Reports 25% Revenue Growth, to $18.4 Million,
and 37% Improvement in Loss from Operations Over Prior Year
Conference Call and Webcast Today at 4:30 p.m.
ET
Veracyte, Inc. (NASDAQ: VCYT) today announced financial results
for the second quarter ended June 30, 2017 and provided an update
on recent business progress. For the second quarter of 2017,
revenue was $18.4 million, an increase of 25%, compared to $14.7
million for the second quarter of 2016.
"Our strong results for the quarter underscore our ability to
execute against our plans,” said Bonnie Anderson, Veracyte's
chairman and chief executive officer. “We achieved key milestones
during the quarter, including establishing coverage for the Afirma
classifier by all major insurance plans; launching the
next-generation version of the classifier, with improved
performance; and significantly extending our market reach to
physicians. In addition, we have laid the foundation to reach our
commercialization goals for the Percepta Bronchial Genomic
Classifier in lung cancer diagnosis. We are thrilled with this
progress and believe that we are poised to accelerate growth in the
second half of the year."
Second Quarter 2017 Financial Results
For the second quarter of 2017, as compared to the second
quarter of 2016:
- Revenue increased 25%, to $18.4
million;
- Operating Expenses declined 1%, to
$25.0 million;
- Net Loss and Comprehensive Loss
improved 35% to $7.3 million;
- Cash Burn (which is defined as net cash
used in operating activities and net capital expenditures) improved
41%, to $5.0 million; and
- Cash and Cash Equivalents was $46.5
million at June 30, 2017.
Second Quarter 2017 and Recent Business Highlights
Commercial Achievements:
- Grew Afirma genomic classifier volume
by 11% in the second quarter of 2017, compared to the second
quarter of 2016;
- Initiated the transition to the
next-generation Afirma Genomic Sequencing Classifier (GSC), which
can save an estimated 70% of benign patients from unnecessary
thyroid surgery to rule out thyroid cancer;
- Initiated access to the Afirma genomic
classifier through Quest/AmeriPath division’s extensive network of
service providers; and
- Accepted our first commercial orders
for the Percepta genomic classifier, which aids in the screening
and diagnosis of lung cancer.
Reimbursement Progress:
- Received Anthem and additional Blues
coverage for our Afirma classifier, which is now one of the few
genomic assays to attain coverage by virtually all health plans in
the U.S.; and
- Signed five new contracts through
Regence Blue Cross and Blue Cross of Kansas, bringing the total
contracted lives for our Afirma classifier to approximately 163
million.
Clinical Evidence Development:
- Delivered podium presentation at the
World Congress on Thyroid Cancer of pivotal clinical validation
data for the next-generation Afirma GSC;
- Published a clinical utility study in
the Journal of Thoracic Oncology, demonstrating that adoption
of the Percepta classifier in lung cancer screening and diagnosis
can meaningfully reduce invasive procedures and associated costs,
and is cost-effective across a range of assumptions;
- Presented pivotal clinical validation
data for the Envisia Genomic Classifier at the American
Thoracic Society 2017 International Conference,
demonstrating the classifier’s unique ability to identify patients
likely to have idiopathic pulmonary fibrosis (IPF), using a
non-invasive sample; and
- Initiated the CATALYST study to
evaluate the clinical utility of the Envisia classifier in the
diagnosis of IPF.
2017 Financial Outlook
Veracyte reiterates its 2017 annual revenue guidance of $76 to
$84 million and annual cash burn of $25 to $27 million.
Conference Call and Webcast Details
Veracyte will host a conference call and webcast today at 4:30
p.m. Eastern Time to discuss the company's financial results and
provide a general business update. The call may be accessed as
follows:
Veracyte Second
Quarter 2017 Conference Call4:30 p.m. ET
Today
Website:
http://investor.veracyte.com
Dial-in number (U.S.): (855) 541-0980 International number: (970)
315-0440 Conference ID: 44718214
The webcast replay will be available on the company's website
approximately two hours following completion of the call.
