Veracyte Announces First Quarter 2022 Financial Results
Grew Total Revenue to $67.8 million, an Increase of 85%
Conference Call and Webcast Today at 4:30 p.m. ET
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- Veracyte, Inc. (Nasdaq: VCYT) today announced financial results for the first quarter ended March 31, 2022.
"I am extremely pleased with our team’s strong results in the first quarter,” said Marc Stapley, Veracyte’s chief executive officer. “Last year we assembled the critical elements needed to drive near and long-term growth, including our acquisitions of Decipher Biosciences and HalioDx, complementing our prior acquisition of the nCounter diagnostic platform. We opened this year with the organization re-aligned to fully execute our strategic plan initiatives. With our innovative lab-based business and international reach, enabled by the automated nCounter platform, we are positioned to achieve our vision of improving outcomes for patients all over the world.”
Key Business Highlights:
- Increased first quarter total revenue by 85% to $67.8 million, compared to the first quarter of 2021;
- Grew test volumes to 23,245, an increase of 61% compared to the first quarter of 2021;
- Announced that new, expanded data will be presented at the upcoming American Thoracic Society (ATS) 2022 International Conference on the Percepta Nasal Swab test’s performance in current and former smokers with lung nodules, regardless of their smoking history burden;
- Announced that three abstracts will be presented at the upcoming American Urological Association conference highlighting new data on the genomic underpinnings of prostate and bladder cancers, derived from analyses of the Decipher GRID database;
- Introduced the Veracyte Biopharma Atlas, a unique pan-cancer database of comprehensive biomarkers linked to clinical outcome data leveraging Veracyte’s unique multi-omic and immuno-oncology capabilities, at the American Association for Cancer Research annual meeting in April;
- Announced that an updated clinical practice guideline, as well as a review article and separate commentary, were published in journals of the American Thoracic Society and highlight the role of the Envisia Genomic Classifier in the diagnosis of idiopathic pulmonary fibrosis (IPF); and
- Ended the first quarter of 2022 with cash and cash equivalents of $163.6 million.
First Quarter 2022 Financial Results
Total revenue for the first quarter of 2022 was $67.8 million, compared to $36.7 million in the first quarter of 2021. Testing revenue was $56.0 million, an increase of 69% compared to $33.1 million in the first quarter of 2021 driven by the strong performance of our Decipher urology portfolio. Product revenue was $3.0 million, a decrease of 3% compared to $3.1 million in the first quarter of 2021 as volume growth was offset by an approximately 5% currency headwind due to a decline in exchange rates. Biopharmaceutical and other revenue was $8.8 million, an increase of $8.2 million compared to $0.6 million in the first quarter of 2021, driven primarily by the contribution of the HalioDx acquisition.
Total gross margin for the first quarter of 2022, including the amortization of acquired intangible assets, was 58%, compared to 62% in the first quarter of 2021. Non-GAAP gross margin, excluding the amortization of acquired intangible assets and other acquisition related expenses was 65%, compared to 66% in the first quarter of 2021.
Operating expenses, excluding cost of revenue, were $54.4 million, a decrease of 20% compared to the first quarter of 2021. Non-GAAP operating expenses, excluding the cost of revenue, amortization of acquired intangible assets and other acquisition related expenses, were $49.1 million compared to $31.9 million in the first quarter of 2021.
First quarter 2022 net loss was $14.5 million, an improvement of 65% compared to the first quarter of 2021. Basic and diluted net loss per common share was $0.20, an improvement of 70% compared to the first quarter of 2021. Net cash used by operating activities in the first quarter of 2022 was $8.9 million, an improvement of $31.7 million compared to the first quarter of 2021.
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."
