Veracyte – 2013 Fierce 15

Veracyte CEO Bonnie Anderson

Based: South San Francisco, CA
Founded: 2008
CEO: Bonnie Anderson
Website: veracyte.com

The Scoop: The molecular diagnostics company's debut product--the Afirma Thyroid FNA Analysis--relies on a combined, specialized cytopathology assessment and gene expression test to help determine if a thyroid nodule is benign or suspicious for cancer. On a broader scale, Veracyte envisions using its molecular cytology technology to improve diagnostic accuracy at an earlier stage of patient care for a wide range of diseases. Veracyte sees room for some major expansion, to the point that it announced a proposed initial public offering in late September that could be worth close to $75 million.

What Makes It Fierce: Veracyte's approach to yielding actionable genetic information from cytology samples is novel and has already gained legitimacy in the medical world. Afirma, launched initially in 2011, won crucial reimbursement from both Medicare and Aetna, the nation's third-largest insurer. Additionally, Sanofi ($SNY)-Genzyme copromotes the thyroid cancer gene test in the U.S. There's a major selling point, too: The test can help cut healthcare costs by leading to fewer inconclusive test results.

"We've got an opportunity to build a solid franchise in endocrinology and we're very excited about it," Veracyte cofounder and CEO Bonnie Anderson told the San Francisco Business Times in February 2013.

Veracyte declined to participate in this story, citing its IPO quiet period. While Veracyte isn't making money yet, it is rapidly growing the market for Afirma. Revenue surpassed $11.6 million in 2012, according to the company's S-1 filing, up from $2.6 million in 2011. Revenue in the first 6 months of 2013 has already hit the $9.5 million mark.

Two months before the company announced its IPO plans, it pulled in the "final tranche" of a $28 million Series C to back an expanded commercial push for Afirma. General Electric's ($GE) GE Ventures arm joined the round, which also attracted previous investors such as Domain Associates, Kleiner Perkins Caufield & Byers, TPG Biotech and Versant Ventures. Veracyte previously raised a $28 million Series B round in 2010.

All of that investor and customer support comes for a test that costs in the $3,500 range, according to reports.

Veracyte employed 90 people as of February 2013 and planned to add nearly 40 more through the course of the year, Anderson told the San Francisco Business Times.

What To Look For: Beyond that, Veracyte is in the late biomarker discovery stage for interstitial lung disease, which can affect the air sacs of the lungs and be hard to diagnose before surgery. Specifically, the company said, it wants to develop a better diagnostic for ideopathic pulmonary fibrosis, one of the most challenging interstitial lung diseases. Early discovery efforts are also underway to develop a more precise lung cancer nodule test.

And then there's that IPO filing. Veracyte submitted documents for the proposed offering on Sept. 20. The company said it would use much of the money for sales and marketing, and research and development. If it goes public, it will trade on Nasdaq under the symbol "VCYT."

For more:
Dx maker Veracyte files planned $75M IPO
Veracyte nails $28M Series C
Veracyte thyroid test could reduce unnecessary procedures

-- Mark Hollmer (email | Twitter)

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Veracyte – 2013 Fierce 15