About Veracyte
Veracyte is a leading genomic diagnostics company that is
fundamentally improving patient care by resolving diagnostic
uncertainty with evidence that is trustworthy and actionable. The
company’s products uniquely combine genomic technology, clinical
science and machine learning to provide answers that give
physicians and patients a clear path forward without risky, costly
surgery that is often unnecessary. Since its founding in 2008,
Veracyte has commercialized three genomic classifiers, which are
transforming the diagnosis of thyroid cancer, lung cancer and
idiopathic pulmonary fibrosis and collectively target a $2 billion
market opportunity. Veracyte is based in South San Francisco,
California. For more information, please visit www.veracyte.com and
follow the company on Twitter (@veracyte).
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by words such
as: "anticipate," "intend," "plan," "expect," "believe," "should,"
"may," "will" and similar references to future periods. Examples of
forward-looking statements include, among others, statements we
make regarding our beliefs regarding our ability to execute against
our plans, our belief that we have laid the foundation to reach our
commercialization goals for the Percepta classifier, our belief
that we are poised to accelerate growth in the second half of 2017,
our belief as to the size of our addressable markets, our
expectations regarding full-year 2017 revenue and cash burn
guidance, our expectations regarding reimbursement coverage and
policies, and the benefits and attributes of our tests, including
our next-generation Afirma GSC. Forward-looking statements are
neither historical facts nor assurances of future performance.
Instead, they are based only on our current beliefs, expectations
and assumptions regarding the future of our business, future plans
and strategies, anticipated events and trends, the economy and
other future conditions. Forward-looking statements involve risks
and uncertainties, which could cause actual results to differ
materially, and reported results should not be considered as an
indication of future performance. These risks and uncertainties
include, but are not limited to: our limited operating history and
history of losses; our ability to enhance the performance of our
Afirma classifier; the performance and acceptance of our Percepta
and Envisia classifiers; our ability to increase usage of and
reimbursement for the Afirma classifier and to obtain adequate
reimbursement for our Percepta and Envisia classifiers, as well as
any future products we may develop or sell; our ability to continue
our momentum and growth; our dependence on a few payers for a
significant portion of our revenue; the complexity, time and
expense associated with billing and collecting from payers for our
classifiers; laws and regulations applicable to our business,
including potential regulation by the Food and Drug
Administration or other regulatory bodies; our ability to
develop and commercialize new products and the timing and speed of
commercialization; the amount by which use of our products is able
to reduce invasive procedures and reduce healthcare costs; our
ability to achieve sales penetration in complex commercial
accounts; the occurrence and outcome of clinical studies; the
timing and publication of study results; the applicability of
clinical results to actual outcomes; the continued application of
clinical guidelines to our products and their inclusion in such
clinical practice guidelines; our ability to compete; our ability
to obtain capital when needed; and other risks set forth in the
company's filings with the Securities and Exchange Commission,
including the risks set forth in the company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2017. These
forward-looking statements speak only as of the date hereof
and Veracyte specifically disclaims any obligation to
update these forward-looking statements.
Veracyte, Afirma, Percepta, Envisia, the Veracyte logo, and the
Afirma logo are trademarks of Veracyte, Inc
VERACYTE, INC. CONDENSED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (Unaudited) (In thousands of
dollars, except share and per share amounts)
Three Months Ended June 30, Six Months
Ended June 30, 2017 2016
2017 2016 Revenue $ 18,406 $ 14,675 $ 34,838 $
28,225 Operating expenses: Cost of revenue 6,960 6,301 13,257
12,580 Research and development 3,603 4,267 7,633 7,728 Selling and
marketing 7,994 8,263 15,330 15,329 General and administrative
6,192 6,071 12,211 12,299 Intangible asset amortization 266
267 533 534 Total
operating expenses 25,015 25,169
48,964 48,470 Loss from operations (6,609 )
(10,494 ) (14,126 ) (20,245 ) Interest expense (808 ) (785 ) (1,608
) (1,152 ) Other income, net 119 36
219 79 Net loss and comprehensive loss
$ (7,298 ) $ (11,243 ) $ (15,515 ) $ (21,318 ) Net loss per common
share, basic and diluted $ (0.22 ) $ (0.40 ) $ (0.46 ) $ (0.77 )
Shares used to compute net loss per common share, basic and diluted
33,873,128 27,859,918 33,848,645
27,838,955
VERACYTE, INC.
