Personalis, Inc. (NASDAQ:PSNL), a company specializing in advanced genomics for cancer, has reached a settlement with Foresight Diagnostics, Inc., putting an end to ongoing litigation and inter-partes review proceedings related to patent disputes. The agreement was finalized on June 21, 2024, and was reported in a recent SEC filing.
Under the terms of the Settlement and License Agreement, both companies have agreed to dismiss all claims, defenses, and counterclaims in the litigation. The U.S. Patent Trial and Appeal Board (PTAB) will be requested to terminate the inter-partes review proceedings. Personalis has granted Foresight a non-exclusive, worldwide license to develop, manufacture, and commercialize products and services utilizing whole genome sequencing and a molecular residual disease panel that employs phased variants.
Foresight, in return, will pay Personalis tiered royalties on net sales of products and services covered by the licensed patents. The royalty rates are in the low-single digits, subject to standard reductions. The agreement also includes a clause that, in the event of a change of control at Foresight involving certain specified parties, the royalty rate will slightly increase, and Foresight will pay Personalis a one-time fee in the low single-digit millions.
Both companies have also agreed to release each other from any claims related to the litigation, the patent reviews, the licensed patents, and the licensed products and services. Additionally, they have made mutual covenants not to sue for products and services covered by certain patents owned or controlled by each party or certain of their affiliates. The license is perpetual and irrevocable unless Foresight challenges any of the licensed patents, in which case Personalis may terminate the license.
The agreement will remain in effect until the expiration of the licensed patents. Full details of the Settlement and License Agreement can be found in the exhibit attached to the SEC filing by Personalis.
This settlement resolves a significant legal dispute for Personalis, allowing the company to continue its focus on providing genomic sequencing services for cancer treatment without the overhang of patent litigation. The financial implications for Personalis include the receipt of ongoing royalty payments and the potential for a one-time fee, depending on future events involving Foresight's ownership.
In other recent news, Personalis Inc . reported significant first-quarter earnings in 2024, with revenues reaching $19.5 million, surpassing their own expectations. This represents a 55% year-over-year growth in the company's biopharma business. Needham has maintained a Buy rating on Personalis, with a price target of $3.50, following the presentation of two studies at the American Society for Clinical Oncology 2024 Annual Meeting. The studies showcased the efficacy of the NeXT Personal Minimal Residual Disease assay in early-stage breast cancer detection and immunotherapy monitoring in metastatic cancers.
However, Personalis has expressed caution regarding their 330 MRD test due to reimbursement concerns. Despite this, the company remains optimistic, aiming to secure reimbursement approval for three or four indications this year and a revenue target of $100 million by 2025. These are the latest developments in the company's ongoing progress.
InvestingPro Insights
The recent settlement between Personalis, Inc. and Foresight Diagnostics not only concludes a contentious legal chapter but also sets the stage for Personalis's financial trajectory. In light of this event, a look at the company's financial health and market performance offers valuable context. Personalis holds more cash than debt, a reassuring sign of financial stability (InvestingPro Tip). Moreover, analysts have shown confidence in the company's prospects by revising their earnings estimates upwards for the upcoming period (InvestingPro Tip).
InvestingPro Data paints a mixed picture. Personalis has a market capitalization of approximately $62.69 million, reflecting its size in the competitive biotech landscape. The company's revenue for the last twelve months as of Q1 2024 is reported at $74.15 million, with a growth of nearly 8%. This is complemented by a gross profit margin of 25.59%, indicating the company's ability to retain a quarter of its revenue as gross profit. However, it's important to note that Personalis is not yet profitable, with a reported operating income margin of -120.35% for the same period.
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