest developments in the company’s recent performance.
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