Document







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): October 22, 2019

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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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 Symbols (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 o
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. o









Item 2.02 Results of Operations and Financial Condition.

On October 22, 2019, Veracyte, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2019. 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
 
 
 
 






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:
October 22, 2019
 
 
 
 
 
 
 
 
VERACYTE, INC.
 
 
 
 
 
 
By:
/s/ Keith Kennedy
 
 
Name:
Keith Kennedy
 
 
Title:
Chief Operating Officer and Chief Financial Officer
 
 
 
 




Exhibit


Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13158270&doc=3
Veracyte Announces Third Quarter 2019 Financial Results and Business Progress

Revenue Grew 32% to $31.0 Million

Genomic Test Volume Grew 24% to 9,941
 
Company Presents Preliminary Data for First-Ever Noninvasive Nasal Swab Test
for Lung Cancer Early Detection

Conference Call and Webcast Today at 5:00 p.m. ET

SOUTH SAN FRANCISCO, Calif., October 22, 2019 -- Veracyte, Inc. (Nasdaq: VCYT) today announced financial results and business progress for the third quarter ended September 30, 2019. For the third quarter of 2019, revenue was $31.0 million, an increase of 32% over the third quarter of 2018. Net cash used in operating activities in the third quarter of 2019 was $1.6 million, an improvement of 13% compared with the third quarter of 2018.
“We had a solid third quarter in which we continued to drive volume and revenue growth across our products and grew biopharmaceutical services revenue through key milestone achievements,” said Bonnie H. Anderson, chairman and chief executive officer of Veracyte. “We are particularly excited by the new, preliminary data for our noninvasive nasal swab test for early lung cancer detection, which we believe has significant potential to improve care among the millions of patients with suspicious lung nodules detected each year. Importantly, as we grow our business and advance our pipeline, we remain on track to achieve our goal of reaching cashflow breakeven status before the end of the year.”

Third Quarter 2019 Financial Results
For the third quarter of 2019 as compared with the third quarter of 2018:
Revenue was $31.0 million, an increase of 32%; excluding $4.3 million of biopharmaceutical services revenue, revenue was $26.7 million, an increase of 15%.
Gross Margin was 71%, an increase of six percentage points; excluding biopharmaceutical services revenue, gross margin was 66%, an increase of two percentage points.
Operating Expenses, Excluding Cost of Revenue were $23.6 million, an increase of 21%.
Net Loss was $0.7 million, an improvement of 84%.
Net Loss Per Share was $0.02, an improvement of 83%.
Net Cash Used in Operating Activities was $1.6 million, an improvement of 13%.
Cash and Cash Equivalents were $195.7 million at September 30, 2019.

For the nine-month period ended September 30, 2019, as compared with the prior year period of 2018:
Revenue was $90.6 million, an increase of 37%; excluding $11.8 million of biopharmaceutical services revenue, revenue was $78.8 million, an increase of 20%.
Gross Margin was 71%, an increase of eight percentage points; excluding biopharmaceutical services revenue, gross margin was 66%, an increase of three percentage points.
Operating Expenses, Excluding Cost of Revenue were $71.2 million, an increase of 17%.
Net Loss was $5.1 million, an improvement of 74%.
Net Loss Per Share was $0.11, an improvement of 80%.
Net Cash Used in Operating Activities was $5.0 million, an improvement of 59%.

Third Quarter 2019 and Recent Business Highlights

Commercial Growth and Reimbursement Expansion:





Grew total genomic test volume in the third quarter of 2019 to 9,941, an increase of 24% over the third quarter of 2018.
Increased Percepta® Genomic Sequencing Classifier (GSC) volume to 793 tests, an increase of 112% compared to the third quarter of 2018.
Expanded Envisia® Genomic Classifier volume to 223 tests, a Q3 2019 growth sequentially over Q2 2019 of 72%.
Grew Afirma® test volume to 8,925 tests, an increase of 17%, compared to the third quarter of last year.

