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Veracyte Q4 Revenues Rise 15 Percent, Beat Wall Street Estimate

NEW YORK – Veracyte reported after the close of the market on Tuesday that its fourth quarter revenues rose 15 percent year over year.

For the three months ended Dec. 31, 2019 the South San Francisco, California-based genomics diagnostics firm posted $29.7 million in revenues, up  from $25.8 million in Q4 2018 and above analysts' average estimate of $29.5 million.

In a conference call with investors follwing the release of earnings, Veracyte CFO Keith Kennedy noted that — due to the December acquisition of Nanostring's nCounter platform — the firm expanded its revenue reporting to distinguish between testing, product, biopharma, and collaboration revenue. 

Testing revenues, which includes Veracyte's centralized CLIA-testing services, grew to $28.6 million from $25.5 million a year ago. Meanwhile product revenues, which includes the sales of Prosigna breast cancer prognositc assay and nCounter Flex instruments, were $923,000 in Q4 2019.

"Testing and products represent Veracyte's global diagnostics business, [while] biopharma and collaborations represent our biopharma strategic agreements," Kennedy explained.

Veracyte's biopharmaceutical revenues were flat year over year at $250,000, and the company posted no collaboration revenues in Q4 2019, unchanged from a year ago.

Veracyte said that its Q4 genomic testing volume grew 25 percent year over year to 10,846 tests.

Veracyte's net loss for Q4 was $7.5 million or $.15 per share, compared to a loss of $3.1 million, or $.81 per share, in the year-ago quarter. The firm missed Wall Street's consensus estimate for a loss per share of $.07.

The company used 49.1 million shares to calculate its per share loss figure for Q4 2019 compared to 40.7 million shares a year ago.

Veracyte's R&D expenses totaled $4.4 million in Q4 2019, up 42 percent from $3.1 million in Q4 2018. The firm's SG&A's expenses jumped about 37 percent to $22.8 million from $16.7 million in Q4 2018.

"We successfully drove strong revenue and volume growth across all of our products, secured strategic biopharmaceutical collaborations, advanced our pipeline … and positioned the company to become a global leader in advanced genomic diagnostics," Veracyte CEO and Chairman Bonnie Anderson said in a statement. "We also achieved cashflow breakeven status for the fourth quarter of 2019, underscoring our focus on driving business growth while maintaining financial discipline."

Anderson also highlighted that more than 280 institutions were using more than one of Veracyte's genomic tests by the end of Q4, with more than 50 sites using all three classifiers tests.  

For full-year 2019, Veracyte's revenues improved about 31 percent year over year to $120.4 million from $92.0 million in 2018 and beat the analysts' average estimate of $120.2 million.

Testing revenues for 2019 increased to $107.4 million from $91.1 million a year ago. Product revenues grew to $923,000 from none in 2018, while biopharmaceutical revenues spiked to $8.1 million from $950,000. Collaboration revenues increased to $4 million from none a year ago, driven by Veracyte's partnership with Acerta Pharma, the hematology research and development arm of AstraZeneca, to provide genomic information that will support Acerta's development of oncology therapeutics.

"Our collaboration with Acerta Pharma ... leverages our recent expansion, through our Nanostring transaction, into additional oncology indications, including lymphoma, where we are developing novel genomic tests that leverage the genetic underpinnings of disease, with the long term potential of expanding our menu of diagnostic tests on the nCounter platform globally," Anderson said. 

Total genomic test volume grew nearly 25 percent year over year to 39,612 tests in 2019, compared to 31,710 in 2018. Veracyte reported over 3,000 Percepta and 750 Envisia test results for 2019, which the firm believes was driven by the introduction of its second-generation Percepta genomics sequencing classifier and final Medicare coverage for the Envisia classifer in IPF diagnosis. Afirma test volume grew over 5,000 in FY 2019.

Veracyte's R&D costs for FY 2019 inched up a fraction of 1 percent to $14.9 million in 2019 from $14.8 million in 2018. Its SG&A spending rose nearly 27 percent to $82.7 million in 2019 from $65.3 million in 2018.

The firm improved its net loss to $12.6 million, or $.27 per share, from a net loss of $23.0 million, or $.62 per share, in 2018. However, it missed the Wall Street estimate of a loss per share of $.19.

For 2020, Veracyte said it anticipates between $138 million and $142 million in total revenues. Anderson noted that the firm aims to continue its steady volume growth for the Afirma GSC Expression Atlas and to double its pulmonary genomic test volume in 2020.  

Veracyte finished 2019 with $159.3 million in cash and cash equivalents.

In Wednesday morning trading, Veracyte's stock was up down 1 percent at $23.54 on the Nasdaq.

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