Freenome (NASDAQ:FRNM) reported third-quarter revenue of $183.5 million, driven largely by revenue recognition following the U.S. Food and Drug Administration’s approval of its blood-based colorectal cancer screening test. The company said it does not expect meaningful testing revenue or royalties in the fourth quarter as its commercial launch gets underway.
On Freenome’s first earnings call as a public company, Chief Executive Officer Aaron Elliott said Abbott began marketing and selling SimpleScreen CRC on Sept. 30. More than 2,000 clinical sites requested blood collection kits in the first 30 days, he said, although the company did not provide test volume guidance.
“It is too early to really provide any specific volume guidance,” Elliott said. He added that Freenome and Abbott are working on commercial metrics to track the launch and expect to provide a better update on the next earnings call.
Results reflect Abbott agreement
Third-quarter revenue rose from $1 million a year earlier. License and collaboration revenue totaled $182.5 million, including $180 million recognized following FDA approval of SimpleScreen CRC under Freenome’s agreement with Abbott, Chief Financial Officer Linh Le said.
That $180 million included $157.5 million for an exclusive commercialization license and a $22.5 million cumulative catch-up adjustment to revenue recognized in earlier periods. Separately, Freenome received a $100 million Abbott milestone payment for the test’s approval, which was included in third-quarter free cash flow.
Freenome reported net income of $60.1 million, or $0.58 per diluted share, compared with a net loss of $64.5 million, or $0.95 per share, a year earlier. Operating expenses rose to $113 million from $65.7 million, with the increase primarily reflecting noncash stock-based compensation, Le said.
The company ended September with approximately $430 million in cash, cash equivalents and marketable securities. It continues to expect those resources to fund operations into 2028.
For the fourth quarter, Freenome forecast revenue of $2 million to $4 million, bringing its full-year outlook to $192 million to $194 million. Le said the fourth-quarter outlook includes Abbott research and development fees, U.K. service revenue and a modest contribution from laboratory service fees associated with the CRC launch. Those lab fees reimburse Freenome’s processing costs and are gross-margin neutral, she said.
CRC launch focuses on providers and payers
Abbott has exclusive U.S. commercialization rights when SimpleScreen CRC is ordered as a standalone test. Freenome retains U.S. commercial rights when the CRC test is ordered alongside another Freenome test for an eligible patient.
The Abbott agreement provides for up to $885 million in potential payments, of which Freenome has received $242.2 million. Elliott said Freenome receives 50% of gross margin before a 20% gross-margin threshold is reached, after which a 10% royalty on net sales is triggered. He did not provide a timeline for reaching that threshold.
Elliott said Abbott has trained approximately 800 sales representatives and is working on provider education, electronic medical record integrations and payer negotiations. Abbott is engaged with most of the top 20 payers, he said, and Freenome expects to discuss progress with larger payers over the next couple of quarters.
Medicare set an initial price of $920 for SimpleScreen CRC, according to Elliott. He also cited recent coverage or policy developments involving UnitedHealthcare, Carelon and Cigna. Abbott is following American Cancer Society guidelines that position colonoscopy and stool-based testing as preferred options, with blood testing offered to individuals unwilling to use those options, Elliott said.
Pipeline includes updated CRC and lung tests
Freenome plans to submit an application for its second-generation CRC test by year-end and anticipates approval in the second half of 2027, Co-Founder and Chief Product Officer Riley Ennis said. The updated test showed improved detection of advanced precancerous lesions in a pivotal study, with sensitivity rising to 18.2% from 13.7% for the first version, he said.
Approval and a successful technology transfer to Abbott would trigger a $70 million milestone payment, currently expected in the first half of 2028, Ennis said. Until the transfer, Freenome expects to process Abbott’s samples in its own lab.
The company also recently launched SimpleScreen Lung as a laboratory-developed test for eligible adults who are not up to date with annual low-dose CT screening. Top-line results showed 85% sensitivity and 50% specificity, including 82% sensitivity for stage 1 disease, Elliott said. Ennis said the aim is to direct more patients into low-dose CT screening and follow-up care.
Freenome is developing a separate multiomics version of the lung test for a future FDA submission. Its PROACT LUNG study is expected to complete enrollment in the first half of 2027 and report results toward the end of that year, Ennis said.
The company expects validation data for two additional single-cancer tests in December and potential launches in the first half of 2027. Elliott said Freenome is not yet identifying those indications. It also expects data for an asymptomatic multi-cancer detection test in the second quarter of 2027 and a launch in the second half of that year.
About Freenome (NASDAQ:FRNM)
Freenome is a biotechnology company developing blood-based tests intended to detect cancer at earlier stages. Its approach combines analysis of biological signals—including DNA and other biomarkers—with computational tools to identify patterns associated with disease. The company’s research has focused on multiomics screening, particularly for colorectal cancer. Freenome has evaluated its blood-based colorectal cancer test in clinical studies; the test is investigational, and its availability and regulatory status may vary.
