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Veracyte Q4 2020 Revenues Rise 16 Percent

NEW YORK: Veracyte reported after the close of the market on Wednesday that its fourth quarter revenues rose 16 percent year over year.

For the three months ended Dec. 31, 2020, the South San Francisco, California-based genomics diagnostics firm posted $34.5 million in revenues, up from $29.7 million a year ago and above analysts' average estimate of $31.9 million.

Testing revenues, which include Veracyte's centralized CLIA-testing services, grew 10 percent to $31.5 million from $28.6 million a year ago. Product revenues, which include the sales of Prosigna breast cancer prognostic assay and nCounter Flex instruments, were $2.7 million in Q4 2020 compared to $923,000 a year ago.

Veracyte biopharmaceutical revenues rose 37 percent to $343,000 from $250,000, and the firm posted no collaboration revenues during the quarter, unchanged from a year ago.

In a conference call with investors following the release of the earnings, Veracyte CFO Keith Kennedy said that the firm's Q4 testing volume grew 14 percent year over year to 13,130 tests, including 11,221 genomic tests and 1,999 distributed Prosigna tests. The genomic test volume included 572 Percepta tests, 279 Envisia tests, and 10,370 Afirma tests, representing a 3 percent growth over a year ago.  Meanwhile, the product volume of the Prosigna test represents a 181 percent growth over Q4 2019.

Veracyte Chairman and CEO Bonnie Anderson highlighted during the call that the firm had secured a new Medicare reimbursement rate of $5,500 for its Envisia classifier in October 2020. The new rate will apply to about 70 percent of the firm's Envisia patients covered by Medicare.

Earlier this month, Veracyte closed a public offering of 8,547,297 shares of common stock, raising about $593.8 million. The firm is using the net proceeds, along with existing cash, to finance its $600 million acquisition of Decipher Biosciences.

Anderson touted the findings of a JAMA Oncology study published last week that validated the Decipher prostate cancer test as the first independent predictor of overall survival. She cited the author of an accompanying commentary who noted that the findings should "lead to reconsideration of ASCO guidelines [that] recommend the use of the test on the basis of the strength of the evidence and its adoption into routine clinical use should become commonplace." Following the close of the Decipher acquisition, Anderson said that one of Veracyte's key priorities will be to secure a final Medicare coverage policy for the Decipher bladder test and then expand its commercialization later this year. The firm will also pursue commercial coverage decisions for its Percepta and Envisia tests.

"Our revenue and genomic testing and product volume continued to rebound from the pandemic during the fourth quarter and we entered 2021 with strong momentum across our business," Anderson, said in a statement. "We are on track to launch multiple new products [in the second half of] this year, including our noninvasive nasal swab test and Percepta Genomic Atlas in lung cancer."

Anderson said Veracyte expects to unveil clinical validation data on the nasal swab test before launching it out of its CLIA-lab in the second half of 2021. The firm then expects to launch the test it on the automated nCounter instrument in 2022.  

Veracyte's net loss for Q4 was $8.0 million or $.14 per share, compared to a loss of $7.5 million, or $.15 per share, in the year-ago quarter. The firm missed the consensus Wall Street estimate for a loss per share of $.11.

Veracyte's R&D expense totaled $4.6 million in Q4 2020, up about 5 percent from $4.4 million in Q4 2019. The firm's selling, general, marketing, and administrative expenses rose 12 percent to $25.5 million from $22.8 million in Q4 2019.

In December, Veracyte partnered with Bayer to launch the Precision Oncology Patient Identification Program in thyroid cancer, which will focus on spotting patients who may benefit from biomarker-driven therapies.

Veracyte also expanded a collaboration with the Lung Cancer Initiative at Johnson & Johnson, which has focused on developing the firm's lung cancer tests.

For full-year 2020, Veracyte's revenues fell 2 percent to $117.5 million from $120.4 million in 2019 but  beat analysts' average estimate of $115.1 million.

Testing revenues for 2020 increased to $102.0 million from $107.4 million a year ago. Product revenues skyrocketed to $9.8 million from $923,000 in 2019, while biopharmaceutical revenues fell nearly 30 percent to $5.7 million from $8.1 million. Meanwhile, the firm posted no collaboration revenues compared to $4 million a year ago.

Kennedy noted that for Q4 and FY 2020, the average testing and product revenue per reported test was approximately $2,600 and $2,500 respectively.

Veracyte's R&D costs for FY 2020 rose 15 percent to $17.2 million from $14.9 million in 2019. Meanwhile, the firm's selling, marketing, general, and administrative spending rose about 8 percent to $89.1 million in 2020 from $82.7 million in 2019.

The firm's FY 2020 net loss soared to $34.9 million, or $.66 per share, from a net loss of $12.6 million, or $.27 per share, in 2019. The firm missed the Wall Street estimate of a loss per share of $.63.

Veracyte finished 2020 with $349.4 million in cash and cash equivalents.

For full-year 2021, the firm said that upon the expected completion of the Decipher Bio acquisition, the combined company is anticipated to record between $190 and $200 million in revenues, which would represent growth of about 65 percent year over year the midpoint of the range.

In Thursday morning trading, Veracyte's stock was down about 6 percent at $69.81 on the Nasdaq.