On November 9, 2021 Veracyte, Inc. (Nasdaq: VCYT) reported financial results for the third quarter ended September 30, 2021 (Press release, Veracyte, NOV 9, 2021, View Source [SID1234594902]).
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"We are pleased with our third quarter performance as we experienced strong year-over-year revenue growth despite the headwind of the COVID-19 Delta variant," said Marc Stapley, Veracyte’s chief executive officer. "With the completion of our acquisition of HalioDx, the launch of our novel noninvasive Percepta Nasal Swab test for early lung cancer risk assessment and of our Decipher Bladder test to help guide bladder cancer treatment decisions, the pieces are coming together to transform our company into a global cancer diagnostics leader."
Third Quarter 2021 Financial Results
For the third quarter of 2021, as compared with the third quarter of 2020:
Total Revenue was $60.4 million, an increase of 94%, including $4.7 million of HalioDx revenue;
Gross Margin was 64%, a decrease of 300 basis points including the impact of HalioDx and the associated purchase accounting; Gross Margin equaled 68%, an increase of 100 basis points, before the impact of HalioDx;
Operating Expenses, Excluding Cost of Revenue, were $55.4 million, an increase of 123%, including $7.5 million of HalioDx expenses and $5.8 million in acquisition-related expenses;
Net Loss was $14.1 million, an increase of 243%, including $5.8 million of acquisition-related expenses and $6.3 million of HalioDx net loss;
Basic and Diluted Net Loss Per Common Share was $0.20, an increase of 150%;
Net Cash Used in Operating Activities was $1.4 million including $3.9 million of acquisition-related expenses; and
Cash and Cash Equivalents were $164.0 million at September 30, 2021.
For the nine months ended September 30, 2021, compared to the prior year:
Total Revenue was $152.2 million, an increase of 83%, including $4.7 million of HalioDx revenue;
Gross Margin was 66%, an increase of 200 basis points including the impact of HalioDx and the associated purchase accounting; Gross Margin equaled 68%, an increase of 400 basis points, before the impact of HalioDx;
Operating Expenses, Excluding Cost of Revenue, were $170.2 million, an increase of 113%, including $7.5 million of HalioDx expenses and $45.3 million of acquisition-related expenses;
Net Loss was $65.0 million, an increase of 142%, including $45.3 million of acquisition-related expenses and $6.3 million of HalioDx net loss;
Basic and Diluted Net Loss Per Common Share was $0.97, an increase of 87%, including $0.68 per share attributable to acquisition-related expenses recorded in general and administrative expenses; and
Net Cash Used in Operating Activities was $40.1 million, including $43.4 million of acquisition-related expenses.
Third Quarter 2021 and Recent Business Highlights
Commercial Growth:
Grew volume to 20,972 tests, including a small contribution from the Immunoscore Colon Cancer test, an increase of 79% compared to the same period in 2020.
Gained a new Blues coverage policy for Decipher Prostate, making the test a covered benefit for the plan’s 5 million members and bringing the total number of covered lives to over 150 million. Also secured contracts for the test with a large Blues plan and national government payer.
Evidence Development and Guideline Inclusion:
Six abstracts demonstrating the performance and utility of our genomic pulmonology and urology tests were presented at the 2021 American College of Chest Physicians (CHEST) and American Society for Radiation Oncology (ASTRO) annual meetings, respectively.
New long-term clinical utility data for the Afirma Genomic Sequencing Classifier were published in the Journal of the Endocrine Society and showed that the test helped reduce unnecessary surgeries in patients with indeterminate thyroid nodule cytology.
Data published in the Journal of Urology demonstrated that the Decipher Bladder genomic test accurately identifies bladder tumors that are most likely to respond to chemotherapy prior to radical cystectomy.
New NCCN Clinical Practice Guidelines for Oncology were published and include specific treatment recommendations for men with prostate cancer uniquely based on their Decipher Prostate RP genomic classifier score.
New Pan-Asian adapted ESMO (Free ESMO Whitepaper) Clinical Practice Guidelines recommended the Immunoscore Colon Cancer test to refine the prognosis of stage 2 and stage 3 colon cancer patients in conjunction with traditional assessment.
Pipeline Advancement:
Began offering the Percepta Nasal Swab test to a limited number of sites as part of a clinical utility study to build the clinical evidence needed to support reimbursement.
Commenced the commercial launch of the Decipher Bladder test following Medicare coverage.
HalioDx Acquisition:
Completed the acquisition of HalioDx for $321 million on August 2, 2021, bringing to Veracyte IVD manufacturing and development capabilities, deep scientific expertise in immuno-oncology and the Immunoscore Colon Cancer test.
2021 Financial Outlook
Veracyte is updating its 2021 annual total revenue guidance to $210 million to $218 million, from the previous guidance range of $200 million to $208 million, with HalioDx expecting to contribute approximately $10 million. This range represents 79% to 86% total revenue growth for fiscal 2021 compared to fiscal 2020.
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