This article has been updated to clarify Veracyte's copromotion arrangement with Sanofi Genzyme.
NEW YORK (GenomeWeb) – Veracyte announced after the close of the market Wednesday a 23 percent rise in its second quarter revenues as the company continued to experience increased demand for its Afirma gene expression classifier thyroid test.
For the three-month period ended June 30, Veracyte's revenues climbed to $14.7 million from $11.9 million in the year-ago quarter, just shy of analysts' consensus estimate of $14.8 million. Contributing to the revenue growth was a 23 percent increase in Afirma test volume to 5,832.
The firm's net loss for the quarter grew to $11.2 million, or $.40 per share, from $9.1 million, or $.35 a share, the year before, well above analysts' average loss estimate of $.33 a share.
Veracyte's R&D expenses in Q2 climbed to $4.3 million from $3.1 million. Meanwhile, SG&A costs rose to $14.4 million from $12.4 million, partly due to the expansion of its sales force and greater Afirma marketing costs as Veracyte nears the conclusion of its US copromotion arrangement for the test with Sanofi Genzyme. The company anticipates further expanding its sales team during 2016 and ending the year with 45 reps.
At the end of the quarter, Veracyte had cash and cash equivalents totaling $39 million.
Looking ahead, the company said it continues to expect full-year revenues to be in the range of $59 million to $63 million, with Afirma test volume in the range of 24,000 to 25,500.
To meet this goal, Veracyte continues to focus on securing in-network contracts with payors for the test.
In the second quarter, it signed in-network coverage deals for Afirma with CareFirst, the Blue Cross and Blue Shield plan covering Maryland, the District of Columbia, and parts of Northern Virginia; and Blue Cross and Blue Shield of Illinois.Â
During a conference call to discuss the second quarter results, Veracyte CEO Bonnie Anderson noted that the firm has also just reached an agreement with Blue Shield of California, and that it anticipates obtaining a coverage decision for Afirma from Anthem before the end of the year.
At the same time, the company is also actively pursuing coverage for the Percepta bronchial genomic classifier, which is designed to identify patients at low risk of lung cancer following inconclusive bronchoscopy. The test was launched in early 2015 but has yet to generate meaningful revenues.
"We have now amassed comprehensive evidence, including published clinical utility data, demonstrating the Percepta classifier's ability to reduce unnecessary surgical procedures in lung cancer diagnosis," Anderson said. "We believe this positions us to secure Medicare coverage this year and prepare for commercial expansion and revenue growth going into 2017."
She added that Veracyte is also on track to launch its third test, the Envisia classifier for diagnosing idiopathic pulmonary fibrosis without the need for surgery, in the fourth quarter.
Following the same path it took with the Afirma and Percepta tests, Veracyte will "make the test available to a limited number of thought-leading institutions as we build the clinical utility and other evidence to support Medicare reimbursement," Anderson said. "We would expect revenue from the Envisia classifier sometime in 2018."