On February 22, 2023 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the fourth quarter and full year ended December 31, 2022 (Press release, Veracyte, FEB 22, 2023, View Source [SID1234627528]).

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"We had an outstanding fourth quarter, driving record revenue and operating cash flows, achieving the best quarter ever for both our Decipher prostate and Afirma thyroid tests," said Marc Stapley, Veracyte’s chief executive officer. "Moreover, throughout 2022, we invested in our long-term growth drivers to deliver on our promise of empowering clinicians with high-value insights to guide and assure patients at pivotal moments in the race to diagnose and treat cancer. Moving into 2023, we have a clear strategy, strong financial position, and significant momentum to advance our vision of transforming cancer care for patients all over the world."

Key Business Highlights:

Grew total test volume to 28,001 in the fourth quarter and 102,524 for the full-year 2022, an increase of 26% and 30%, respectively, compared to the prior year.
Launched an updated Decipher Genomics Resource for Intelligent Discovery (GRID) patient report, providing physicians who order the Decipher Prostate Genomic Classifier with expanded precision-medicine insights, on a Research Use Only basis.
Submitted the Envisia Genomic Classifier to the Notified Body for CE marking in the European Union, ahead of schedule.
Published data in the International Journal of Radiation Oncology, Biology, Physics demonstrating that the Decipher Prostate Genomic Classifier can improve risk stratification among men with clinically high-risk prostate cancer.
Published a meta-analysis of 13 independent studies for the Afirma Genomic Sequencing Classifier in the Journal of Clinical Endocrinology & Metabolism, confirming the test’s strong real-world performance in informing thyroid nodule diagnosis.
Published data in Frontiers in Endocrinology suggesting that insights derived from Veracyte’s comprehensive thyroid nodule database of whole-transcriptome sequencing may help personalize care for patients with thyroid nodules.
Generated $9.7 million in cash from operating activities in the fourth quarter and $7.5 million for the full-year 2022. Ended the fourth quarter of 2022 with cash, cash equivalents and short-term investments of $178.9 million, compared to $177.2 million at the beginning of 2022.
Promoted Annie McGuire to General Counsel and Chief People Officer.
Fourth Quarter 2022 Financial Results

Total revenue for the fourth quarter of 2022 was $80.3 million, an increase of 19% compared to $67.3 million in the fourth quarter of 2021. Testing revenue was $70.3 million, an increase of 32% compared to $53.4 million in the fourth quarter of 2021 driven primarily by the strong performance of our Decipher and Afirma tests. Product revenue was $3.2 million, an increase of 17% compared to $2.8 million in the fourth quarter of 2021. Biopharmaceutical and other revenue was $6.8 million, a decrease of 39% compared to $11.2 million, driven primarily by a milestone payment received in the prior year period.

Total gross margin for the fourth quarter of 2022, including the amortization of acquired intangible assets, was 61%, compared to 59% in the fourth quarter of 2021. Non-GAAP gross margin, excluding the amortization of acquired intangible assets and other acquisition related expenses was 67% compared to 66% in the fourth quarter of 2021.

Operating expenses, excluding cost of revenue, were $58.9 million, an increase of 4% compared to the fourth quarter of 2021. Non-GAAP operating expenses, excluding cost of revenue, amortization of acquired intangible assets, other acquisition related expenses and other restructuring costs, were $51.1 million compared to $46.2 million in the fourth quarter of 2021.

Net loss for the fourth quarter of 2022 was $3.8 million, an improvement of 63% compared to the fourth quarter of 2021. Basic and diluted net loss per common share was $0.05, an improvement of 67% compared to the fourth quarter of 2021.

Full Year 2022 Financial Results

Total revenue for 2022 was $296.5 million, an increase of 35% compared to $219.5 million in 2021. Testing revenue was $250.5 million, an increase of 33% compared to $188.2 million in 2021 driven primarily by the strong performance of our Decipher and Afirma tests. Product revenue was $12.6 million, an increase of 10% compared to $11.5 million in 2021. Biopharmaceutical and other revenue was $33.4 million, an increase of 68% compared to $19.9 million in 2021, driven primarily by the contribution of the HalioDx acquisition.

Total gross margin for the full year 2022, including the amortization of acquired intangible assets, was 59%, compared to 60% in 2021. Non-GAAP gross margin, excluding the amortization of acquired intangible assets and other acquisition related expenses was 66%, flat to 2021.

Operating expenses, excluding cost of revenue, were $236.0 million, an increase of 4% compared to 2021. Non-GAAP operating expenses, excluding cost of revenue, amortization of acquired intangible assets, other acquisition related expenses and other restructuring costs, were $200.3 million compared to $158.4 million in 2021.

Net loss for the full year 2022 was $36.6 million, an improvement of 52% compared to 2021. Basic and diluted net loss per common share was $0.51, an improvement of 54% compared to 2021. Net cash provided by operating activities in 2022 was $7.5 million, an improvement of $39.2 million compared to 2021.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Note Regarding Use of Non-GAAP Financial Measures."

2023 Financial Outlook

Veracyte is initiating 2023 annual total revenue guidance of $325 million to $335 million, assuming currency rates as of February 22, 2023. This range includes mid-teens year-over-year growth of testing and product revenue, and a decline in Biopharmaceutical and other revenue for fiscal 2023 compared to fiscal 2022.

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 conference call will be webcast live from the company’s website and will be available via the following link: View Source The webcast should be accessed 10 minutes prior to the conference call start time. A replay of the webcast will be available for one year following the conclusion of the live broadcast and will be accessible on the company’s website at View Source

The conference call dial-in can be accessed by registering at the following link: https://register.vevent.com/register/BIbe54a1af06be4083968e88a7edfb6679