On February 17, 2021 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the fourth quarter and full year ended December 31, 2020 and provided an update on recent business progress (Press release, Veracyte, FEB 17, 2021, View Source [SID1234575188]).
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"Our revenue and genomic testing and product volume continued to rebound from the pandemic during the fourth quarter and we entered 2021 with strong momentum across our business," said Bonnie Anderson, Veracyte’s chairman and chief executive officer. "We are on track to launch multiple new products this year, including our noninvasive nasal swab test and Percepta Genomic Atlas in lung cancer.
"Additionally, we expect our pending acquisition of Decipher Biosciences, with its market-leading products in urologic cancers, will significantly accelerate our revenue growth by expanding our reach into seven of the ten most common cancers, further solidifying our global leadership in cancer genomic diagnostics. We look forward to welcoming Decipher’s employees when the transaction closes and to strengthening our executive leadership team with the addition of Dr. Tina Nova, Decipher’s president and CEO."
Fourth Quarter 2020 Financial Results
For the three months ended December 31, 2020, compared to the prior year:
Total Revenue was $34.5 million, an increase of 16%;
Gross Margin was 68%, an increase of 2 percentage points;
Operating Expenses, Excluding Cost of Revenue, were $31.4 million, an increase of 13%;
Net Loss and Comprehensive Loss was $8.0 million, compared to $7.5 million;
Basic and Diluted Net Loss Per Common Share was $0.14, versus $0.15;
Net Cash Provided by Operating Activities was $2.3 million, compared to $1.8 million; and
Cash and Cash Equivalents were $349.4 million at December 31, 2020.
For the year ended December 31, 2020, compared to the prior year:
Total Revenue was $117.5 million, a decrease of 2%;
Gross Margin was 65%, a decrease of 5 percentage points;
Operating Expenses, Excluding Cost of Revenue, were $111.4 million, an increase of 13%;
Net Loss and Comprehensive Loss was $34.9 million, compared to $12.6 million;
Basic and Diluted Net Loss Per Common Share was $0.66, versus $0.27; and
Net Cash Used in Operating Activities was $9.7 million, compared to $3.2 million.
2020 Full-Year and Recent Business Highlights
Commercial Growth
Grew revenue to $34.5 million in the fourth quarter, an increase of 16% compared to the same period in 2019.
Product revenue grew to $9.8 million for 2020, exceeding our expectations.
Achieved genomic testing and product volume of 13,130 tests in the fourth quarter, a 14% increase compared to the fourth quarter of 2019.
Received new Medicare reimbursement rate of $5,500 for the Envisia Genomic Classifier, which went into effect on October 1, 2020, following the test’s designation by the Centers for Medicare & Medicaid Services as an Advanced Diagnostic Laboratory Test (ADLT).
Received reimbursement approval from the German government for the Prosigna Breast Cancer Gene Signature Assay, making the test accessible for all breast cancer patients in Germany with HR+/HER2- early-stage breast cancer.
Evidence Development
Published ten studies in leading peer-reviewed journals supporting our genomic tests in four disease areas (lung cancer, breast cancer, thyroid cancer and interstitial lung diseases, including idiopathic pulmonary fibrosis).
Launched the PROCURE study, led by an independent scientific committee of breast cancer experts and including input from 180 clinicians throughout Europe, to help achieve consensus on the evidence supporting the most frequently used breast cancer genomic tests, including Prosigna.
Pipeline Advancement/Collaborations
Unveiled new preliminary performance data at an R&D Day event for our noninvasive nasal swab test for early lung cancer detection and our Percepta Genomic Atlas for informing treatment decisions at the time of lung cancer diagnosis.
Expanded our strategic collaboration with the Lung Cancer Initiative at Johnson & Johnson to include a focus on the NOBLE trial. The 9,000-patient, prospective, multicenter clinical study is designed to distinguish genomic and other differences in lung cancer development, which may fuel Veracyte’s development of future tests.
Decipher Acquisition
Announced we have entered into an agreement to acquire Decipher Biosciences, a commercial-stage precision oncology company focused on urologic cancers, further solidifying Veracyte’s global leadership in the genomic cancer diagnostics market while accelerating revenue growth.
Under terms of the acquisition agreement and following Veracyte’s exercise of an option to substitute cash for the entire stock portion of the consideration, the company will pay Decipher security holders $600 million in cash, subject to customary purchase price adjustments.
The acquisition is expected to close on or before April 1, 2021, subject to regulatory approval and the satisfaction of other customary conditions.
Financing
Issued and sold 8,547,297 shares of common stock, including 1,114,864 shares sold upon full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $74.00 per share. The net proceeds to Veracyte from the offering were approximately $593.8 million.
Veracyte intends to use a portion of the net proceeds from the offering, together with its existing cash and cash equivalents, to finance its acquisition of Decipher and intends to use the remaining net proceeds of the offering for working capital and other general corporate purposes, including to acquire or invest in complementary businesses, technologies or other assets.
2021 Outlook
Pending the completion of the acquisition of Decipher Biosciences, which is assumed to occur by April 1, 2021, Veracyte expects total combined revenue in 2021 to be approximately $190 million to $200 million, representing growth of approximately 65% over 2020 at the midpoint of the range.
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