Strengthened Library of Clinical Evidence:
Published a clinical and analytical validation paper in Frontiers in Endocrinology demonstrating the Afirma Xpression Atlas’s ability to help inform surgery and treatment decisions in patients with thyroid nodules deemed suspicious for cancer by the Afirma Genomic Sequencing Classifier. A separate paper published in Thyroid reinforced the test’s potential value in clinical practice.
Five studies are being presented at the annual meeting of the American College of Chest Physicians® (CHEST 2019), including:
Three abstracts showing that the Envisia classifier enhances physicians’ ability to confidently distinguish idiopathic pulmonary fibrosis from other interstitial lung diseases when used with high-resolution CT imaging.
Two abstracts demonstrating the clinical validity and utility, respectively, of the Percepta classifier in lung cancer diagnosis when bronchoscopy findings are inconclusive.

Advanced Pipeline:

Presented data at CHEST 2019 demonstrating the ability of the company’s preliminary nasal swab test to enable early lung cancer detection and diagnosis. The findings show that the test can accurately classify lung cancer risk in patients with lung nodules so that they may be directed to prompt diagnosis and treatment or may be monitored noninvasively.

Updated 2019 Financial Outlook
Veracyte is re-affirming its 2019 annual revenue guidance of $119 million to $122 million and net cash used in operating activities of $2 million to $4 million.

Conference Call and Webcast Details
Veracyte will host a conference call and webcast to discuss its financial results and provide a general business update at 5:00 p.m. Eastern time today.

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/djat9cqg.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.

    
U.S./Canada participant dial-in number (toll-free):
(855) 541-0980
International participant dial-in number:
(970) 315-0440
Conference I.D.:
8767084



About Veracyte
Veracyte (Nasdaq: VCYT) is a leading genomic diagnostics company that improves patient care by providing answers to clinical questions that inform diagnosis and treatment decisions without the need for costly, risky surgeries that are often unnecessary. The company's products uniquely combine RNA whole-transcriptome sequencing and machine learning to deliver results that give patients and physicians a clear path forward. Since its founding in 2008, Veracyte has commercialized seven genomic tests and is transforming the diagnosis of thyroid





cancer, lung cancer and idiopathic pulmonary fibrosis. 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, our third quarter 2019 performance; our 2019 annual revenue guidance; our expectations regarding fourth quarter 2019 revenue and cashflow; the potential impact of the preliminary data for our nasal swab test in improving lung cancer detection and diagnosis . 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 benefits of our tests and the applicability of clinical results to actual outcomes; the laws and regulations applicable to our business, including potential regulation by the Food and Drug Administration or other regulatory bodies; our ability to successfully achieve and maintain adoption of and reimbursement for our products; the amount by which use of our 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 our filings with the Securities and Exchange Commission, including the risks set forth in our quarterly report on Form 10-Q for the quarter ended September 30, 2019. 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, except as required by law.

Veracyte, Afirma, Percepta, Envisia and the Veracyte logo are trademarks of Veracyte, Inc.












VERACYTE, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Revenue
$
30,973

 
$
23,466

 
$
90,638

 
$
66,258

Operating expenses:
 
 
 
 
 
 
 
Cost of revenue
9,114

 
8,261

 
26,404

 
24,374

Research and development
3,643

 
3,419

 
10,408

 
11,695

Selling and marketing
13,088

 
10,081

 
39,508

 
31,247

General and administrative
6,624

 
5,742

 
20,448

 
17,318

Intangible asset amortization
267

 
267

 
800

 
800

Total operating expenses
32,736

 
27,770

 
97,568

 
85,434

Loss from operations
(1,763
)
 
(4,304
)
 
(6,930
)
 
(19,176
)
Interest expense
(58
)
 
(498
)
 
(596
)
 
(1,427
)
Other income, net
1,091

 
333

 
2,385

 
709

Net loss and comprehensive loss
$
(730
)
 
$
(4,469
)
 
$
(5,141
)
 
$
(19,894
)
Net loss per common share, basic and diluted
$
(0.02
)
 
$
(0.12
)
 
$
(0.11
)
 
$
(0.56
)
Shares used to compute net loss per common share, basic and diluted
48,588,296

 
38,620,036

 
45,141,502

 
35,769,623







VERACYTE, INC.
CONDENSED BALANCE SHEETS
(In thousands)
 
