Personalis surges 9.8% on Medicare coverage for lung cancer test
Coverage decision expands access to NeXT Personal MRD test for 230,000 annual US patients
Personalis shares jumped 9.8% on Tuesday after the cancer genomics company secured Medicare coverage for its NeXT Personal molecular residual disease test in lung cancer surveillance, opening a significant revenue pathway in the largest cancer diagnostic market in the United States.
The Medicare coverage decision applies to patients with Stage I to III non-small cell lung cancer, representing approximately 230,000 new cases diagnosed annually in the US. The coverage determination was based on clinical evidence from the TRACERx consortium, a longitudinal study that demonstrated NeXT Personal's high accuracy in identifying residual disease.
"Securing Medicare coverage for lung cancer surveillance is a major step forward, broadening patient access and serving as a catalyst for the company's continued growth," said Chris Hall, chief executive officer and president of Personalis. "Medicare beneficiaries battling lung cancer will now have access to ultrasensitive MRD testing, providing deeper insights for managing their care."
The announcement marks a critical commercial milestone for the Menlo Park, California-based company, which specializes in advanced genomic sequencing to enable personalized cancer therapies. The NeXT Personal test uses whole-genome sequencing and advanced noise-suppression technology to track up to approximately 1,800 mutations unique to a patient's tumor, detecting trace amounts of circulating tumor DNA that can indicate cancer presence before it's visible on standard imaging scans.
Analysts at BTIG described the Medicare approval as a "major derisking event" for the company, according to market coverage. The coverage builds upon the company's earlier Medicare approval for breast cancer surveillance, which secured a reimbursement rate of $4,266 per test that took effect in December.
Personalis reported revenue of $69.1 million over the trailing twelve months, with the company maintaining a market capitalization of approximately $715 million following Tuesday's rally. The stock, which now trades at $8.60, remains below its 52-week high of $11.50 but has recovered significantly from its 52-week low of $2.83.
Wall Street analysts maintain a predominantly bullish outlook on the shares, with six analysts rating the stock a Buy versus one Hold rating, according to consensus data. The average price target stands at $11.14, representing potential upside of approximately 29% from current levels.
Dr. Richard Chen, chief medical officer and executive vice president of R&D at Personalis, emphasized the clinical significance of the coverage decision. "This decision helps cancer patients and physicians access the NeXT Personal test to navigate the uncertainty in their cancer journey, as lung cancer survivors often live with significant worry about recurrence," Chen said.
The Medicare coverage expansion comes as Personalis has reported strong momentum in test volumes, with 41% quarter-over-quarter growth in the fourth quarter of 2025, supported by strategic partnerships including an alliance with Tempus. However, the company continues to face financial challenges, having lowered its 2025 revenue guidance while navigating logistical issues related to global sample processing.
Lung cancer remains the leading cause of cancer death in the United States, making the surveillance market particularly significant for diagnostic companies. For patients with Stage I-III non-small cell lung cancer, recurrence represents a primary clinical concern, creating substantial demand for effective monitoring tools like molecular residual disease testing.
The company's proprietary technology platform addresses a critical limitation in ctDNA detection: low tumor DNA shedding in early-stage cancers. By achieving ultrasensitivity through whole-genome sequencing, NeXT Personal can identify minimal residual disease that other tests might miss, potentially enabling earlier intervention and improved patient outcomes.
Despite the positive catalyst, analysts caution that Personalis remains unprofitable, with negative earnings per share of $0.83 over the trailing twelve months. The company's path to profitability will depend heavily on successful commercial execution of its newly covered tests and continued expansion into additional cancer indications.