On May 1, 2018 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the first quarter ended March 31, 2018 and provided an update on recent business progress. For the first quarter of 2018, revenue was $20.0 million, an increase of 22%, compared to $16.4 million for the first quarter of 2017 (Press release, Veracyte, MAY 1, 2018, View Source [SID1234525901]).
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"We had a great quarter in which we beat revenue and genomic test volume growth expectations and generated strong momentum across our business," said Bonnie Anderson, chairman and chief executive officer of Veracyte. "Our team converted the majority of our thyroid business to the next-generation Afirma Genomic Sequencing Classifier, gained in-network status with Anthem and significantly accelerated our Percepta business. Additionally, we unveiled our new, RNA sequencing-based Afirma Xpression Atlas, which positions us to deliver even more value to physicians, while enabling new collaborations – beginning with Loxo Oncology – to help advance precision medicine efforts."
First Quarter 2018 Financial Results
For the first quarter of 2018, as compared to the first quarter of 2017:
Revenue was $20.0 million, an increase of 22%;
Genomic Volume was 6,864, an increase of 18%;
Gross Margin was 61%, a decline of 1%;
Operating Expenses, Excluding Cost of Revenue were $21.1 million, an increase of 20%;
Net Loss and Comprehensive Loss was ($9.2) million, an increase of 12%;
Basic and Diluted Net Loss Per Common Share was ($0.27), an increase of 13%;
Cash Burn1 was $7.6 million, an improvement of 8%; and
Cash and Cash Equivalents was $27.2 million at March 31, 2018.
1 A reconciliation of net cash used in operating activities to cash burn has been provided in the financial statement tables included in this press release. An explanation of cash burn is also included below under the heading "Non-GAAP Financial Measures."
First Quarter 2018 and Recent Business Highlights
Commercial Growth:
Reported 6,864 genomic tests in the first quarter of 2018, representing 18% growth as compared to the first quarter of 2017, and transitioned approximately 70% of the company’s thyroid business to the next-generation Afirma Genomic Sequencing Classifier (GSC), ahead of plan; and
Doubled the number of institutions that submitted samples for Percepta testing in the first quarter of 2018, compared to the fourth quarter of 2017.
Reimbursement Expansion:
Executed an in-network contract with Anthem, an independent Blues plan and one of the nation’s largest health benefits companies. This achievement nearly completes Veracyte’s contracting efforts to make the Afirma classifier available to patients nationally as an in-network service.
Evidence Development:
Presented the first real-world clinical utility data for the Afirma GSC at ENDO 2018 demonstrating that the genomic test enabled significantly more patients to avoid unnecessary thyroid surgery, compared to the original Afirma test;
Published the INTENSITY study in BMC Pulmonary Medicine, quantifying the challenges of obtaining an IPF diagnosis and the resulting negative impact on patients – and underscoring the clinical need for the Envisia classifier; and
Received acceptance of an abstract for a validation study demonstrating the performance of the Afirma Xpression Atlas to be presented at the American Association of Clinical Endocrinologists’ (AACE) 27th Annual Scientific & Clinical Congress in May 2018.
Scientific Innovation:
Unveiled the Afirma Xpression Atlas, an extension of the Afirma GSC, at ENDO 2018 in an oral presentation detailing the RNA sequencing-based platform’s ability to derive rich genomic content – 761 DNA variants and 130 RNA fusions in over 500 genes that are associated with thyroid cancer – from thyroid fine needle aspiration samples; and
Entered into a research collaboration with Loxo Oncology, which will leverage Veracyte’s Afirma Xpression Atlas platform to advance Loxo Oncology’s development of therapies for patients with genetically defined cancers, including thyroid cancer.
Updated 2018 Financial Outlook
Veracyte is increasing its 2018 annual revenue guidance to $83 million to $86 million, from its prior guidance of $81 million to $83 million. The company reiterates its annual cash burn guidance of $18 million to $22 million.