Analyst Upgrades Personalis; Says Biopharma Is Strong, Cash Burn Is Down

  • Needham has upgraded Personalis Inc PSNL to Buy from Hold with a price target of $8.
  • The analyst writes that Personalis's cash burn has likely peaked and expects it to decline steadily over the next few years. 
  • Needham writes that PSNL used $41 million of cash in 3Q22, up from $33 million in 2Q22, and a significant portion of its new facility expenses ($38 million in 2022) fell into 3Q22. 
  • The company used $121 million in 2022, up from $78 million in 2021 (down from its initial expectation of $140 million) and $45 million in 2020. 
  • Management had expected the cash burn to be less than $85 million in 2023, but recent steps to reduce operating expenses (including reducing its headcount by 30%) are expected to reduce its operating expenses by $17 million in 2023.
  • The analyst models $62 million of cash burn in 2023.
  • The analyst is also encouraged by the strength of the biopharma business, which has sustained 50% Y/Y growth for eight consecutive quarters through 3Q22 as customers increase engagement with the NeXT platform. 
  • Earlier this month, Personalis signed a new agreement to continue using the Personalis NeXT Platform as part of upcoming clinical studies of mRNA-4157/V940, an investigational personalized cancer vaccine jointly developed by Moderna Inc MRNA and Merck & Co Inc MRK.
  • The deal could generate a material amount of revenue for PSNL, and demonstrate PSNL's traction with biopharma customers, writes the analyst.
  • Price Action: PSNL shares are up 7.179% at $4.18 on the last check Monday.
Market News and Data brought to you by Benzinga APIs
Price Target
Posted In: Analyst ColorNewsPenny StocksUpgradesHealth CarePrice TargetAnalyst RatingsMoversTrading IdeasGeneralBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!