2022 Financial Outlook
The company is currently projecting full year 2022 total revenue of $265 million to $275 million, representing year-over-year growth of 21% to 25% compared to the prior year. This compares to our prior 2022 total revenue guidance of $260 million to $275 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/iy7oapub. 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 can be accessed as follows:
U.S./Canada participant dial-in number (toll-free): |
(855) 541-0980 |
||
International participant dial-in number: |
(970) 315-0440 |
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Conference I.D.: |
3848138 |
About Veracyte
Veracyte (Nasdaq: VCYT) is a global diagnostics company that improves patient care by answering important clinical questions to inform diagnosis and treatment decisions. Our growing menu of advanced diagnostic tests help patients avoid risky, costly procedures and interventions, and reduce time to appropriate treatment. Our tests address eight of the ten most prevalent cancers as defined by incidence in the United States. In addition to making our tests available in the United States through our central laboratories, our exclusive license to our best-in-class diagnostics instrument positions us to deliver our tests to patients worldwide through laboratories that can perform them locally. Veracyte is based in South San Francisco, California. For more information, please visit www.veracyte.com and follow the company on Twitter (@veracyte).
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, our statements related to our expected total revenue and other financial and operating results for 2022 and our plans, objectives, expectations (financial and otherwise) or intentions with respect to our Prosigna, Afirma, Percepta, Envisia, LymphMark, Decipher Prostate, Percepta Nasal Swab, Percepta Genomic Atlas and Decipher Bladder tests and products, including our biopharma atlas, for use in diagnosing and treating diseases, Medicare coverage, and our commercial organization. Forward-looking statements can be identified by words such as: “appears,” "anticipate," "intend," "plan," "expect," "believe," "should," "may," "will," “positioned,” “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, to successfully integrate the HalioDx and Decipher businesses and execute on our business plans; continue to scale our global operations and enhance our internal control environment; the impact of the COVID-19 pandemic and its variants on our business and general economic conditions; 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 28, 2022, and our Quarterly Report on Form 10-Q to be filed for the three months ended March 31, 2022. Copies of these documents, when available, may be found in the Investors section of our website at www.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, HalioDx, Decipher, Decipher GRID, Afirma, Percepta, Envisia, Prosigna, LymphMark, Immunoscore, TMExplore, Brightplex, Immunosign, “Know by Design” and “More about You” are registered trademarks of Veracyte, Inc. and its subsidiaries in the U.S. and selected countries. nCounter is the registered trademark of NanoString Technologies, Inc. in the U.S. and selected countries and used by Veracyte under license.
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 and HalioDx 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.
Reconciliations between our GAAP results and non‐GAAP financial measures are presented in the tables of this release.
