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Veracyte Q1 Revenues Up 21 Percent

NEW YORK (GenomeWeb) – Veracyte announced after the close of the market today a 21 percent increase in first quarter revenues on strong volume growth for its Afirma gene expression classifier test, which differentiates benign thyroid nodules from cancerous ones.

For the three-month period ended March 31, Veracyte's revenues rose to $13.6 million from $11.2 million, topping analysts' consensus estimate of $13.1 million. Driving the revenue jump was a 33 percent increase in Afirma test volume to 5,352.

The company's net loss for the quarter was $10.1 million, or $.36 per share, compared to $7.6 million, or $.34 a share, the year before. Analysts had, on average, been expecting the company to report of loss per share of $.35.

Veracyte's first quarter R&D costs climbed to $3.5 million from $2.8 million, while SG&A expenses rose to $13.3 million from $11.4 million year over year.

At the end of the first quarter, Veracyte had cash and cash equivalents totaling $47.5 million, which includes $19.2 million in net proceeds from the firm's $45 million financing agreement with Visium Healthcare Partners announced in March. 

Looking ahead, the company said it continues to expect revenues between $59 million and $63 million for the full year, with Afirma test volume in the range of 24,000 to 25,500.

Key to hitting this goal for Afirma will be securing in-network contracts for the test with Blue Cross and Blue Shield (BCBS) plans nationwide, Veracyte CEO Bonnie Anderson said during a conference call to discuss the Q1 results. "Physicians cite lack of in-network status as the single greatest deterrent to adoption of the Afirma GEC," she noted.

She said that Veracyte recently inked a deal with CareSource, the Blue Cross and Blue Shield Association's internal group purchasing organization, which allows individual state BCBS organizations to contract with Veracyte at "established and competitive rates" for cytopathology and molecular testing services without having to negotiate contracted rates with each individual plan.

"We believe this agreement will enable us to accelerate our ability to achieve in-network contracts with Blue Cross and Blue Shield plans around the country, [which is] key to expanding our reimbursement levels," Anderson said, adding that Veracyte is also aiming to secure a coverage decision for Afirma from Anthem in 2016.

Anderson also said that Veracyte is continuing to work to gain Medicare coverage for the Percepta Bronchial Genomic Classifier, which is designed to identify patients at low risk of lung cancer following inconclusive bronchoscopy.

"Once we achieve Medicare reimbursement, we will ramp commercialization of the test beyond our three initial sales specialists and expand our customer base beyond the roughly 40 to 50 sites that are currently offering the test to their patients," she said. 

During early morning trading on the Nasdaq Friday, shares of Veracyte were up 2 percent at $5.34.