On October 29, 2018 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the third quarter ended September 30, 2018 and provided an update on recent business progress (Press release, Veracyte, OCT 29, 2018, View Source [SID1234530385]). For the third quarter of 2018, revenue was $23.5 million, an increase of 34 percent, compared with $17.5 million for the third quarter of 2017. Genomic test volume was 8,006, an increase of 23 percent compared with the same period in 2017.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"We delivered another quarter of strong revenue and genomic volume growth for our Afirma and Percepta classifiers, which are changing practice in the diagnosis of thyroid and lung cancer," said Bonnie Anderson, Veracyte’s chairman and chief executive officer. "In addition, we are thrilled that we recently received draft Medicare coverage for our third product, the Envisia Genomic Classifier."
Anderson continued, "As a result of our strong third quarter performance and our outlook for the remainder of this year, we are raising our annual revenue guidance and lowering our cash burn guidance for 2018. And, as we look to 2019 and beyond, we believe we are well-positioned to continue making a difference in the lives of patients, providing solutions to physicians to help better inform clinical decisions, and delivering cost savings to the healthcare system."
Third Quarter 2018 Financial Results
For the three-month period ended September 30, 2018 as compared with the third quarter of 2017:
Revenue was $23.5 million, an increase of 34 percent;
Genomic test volume was 8,006, an increase of 23 percent;
Gross margin was 65 percent, an increase of 6 percent;
Operating expenses, excluding cost of revenue, were $19.5 million, an increase of 17 percent;
Net loss and comprehensive loss was ($4.5) million, an improvement of 37 percent;
Basic and diluted net loss per common share was ($0.12), an improvement of 43 percent;
Cash burn1 was $2.4 million, an improvement of 58 percent; and
Cash and cash equivalents was $77.8 million at September 30, 2018.
For the nine-month period ended September 30, 2018, as compared to the prior year period of 2017:
Revenue was $66.3 million, an increase of 27 percent;
Genomic test volume was 22,556, an increase of 20 percent;
Gross margin was 63 percent, an increase of 2 percent;
Operating expenses, excluding cost of revenue were $61.1 million, an increase of 16 percent
Net loss and comprehensive loss was ($19.9) million, an improvement of 12 percent;
Basic and diluted net loss per common share was ($0.56), an improvement of 16 percent; and
Cash burn1 was $13.7 million, an improvement of 28 percent.
1 Refer to the "Non-GAAP Financial Measures" for an explanation of cash burn and the "Reconciliation of Net Cash Used in Operating Activities to Cash Burn" table included in the financial statements in this press release.
Third Quarter 2018 and Recent Business Highlights
Commercial Growth:
Completed national transition from the Afirma Gene Expression Classifier (GEC) to the Genomic Sequencing Classifier (GSC), retiring all GEC testing and accelerating the adoption of the Afirma Xpression Atlas for surgical and treatment decisions in the third quarter of 2018.
Increased the number of physicians ordering Percepta to nearly 200, across 140 institutions, primarily through a continued focus on sales and marketing initiatives, as of September 30, 2018.
Expanded Envisia Early Access Program sites that have submitted samples for genomic testing to 15 – exceeding the company’s expectations.
Reimbursement Expansion:
Received draft Medicare coverage for the Envisia Genomic Classifier through the MolDX program; upon anticipated finalization in early 2019, Veracyte will be positioned to ramp commercial adoption of Envisia and begin to grow associated revenue next year.
Evidence Development:
Positive performance and clinical utility data for the Afirma GSC and Xpression Atlas were presented at the American Thyroid Association annual meeting. Results show that the Afirma GSC is identifying even more benign thyroid nodules in real-world practice than was demonstrated in the company’s clinical validation study, previously published in JAMA Surgery.
Early results of the ongoing Percepta registry clinical utility study were presented at CHEST 2018 and show that the genomic test changed clinical decision-making and reduced invasive procedures at every evaluation time point up to 12 months post-testing.
Clinical validation data for the Envisia classifier were also presented at CHEST 2018 and confirm the test’s ability to improve diagnosis of idiopathic pulmonary fibrosis – without the need for surgery.
Financing:
In July 2018, Veracyte issued and sold 5,750,000 shares of common stock in a registered public offering, including the underwriters’ exercise in full of their option to purchase an additional 750,000 shares, at a price to the public of $10.25 per share. Net proceeds from the offering were approximately $55.0 million.
Updated 2018 Financial Outlook
Veracyte is increasing its 2018 annual revenue guidance to a range of $90.0 million to $91.0 million from its previous guidance range of $87 million and $89 million. In addition, the company is reducing its annual cash burn guidance to a range of $17.0 million to $18.0 million from its previous guidance range of $18 million to $21 million.
Conference Call and Webcast Details
The company will host a conference call and simultaneous webcast today at 4:30 p.m. EDT to discuss its financial results and provide a general business update. The call and webcast may be accessed as follows:
Webcast:
View Source
Dial-in number (U.S.): (855) 541-0980
International Number: (970) 315-0440
Conference ID: 1658434
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.