VERACYTE, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Unaudited) |
|||||||
(In thousands of dollars, except share and per share amounts) |
|||||||
|
|
|
|
||||
|
Three Months Ended March 31, |
||||||
|
|
2022 |
|
|
|
2021 |
|
Revenues: |
|
|
|
||||
Testing revenue |
$ |
55,980 |
|
|
$ |
33,078 |
|
Product revenue |
|
2,979 |
|
|
|
3,059 |
|
Biopharmaceutical and other revenue |
|
8,824 |
|
|
|
566 |
|
Total revenue |
|
67,783 |
|
|
|
36,703 |
|
|
|
|
|
||||
Operating expenses (1): |
|
|
|
||||
Cost of testing revenue |
|
17,523 |
|
|
|
10,832 |
|
Cost of product revenue |
|
1,575 |
|
|
|
1,490 |
|
Cost of biopharmaceutical and other revenue |
|
4,615 |
|
|
|
81 |
|
Research and development |
|
9,166 |
|
|
|
5,336 |
|
Selling and marketing |
|
23,754 |
|
|
|
16,296 |
|
General and administrative |
|
20,912 |
|
|
|
46,282 |
|
Intangible asset amortization |
|
5,486 |
|
|
|
1,801 |
|
Total operating expenses |
|
83,031 |
|
|
|
82,118 |
|
Loss from operations |
|
(15,248 |
) |
|
|
(45,415 |
) |
Other income (loss), net |
|
784 |
|
|
|
(248 |
) |
Loss before income taxes |
|
(14,464 |
) |
|
|
(45,663 |
) |
Income tax benefit |
|
(3 |
) |
|
|
(3,795 |
) |
Net loss |
$ |
(14,461 |
) |
|
$ |
(41,868 |
) |
Net loss per common share, basic and diluted |
$ |
(0.20 |
) |
|
$ |
(0.66 |
) |
Shares used to compute net loss per common share, basic and diluted |
|
71,229,672 |
|
|
|
63,331,702 |
|
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, |
||||
|
|
2022 |
|
|
2021 |
Cost of revenue |
$ |
271 |
|
$ |
131 |
Research and development |
|
1,656 |
|
|
844 |
Selling and marketing |
|
1,046 |
|
|
1,037 |
General and administrative |
|
3,882 |
|
|
1,843 |
Total stock-based compensation expense |
$ |
6,855 |
|
$ |
3,855 |
VERACYTE, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS |
|||||||
(Unaudited) |
|||||||
(In thousands) |
|||||||
|
|
|
|
||||
|
Three Months Ended March 31, |
||||||
|
|
2022 |
|
|
|
2021 |
|
Net loss |
$ |
(14,461 |
) |
|
$ |
(41,868 |
) |
Other comprehensive loss: |
|
|
|
||||
Change in currency translation adjustments |
|
(5,598 |
) |
|
|
— |
|
|
|
|
|
||||
Net comprehensive loss |
$ |
(20,059 |
) |
|
$ |
(41,868 |
) |
VERACYTE, INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(In thousands) |
||||||
|
|
|
|
|||
|
March 31, |
|
December 31, |
|||
|
2022 |
|
2021 |
|||
|
(Unaudited) |
|
(See Note 1) |
|||
Assets |
|
|
|
|||
Current assets: |
|
|
|
|||
Cash and cash equivalents |
$ |
163,615 |
|
$ |
173,197 |
|
Accounts receivable |
|
42,481 |
|
|
41,461 |
|
Supplies and inventory |
|
12,372 |
|
|
11,225 |
|
Prepaid expenses and other current assets |
|
20,015 |
|
|
17,219 |
|
Total current assets |
|
238,483 |
|
|
243,102 |
|
Property and equipment, net |
|
16,299 |
|
|
15,098 |
|
Right-of-use assets, operating leases |
|
15,663 |
|
|
16,043 |
|
Intangible assets, net |
|
196,228 |
|
|
202,731 |
|
Goodwill |
|
704,368 |
|
|
707,904 |
|
Restricted cash |
|
749 |
|
|
749 |
|
Other assets |
|
1,799 |
|
|
2,198 |
|
Total assets |
$ |
1,173,589 |
|
$ |
1,187,825 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable |
$ |
11,273 |
|
$ |
12,360 |
|
Accrued liabilities |
|
38,543 |
|
|
39,475 |
|
Current portion of long-term debt |
|
1,079 |
|
|
1,127 |
|
Current portion of deferred revenue |
|
4,878 |
|
|
4,646 |
|
Current portion of acquisition-related contingent consideration |
|
2,703 |
|
|
2,682 |
|
Current portion of operating lease liabilities |
|
3,849 |
|
|
3,630 |
|
Current portion of other liabilities |
|
218 |
|
|
231 |
|
Total current liabilities |
|
62,543 |
|
|
