vcyt20200624

vcyt20200624_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2020

VERACYTE, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36156	20-5455398
(State or other jurisdiction of incorporation)	Commission File Number	(IRS Employer Identification No.)

6000 Shoreline Court, Suite 300, South San Francisco, California	94080
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 243-6300

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value, $0.001 per share

VCYT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2020, Veracyte, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2020. The full text of the press release is furnished as Exhibit 99.1 to this report.

The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits

Exhibit No.						Description

99.1						Press release issued by Veracyte, Inc. dated July 30, 2020.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:	July 30, 2020

		VERACYTE, INC.

		By:	/s/ Keith Kennedy
		Name:	Keith Kennedy
		Title:	Chief Operating Officer and Chief Financial Officer
			(Principal Financial Officer)

ex_191377.htm

Exhibit 99.1

Veracyte Announces Second Quarter 2020 Financial Results

Revenue of $20.7 Million and Genomic Testing Volume of 5,379

Company Advances Pipeline and Global Expansion Strategy

Conference Call and Webcast Today at 4:30 p.m. ET

SOUTH SAN FRANCISCO, Calif., July 30, 2020-- Veracyte, Inc. (Nasdaq: VCYT) today announced financial results for the second quarter ended June 30, 2020 and provided an update on recent business progress.

“We delivered solid second quarter results in the face of headwinds from the COVID-19 pandemic,” said Bonnie Anderson, Veracyte’s chairman and chief executive officer. “Our genomic testing volume doubled between April and June as hospitals started performing more non-emergency procedures and physician practices began to open. We have begun leveraging opportunities for new virtual sales and marketing models to increase efficiency and drive growth. We also remain on track to bring four new tests to market in 2021, further accelerating our growth. Additionally, we continued to grow our biopharmaceutical and diagnostic partnerships to fuel our global expansion with a comprehensive test menu that extends our total addressable market beyond the $40 billion for our current and pipeline products.”

Second Quarter 2020 Financial Results

For the second quarter of 2020:

•

Total revenue was $20.7 million, comprising $16.9 million in testing and product revenue and $3.8 million in biopharmaceutical partnership and collaboration revenue;

•

Gross Margin was 63%;

•

Operating Expenses, Excluding Cost of Revenue, were $24.1 million;

•

Net Loss and Comprehensive Loss was $11.0 million;

•

Basic and Diluted Net Loss Per Common Share was $0.22;

•

Net Cash Used in Operating Activities was $8.4 million; and

•

Cash and Cash Equivalents were $147.5 million at June 30, 2020.

For the six-month period ended June 30, 2020:

•

Total revenue was $51.8 million, comprising $47.3 million in testing and product revenue and $4.5 million in biopharmaceutical partnership and collaboration revenue;

•

Gross Margin was 62%;

•

Operating Expenses, Excluding Cost of Revenue, were $55.2 million;

•

Net Loss and Comprehensive Loss was $22.7 million;

•

Basic and Diluted Net Loss Per Common Share was $0.45; and

•

Net Cash Used in Operating Activities was $13.7 million.

Second Quarter 2020 and Recent Business Highlights

Core Diagnostics Business:

•

Increased our reported genomic testing volume (Afirma, Percepta and Envisia), with June total volume doubling that of April.

•

Expanded virtual customer engagement program, conducting more than two dozen virtual educational events, email campaigns and other digital outreach to clinicians.

•

Strengthened our library of published clinical evidence supporting use of the Afirma Xpression Atlas (Cancer Cytopathology) and the Envisia Genomic Classifier (CHEST and AJRCCM). The AJRCCM study further demonstrates the Envisia classifier’s ability to improve diagnosis of idiopathic pulmonary fibrosis without the need for surgery.

	•	LymphMark – Submitted De Novo classification request to the FDA for the lymphoma subtyping test, which is designed to help inform diagnosis and better treatment decisions.
	•	On track to launch four new products in 2021: Nasal swab test for early lung cancer detection; Percepta Atlas to inform treatment decisions in lung cancer; Envisia international launch on the nCounter; and LymphMark, if the FDA grants our De Novo classification request.
	•	Signed distributor contracts that will make Veracyte’s advanced genomic testing on the nCounter system available to laboratories throughout the Asia Pacific region, as well as in Australia and New Zealand.

