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Veracyte Preliminary Q1 Revenues up 3 to 7 Percent, Firm Withdraws 2020 Guidance

NEW YORK – Veracyte said after the close of the market on Thursday that it expects preliminary Q1 revenues to be in the range of $30.5 million to $31.5 million.

The expected revenues would represent a range of 3 to about 7 percent increase from $29.5 million a year ago and would beat the analysts' average estimate of $30.4 million.

The South San Francisco, California-based firm expects to report Q1 testing and product revenue in the rang of $30.0 million to $30.6 million compared to $25.4 million a year ago.

Veracyte noted that its genomic testing volume from its Afirma, Percepta, and Envisia classifiers is expected to rise between 15 and 16 percent to between 10,500 and 10,600 tests for the quarter compared to 9,162 in Q1 2019.  

However, Veracyte noted genomic testing volume declined in the second half of March, and that genomic testing volumes in the first half of April has fallen over 50 percent year over year.

Veracyte also said that it is withdrawing its previously issued guidance for full-year 2020 due to uncertainties surrounding the impact of the COVID-19 pandemic.

It also said that it is taking several actions to reduce costs caused by the pandemic. Bonnie Anderson, CEO and chairman of Veracyte, is reducing her base pay and target bonus by 25 percent until the firm can resume normal operations. The firm's board of directors, executive leaders, and certain other employees are also taking a pay cut during the same time period.

Veracyte is temporarily furloughing about 60 employees, with a current goal of bringing them back once the firm's business rebounds though  it will continue to provide furloughed employees certain benefits, including covering employee healthcare contributions during the furlough.

Veracyte has also terminated "a small number of employees" and has instituted a temporary hiring freeze. In addition, the firm is securing vendor discounts and halting all nonessential outside spending.

"By taking temporary but necessary cost-saving measures now, we believe we will be better positioned to emerge strongly from this situation," Anderson said in a statement. "Our confidence in Veracyte's long-term positioning is boosted by the fundamental strength and diversification of our business, our strong balance sheet, our robust pipeline, and our focus on helping patients to be diagnosed and treated sooner while avoiding unnecessary procedures."

Veracyte anticipates reporting cash and cash equivalents of about $153 million as of March 31, 2020.

Veracyte expects to release its full financial and operating results for Q1 and provide additional information on the impact of COVID-19 pandemic on May 6.

In mid-morning Friday trading on the Nasdaq, shares of Veracyte were down about 3 percent at $22.06.