64,151 |
|
Deferred revenue, net of current portion |
|
278 |
|
|
343 |
|
Deferred tax liabilities |
|
4,983 |
|
|
5,592 |
|
Acquisition-related contingent consideration, net of current portion |
|
5,732 |
|
|
5,722 |
|
Operating lease liabilities, net of current portion |
|
13,485 |
|
|
14,096 |
|
Other liabilities |
|
1,378 |
|
|
1,407 |
|
Total liabilities |
|
88,399 |
|
|
91,311 |
|
Total stockholders’ equity |
|
1,085,190 |
|
|
1,096,514 |
|
Total liabilities and stockholders’ equity |
$ |
1,173,589 |
|
$ |
1,187,825 |
|
|
|
|
|
|||
1. The condensed consolidated balance sheet at December 31, 2021 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 28, 2022. |
||||||
|
||||||
VERACYTE, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
(in thousands of dollars) |
|||||||
|
|
|
|
||||
|
Three Months Ended March 31, |
||||||
|
|
2022 |
|
|
|
2021 |
|
Operating activities |
|
|
|
||||
Net loss |
$ |
(14,461 |
) |
|
$ |
(41,868 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
6,556 |
|
|
|
2,550 |
|
Stock-based compensation |
|
6,645 |
|
|
|
3,855 |
|
Benefit from income taxes |
|
(3 |
) |
|
|
(3,795 |
) |
Interest on end-of-term debt obligation |
|
53 |
|
|
|
53 |
|
Noncash lease expense |
|
587 |
|
|
|
258 |
|
Revaluation of acquisition-related contingent consideration |
|
31 |
|
|
|
192 |
|
Effect of foreign currency on operations |
|
131 |
|
|
|
82 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(3,575 |
) |
|
|
(3,748 |
) |
Supplies and inventory |
|
(1,201 |
) |
|
|
(10 |
) |
Prepaid expenses and other current assets |
|
(2,139 |
) |
|
|
132 |
|
Other assets |
|
451 |
|
|
|
(58 |
) |
Operating lease liabilities |
|
(597 |
) |
|
|
(373 |
) |
Accounts payable |
|
(960 |
) |
|
|
1,931 |
|
Accrued liabilities and deferred revenue |
|
(390 |
) |
|
|
238 |
|
Net cash used in operating activities |
|
(8,872 |
) |
|
|
(40,561 |
) |
Investing activities |
|
|
|
||||
Acquisition of Decipher Biosciences, net of cash acquired |
|
— |
|
|
|
(574,411 |
) |
Purchases of property and equipment |
|
(2,453 |
) |
|
|
(1,196 |
) |
Net cash used in investing activities |
|
(2,453 |
) |
|
|
(575,607 |
) |
Financing activities |
|
|
|
||||
Proceeds from the issuance of common stock in a public offering, net of issuance costs |
|
— |
|
|
|
593,821 |
|
Payment of long-term debt |
|
(100 |
) |
|
|
— |
|
Payment of taxes on vested restricted stock units |
|
(1,447 |
) |
|
|
(6,774 |
) |
Proceeds from the exercise of common stock options and employee stock purchases |
|
3,537 |
|
|
|
3,965 |
|
Net cash provided by financing activities |
|
1,990 |
|
|
|
591,012 |
|
Decrease in cash, cash equivalents and restricted cash |
|
(9,335 |
) |
|
|
(25,156 |
) |
Effect of foreign currency on cash, cash equivalents and restricted cash |
|
(247 |
) |
|
|
— |
|
Net decrease in cash, cash equivalents and restricted cash |
|
(9,582 |
) |
|
|
(25,156 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
173,946 |
|
|
|
349,967 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
164,364 |
|
|
$ |
324,811 |
|
|
|
|
|
||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|||||
(Unaudited) |
|||||
(In thousands of dollars) |
|||||
|
|
|
|
||
|
March 31, |
|
December 31, |
||
|
2022 |
|
2021 |
||
Cash and cash equivalents |
$ |
163,615 |
|
$ |
173,197 |
Restricted cash |
|
749 |
|
|
749 |
Total cash, cash equivalents and restricted cash |
$ |
164,364 |
|
$ |
173,946 |
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures |
|
|
|
|
||||||||||||
(Unaudited) |
|
|
|
|
||||||||||||
(In thousands of dollars) |
