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) |
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) |
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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)) |
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 |
Exhibit No. | Description | |
99.1 |
Dated: | February 25, 2019 | ||
VERACYTE, INC. | |||
By: | /s/ Keith Kennedy | ||
Name: | Keith Kennedy | ||
Title: | Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
• | Revenue was $25.8 million and $92.0 million, respectively, an increase of 31% and 28%; |
• | Gross Margin was 66% and 64%, respectively, an increase of 6% and 3%; |
• | Operating Expenses, Excluding Cost of Revenue, were $20.1 million and $81.2 million, respectively, an increase of 12% and 15%; |
• | Net Loss and Comprehensive Loss was ($3.1) million and ($23.0) million, respectively, an improvement of 63% and 26%; |
• | Basic and Diluted Net Loss Per Common Share was ($0.08) and ($0.62), respectively, an improvement of 67% and 32%; |
• | Net Cash Used in Operating Activities was $1.2 million and $13.5 million, respectively, an improvement of 79% and 44%; |
• | Cash Burn1 was $1.7 million and $15.4 million, respectively, an improvement of 73% and 39%; and |
• | Cash and Cash Equivalents were $78.0 million at December 31, 2018. |
• | Grew total genomic test volume to 9,154 tests in the fourth quarter of 2018, representing 28% growth over 2017, which resulted in full-year 2018 growth of 22% over 2017, or 31,710 tests. |
• | Transitioned all Afirma customers to the second-generation Afirma Genomic Sequencing Classifier (GSC) platform and launched the Afirma Xpression Atlas to provide a comprehensive solution that informs both thyroid cancer diagnosis and treatment decisions. Notably, 30% of Afirma GSC orders included Xpression Atlas in 2018, ahead of the company’s expectations. |
• | Grew Percepta Bronchial Genomic Classifier volume to nearly 1,550 tests in its first full year of commercialization, with genomic volume accelerating 74% sequentially from the third quarter to the fourth quarter of 2018. |
• | Established 20 leading Early Access Program (EAP) sites across the United States for Envisia in 2018, addressing physician demand for patient access to the classifier which improves idiopathic pulmonary fibrosis (IPF) diagnosis and builds a solid foundation for the company to commercially expand it in 2019. |
• | Executed a long-term strategic collaboration with Johnson & Johnson, LLC and Johnson & Johnson’s Lung Cancer Initiative to advance diagnostics, including a nasal swab test, for early lung cancer detection. Veracyte estimates the combined monetary and non-monetary value of the collaboration to be more than $50 million. The company believes this collaboration expands its addressable lung cancer diagnostic market to a more than $30 billion global opportunity. |
• | Entered into a research collaboration with Loxo Oncology, through which Loxo has access to data from Veracyte’s Afirma Xpression Atlas platform to help in its development of therapies for patients with genetically defined cancers, including thyroid cancer. |
• | Received draft Medicare coverage for the Envisia Genomic Classifier through the MolDX program, with a final positive coverage decision expected in early 2019. |
• | Achieved in-network status as a service provider with the last of the major commercial health plans, which Veracyte believes will facilitate coverage and reimbursement for its Percepta and Envisia classifiers. |
• | Afirma - Published clinical validation data for the Afirma GSC in JAMA Surgery, demonstrating the next-generation test’s ability to help approximately 70% of patients with indeterminate thyroid nodules avoid unnecessary surgery. Presented 12 Afirma studies at three endocrinology conferences, including real-world data showing that the Afirma GSC is helping even more patients avoid unnecessary surgery than is suggested by the clinical validation study findings. |
• | Percepta - Presented early, interim results at the 2018 CHEST Annual Meeting from the ongoing registry clinical utility study showing the test changed clinical decision-making and reduced invasive procedures at every evaluation time point up to 12 months post-testing. |
• | Envisia - Published a study quantifying and qualifying the challenges in obtaining timely, accurate diagnosis of IPF and other interstitial lung diseases, thus underscoring the clinical need for the |
• | In July 2018, Veracyte issued and sold 5,750,000 shares of common stock in a registered public offering, including the underwriters' exercise in full of their option to purchase an additional 750,000 shares, at a price to the public of $10.25 per share. Net proceeds from the offering were approximately $55.0 million. |
• | In January 2019, the company used $12.5 million of cash and cash equivalents to reduce its principal debt balance from $25.0 million to $12.5 million. |
U.S./Canada participant dial-in number (toll-free): | (855) 541-0980 |
International participant dial-in number: | (970) 315-0440 |
Conference I.D.: | 5498321 |
VERACYTE, INC. | |||||||||||||||
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||||||||
(Unaudited) | |||||||||||||||
(In thousands of dollars, except share and per share amounts) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 25,750 | $ | 19,596 | $ | 92,008 | $ | 71,953 | |||||||
Operating expenses: | |||||||||||||||
Cost of revenue | 8,704 | 7,769 | 33,078 | 28,195 | |||||||||||
Research and development | 3,125 | 3,202 | 14,820 | 13,881 | |||||||||||
