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Veracyte Q3 Revenues Nearly Double

NEW YORK – Genomic testing firm Veracyte reported after the close of the market on Tuesday a 94 percent increase in revenues for the third quarter of 2021.

For the three months ended Sept. 30, the South San Francisco, California-based firm reported total revenues of $60.4 million compared to $31.1 million in Q3 2020 and beating analysts' average estimate of $54.4 million.

Total revenue included $53.9 million in testing and product revenue and $6.5 million in biopharmaceutical revenue.

Veracyte reported that testing volume for its genomic tests, the Afirma, Percepta, and Envisia assays, grew 79 percent year over year to 20,972.

The firm performed more than 11,000 Afirma, Envisia, and Percepta tests during the quarter, an increase of 10 percent compared to Q3 2020, Veracyte CFO Rebecca Chambers said on a conference call to discuss the firm's financial results. Decipher contributed nearly 7,500 tests during the quarter, and Prosigna volumes were about 2,150 tests, she added.

The company's CEO Marc Stapley noted on the call that the Decipher Prostate test was less impacted by the COVID-19 pandemic and related effects than some of Veracyte's other tests.

Because many urologists practice in community settings instead of hospitals, staffing shortages from vaccine mandates and other potentially sales-dampening impacts were lessened for the Decipher tests, he said, adding that while Decipher has been resilient to COVID-19 effects, the firm is keeping an eye on potential staffing shortages that could affect sales volumes.

Orders for its other tests, including the Afirma thyroid cancer test and pulmonology assays, were more negatively impacted because the majority of sales come from hospital settings, Stapley said, while the rise of the Delta variant and other COVID-19 related effects caused problems with access for sales reps and reduced the number of procedures performed in hospitals.

The firm is "not anticipating much change" in volumes in the next quarter as those issues continue, he said.

Veracyte's net loss widened to $14.1 million, or $.20 per share, from a loss of $4.1 million, or $.08 per share, in the year-ago quarter due to $5.8 million in acquisition-related expenses and a loss of $6.3 million from the HalioDx business. Veracyte closed on the acquisition of the immune-oncology diagnostics company in August.

The company missed Wall Street's consensus estimate for a loss per share of $.16.

“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," Stapley said in a statement.

Veracyte's priorities for the HalioDx business are to transfer its global manufacturing capabilities, which will take approximately two years, and develop some of its tests to run on HalioDx's nCounter platform, which will likely take two to three years, Stapley said on the call.

There are currently plans to port the Envisia, Decipher Prostate, and Percepta Nasal Swab tests to the nCounter platform, and more tests could be moved over as well, he said. Work on developing Envisia for the platform has already started, he added.

Stapley also noted that Veracyte will have to "be cognizant" of changing European in vitro diagnostic regulations that will go into effect next year.

Veracyte's R&D expenses almost doubled year over year to $8.0 million in Q3 2021 from $4.1 million in Q3 2020. Its SG&A expenses more than doubled to $42.4 million from $19.5 million.

The company ended the quarter with $164.0 million in cash and cash equivalents, and $749,000 in restricted cash.

Veracyte increased its full-year 2021 guidance to between $210 million and $218 million from a previous estimate of between $200 million and $208 million. HalioDx is expected to contribute $10 million in revenue, the company said.