Grew total revenue to $96.8 million, an
increase of 17%
Grew testing revenue by 25%
Conference call and webcast today at 4:30 p.m.
ET
Veracyte, Inc. (Nasdaq: VCYT) today announced financial results
for the first quarter ended March 31, 2024.
“We had a strong start to 2024, driven by robust growth from our
market-leading Decipher Prostate and Afirma tests. We executed upon
our strategies to further penetrate these markets by expanding our
clinical evidence, and, for Decipher, securing enhanced status in
guidelines while also achieving a key commercial reimbursement
milestone,” said Marc Stapley, Veracyte’s chief executive officer.
“We also expanded our capabilities into minimal residual disease
(MRD) testing by completing our acquisition of C2i Genomics and
initiating development of our first test using their novel,
whole-genome approach.”
Key Business Highlights
- Increased first quarter total revenue by 17% to $96.8 million,
compared to the first quarter of 2023.
- Grew total test volume to 33,424, an increase of 16% compared
to the first quarter of 2023.
- Received the highest-level rating among gene expression tests
for the Decipher Prostate Genomic Classifier in updated NCCN*
prostate cancer guidelines.
- Expanded clinical evidence for the Decipher Prostate test with
a study published in JCO Precision Oncology showing that it is
prognostic for progression in prostate cancer patients undergoing
Active Surveillance.
- Demonstrated the power of the Veracyte Diagnostic Platform to
expand evidence with the presentation of 14 abstracts at the
American Urological Association’s 2024 Annual Meeting, including
podium presentations for our research-use-only Decipher GRID
offerings in prostate cancer and bladder cancer.
- Contracted with one of the largest commercial payers in the
U.S., making the Decipher Prostate test an in-network offering for
its close to 30 million members.
- Received Medicare coverage for our Afirma TERT promoter gene
mutation test, following publication of analytical validity data
for the test in the Journal of Endocrinology & Metabolism.
- Completed the acquisition of C2i Genomics and initiated
development of an MRD test for muscle-invasive bladder cancer.
- Ended the first quarter with $209.2 million of cash and cash
equivalents.
* National Comprehensive Cancer Network. NCCN makes no
warranties of any kind whatsoever regarding their content, use or
application and disclaims any responsibility for their application
or use in any way.
First Quarter 2024 Financial Results
Total revenue for the first quarter of 2024 was $96.8 million,
an increase of 17% compared to $82.4 million reported in the first
quarter of 2023. Testing revenue was $90.3 million, an increase of
25% compared to $72.4 million in the first quarter of 2023, driven
primarily by the strong performance of our Decipher Prostate and
Afirma tests. Product revenue was $3.5 million, a decrease of 9%
compared to $3.9 million in the first quarter of 2023.
Biopharmaceutical and other revenue was $3.0 million, a decrease of
51% compared to $6.1 million in the first quarter of 2023.
Total gross margin for the first quarter of 2024, including the
amortization of acquired intangible assets, was 65%, compared to
62% in the first quarter of 2023. Non-GAAP gross margin, excluding
the amortization of acquired intangible assets and other
acquisition related expenses was 68%, compared to 68% in the first
quarter of 2023.
Operating expenses, excluding cost of revenue, were $67.1
million. Non-GAAP operating expenses, excluding cost of revenue,
amortization of acquired intangible assets, other acquisition
related expenses and other restructuring costs, grew 6% to $61.6
million compared to $58.1 million in the first quarter of 2023.
Net loss for the first quarter of 2024 was $1.9 million, an
improvement of 77% compared to the first quarter of 2023. Basic and
diluted net loss per common share was $0.02, an improvement of
$0.09 compared to the first quarter of 2023. Net cash used in
operating activities in the first three months of 2024 was $9.0
million inclusive of the typical annual bonus payments and payroll
tax reset in the first quarter, as well as C2i acquisition-related
expenses, an increase of $6.8 million compared to the same period
in 2023.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included in this press release. An
explanation of these measures is also included below under the
heading "Note Regarding Use of Non-GAAP Financial Measures."
2024 Financial Outlook
The company is raising full-year 2024 total revenue guidance to
$402 million to $410 million, representing year-over-year growth of
11% to 14% and testing growth of 15% to 18%. This guidance range
represents an increase compared to prior guidance of $394 million
to $402 million. In addition, the company now expects cash, cash
equivalents and short-term investments at the end of the year to be
$236 million to $240 million compared to prior guidance of $230
million to $234 million.
Conference Call and Webcast Details
Veracyte will host a conference call and webcast today at 4:30
p.m. Eastern Time to discuss the company's financial results and
provide a general business update. The conference call will be
webcast live from the company’s website and will be available via
the following link: https://edge.media-server.com/mmc/p/6m9ec99y.