Selling and marketing | 10,066 | 9,045 | 41,313 | 32,260 | |||||||||||
General and administrative | 6,645 | 5,357 | 23,963 | 23,088 | |||||||||||
Intangible asset amortization | 267 | 267 | 1,067 | 1,067 | |||||||||||
Total operating expenses | 28,807 | 25,640 | 114,241 | 98,491 | |||||||||||
Loss from operations | (3,057 | ) | (6,044 | ) | (22,233 | ) | (26,538 | ) | |||||||
Interest expense | (536 | ) | (2,518 | ) | (1,963 | ) | (4,941 | ) | |||||||
Other income, net | 488 | 123 | 1,197 | 476 | |||||||||||
Net loss and comprehensive loss | $ | (3,105 | ) | $ | (8,439 | ) | $ | (22,999 | ) | $ | (31,003 | ) | |||
Net loss per common share, basic and diluted | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.62 | ) | $ | (0.91 | ) | |||
Shares used to compute net loss per common share, basic and diluted | 40,731,334 | 34,055,524 | 37,020,246 | 33,925,617 |
VERACYTE, INC. | |||||||
CONDENSED BALANCE SHEETS | |||||||
(In thousands) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
(Unaudited) | (1) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 77,995 | $ | 33,891 | |||
Accounts receivable | 13,168 | 12,716 | |||||
Supplies | 3,402 | 5,324 | |||||
Prepaid expenses and other current assets | 2,387 | 1,997 | |||||
Total current assets | 96,952 | 53,928 | |||||
Property and equipment, net | 8,940 | 9,688 | |||||
Finite-lived intangible assets, net | 12,000 | 13,067 | |||||
Goodwill | 1,057 | 1,057 | |||||
Restricted cash | 603 | 603 | |||||
Other assets | 1,086 | 326 | |||||
Total assets | $ | 120,638 | $ | 78,669 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,516 | $ | 3,853 | |||
Accrued liabilities | 9,186 | 8,175 | |||||
Current portion of long-term debt | 1,357 | — | |||||
Total current liabilities | 13,059 | 12,028 | |||||
Long-term debt | 23,925 | 24,938 | |||||
Capital lease liability, net of current portion | — | 308 | |||||
Deferred rent, net of current portion | 3,899 | 4,170 | |||||
Total liabilities | 40,883 | 41,444 | |||||
Total stockholders’ equity | 79,755 | 37,225 | |||||
Total liabilities and stockholders’ equity | $ | 120,638 | $ | 78,669 | |||
(1) The condensed balance sheet at December 31, 2017 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 27, 2018. |
VERACYTE, INC. | |||||||
Condensed Statements of Cash Flows | |||||||
(Unaudited) | |||||||
(In thousands of dollars) | |||||||
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
Operating activities | |||||||
Net loss | $ | (22,999 | ) | $ | (31,003 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 3,920 | 3,841 | |||||
Loss on disposal of property and equipment | — | 12 | |||||
Stock-based compensation | 5,958 | 6,617 | |||||
Other income | (93 | ) | — | ||||
Amortization and write-off of debt discount and issuance costs | 32 | 472 | |||||
Interest on end-of-term debt obligations and prepayment penalty | 312 | 1,589 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (452 | ) | (3,960 | ) | |||
Supplies | 1,922 | (1,849 | ) | ||||
Prepaid expenses and current other assets | (517 | ) | (7 | ) | |||
Other assets | (760 | ) | (192 | ) | |||
Accounts payable | (1,568 | ) | 1,728 | ||||
Accrued liabilities and deferred rent | 724 | (1,163 | ) | ||||
Net cash used in operating activities | (13,521 | ) | (23,915 | ) | |||
Investing activities | |||||||
Purchases of property and equipment | (1,874 | ) | (1,755 | ) | |||
Proceeds from sale of property and equipment | — | 440 | |||||
Net cash used in investing activities | (1,874 | ) | (1,315 | ) | |||
Financing activities | |||||||
Proceeds from the issuance of long-term debt, net of debt issuance costs | — | 24,880 | |||||
Proceeds from the issuance of common stock in a public offering, net of costs | 55,038 | 200 | |||||
Payment of long-term debt | — | (25,385 | ) | ||||
Payment of end-of-term debt obligation and prepayment penalty | — | (1,536 | ) | ||||
Proceeds from legal settlement regard short-swing profits | 403 | — | |||||
Payment of capital lease liability | (292 | ) | (274 | ) | |||
Proceeds from the exercise of common stock options and employee stock purchases | 4,350 | 1,897 | |||||
Net cash provided by financing activities | 59,499 | (218 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 44,104 | (25,448 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 34,494 | 59,942 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 78,598 | $ | 34,494 | |||
Supplementary cash flow information of non-cash investing and financing activities: | |||||||
Purchases of property and equipment included in accounts payable | $ | 273 | $ | 42 | |||
Cash paid for interest on debt | $ | 1,547 | $ | 2,718 | |||
Cash paid for tax | $ | 79 | $ | 21 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |||||||
(Unaudited) | |||||||
(In thousands of dollars) | |||||||
December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | $ | 77,995 | $ | 33,891 | |||
Restricted cash - long-term | 603 | 603 | |||||
Total cash, cash equivalents and restricted cash | $ | 78,598 | $ | 34,494 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net cash used in operating activities | $ | (1,226 | ) | $ | (5,816 | ) | $ | (13,521 | ) | $ | (23,915 | ) | |||
Plus purchases of property and equipment | (454 | ) | (300 | ) | (1,874 | ) | (1,755 | ) | |||||||
Less proceeds from the sale of property and equipment | — | — | — | 440 | |||||||||||
Cash burn | $ | (1,680 | ) | $ | (6,116 | ) | $ | (15,395 | ) | $ | (25,230 | ) | |||
Net cash used in investing activities | $ | (454 | ) | $ | (300 | ) | $ | (1,874 | ) | $ | (1,315 | ) | |||
Net cash provided by (used in) financing activities | $ | 1,829 | $ | (1,188 | ) | $ | 59,499 | $ | (218 | ) |