Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Personalis Fell as Much as 13.8% Today

By Maxx Chatsko – Aug 12, 2020 at 12:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The genomics company announced a public offering of common stock.

What happened

Shares of Personalis (PSNL -8.46%) fell nearly 14% today, after the company announced the pricing of a public offering of common stock. The genomics company will issue up to 7.56 million shares of common stock at $19 apiece. The offering could result in gross proceeds of up to $143.5 million. 

Personalis ended June with $105 million in cash and reported an operating cash outflow of $24 million in the first six months of 2020. The offering wisely takes advantage of a soaring stock price and pads the balance sheet during the market launch of an important new liquid biopsy product.

As of 11:22 a.m. EDT, the small-cap stock had settled to a 11.8% loss.

A series of declining arrows drawn on a chalkboard

Image source: Getty Images.

So what

Personalis has developed a genomics data-mining technology platform called NeXT. Made possible in large part thanks to a lucrative relationship with the U.S. Department of Veterans Affairs (VA), the platform is capable of scanning all 20,000 human genes for genomic patterns that can guide cancer diagnosis and treatment. 

The company offers two products: ImmunoID NeXT (a tissue biopsy) and NeXT Liquid Biopsy (a liquid biopsy). The latter launched in the beginning of August. Personalis hopes the two products will be paired together by customers to provide unrivaled insights into a patient's cancer. Considering its liquid biopsy covers 20 times more genes than most similar tests available on the market, that vision might not be corporate marketing fluff. However, it's currently only intended for advanced solid tumor cancers and focused on biopharmaceutical companies, not clinicians.

Now what

Today's stock offering wisely takes advantage of a soaring stock price and provides a financial cushion to make the most of the NeXT Liquid Biopsy market launch. It will take at least a few quarters for investors to gauge the early success of the product, which makes changes to the company's customer count and signs that the tissue and liquid biopsy products are being paired together two of the more important metrics to watch in the next year. 

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Personalis, Inc.  Stock Quote
Personalis, Inc.
PSNL
$3.14 (-8.46%) $0.29

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
338%
 
S&P 500 Returns
108%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.