On May 6, 2020 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the first quarter ended March 31, 2020 and provided an update on recent business progress (Press release, Veracyte, MAY 6, 2020, View Source [SID1234557132]).

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"Despite late-quarter challenges from the COVID-19 pandemic, we delivered solid results for the first quarter of 2020, with strong revenue and volume growth across our genomic testing business. We continued to strengthen our position for long-term success by advancing our pipeline and solidifying our infrastructure for global expansion. We also established a new biopharmaceutical partnership in lymphoma, our newest clinical indication, and made strong progress with all of our biopharmaceutical collaborations," said Bonnie Anderson, chairman and chief executive officer of Veracyte.

"While we anticipate impact to our business from the pandemic through 2020, we believe we are well-positioned to emerge strong over the long term due to the fundamental strength and diversification of our business, as well as our strong cash position. Moreover, we believe our focus on improving diagnosis and treatment decisions for patients with cancer and lung disease, while reducing unnecessary procedures, aligns with the needs of our healthcare system."

First Quarter 2020 Financial Results

For the first quarter of 2020, as compared with the first quarter of 2019:

Total Testing and Product Revenue was $30.4 million, an increase of 20%; including biopharmaceutical revenue, total revenue was $31.1 million, an increase of 5%;
Gross Margin was 61%, which included a $1.1 million write-down of supplies;
Operating Expenses, Excluding Cost of Revenue, were $31.1 million, an increase of 35%;
Net Loss and Comprehensive Loss was $(11.7) million, versus $(1.9) million;
Basic and Diluted Net Loss Per Common Share was $(0.24), versus $(0.05);
Net Cash Used in Operating Activities was $5.3 million, versus $1.0 million; and
Cash and Cash Equivalents were $153.1 million at March 31, 2020.
COVID-19 Impact and Recent Events

As previously announced, Veracyte’s business was impacted by the COVID-19 pandemic and the company observed genomic testing volume decline in the second half of March and through April, where it experienced an over-50 percent volume decline during the month compared to prior year. In response to this unprecedented challenge, the company took the following steps to reduce costs:

Veracyte’s chairman and chief executive officer reduced her base pay and target bonus by 25% until the company resumes normal operations.
Veracyte’s board of directors, executive leaders and certain other employees took a reduction in pay until the company resumes normal operations.
Approximately 60 employees were put on a temporary furlough with a goal of bringing them back from furlough once the company’s business rebounds. Veracyte will continue at this time to provide furloughed employees certain benefits including covering employee healthcare contributions during the furlough. In addition, Veracyte terminated a small number of employees.
Instituted a temporary hiring freeze.
Secured vendor discounts and halted all nonessential outside spending.
First Quarter 2020 and Recent Business Highlights

Core Diagnostics Business:

Grew total genomic test volume (Afirma, Percepta and Envisia) by 15% to 10,559 tests.
Launched "More About You," a national campaign to help patients navigate the work-up of thyroid nodules and ask for Afirma testing by name.
Announced that data accepted for oral presentation at the ENDO 2020 conference identified novel or rare gene fusions that are included in the newly expanded Afirma Xpression Atlas and may potentially be targeted with drugs that are approved or under development.
Reported new data published in npj Breast Cancer, which suggest potential growth opportunities for the Prosignatest in global markets where the test reports intrinsic breast cancer subtypes. Additionally, data published in Clinical Breast Cancer suggest the Prosigna test’s ability to provide significant prognostic information beyond clinicopathologic factors in patients with invasive lobular breast cancer, a major breast cancer histopathologic subtype.
Strategic Collaborations and Pipeline Advancement:

Secured an exclusive licensing and research agreement with Yale University to advance the first genomic monitoring test for idiopathic pulmonary fibrosis prognosis, complementing our Envisia classifier for improved early diagnosis of the disease. The non-invasive, blood-based test was developed for use on our nCounter diagnostic platform.
Signed an exclusive licensing agreement with Boston University for technology that will help advance development of the first-ever, non-invasive nasal swab test for lung cancer early detection.
Announced a multi-year collaboration with Acerta Pharma, the hematology research and development arm of AstraZeneca plc, to provide genomic information that will support the biopharmaceutical company’s development of oncology therapeutics in lymphoma.
Conference Call and Webcast Details

Veracyte will host a conference call and webcast today at 5:00 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