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Veracyte Q2 Revenues More Than Double on Test Volume Spike

NEW YORK — Genomic testing firm Veracyte reported after the close of the market on Thursday that its second quarter 2021 revenues rose 166 percent year over year driven by a boom in test volume.

For the three months ended June 30, the South San Francisco, California-based molecular diagnostics firm reported total revenues of $55.1 million compared to $20.7 million in Q2 2020, beating Wall Street analysts' average estimate of $48.1 million.

Veracyte's testing revenues jumped more than 230 percent year over year to $50.8 million from $15.2 million a year ago, while product revenues rose 59 percent to $2.7 million from $1.7 million. Biopharmaceutical revenues, meanwhile, shrank 58 percent to $1.6 million from $3.8 million.

The firm reported that testing volume for its commercial assays continued to grow in Q2, reaching 20,856 tests during the recently completed quarter, more than triple what it billed in the same period of 2020.

On a call discussing the firm's financial results, Veracyte CEO Marc Stapley cited growth in its thyroid and urologic cancer business as specific drivers for the quarter's momentum.

Stapley said that volume for the company's Afirma thyroid cancer test grew approximately 120 percent year over year as the business recovered from negative effects of the COVID-19 pandemic in Q2 2020.

In prostate cancer, the firm saw significant milestones with its receipt of a final coverage policy for the Decipher Bladder test from the Medicare administrative contractor, Noridian, through the MolDX program.

Veracyte also signed a managed care contract with a major health plan, making the Decipher Prostate test an in-network benefit for eligible patients among the plan’s approximately 20 million members nationally.

Stapley said these wins "led in part to Decipher Prostate revenue of more than $18 million in the quarter, a record for this product line."

According to Stapley, Veracyte's pulmonology testing continues to recover from the effects of the ongoing pandemic, although more slowly "with our physicians still performing fewer lung cancer diagnostic bronchoscopy than [they did] prior."

Finally, Veracyte noted progress it is seeing with its Prosigna breast cancer assay. "We were pleased when Germany recently began reimbursing for Prosigna and are optimistic that other EU countries will similarly adopt coverage policies," Stapley said.

Looking forward, Veracyte is focusing on building out its remaining pipeline, and in closing its planned acquisition of HalioDx.

"We believe that HalioDx acquisition and our key management hires have solidified the foundation for scaling our business globally," Stapley said.

"We expect to gain IVD test development and manufacturing operations in Europe, giving us end-to-end control of our IVD product business. Further, with the addition of the Immunoscore colon cancer test, we will expand our scientific expertise into the emerging immune-oncology field," he added.

The company's net loss for Q2 2021 was $9 million, or $.13 per share, compared to $11.0 million, or $.22 per share, in the year-ago quarter, far below the Wall Street estimate of a loss per share of $.25.

Veracyte’s R&D expenses totaled $6.2 million in Q2 2021, up 48 percent from $4.2 million in the same quarter of 2020. The firm's sales, marketing, general, and administrative expenses rose 88 percent to $35.1 million from $18.7 million.

The firm revised its full-year 2021 revenue guidance to a new range of between $200 million and $208 million from a previous range of $190 million to $200 million.

The company ended the quarter with $327.5 million in cash and cash equivalents, as well as $749,000 in restricted cash.