The webcast should be accessed 10 minutes prior to the conference
call start time. A replay of the webcast will be available for one
year following the conclusion of the live broadcast and will be
accessible on the company’s website at
https://investor.veracyte.com/events-presentations.
The conference call dial-in can be accessed by registering at
the following link:
https://register.vevent.com/register/BI5ccb6c3c55e34500b5c9256eb8e1a7f4
About Veracyte
Veracyte (Nasdaq: VCYT) is a global diagnostics company whose
vision is to transform cancer care for patients all over the world.
We empower clinicians with the high-value insights they need to
guide and assure patients at pivotal moments in the race to
diagnose and treat cancer. Our Veracyte Diagnostics Platform
delivers high-performing cancer tests that are fueled by broad
genomic and clinical data, deep bioinformatic and AI capabilities,
and a powerful evidence-generation engine, which ultimately drives
durable reimbursement and guideline inclusion for our tests, along
with new insights to support continued innovation and pipeline
development. For more information, please visit www.veracyte.com or
follow us on LinkedIn or X (Twitter).
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to our statements related to our plans,
objectives, and expectations (financial and otherwise), including
with respect to 2024 financial and operating results; statements
regarding the expected benefits of the acquisition of C2i Genomics;
and our intentions with respect to our tests and products, for use
in diagnosing and treating diseases, in and outside of the United
States. Forward-looking statements can be identified by words such
as: “appears,” “anticipate,” “intend,” “plan,” “expect,” “believe,”
“should,” “may,” “will,” “enable,” “positioned,” “offers,”
“designed” and similar references to future periods. Actual results
may differ materially from those projected or suggested in any
forward-looking statements. These statements involve risks and
uncertainties, which could cause actual results to differ
materially from our predictions, and include, but are not limited
to: our ability to launch, commercialize and receive reimbursement
for our products; our ability to execute on our business strategies
relating to the C2i Genomics acquisition, integration of the
business and the realization of expected benefits and synergies;
our ability to demonstrate the validity and utility of our genomic
tests and biopharma and other offerings; our ability to continue
executing on our business plan; our ability to continue to scale
our global operations and enhance our internal control environment;
the impact of the war in Ukraine and other regional conflicts on
European economies and energy supply, as well as our facilities in
France; the impact of foreign currency fluctuations, increasing
interest rates, inflation, potential government shutdowns and
turmoil in the global banking and finance system; and the
performance and utility of our tests in the clinical environment.
Additional factors that may impact these forward-looking statements
can be found under the caption “Risk Factors” in our Annual Report
on Form 10-K filed on February 29, 2024, and our Quarterly Report
on Form 10-Q filed for the three months ended March 31, 2024, to be
filed May 8, 2024, as well as in other documents that we may file
from time to time with the Securities and Exchange Commission.
Copies of these documents, when available, may be found in the
Investors section of our website at investor.veracyte.com. These
forward-looking statements speak only as of the date hereof and,
except as required by law, we specifically disclaim any obligation
to update these forward-looking statements or reasons why actual
results might differ, whether as a result of new information,
future events or otherwise.
Veracyte, the Veracyte logo, Decipher, C2i Genomics, and Afirma
are registered trademarks of Veracyte, Inc., and its subsidiaries
in the U.S. and selected countries.
Note Regarding Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), this press
release and the accompanying tables contain, and reference certain
non‐GAAP results including non-GAAP gross margin, non-GAAP
operating expenses, and non-GAAP loss from operations. These
measures are not meant to be considered superior to or a substitute
for financial measures calculated in accordance with GAAP, and
investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool.
We use non-GAAP measures to internally evaluate and analyze
financial results. We believe these non-GAAP financial measures
provide investors with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and enable comparison of our
financial results with other public companies, many of which
present similar non-GAAP financial measures. However, the non-GAAP
measures we present may be different from those used by other
companies.
We exclude amortization of acquired intangible assets,
acquisition-related expenses relating to our acquisitions of
Decipher Biosciences, HalioDx and C2i Genomics, impairment charges
associated with the nCounter license and other biopharmaceutical
services related HalioDx intangible assets and certain costs
related to restructuring from certain of our non-GAAP measures.
Management has excluded the effects of these items in non-GAAP
measures to help investors gain a better understanding of the core
operating results and future prospects of the company, consistent
with how management measures and forecasts the company's
performance, especially when comparing such results to previous
periods or forecasts. The company encourages investors to carefully
consider its results under GAAP, as well as its supplemental
non‐GAAP information and the reconciliation between these
presentations, to more fully understand its business.
