Veracyte ($VCYT) isn't making money yet, but CEO Bonnie Anderson isn't complaining. The South San Francisco molecular diagnostics company and 2013 Fierce 15 winner has had an active year, racking up insurance reimbursement agreements for its signature thyroid cancer test and then launching a successful $65 million IPO at the end of October.
|Veracyte CEO Bonnie Anderson|
"We're very pleased," Anderson told FierceDiagnostics in a wide-ranging telephone interview. "We are excited to be one of the few diagnostics companies to be able to attract a group of high-caliber, long-term investors that understand the challenges of building these kinds of businesses."
Veracyte announced its first financial results as a public company on Nov. 23, and they reflect the advances that helped fuel investor interest in its IPO. The company booked $5.6 million in the 2013 third quarter ending Sept. 30, up 74% from the $3.2 million generated over the same period in 2012. Net losses reached $6.3 million, up from $4.9 million in the 2012 third quarter, as the company accelerated commercial operations for its Afirma Thyroid FNA Analysis test, which combines a specialized cytopathology assessment and a gene-expression test to determine whether a thyroid nodule is benign or cancerous.
Afirma launched in 2011, and Sanofi's ($SNY) Genzyme arm promotes it. It's designed to allow for a more precise diagnosis, an approach that should help patients avoid unnecessary surgeries "and take substantial costs out of the system at the same time," Anderson explained. Veracyte may not be making money yet, but its revenue should continue to accelerate now that Medicare, United Healthcare, Aetna, Humana and SelectHealth have signed on to reimburse the test, as well as some smaller payers. In all, Veracyte now has access to more than 100 million covered lives for Afirma, Anderson said.
With IPO money in hand, Anderson said she expects "new proceeds to begin to accelerate growth in the coming year." And while Anderson won't predict when Veracyte might become profitable, she said that the company, post-IPO, will be all about expanding its diagnostics capabilities and revenue in the near future.
"We do have our eyes on becoming a profitable company," she told us. "But in the near term we are really focused on driving growth at the top line and expanding our portfolio beyond the thyroid product to include other indications, and using our resources to gain positive coverage and reimbursement decisions. All of those things really give us foundation to grow and expand the business."
Biotech IPOs surged through the latter part of 2013, and Veracyte was part of a diagnostics IPO boomlet that followed, a trend that some observers think may have peaked. Anderson told us she was glad about Veracyte's IPO timing all the same.
"In a year like this, sometimes you do worry about investor fatigue at the end of a fabulous IPO year," she said. "Ultimately, we do believe there is tremendous investor interest in molecular diagnostics and I really believe, [based on] our experience on the road, that the interest is growing and is going to continue to grow.
"Given the increasing recognition among payers and physicians of the potential of diagnostics to really improve their decision making, and the proof that they can lower healthcare costs, I think that interest will continue."
- read the earnings release
Special Report: 2013 Fierce 15 - Veracyte