|Veracyte CEO Bonnie Anderson|
Veracyte ($VCYT) has been on an upward trajectory since launching its IPO a few years ago, and now, it has new funds to help along the way. The company brought in $45 million from healthcare investment firm Visium Healthcare Partners to expand business and generate growth for its core products.
Under the terms of the deal, Visium will give San Francisco-based Veracyte $25 million up front. The company will put $5 million of that amount toward paying down debt.
Veracyte will also get up to $15 million in additional funding through June 2017, as long as it meets certain milestones and other borrowing conditions, the company said in a statement. The 6-year agreement also has quarterly payments of interest for the first four years. During that time, a portion of the interest can be deferred and paid together with interest accrued in the final two years. Visium has the option to invest up to $5 million more if the company decides to make an equity offering.
"This agreement provides Veracyte the funding and flexibility we need to advance our business towards having three revenue generating products by the end of 2018. We have a clear path to profitability and will build the business with financial discipline and measured investments," Veracyte CEO Bonnie Anderson said in a statement.
The new funds give Veracyte more momentum as it charges ahead with its business initiatives. The company has already charted progress for its Afirma Thyroid FNA Analysis product, a specialized cytopathology assessment and gene expression test that helps see whether a thyroid nodule is benign or cancerous. Wider adoption of the product after Veracyte's IPO in October 2013 helped drive large increases in sales.
But Veracyte also wants to build up its Percepta Bronchial Genomic Classifier, which the company picked up through its $21 million deal with Allegro Diagnostics in 2014. The test helps physicians make a lung cancer diagnosis by analyzing 23 genes in cells lining the respiratory tract. Pinpointing changes in those cells helps identify patients who are low-risk for cancer after a bronchoscopy.
"If the next step is an invasive procedure, you're talking about patients being admitted overnight for the procedure with a high risk of complications," Anderson told FierceMedicalDevices last year. "If we can identify those patients who are at low risk of having cancer and can be followed up with a CT scan as opposed to going straight to the operating room, that's a good thing."
- read the release
Special Report: FierceMedicalDevices' 2013 Fierce 15 - Veracyte