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Veracyte Q1 Revenues Rise 5 Percent as Net Loss Soars on Higher Expenses

NEW YORK – Genomic testing firm Veracyte reported after the close of the market on Wednesday that its first quarter 2020 revenues grew 5 percent year over year.

For the three months ended Mar. 31, the South San Francisco, California-based molecular diagnostics firm reported total revenues of $31.1 million compared to $29.5 million in Q1 2019, beating analysts' average estimate of $30.6 million.

In addition, Veracyte's testing volumes grew by 15 percent year over year to 10,559 tests.

Total revenue included $30.4 million in product and testing revenue and $700,000 in biopharmaceutical revenue. For Q1 2019, its testing revenue was $25.4 million and its biopharma revenue was $4.1 million.

The company's net loss soared nearly 516 percent to $11.7 million, or $.24 per share, from $1.9 million, or $.05 per share, in the year-ago quarter. It missed Wall Street's expected loss per share of $.20. The loss was driven by operating expenses, which rose 37 percent from $31.6 million to $43.3 million in Q1 2020.

Veracyte previously withdrew its guidance for full-year 2020 due to uncertainties surrounding the impact of the COVID-19 pandemic. The firm has taken several steps to minimize costs because of the pandemic.

On a conference call with analysts and investors following the release of earnings, Bonnie Anderson, CEO and chairman of Veracyte, noted that the firm began to see genomic testing volume decline in the second half of March. Continuing into April, the firm experienced an over 50 percent decline during the month compared to the prior year.

As some states have begun to loosen restrictions in the last week, Anderson said that Veracyte has seen a slight near-term rebound in samples for its Afirma Xpression Atlas test for thyroid cancer in the physician office market segment, although volumes remain suppressed among hospital customers for Afirma and other products.

"Despite late quarter challenges form the COVID-19 pandemic, we delivered solid results for the first quarter of 2020, with strong revenue and volume growth across our genomic testing business," Bonnie Anderson, CEO and chairman of Veracyte, said in a statement. "While we anticipate impact to our business from the pandemic through 2020, we believe we are well-positioned to emerge strong over the long term due to the fundamental strength and diversification of our business."  

Veracyte's R&D expenses totaled $4.4 million in Q1 2019, up 29 percent from $3.4 million in Q1 2019. The firms SG&A expenses, meanwhile, grew 31 percent to $25.4 million from $19.4 million.

Anderson also highlighted that Veracyte signed an exclusive licensing agreement with Yale University in April for a genomic test to predict disease progression in patients with idiopathic pulmonary fibrosis (IPF).

The company ended the quarter with $153.1 million in cash and cash equivalents.

In Thursday morning trading on Nasdaq, Veracyte shares were down 2 percent to $26.52.