CONDENSED BALANCE SHEETS (In thousands of dollars)
June 30, December 31, 2017
2016 (Unaudited) (1) Assets Current
assets: Cash and cash equivalents $ 46,463 $ 59,219 Accounts
receivable 11,027 8,756 Supplies inventory 3,317 3,475 Prepaid
expenses and other current assets 1,933 2,057 Restricted cash
120 120 Total current assets 62,860 73,627
Property and equipment, net 10,093 11,480 Finite-lived intangible
assets, net 13,600 14,133 Goodwill 1,057 1,057 Restricted cash 603
603 Other assets 134 134 Total assets $ 88,347
$ 101,034
Liabilities and Stockholders’ Equity
Current liabilities: Accounts payable $ 2,349 $ 2,424 Accrued
liabilities 8,450 9,110 Total current
liabilities 10,799 11,534 Long-term debt 24,971 24,918 Capital
lease liability, net of current portion 456 599 Deferred rent, net
of current portion 4,277 4,402 Total
liabilities 40,503 41,453 Total stockholders’ equity 47,844
59,581 Total liabilities and stockholders’ equity $
88,347 $ 101,034
(1) The condensed balance
sheet at December 31, 2016 has been derived from the audited
financial statements at that date included in the Company's Form
10-K filed with the Securities and Exchange Commission dated March
1, 2017.
VERACYTE, INC. CONDENSED
STATEMENT OF CASH FLOWS (Unaudited) (In thousands of
dollars) Six Months Ended June 30, 2017
2016 Operating activities Net loss $ (15,515 ) $
(21,318 ) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 1,846 1,703 Bad
debt expense - 68 Loss on disposal of property and equipment - 12
Genzyme co-promotion fee amortization - (721 ) Stock-based
compensation 3,214 3,173 Conversion of accrued interest on
long-term debt - 192 Amortization and write-off of debt discount
and issuance costs 53 119 Interest on debt balloon payment and
prepayment penalty - 206 Changes in operating assets and
liabilities: Accounts receivable (2,271 ) 48 Supplies inventory 158
265 Prepaid expenses and other current assets 25 47 Other assets -
(13 ) Accounts payable 266 (805 ) Accrued liabilities and deferred
rent (772 ) 712 Net cash used in operating
activities (12,996 ) (16,312 )
Investing
activities Purchases of property and equipment (728 ) (3,587 )
Proceeds from sale of property and equipment 440 - Change in
restricted cash - (2 ) Net cash used in
investing activities (288 ) (3,589 )
Financing
activities Proceeds from the issuance of long-term debt, net of
debt issuance costs - 24,452 Payment of long-term debt - (5,000 )
Payment of end-of-term debt obligation and prepayment penalty -
(288 ) Proceeds from issuance of common stock in a public offering,
net of costs 200 - Payment of capital lease liability (135 ) -
Proceeds from the exercise of common stock options and employee
stock purchases 463 646 Net cash
provided by financing activities 528 19,810
Net decrease in cash and cash equivalents (12,756 )
(91 )
Cash and cash equivalents at beginning of period
59,219 39,084
Cash and cash
equivalents at end of period $ 46,463 $ 38,993
Supplementary cash flow information of non-cash investing
and financing activities: Purchases of property and equipment
included in accounts payable and accrued liabilities $ - $ 42
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170731006028/en/
Veracyte, Inc.Tracy Morris,
650-380-4413tracy.morris@veracyte.comorInvestors:Jackie Cossmon,
650-243-6371jackie@veracyte.com
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