VERACYTE, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(Unaudited)
(In thousands, except share and
per share amounts)
Three Months Ended March 31,
2024
2023
Revenue:
Testing revenue
$
90,303
$
72,396
Product revenue
3,537
3,892
Biopharmaceutical and other revenue
3,004
6,134
Total revenue
96,844
82,422
Operating expenses (1):
Cost of testing revenue
25,979
19,648
Cost of product revenue
2,644
2,162
Cost of biopharmaceutical and other
revenue
2,838
4,419
Research and development
15,965
12,769
Selling and marketing
23,782
26,130
General and administrative
26,210
21,053
Impairment of long-lived assets
429
1,410
Intangible asset amortization
3,653
5,329
Total operating expenses
101,500
92,920
Loss from operations
(4,656
)
(10,498
)
Other income, net
2,748
2,407
Loss before income taxes
(1,908
)
(8,091
)
Income tax benefit
(44
)
—
Net loss
$
(1,864
)
$
(8,091
)
Net loss per common share, basic and
diluted
$
(0.02
)
$
(0.11
)
Shares used to compute net loss per common
share, basic and diluted
74,759,789
72,175,457
1. Cost of revenue, research and
development, sales and marketing and general and administrative
expenses include the following stock-based compensation related
expenses:
Three Months Ended March 31,
2024
2023
Cost of revenue
$
487
$
386
Research and development
1,763
1,256
Selling and marketing
1,093
2,112
General and administrative
4,676
4,347
Total stock-based compensation expense
$
8,019
$
8,101
VERACYTE, INC.
CONDENSED CONSOLIDATED STATEMENT
OF COMPREHENSIVE LOSS
(Unaudited)
(In thousands)
Three Months Ended March 31,
2024
2023
Net loss
$
(1,864
)
$
(8,091
)
Other comprehensive income (loss):
Change in currency translation
adjustments
(4,889
)
4,480
Net comprehensive loss
$
(6,753
)
$
(3,611
)
VERACYTE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
March 31,
December 31,
2024
2023
(Unaudited)
(See Note 1)
Assets
Current assets:
Cash and cash equivalents
$
209,188
$
216,454
Accounts receivable
46,665
40,378
Supplies and inventory
18,328
16,128
Prepaid expenses and other current
assets
16,237
12,661
Total current assets
290,418
285,621
Property, plant and equipment, net
21,566
20,584
Right-of-use assets, operating leases
11,167
10,277
Intangible assets, net
116,348
88,593
Goodwill
753,853
702,984
Restricted cash
1,082
876
Other assets
5,639
5,971
Total assets
$
1,200,073
$
1,114,906
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
12,152
$
12,943
Accrued liabilities
30,293
38,427
Current portion of deferred revenue
2,602
2,008
Current portion of acquisition-related
contingent consideration
6,934
2,657
Current portion of operating lease
liabilities
5,982
5,105
Current portion of other liabilities
89
101
Total current liabilities
58,052
61,241
Deferred tax liabilities
1,340
734
Acquisition-related contingent
consideration, net of current portion
13,446
518
Operating lease liabilities, net of
current portion
8,058
7,525
Other liabilities
528
786
Total liabilities
81,424
70,804
Total stockholders’ equity
1,118,649
1,044,102
Total liabilities and stockholders’
equity
$
1,200,073
$
1,114,906
1. The condensed consolidated balance
sheet at December 31, 2023 has been derived from the audited
financial statements at that date included in the Company's Form
10-K filed with the Securities and Exchange Commission dated
February 29, 2024.
