Cancer diagnostics leader Veracyte, Inc. (Nasdaq: VCYT) has revealed preliminary unaudited financials for Q4 and full-year 2023 and announced a definitive agreement to acquire C2i Genomics, Inc., a minimal residual disease detection company. The $70 million acquisition will expand Veracyte’s capabilities, adding whole-genome MRD technology. Preliminary financial results project Q4 revenue of $95-96 million, a 18-20% increase, and FY2023 revenue of $358-359 million, a 21% rise. Veracyte expects to close the acquisition in Q1 2024, advancing its vision to transform cancer care through innovative diagnostics.
Veracyte, Inc. (Nasdaq: VCYT), a leading cancer diagnostics company, today announced preliminary unaudited financial results for the fourth quarter and full year ended December 31, 2023. The company also announced it has reached a definitive agreement to acquire C2i Genomics, Inc. a minimal residual disease (MRD) detection company, adding whole-genome MRD capabilities to its novel diagnostics platform and positioning Veracyte to expand its offerings along the cancer care continuum. Under the terms of the agreement, Veracyte will pay $70 million in Veracyte shares at closing, and up to an additional $25 million based on the achievement of future performance milestones over the next two years, payable in Veracyte shares or cash at Veracyte’s election.
Preliminary Unaudited Financial Results and 2024 Financial Outlook
For the fourth quarter ended December 31, 2023, as compared to the same period of 2022, Veracyte expects to report:
- Revenue of between $95 million and $96 million, an increase of between 18% and 20%
- Total test volume of approximately 34,000, an increase of 21%
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For the full year ended December 31, 2023, as compared to the same period of 2022, Veracyte expects to report:
- Revenue of between $358 million and $359 million, an increase of 21%
- Total test volume of approximately 127,000, an increase of 24%
Veracyte expects to report cash, cash equivalents and short-term investments of more than $215 million as of December 31, 2023.
“We had an outstanding fourth quarter and finished 2023 with continued growth driven by our Afirma and Decipher businesses,” said Marc Stapley, Veracyte’s chief executive officer. “I could not be prouder of the Veracyte team and their commitment to our physician customers and their patients, and look forward to continued strong execution in 2024 and beyond.”
Veracyte is initiating 2024 testing and product revenue guidance of 13% to 15% growth, partially offset by declining biopharma and other revenue, resulting in total company revenue growth of 10% to 12%, or $394 million to $402 million. Further, 2024 cash, cash equivalents and short-term investments ending balance is expected to grow by 10% to 12%, in line with total company revenue growth, excluding approximately $8 million of one-time acquisition related items but including the expenses required to develop MRD assays.
C2i Genomics Acquisition
Through its acquisition of C2i Genomics, Veracyte will be positioned to serve physicians and their patients further along the cancer care continuum, in combination with its portfolio of diagnostic and prognostic tests.
“MRD detection and monitoring is a large, rapidly growing space that provides critical information to physicians and their patients. The expected acquisition of C2i Genomics will enable us to expand our role across the cancer care continuum to help monitor the success of a therapeutic or surgical intervention, and determine the best course of action for each patient,” said Mr. Stapley. “We believe that C2i Genomics’ whole-genome technology will enable earlier detection of MRD and recurrence than imaging and other molecular tests, resulting in better patient outcomes, with faster results and smaller sample requirements. This will further fuel our vision to transform cancer care for patients all over the world.”
C2i Genomics’ whole-genome, artificial intelligence-powered approach generates broad signatures from blood more quickly and efficiently than bespoke panels. The company’s MRD solution requires less than a tube of blood (as little as 3-4 ml blood, or 1-2 ml plasma), can go from sample to result in just two weeks, and delivers improved performance compared to imaging and other molecular tests. Veracyte believes this ability, when combined with its own prognostic and diagnostic tests, will enable physicians to track a tumor’s progression as it evolves from early diagnosis through patient treatment and follow-up.
“Our vision has been to provide clinicians with deeper insight into their patients’ cancer so that we can help improve treatment outcomes worldwide,” said Ezra Sofer, chief executive officer and cofounder of C2i Genomics. “Our goal since the inception of the company has been to introduce our robust solution into the clinic. I’m incredibly proud of the progress our team has made and believe that Veracyte, with its strong presence in multiple cancer indications and its powerful commercialization capabilities, will accelerate this vision into a reality.”
Veracyte’s first application of C2i Genomics’ technology will be a muscle-invasive bladder cancer MRD test, where it plans to leverage its strong urology commercial channel and a clear pathway to expected reimbursement. The company plans to develop further MRD tests in several of its focused indications.
Veracyte expects the upfront purchase price to be subject to customary balance sheet adjustments and the transaction to close in the first quarter of 2024.
Morgan Stanley & Co. LLC is serving as financial advisor to Veracyte, and Fenwick & West LLP is serving as legal advisor. Perella Weinberg Partners is serving as financial advisor to C2i Genomics, and Meitar is serving as legal advisor.
Source: Bio Space
