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Veracyte Q3 Revenues Spike 75 Percent

NEW YORK (GenomeWeb) – Veracyte reported after the close of the market on Thursday a 75 percent jump in revenues for the third quarter.

The South San Francisco, Calif.-based firm reported $9.8 million in revenues for the three months ended Sept. 30, up from $5.6 million in the year-ago quarter, and matching the consensus Wall Street estimate.

Veracyte said that it received 16,781 fine needle aspiration samples during the third quarter, up from 12,430 in the year-ago quarter, while the number of Afirma Gene Expression Classifier tests for diagnosing thyroid cancer continued to be performed within the 20 percent to 22 percent range of FNA samples received.

"In many respects the third quarter of 2014 was transformative for the company," Veracyte President and CEO Bonnie Anderson said on a conference call following the release of the company's financial results. "We continued to execute on growing our Afirma franchise and at the same time achieve strategic and pipeline developments that position Veracyte very well for both near- and long-term sustainable growth."

During the quarter, the company bought lung cancer diagnostics firm Allegro Diagnostics for $21 million, which Anderson said accelerates Veracyte's entry into the pulmonology space by providing the company a clinically validated lung cancer test, which the firm aims to launch in the second half of 2015. The test is designed to help physicians determine which patients with lung nodules are at low risk for cancer.

In the third quarter, Veractye also obtained positive coverage policies for the Afirma GEC test with Highmark and Horizon Blue Cross Blue Shield. Additionally, the company said today that it has secured contracts with UnitedHealthcare and Cigna for the Afirma GEC test. Previously, UnitedHealthcare issued a positive coverage decision for the test in March 2013, while Cigna issued a positive coverage decision in December 2013.

Veracyte's net loss for Q3 2014 was $7.9 million, or $.37 per share, compared to a net loss of $6.3 million, or $6.59 per share, a year ago. The average Wall Street estimate was for a net loss of $.35 per share.

Veracyte went public in November 2013 and used 21.6 million shares to calculate its loss on a per-share basis for the most recently completed quarter, compared to 955,890 shares in the year-ago period.

Veracyte's R&D spending was up 10 percent to $2.2 million from $2.0 million a year ago, while its SG&A costs shot up 72 percent to $11.2 million from $6.5 million.

It had $44.0 million in cash and cash equivalents as of Sept. 30.

The company reiterated full-year 2014 guidance for the number of FNA samples received to be between 66,000 and 73,000. It said that it anticipates full-year 2014 revenues of about $38 million.