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Veracyte Q2 Revenues Fall 31 Percent

NEW YORK— Genomic testing firm Veracyte reported after the close of the market on Thursday that its second quarter 2020 revenues fell 31 percent year over year on a sharp decline in testing revenues.

For the three months ended June 30, the South San Francisco, California-based molecular diagnostics firm reported total revenues of $20.7 million compared to $30.1 million in Q2 2019. It narrowly beat the analysts' average estimate of $20.6 million.

Veracyte said that testing revenues were down 43 percent year over year to $15.2 million from $26.7 million a year ago, while product revenues grew to $1.7 million from none. Biopharmaceutical revenues grew 153 percent to $3.8 million from $1.5 million, but collaboration revenues declined to none in Q2 2020 from $2 million in the prior year.

The firm reported that testing volume for its genomic tests, the Afirma, Percepta, and Envisia assays, reached 5,379 tests during the recently completed quarter.

"Our genomic testing volume doubled between April and June as hospitals started performing more non-emergency procedures and physician practices began to open," Bonnie Anderson, CEO of Veracyte, said in a statement. "We also remain on track to bring four new tests to market in 2021, further accelerating our growth.

In a conference call with investors and analysts following the release of earnings, Anderson noted that the firm aims to launch its non-invasive nasal swab classifier test and its Percepta Atlas — a comprehensive gene alteration profiling test for lung cancer patients that that is based on its whole transcriptome sequencing assay — in the second half of next year.

"We believe this test will help inform treatment decisions the first time, and at the time of diagnosis, using a small biopsy sample," Anderson said. "The Percepta Atlas will allow us to build perhaps a biorepository of lung cancer information that captures the transcriptome of all cancer stages (I through IV) with data for over 2,000 transcripts for every  sample."

In addition, Anderson noted that Veracyte aims to launch its Envisia classifier for idiopathic pulmonary fibrosis on the nCounter platform for the test's international expansion in "very late 2021."

As part of Veracyte's plans to launch its in-development LymphMark lymphoma subtyping test on the nCounter system, the firm submitted a de novo classification request to the US Food and Drug Administration this month for use of the test to support disease management for patients newly diagnosed with diseased large B-cell lymphoma. Veracyte aims to introduce the test in the first half of 2021.

In May, Veracyte signed an agreement with CareDx to establish that firm as the exclusive worldwide commercialization partner for solid organ transplant rejection tests on Veracyte’s nCounter Flex Analysis platform.

Earlier this week, Veracyte inked an agreement with MaviDx to develop ultra-high-throughput genomic testing for SARS-CoV-2 on Veracyte's nCounter platform.

"We continued to grow our biopharmaceutical and diagnostic partnerships that extends our total addressable market beyond the $40 billion for our current and pipeline products," Anderson noted.

Because of the fluid state of the COVID-19 pandemic however, Veracyte has chosen not to provide guidance for the rest of 2020.

The company's net loss for Q2 2020 soared to $11.0 million, or $.22 per share, from $2.5 million, or $.05 per share, in the year-ago quarter. However, the firm beat the consensus Wall Street estimate of a  loss per share of $.24. 

Veracyte’s R&D expenses totaled $4.2 million in Q2 2020, up 27 percent from $3.3 million in Q2 2019. The firm's sales, marketing, general, and administrative expenses, meanwhile, fell 10 percent to $18.7 million from $20.8 million.

The company ended the quarter with $147.5 million in cash and cash equivalents.

In Friday morning trading on Nasdaq, Veracyte shares were down up 5 percent to $34.81