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Veracyte Q3 Revenues Up on Increased Afirma Gene Expression Classifier Volume

NEW YORK (GenomeWeb) - Veracyte announced after the close of the market Thursday a 25 percent rise in third quarter revenues amid increased demand for the company's Afirma gene expression classifier (GEC) test.

For the three-month period ended Sept. 30, Veracyte's revenues increased to $12.3 million from $9.8 million in the year ago period, but missed analysts' consensus estimate of $12.7 million. 

Afirma test volume during the quarter increased 46 percent to 5,034 over the same period last year — driven in part by increased private payor coverage, new in-network contracts, and test performance, the company said.

"The Afirma GEC is now included in all of the recently updated major thyroid guidelines and is covered for nearly 155 million Americans through policies deeming it medically necessary," Veracyte CEO Bonnie Anderson said during a conference call following the release of the financial results.

Veracyte's dual-model marketing approach for Afirma, she added, has continued to help fuel the test's growth.

Veracyte currently sells the Afirma Thyroid FNA test, which uses the GEC to differentiate benign thyroid nodules from cancerous ones in fine-needle aspirate samples deemed indeterminate following company-performed cytopathological analysis. It also offers the test through its so-called Afirma-enabled model, typically used by institutional partners with their own cytopathology labs, in which FNA samples undergo GEC testing only.

"This dual-model approach ensures that our sales team is best able to meet our diverse customer needs, and it's clearly working," Anderson said. "During the third quarter of 2015, the number of samples received for GEC-only testing increased by 97 percent compared to the same period in 2014. Total fine-needle aspiration samples received was 20,191 for the quarter, with GEC-only samples comprising 12 percent of that total, up from just 7 percent in the third quarter of 2014."

She noted that Veracyte expects an added boost from the American Thyroid Association updated patient-management guidelines, which now recommends that the Afirma GEC may be used instead of diagnostic surgery to rule out cancer in the case of indeterminate thyroid nodules.

In April, Veracyte also launched the Percepta Bronchial GEC test to resolve lung cancer diagnosis after ambiguous bronchoscopy. Anderson said during the call that Veracyte continues to generate data necessary to secure payor coverage for the test.

Medicare coverage is expected in 2016, she said, but cautioned that Percepta isn't expected to generate meaningful revenues until 2017.

Veracyte's net loss in the third quarter climbed to $8.9 million, or $.32 a share, from $7.9 million, or $.37 a share, the year before, beating Wall Street's estimate by a penny.Its R&D spending in the quarter rose to $3.6 million from $2.2 million, while SG&A costs grew to $11.7 million from $11.2 million.

At the end of the third quarter, the firm had cash and cash equivalents totaling $46.1 million.

Veracyte reiterated its 2015 annual revenue guidance of $48 million to $53 million, as well as its forecast of full-year Afirma GEC test volume in the range of 19,000 to 21,000.