On April 16, 2020 Veracyte, Inc. (Nasdaq: VCYT) reported preliminary, unaudited and unreviewed financial results for the first quarter ended March 31, 2020 and withdrew its previously issued full-year 2020 financial performance guidance (Press release, Veracyte, APR 16, 2020, View Source [SID1234556376]).

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First Quarter 2020 Financial Results

Based upon preliminary financial information, Veracyte expects to report first quarter 2020 total revenue in the range of $30.5 million to $31.5 million, compared to $29.5 million in the first quarter of 2019. First quarter 2020 testing and product revenue is estimated to be in the range of $30.0 million to $30.6 million, compared to $25.4 million in the first quarter of 2019. The company expects to report genomic test volume from our Afirma, Percepta and Envisia classifiers in the range of 10,500 to 10,600 tests for the first quarter, compared to 9,162 tests in the first quarter of 2019. The company expects to report cash and cash equivalents of approximately $153 million at March 31, 2020.

While first quarter genomic testing volume increased approximately 15% compared to the first quarter of 2019, the company began to see volume decline in the second half of March and its reported genomic testing volumes in the first fifteen days of April 2020 declined over 50%, compared to the same period in 2019.

"We are generally pleased with our first-quarter financial performance, despite the rapid onset of the COVID-19 pandemic and associated shelter-in-place orders towards the end of the quarter," said Bonnie Anderson, Veracyte’s chairman and chief executive officer. "However, during the second half of March, we experienced a significant decline in the volume of samples received, which has continued into April, resulting in a significant decline in revenue."

Business Response to COVID-19 Pandemic

"We have taken swift steps to protect our employees and the broader community, while ensuring our ability to deliver genomic test results to physicians and their patients who need them. Our CLIA lab is running and most of our employees are working remotely. Meanwhile, the pandemic continues to have an unprecedented impact on the broader economy and on our business, with significant reductions in patient visits to physician offices and with medical centers significantly restricting functions. Once shelter-in-place orders begin to lift, we anticipate that the return to ‘normal’ may take time for our customers and their patients. Given the significant challenges we face from these circumstances, we are taking actions now to reduce expenses and preserve the health of our business," said Ms. Anderson.

Actions that Veracyte is taking immediately to reduce costs include:

Veracyte’s chairman and chief executive officer is reducing her base pay and target bonus by 25% until the company can resume normal operations
Veracyte’s board of directors, executive leaders and certain other employees are taking a reduction in pay until the company can resume normal operations
Approximately 60 employees are being put on a temporary furlough with a current 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 has terminated a small number of employees.
Instituting a temporary hiring freeze
Securing vendor discounts and halting all nonessential outside spending
"By taking temporary but necessary cost-saving measures now, we believe we will be better positioned to emerge strongly from this situation," said Ms. Anderson. "Our confidence in Veracyte’s long-term positioning is boosted by the fundamental strength and diversification of our business, our strong balance sheet, our robust pipeline and our focus on helping patients to be diagnosed and treated sooner while avoiding unnecessary procedures – an approach that aligns with essential healthcare system needs."

Withdrawal of 2020 Financial Guidance

Due to uncertainties surrounding the impact of the COVID-19 pandemic, Veracyte is withdrawing its previously issued financial guidance for full-year 2020. Veracyte will provide further information to investors when it releases its first quarter 2020 results.

First Quarter Conference Call and Webcast Details

Veracyte will host a webcast and conference call on Wednesday, May 6, 2020 at 5:00 p.m. Eastern Time to discuss its first quarter 2020 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