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Veracyte Q1 Revenues Up 18 Percent; CEO Transition Underway

NEW YORK – Molecular diagnostics firm Veracyte reported after the close of the market on Monday that its first quarter revenues rose 18 percent.

The South San Francisco, California-based firm also announced that Bonnie Anderson, CEO and cofounder, will step down and be replaced by former Helix CEO Marc Stapley.

For the three months ended March 31, Veracyte posted $36.7 million in revenues, up from $31.1 million a year ago, in line with preliminary revenues and above analysts' average estimate of $32.7 million.

Testing revenues, which include Veracyte's centralized CLIA testing services, grew about 23 percent to $33.1 million from $27.0 million a year ago. Product revenues, which include the sales of Prosigna breast cancer prognostic assays and nCounter Flex instruments, were $3.1 million in Q1 2021, compared to $3.4 million a year ago.

The firm's Q1 genomic testing volume grew 11 percent year over year to 14,437 tests, including 1,560 tests from Decipher Biosciences. Product volume of 2,144 Prosigna tests represents a 14 percent decline over the prior year. Veracyte's biopharmaceutical revenues fell about 22 percent to $566,000 from $722,000 and the firm posted no collaboration revenues during the quarter, unchanged from a year ago.

On a conference call with investors following the release of earnings, Anderson said that Veracyte is "on track" to begin an early-access program for its noninvasive nasal swab lung cancer risk test in the second half of 2021, with the goal of gathering clinical utility evidence for Medicare coverage.

Veracyte will also adapt the nasal test to the nCounter analysis system in 2022, which the firm believes will allow it to access an approximately $8 billion global market for its lung cancer franchise, she said. The firm also expects to commercially introduce the Percepta Genomic Atlas lung cancer genomic profiling test in Q4.

Anderson also noted that Veracyte plans to submit a CE mark for the Envisia Gene Classifier by the end of the year.

Veracyte's Q1 net loss swelled to $41.9 million, or $.66 per share, from a loss of $11.7 million, or $.24 per share, in the year ago quarter. Net loss included $35.1 million of expenses related to the acquisition of Decipher Biosciences. The firm missed the consensus Wall Street estimate for a loss per share of $.12.

Veracyte' R&D expenses totaled $5.3 million in Q1 2021, up 20 percent from $4.4 million in Q1 2020. The firm's selling, general, marketing, and administrative expenses soared about 146 percent to $62.6 million from $25.4 million in Q1 2020.

Veracyte finished the quarter with $324.1 million in cash and cash equivalents.

Stapley will succeed Anderson as CEO and join Veracyte's board effective June 1. Anderson will transition to executive chairman and will continue to serve on the firm's board. As previously announced, CFO Keith Kennedy will also retire effective May 15, and Jane Alley, VP and corporate controller will serve as acting CFO until a replacement is named.

Stapley will join Veracyte from his current role as chairman and CEO of Helix. Prior to Helix, Stapley served in several executive leadership positions at Illumina, including CFO, chief administrative officer, and executive VP. Before joining Illumina, Stapley was senior VP of finance at Pfizer.

Veracyte said that it continues to expect a mid-year Medicare coverage decision for the Decipher Bladder test, which the firm believes will allow it to leverage its urology sales footprint to accelerate commercial adoption.

Anderson said that Veracyte will present additional data on the Percepta Genomic Atlas and nasal swab assay at the annual American Society of Clinical Oncology in June.

The firm reiterated its previously stated 2021 annual total revenue guidance of about $190 million to $200 million, representing growth of about 65 percent over 2020's full-year revenue at the midpoint of the range.

In Tuesday morning trading on the Nasdaq, Veracyte's shares were up 1 percent at $42.71

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