Strategic Collaborations:

•

CareDx – Formed strategic collaboration through which CareDx has the exclusive right to develop solid organ transplant rejection tests on the nCounter Analysis System, fueling our global menu expansion.

•

Generated revenue from four biopharmaceutical and diagnostics partners: Eli Lilly/Loxo Oncology, Johnson & Johnson Innovation, Acerta Pharma and CareDx.

•

MAVIDx – Signed strategic agreement, taking an equity stake in MAVIDx, for the new company to develop COVID-19 and other infectious disease tests for ultra-high throughput testing on the nCounter system. A Harvard University report estimates the market will require 20 million tests per day in the United States alone.

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/xs86q7qz. 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
	Conference I.D.:	2496566

About Veracyte

Veracyte (Nasdaq: VCYT) is a global genomic diagnostics company that improves patient care by providing answers to clinical questions, informing diagnosis and treatment decisions throughout the patient journey in cancer and other diseases. The company’s growing menu of genomic tests leverage advances in genomic science and technology, enabling patients to avoid risky, costly diagnostic procedures and quicken time to appropriate treatment. The company’s tests in thyroid cancer, lung cancer, breast cancer and idiopathic pulmonary fibrosis are available to patients and its lymphoma subtyping test is in development. With Veracyte’s exclusive global license to a best-in-class diagnostics instrument platform, the company is positioned to deliver its tests to patients worldwide. 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" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "expect," "believe," "should," "may," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements regarding Veracyte’s financial and operational results for the second quarter ended June 30, 2020, anticipated timing of the launch of new products in 2021, availability of Veracyte’s testing internationally, Veracyte’s total addressable market, the current and future impacts of COVID-19 on Veracyte’s business, actions Veracyte has taken in response to COVID-19, and Veracyte’s long-term outlook. Forward-looking statements are neither historical facts nor assurances of future performance, but are based only on our current beliefs, expectations and assumptions. These statements involve risks and uncertainties, which could cause actual results to differ materially from our predictions, and include, but are not limited to: the impact of COVID-19 on Veracyte’s business and operating results, specifically, and the healthcare system and economy more generally, Veracyte’s ability to achieve and maintain Medicare coverage for its tests; the benefits of Veracyte’s tests and the applicability of clinical results to actual outcomes; the laws and regulations applicable to Veracyte’s business, including potential regulation by the Food and Drug Administration or other regulatory bodies; Veracyte’s ability to successfully achieve and maintain adoption of and reimbursement for its products; the amount by which use of Veracyte’s products are able to reduce invasive procedures and misdiagnosis, and reduce healthcare costs; the occurrence and outcomes of clinical studies; and other risks set forth in Veracyte’s filings with the Securities and Exchange Commission, including the risks set forth in its quarterly report on Form 10-Q for the quarter ended June 30, 2020. These forward-looking statements speak only as of the date hereof and Veracyte specifically disclaims 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, Afirma, Percepta, Envisia, Prosigna, LymphMark, and the Veracyte logo are trademarks of Veracyte, Inc.

VERACYTE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands of dollars, except share and per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues:
Testing revenue	$	15,212		$	26,686		$	42,203		$	52,075
Product revenue		1,713			—			5,122			—
Biopharmaceutical revenue		3,779			1,450			4,501			5,590
Collaboration revenue		—			2,000			—			2,000
Total revenue		20,704			30,136			51,826			59,665

Operating expenses:
Cost of testing revenue		6,471			8,777			17,039			17,290
Cost of product revenue		932			—			2,491			—
Cost of biopharmaceutical revenue		252			—			368			—
Research and development		4,169			3,330			8,576			6,765
Selling and marketing		10,701			13,943			28,285			26,420
General and administrative		7,957			6,920			15,770			13,824
Intangible asset amortization		1,273			266			2,548			533
Total operating expenses		31,755			33,236			75,077			64,832
Loss from operations		(11,051	)		(3,100	)		(23,251	)		(5,167	)
Interest expense		(65	)		(235	)		(120	)		(538	)
Other income, net		91			841			630			1,294
Net loss and comprehensive loss	$	(11,025	)	$	(2,494	)	$	(22,741	)	$	(4,411	)
Net loss per common share, basic and diluted	$	(0.22	)	$	(0.05	)	$	(0.45	)	$	(0.10	)
Shares used to compute net loss per common share, basic and diluted		50,212,123			45,586,081			50,002,377			43,389,540