VERACYTE, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended March 31,
2024
2023
Operating activities
Net loss
$
(1,864
)
$
(8,091
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
5,590
6,670
Loss on disposal of property, plant and
equipment
30
121
Stock-based compensation
8,019
7,985
Deferred income taxes
(120
)
—
Noncash lease expense
1,139
903
Revaluation of acquisition-related
contingent consideration
5
(485
)
Effect of foreign currency on
operations
637
(224
)
Impairment loss
429
1,410
Changes in operating assets and
liabilities:
Accounts receivable
(6,459
)
(1,302
)
Supplies and inventory
(2,303
)
1,055
Prepaid expenses and other current
assets
(2,738
)
(3,064
)
Other assets
259
(491
)
Operating lease liabilities
(1,053
)
(950
)
Accounts payable
(1,544
)
2,012
Accrued liabilities and deferred
revenue
(8,993
)
(7,721
)
Net cash used in operating activities
(8,966
)
(2,172
)
Investing activities
Acquisition of C2i, net of cash
acquired
5,012
—
Purchase of short-term investments
—
(19,700
)
Proceeds from sale of short-term
investments
—
39,773
Proceeds from maturity of short-term
investments
—
5,000
Purchases of property, plant and
equipment
(2,134
)
(993
)
Net cash provided by investing
activities
2,878
24,080
Financing activities
Payment of taxes on vested restricted
stock units
(3,832
)
(2,277
)
Proceeds from the exercise of common stock
options and employee stock purchases
2,968
3,962
Net cash (used in) provided by financing
activities
(864
)
1,685
Increase (decrease) in cash, cash
equivalents and restricted cash
(6,952
)
23,593
Effect of foreign currency on cash,
cash equivalents and restricted cash
(108
)
50
Net increase (decrease) in cash, cash
equivalents and restricted cash
(7,060
)
23,643
Cash, cash equivalents and restricted
cash at beginning of period
217,330
154,996
Cash, cash equivalents and restricted
cash at end of period
$
210,270
$
178,639
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
(Unaudited)
(In thousands)
March 31,
December 31,
2024
2023
Cash and cash equivalents
$
209,188
$
216,454
Restricted cash
1,082
876
Total cash, cash equivalents and
restricted cash
$
210,270
$
217,330
Reconciliation of U.S. GAAP to Non-GAAP
Financial Measures
(Unaudited)
(In thousands)
Identified Expenses
GAAP
Acquisition Related Expenses
(1)
Intangible Assets Amortization
Expense
Other (4)
Total Non-GAAP Measure
Three Months Ended March 31,
2024
Total revenue
$
96,844
$
—
$
—
$
—
$
96,844
Cost of testing revenue
25,979
60
—
6
25,913
Cost of product revenue
2,644
—
—
—
2,644
Cost of biopharmaceutical and other
revenue
2,838
—
—
—
2,838
Intangible asset amortization (2)
2,915
—
2,915
—
—
Gross margin $
62,468
60
2,915
6
65,449
Gross margin %
65
%
68
%
Research and development
15,965
461
—
278
15,226
Selling and marketing
23,782
(1,141
)
—
900
24,023
General and administrative
26,210
3,578
—
266
22,366
Impairment of long-lived assets
429
429
—
—
—
Intangible asset amortization
738
—
738
—
—
Total operating expenses excluding cost of
revenue (3)
67,124
3,327
738
1,444
61,615
Loss from operations
$
(4,656
)
$
3,387
$
3,653
$
1,450
$
3,834
Three Months Ended March 31,
2023
Total revenue
$
82,422
$
—
$
—
$
—
$
82,422
Cost of testing revenue
19,648
83
—
—
19,565
Cost of product revenue
2,162
—
—
—
2,162
Cost of biopharmaceutical and other
revenue
4,419
43
—
—
4,376
Intangible asset amortization (2)
4,804
—
4,804
—
—
Gross margin $
51,389
126
4,804
—
56,319
Gross margin %
62
%
68
%
Research and development
12,769
24
—
—
12,745
Selling and marketing
26,130
890
—
—
25,240
General and administrative
21,053
1,036
—
(66
)
20,083
Impairment of long-lived assets
1,410
—
—
1,410
—
Intangible asset amortization
525
—
525
—
—
Total operating expenses excluding cost of
revenue (3)
61,887
1,950
525
1,344
58,068
Loss from operations
$
(10,498
)
$
2,076
$
5,329
$
1,344
$
(1,749
)
1. Includes transaction related expenses
as well as post-combination compensation expenses. For the three
months ended March 31, 2024, adjustments consist primarily of
transaction related expenses associated with the acquisition of C2i
Genomics ($4.6 million) and reversals of accrued compensation
associated with the acquisition of HalioDx ($1.2 million). For the
three months ended March 31, 2023, adjustments consist primarily of
post-combination compensation expenses associated with the
acquisition of HalioDx.
2. Includes only amortization of
intangible assets identified as developed technology assets through
purchase accounting transactions, which otherwise would have been
allocated to cost of revenue.
3. Includes only amortization of
intangible assets, which otherwise would have been allocated to
research and development, selling and marketing or general and
administrative expense and excludes the cost of revenue ($31.5
million and $26.2 million) and the amortization of intangible
assets which would have been allocated to the cost of revenue ($2.9
million and $4.8 million) for the three months ended March 31, 2024
and for the three months ended March 31, 2023 respectively.
4. For the three months ended March 31,
2024, includes $1.4 million expense related to restructuring costs
associated with portfolio prioritization including the reduction in
Envisia commercial support. For the three months ended March 31,
2023, includes $1.3 million related to impairment charges.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507478547/en/
Investors: Shayla Gorman investors@veracyte.com
619-393-1545
Media: Tracy Morris media@veracyte.com 650-380-4413
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