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Veracyte Q4 Revenues Jump 78 Percent

NEW YORK (GenomeWeb) - Veracyte announced after the close of the market Thursday that revenues for its second quarter rose 37 percent year over year on sales of its Afirma gene expression classifier (GEC) tests.

For the three months ended June 30, 2015, the South San Francisco, California-based molecular diagnostics company said that revenues increased 37 percent to $11.9 million from $8.7 million a year ago, missing the average Wall Street expectation of $12.2 million.

Sales of the Afirma tests in the quarter grew 38 percent year over year compared to Q2 2014 to 4,758 tests, the firm said in a statement, attributing the increase to greater insurance coverage and contracts, as well as an expansion of its sales team in 2014.

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.

During a conference call held to discuss the second quarter financial results, Veracyte CEO Bonnie Anderson noted the Afirma-enabled model "continues to fuel our test volume growth and also represents a higher-margin opportunity."

In April, the firm also launched the Percepta Bronchial GEC test to resolve lung cancer diagnosis after ambiguous bronchoscopy. Anderson said during the call that Veracyte is currently focused on generating data needed to secure payor coverage for the test.

"As we did with Afirma, our goal is to work with a limited number of [clinical] sites — approximately 50 to 75 — as we fine-tune our service delivery and compile the clinical data needed to approach Medicare for reimbursement," she said. "We are well on our way with nearly 25 sites signed or in the process of signing on to get their patients access to Percepta."

Anderson noted that Veracyte does not expect Percepta sales to generate meaningful revenues until 2017.

Veracyte's net loss in the quarter was $9.1 million, or $.35 per share, compared to a net loss of $6.7 million, or $.31 per share, a year ago, falling short of the consensus Wall Street estimate of a net loss per share of $.31.

Veracyte's R&D spending rose to $3.1 million from $2.2 million during the second quarter of 2014, while its SG&A costs rose to $12.4 million from $9 million.

The company ended the quarter with $51 million in cash and cash equivalents.

Veracyte reiterated its FY 2015 revenue guidance of $48 million to $53 million and its forecast of Afirma GEC volume in the range of 19,000 to 21,000 tests.