VERACYTE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30, 2020		December 31, 2019
	(Unaudited)		(See Note 1)
Assets
Current assets:
Cash and cash equivalents	$	147,450	$	159,317
Accounts receivable		15,306		19,329
Supplies		7,041		6,806
Prepaid expenses and other current assets		2,891		2,235
Total current assets		172,688		187,687
Property and equipment, net		8,640		8,933
Right-of-use assets - operating lease		8,339		8,808
Finite-lived intangible assets, net		62,471		65,019
Goodwill		2,725		2,725
Restricted cash		603		603
Other assets		1,271		1,437
Total assets	$	256,737	$	275,212
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,224	$	2,328
Accrued liabilities		9,386		13,734
Current portion of operating lease liability		1,495		1,407
Total current liabilities		13,105		17,469
Long-term debt		801		694
Acquisition related contingent consideration		5,948		6,088
Operating lease liability, net of current portion		10,736		11,506
Total liabilities		30,590		35,757
Total stockholders’ equity		226,147		239,455
Total liabilities and stockholders’ equity	$	256,737	$	275,212

(1)	The condensed balance sheet at December 31, 2019 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 25, 2020.

VERACYTE, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands of dollars)

	Six Months Ended June 30,
	2020			2019
Operating activities
Net loss	$	(22,741	)	$	(4,411	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,929			1,869
Gain on disposal of property and equipment		—			(17	)
Stock-based compensation		6,265			4,325
Amortization of debt issuance costs		—			83
Interest on end-of-term debt obligations		107			120
Write-down of excess supplies		1,088			—
Noncash lease expense		469			431
Revaluation of acquisition related contingent consideration		(140	)		—
Changes in operating assets and liabilities:
Accounts receivable		4,023			(6,458	)
Supplies		(1,323	)		(1,702	)
Prepaid expenses and other current assets		(664	)		(192	)
Operating lease liability		(682	)		(604	)
Other assets		166			25
Accounts payable		122			1,746
Accrued liabilities		(4,343	)		1,319
Net cash used in operating activities		(13,724	)		(3,466	)
Investing activities
Purchases of property and equipment		(1,314	)		(1,424	)
Proceeds from disposal of property and equipment		—			17
Net cash used in investing activities		(1,314	)		(1,407	)
Financing activities
Proceeds from the issuance of common stock in a public offering, net of issuance costs		—			137,848
Payment of long-term debt		—			(24,900	)
Payment of financial lease liability		—			(152	)
Payment of taxes on vested restricted stock units		(2,678	)		(676	)
Proceeds from the exercise of common stock options and employee stock purchases		5,849			7,405
Net cash provided by financing activities		3,171			119,525
Net (decrease) increase in cash, cash equivalents and restricted cash		(11,867	)		114,652
Cash, cash equivalents and restricted cash at beginning of period		159,920			78,598
Cash, cash equivalents and restricted cash at end of period	$	148,053		$	193,250

Supplementary cash flow information of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued liability	$	—		$	72
Interest paid on debt	$	3		$	319

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(Unaudited)

(In thousands of dollars)

	June 30, 2020		December 31, 2019
Cash and cash equivalents	$	147,450	$	159,317
Restricted cash		603		603
Total cash, cash equivalents and restricted cash	$	148,053	$	159,920

#-#-#

Investor and Media Contact:

Tracy Morris

Vice President of Corporate Communications

& Investor Relations

650-380-4413

tracy.morris@veracyte.com

Document And Entity Information	Jul. 30, 2020
Document Information [Line Items]
Entity, Registrant Name	VERACYTE, INC.
Document, Type	8-K
Document, Period End Date	Jul. 30, 2020
Entity, Incorporation, State or Country Code	DE
Entity, File Number	001-36156
Entity, Tax Identification Number	20-5455398
Entity, Address, Address Line One	6000 Shoreline Court, Suite 300
Entity, Address, City or Town	South San Francisco
Entity, Address, State or Province	CA
Entity, Address, Postal Zip Code	94080
City Area Code	650
Local Phone Number	243-6300
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	VCYT
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001384101