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Veracyte Files for IPO

NEW YORK (GenomeWeb News) – Molecular cytology firm Veracyte has filed for an initial public offering in the US.

The South San Francisco, Calif.-based firm was founded in 2006 as Calderome, but changed its name to Veracyte in early 2008.

Veracyte's first commercial product, which was launched in January 2011, is the Afirma Thyroid FNA Analysis. It combines cytopathology with the firm's Afirma Gene Expression Classifier gene expression test, which includes a 142-gene signature, for assessing thyroid nodule fine needle aspirate biopsies that are neither clearly benign nor malignant based on cytology review.

Since launching the Afirma, Veracyte has processed more than 50,000 fine needle aspiration samples for evaluation and performed more than 10,000 GECs to resolve indeterminate cytopathology results, the firm said in its filing with the US Securities and Exchange Commission.

The company markets the test through its own sales force and through members of Genzyme's endocrinology sales team. In January 2012 it granted Genzyme the rights to market and promote the Afirma Thyroid FNA Analysis solution in the US initially and then globally.

According to the SEC filing, Genzyme paid Veracyte a $10 million fee. In return, Veracyte will pay Genzyme a co-promotion fee that is equal to a percentage of its cash receipts from Afirma sales.

The GEC test received Medicare coverage in January 2012, and the firm has received positive coverage determinations from several insurers, including United Healthcare, Aetna, and Humana. In all, the payers who have agreed to reimburse for the test represent more than 100 million covered lives, said Veracyte.

Veracyte reported revenues of $11.6 million for Fiscal Year 2012, ended Dec. 31, compared to $2.6 million for FY 2011. For the first six months of 2013, the firm had revenues of $9.5 million versus $3.9 million for the first six months of 2012.

Its net loss for FY 2012 was $18.6 million, or $7.17 per share, compared to a loss of $14.4 million, or $6.23 per share, for 2011.

As of June 30, Veracyte had cash and cash equivalents of $20.7 million and working capital of $14 million.

Around the end of the second quarter it announced that it had raised $28 million in a Series C round of financing. That financing followed a Series B round, which also brought in $28 million and closed in 2010.