Veracyte Announces Fourth Quarter and Full-Year 2017 Financial Results, Provides 2018 Financial Outlook
“We delivered a solid year of growth in 2017,” said Bonnie Anderson, chairman and chief executive officer of Veracyte. “We continued to grow the Afirma franchise in thyroid cancer diagnosis and expanded payer coverage and contracts. We also launched our RNA sequencing-based Afirma Genomic Sequencing Classifier and will soon introduce our Afirma Xpression Atlas platform. We believe these advances will offer physicians a one-stop shop in thyroid cancer diagnosis and position us well for further growth and future product innovation.”
“In pulmonology, we built a strong foundation to advance market uptake of the Percepta classifier in lung cancer screening and diagnosis and moved our Envisia Genomic Classifier for the diagnosis of idiopathic pulmonary fibrosis toward Medicare reimbursement and expanded commercialization. We enter 2018 with a stronger, more efficient operational structure and a robust, multi-product commercial team that we believe is poised to drive revenue growth across our endocrinology and pulmonology franchises.”
Fourth Quarter and Full-Year 2017 Financial Results
For the three- and twelve-month periods ended December 31, 2017, compared to the prior year:
- Revenue was $19.6 million and $72.0 million, respectively, an increase of 7% and 11%;
- Genomic Volume was 7,153 and 26,026 reported tests, respectively, an increase of 13% and 12%;
- Gross Margin was 60% and 61%, respectively, a decline of 4% and flat to prior year;
- Operating Expenses, Excluding Cost of Revenue, were $17.9 million and $70.3 million, respectively, an increase of 16% and 3%;
- Net Loss and Comprehensive Loss was ($8.4) million and ($31.0) million, respectively, an increase of 92% and decrease of 1%;
- Basic and Diluted Net Loss Per Common Share was ($0.24) and ($0.91), respectively, an increase of 71% and decrease of 17%;
- Cash Burn1 was $6.1 million and $25.2 million, respectively, an increase of 31% and improvement of 22%; and
- Cash and Cash Equivalents was $33.9 million at December 31, 2017.
1 A reconciliation of net cash used in operating activities to cash burn has been provided in the financial statement tables included in this press release. An explanation of cash burn is also included below under the heading “Non-GAAP Financial Measures.”
2017 and Recent Business Highlights
- In January 2018, achieved the milestone of 100,000 Afirma tests performed to date, with an estimated 40,000 unnecessary thyroid surgeries saved, penetrating the market by an estimated 35%.
- Launched the next-generation Afirma Genomic Sequencing Classifier on our RNA sequencing platform, further improving the test’s performance and expanding our comprehensive biorepository of genomic content to fuel future product innovation.
- Announced upcoming launch of the Afirma Xpression Atlas platform, providing physicians the most comprehensive genomic data available in a single assay to further inform surgery and treatment decisions for patients with suspected thyroid cancer.
- During the year, structured and significantly expanded our multi-product sales team by over 40% during the year, in preparation for driving Percepta growth in 2018.
- Expanded the number of covered lives for Afirma by 70 million during 2017, bringing the total number of patients covered for the genomic test through their health insurers to over 275 million, including nearly 120 million Blues plan members, as of December 31, 2017.
- Expanded the number of contracted lives for Afirma by nearly 20 million during 2017, making the test an in-network covered benefit for over 175 million people, including nearly 45 million Blues plan members, as of December 31, 2017.
- Gained final Medicare coverage for Percepta through the MolDX program in May 2017, making it the first genomic test to be covered for use in lung cancer screening and diagnosis. The test is now available as a covered benefit for the nearly 60 million Medicare enrollees nationwide.
- Achieved Medicare pricing stability and transparency for Afirma through the Protecting Access to Medicare Act of 2014 (PAMA) implementation in January 2018, resulting in an increased reimbursement rate of approximately $3,600 per test from approximately $3,200 per test.
- Completed the package of clinical evidence needed to target Medicare coverage for the Envisia Genomic Classifier in 2018.
- Afirma – Presented 14 Afirma abstracts at four medical conferences, including four clinical utility studies demonstrating the long-term durability of a benign genomic test result during up to six years of follow-up and seven studies showing the enhanced Afirma GSC’s ability to identify significantly more benign thyroid nodules than the original Afirma test.
- Percepta – Presented three studies at major medical meetings demonstrating the clinical utility of the Percepta classifier and published a study in the Journal of Thoracic Oncology demonstrating the genomic test’s cost-effectiveness.
- Envisia – Presented five abstracts at leading pulmonology meetings and published three studies demonstrating the clinical validity, clinical utility and/or analytical verification of the Envisia classifier.
Veracyte expects to achieve full-year 2018 revenue in the range of $81 million to $83 million, with a cash burn in the range of $18 million to $22 million.
The above guidance for the full year of 2018 includes the adoption of ASC 606, which is effective January 1, 2018. We believe that the adoption of ASC 606 will not result in a material cumulative catch-up adjustment under the modified retrospective method, or have a material impact on our financial position or results of operations. We have not reconciled our guidance with respect to cash burn to net cash used in operating activities because certain items that impact this measure are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of cash burn to net cash used in operating activities is not available without unreasonable effort.
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 call may be accessed as follows:
Veracyte Fourth Quarter 2017 Conference Call
4:30 p.m. ET Today
|Dial-in number (U.S.):||(855) 541-0980|
|International number:||(970) 315-0440|
The webcast replay will be available on the company’s website approximately two hours following completion of the call.