 
September 30, 2019
 
December 31, 2018
 
(Unaudited)
 
(See Note 1)
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
195,662

 
$
77,995

Accounts receivable
23,613

 
13,168

Supplies
6,608

 
3,402

Prepaid expenses and other current assets
2,196

 
2,387

Total current assets
228,079

 
96,952

Property and equipment, net
8,488

 
8,940

Right-of-use assets - finance lease, net
619

 

Right-of-use assets - operating lease
9,033

 

Finite-lived intangible assets, net
11,200

 
12,000

Goodwill
1,057

 
1,057

Restricted cash
603

 
603

Other assets
1,228

 
1,086

Total assets
$
260,307

 
$
120,638

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
5,568

 
$
2,516

Accrued liabilities
9,760

 
9,186

Current portion of long-term debt

 
1,357

Current portion of finance lease liability
79

 

Current portion of operating lease liability
1,365

 

Total current liabilities
16,772

 
13,059

Long-term debt
639

 
23,925

Deferred rent, net of current portion

 
3,899

Operating lease liability, net of current portion
11,872

 

Total liabilities
29,283

 
40,883

Total stockholders’ equity
231,024

 
79,755

Total liabilities and stockholders’ equity
$
260,307

 
$
120,638

 
 
 
 
(1) The condensed balance sheet at December 31, 2018 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, 2019.







VERACYTE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of dollars)
 
Nine Months Ended September 30,
 
2019
 
2018
Operating activities
 

 
 

Net loss
$
(5,141
)
 
$
(19,894
)
Adjustments to reconcile net loss to net cash used in operating activities:
 

 
 

Depreciation and amortization
2,836

 
2,950

Gain on disposal of property and equipment
(23
)
 

Stock-based compensation
6,965

 
4,425

Other income

 
(93
)
Amortization of debt issuance costs
83

 
24

Interest on end-of-term debt obligation
174

 
230

Changes in operating assets and liabilities:
 

 
 

Accounts receivable
(10,445
)
 
454

Supplies
(3,206
)
 
1,861

Prepaid expenses and other current assets
185

 
61

Right-of-use assets - operating lease and operating lease liability
(71
)
 

Other assets
(142
)
 
(511
)
Accounts payable
2,505

 
(2,636
)
Accrued liabilities and deferred rent
1,258

 
834

Net cash used in operating activities
(5,022
)
 
(12,295
)
Investing activities
 

 
 

Purchases of property and equipment
(1,656
)
 
(1,420
)
Proceeds from disposal of property and equipment
23

 

Net cash used in investing activities
(1,633
)
 
(1,420
)
Financing activities
 

 
 

Proceeds from the issuance of common stock in a public offering, net of costs
137,848

 
55,039

Payment of long-term debt
(24,900
)
 

Proceeds from legal settlement regarding short-swing profits

 
403

Payment of finance lease liability
(229
)
 
(217
)
Proceeds from the exercise of common stock options and employee stock purchases
11,603

 
2,445

Net cash provided by financing activities
124,322

 
57,670

Net increase in cash, cash equivalents and restricted cash
117,667

 
43,955

Cash, cash equivalents and restricted cash at beginning of period
78,598

 
34,494

Cash, cash equivalents and restricted cash at end of period
$
196,265

 
$
78,449

Supplementary cash flow information of non-cash investing and financing activities:
 

 
 

Operating lease liability arising from obtaining right-of-use assets - operating lease at beginning of period
$
14,118

 
$

Purchases of property and equipment included in accounts payable and accrued liability
$
821

 
$
23

Interest paid on debt
$
330

 
$
1,235












CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Unaudited)
(In Thousands)
 
 
 
 
 
September 30, 2019
 
December 31, 2018
Cash and cash equivalents
$
195,662

 
$
77,995

Restricted cash
603

 
603

Total cash, cash equivalents and restricted cash
$
196,265

 
$
78,598



#  #  #




Investor and Media Contact:
Keith Kennedy, 650-243-6357
Chief Operating Officer and Chief Financial Officer
keith@veracyte.com