|
|
|
|
||||||||||||
|
|
|
Adjustments |
|
|
|||||||||||
|
GAAP |
|
Acquisition Related Expenses (1) |
|
Intangible Assets Amortization Expense |
|
Other |
|
Total Non-GAAP Measure |
|||||||
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
||||||||
Total revenue |
$ |
67,783 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
67,783 |
|
Cost of testing revenue |
|
17,523 |
|
|
|
53 |
|
|
— |
|
|
— |
|
|
17,470 |
|
Cost of product revenue |
|
1,575 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
1,575 |
|
Cost of biopharmaceutical and other revenue |
|
4,615 |
|
|
|
133 |
|
|
— |
|
|
— |
|
|
4,482 |
|
Intangible asset amortization (2) |
|
4,953 |
|
|
|
— |
|
|
4,953 |
|
|
— |
|
|
— |
|
Gross margin $ |
|
39,117 |
|
|
|
186 |
|
|
4,953 |
|
|
— |
|
|
44,256 |
|
Gross margin % |
|
58 |
% |
|
|
|
|
|
|
|
|
65 |
% |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Research and development |
|
9,166 |
|
|
|
642 |
|
|
— |
|
|
— |
|
|
8,524 |
|
Selling and marketing |
|
23,754 |
|
|
|
1,216 |
|
|
— |
|
|
— |
|
|
22,538 |
|
General and administrative |
|
20,912 |
|
|
|
2,890 |
|
|
— |
|
|
— |
|
|
18,022 |
|
Intangible asset amortization |
|
533 |
|
|
|
— |
|
|
533 |
|
|
— |
|
|
— |
|
Total operating expenses excluding cost of revenue (3) |
|
54,365 |
|
|
|
4,748 |
|
|
533 |
|
|
— |
|
|
49,084 |
|
Loss from operations |
$ |
(15,248 |
) |
|
$ |
4,934 |
|
$ |
5,486 |
|
$ |
— |
|
$ |
(4,828 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||
Three Months Ended March 31, 2021 |
|
|
|
|
|
|
|
|
||||||||
Total revenue |
$ |
36,703 |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
36,703 |
|
Cost of testing revenue |
|
10,832 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
10,832 |
|
Cost of product revenue |
|
1,490 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
1,490 |
|
Cost of biopharmaceutical and other revenue |
|
81 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
81 |
|
Intangible asset amortization (2) |
|
1,636 |
|
|
|
— |
|
|
1,636 |
|
|
— |
|
|
— |
|
Gross margin $ |
|
22,664 |
|
|
|
— |
|
|
1,636 |
|
|
— |
|
|
24,300 |
|
Gross margin % |
|
62 |
% |
|
|
|
|
|
|
|
|
66 |
% |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Research and development |
|
5,336 |
|
|
|
1 |
|
|
— |
|
|
— |
|
|
5,335 |
|
Selling and marketing |
|
16,296 |
|
|
|
57 |
|
|
— |
|
|
— |
|
|
16,239 |
|
General and administrative |
|
46,282 |
|
|
|
35,988 |
|
|
— |
|
|
— |
|
|
10,294 |
|
Intangible asset amortization |
|
165 |
|
|
|
— |
|
|
165 |
|
|
— |
|
|
— |
|
Total operating expenses excluding cost of revenue (3) |
|
68,079 |
|
|
|
36,046 |
|
|
165 |
|
|
— |
|
|
31,868 |
|
Loss from operations |
$ |
(45,415 |
) |
|
$ |
36,046 |
|
$ |
1,801 |
|
$ |
— |
|
$ |
(7,568 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||
1. |
|
Includes transaction related expenses as well as post-combination compensation expenses. 2021 adjustments consist primarily of transaction-related expenses associated with the acquisition of Decipher Biosciences. 2022 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 ($23.7 and $12.4 million) and the amortization of intangible assets which would have been allocated to the cost of revenue ($5.0 and $1.6 million) for 2022 and 2021 respectively. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220503005909/en/
Investor Contact:
Shayla Gorman
Director, Investor Relations
619-393-1545
[email protected]
Media Contact:
Tracy Morris
Vice President of Global Corporate Communications
650-380-4413
[email protected]
Source: Veracyte, Inc.