NEW YORK (GenomeWeb) – Veracyte reported after the close of the market on Wednesday that its first quarter earnings rose 21 percent year over year.
For the three months ended March 31, the company reported revenues of $16.4 million, up from $13.6 million a year earlier, but missing the average analyst estimate for revenues of $17.7 million.
Veracyte said volume of its Afirma Gene Expression Classifier test rose 9 percent during Q1 to 5,834 tests.
"We sustained strong revenue growth during the quarter and executed on key milestones driving momentum across our business," Veracyte Chairman and CEO Bonnie Anderson said in a statement. "We increased payer coverage and in-network contracts for the Afirma GEC. We received final Medicare coverage and pricing for the Percepta Bronchial Genomic Classifier and are poised to begin ramping test volume and revenue."
On a conference call with analysts following the release of the earnings, Anderson added that the company was "off to a terrific start in 2017" with a "solid first quarter in line with expectations," strong growth in revenues and Afirma volume, and "great momentum across the business" going into the second quarter.
She said the company plans to launch campaigns to drive further Afirma demand among physicians and patients, adding that the campaigns with complement Veracyte's ongoing physician education activities for the test.
Anderson further highlighted an agreement Veracyte signed with Quest Diagnostics in February, under which Quest will offer Afirma to its customers, "which will help fuel Afirma's sustained growth through the future."
She also emphasized the recent news that 10 new Blue Cross Blue Shield plans and the Blues Federal Employee Program issued positive coverage decisions for Afirma for use in thyroid cancer diagnosis. This expands the number of health plan members with in-network access to the Afirma GEC to approximately 160 million, including more than 30 million through Blues plans.
Anderson also noted that Veracyte is getting ready to unveil data from a validation study of its new Afirma Genomic Sequencing Classifier. The data show that the GSC maintains the sensitivity of the GEC while improving on specificity, she said. Veracyte will begin offering early access to the test within the next few weeks and will offer wider access early next year.
The company's net loss for the quarter narrowed to $8.2 million, or $.24 per share, from $10.1 million, or $.36 per share, in Q1 2016. Analysts had expected a loss per share of $.25.
Veracyte's Q1 R&D costs rose 14 percent to $4.0 million from $3.5 million in the year-ago period, while its SG&A expenses stayed flat at $13.3 million.
The firm ended the quarter with $51.5 million in cash and cash equivalents.
For 2017, Veracyte reiterated its previous guidance for revenues of $76 million to $84 million. Analysts are expecting full year revenues of $79.9 million.
Veracyte's shares fell 6 percent to $7.39 in Thursday morning trading on the Nasdaq.