Veracyte Profile
Veracyte, Inc. (Veracyte) operates as a global diagnostics company.
The company empowers clinicians with the high-value insights they need to guide and assure patients at pivotal moments in the race to diagnose and treat cancer. The company’s high-performing tests enable clinicians to make more confident diagnostic, prognostic and treatment decisions, helping patients avoid unnecessary procedures and interventions, and speed time to appropriate treatment, thereby improving outcomes for patients all over the world.
The company’s high performing tests are developed using its proven framework of identifying an unmet clinical need, determining the combination of appropriate biomarkers utilizing cutting-edge genomic and other technologies, and then tuning its assays with deep scientific and machine learning capabilities.
The company offers tests in thyroid cancer (Afirma); prostate cancer (Decipher Prostate); breast cancer (Prosigna); interstitial lung diseases (Envisia); and bladder cancer (Decipher Bladder). The company’s Percepta Nasal Swab test is being run in its Clinical Laboratory Improvement Amendments of 1988 (CLIA) lab in support of clinical studies and its tests for kidney cancer and lymphoma are in development, the latter as a companion diagnostic.
The company serves global markets with two complementary models. In the United States, it offers laboratory developed tests, or LDTs, through its centralized, Clinical Laboratory Improvement Amendments of 1988, or CLIA, certified laboratories in South San Francisco and San Diego, California, supported by its cytopathology expertise in Austin, Texas. Additionally, primarily outside of the United States, the company provides tests to patients through distribution to laboratories and hospitals that can perform the tests locally. This includes the company’s Prosigna test, and in the future, it intends to offer the Envisia, Decipher Prostate and Percepta Nasal Swab tests as in vitro diagnostic, or IVD, tests that run on the nCounter Analysis System. The company’s broad menu of advanced genomic diagnostic tests, combined with its ability to deliver them globally, uniquely positions it in the diagnostics industry.
In March 2021, the company acquired Decipher Biosciences, expanding its genomic testing menu into urologic cancers. The acquisition also provided the company with Decipher GRID (Genomics Resource for Intelligent Discovery), a platform and database that helps drive biopharmaceutical partnerships, key opinion leader, or KOL, engagement and pipeline development in urologic cancers.
In August 2021, the company acquired HalioDx SAS and HalioDx Inc., historically a wholly owned subsidiary of HalioDx SAS, (collectively referred to as HalioDx), giving it the capabilities and expertise to manufacture its own IVD test kits for use on the nCounter Analysis System. The acquisition also deepened its scientific expertise and capabilities in the rapidly growing area of immuno-oncology further strengthening its offerings to biopharmaceutical and other partners.
Proven Framework for Test Development and Commercialization
The company has an established framework to develop and commercialize tests to benefit physicians, patients and payers in the diagnosis, prognosis and treatment of cancer.
The company’s experienced medical affairs team supports the process by conducting extensive diligence to understand the patient journey – focusing on diagnosis, prognosis and treatment decision-making – to determine where providing physicians with more accurate and comprehensive information can positively enhance care for patients, enabling them to avoid risky, costly procedures and interventions, and accelerate time to appropriate treatment.
The company utilizes a comprehensive, platform-agnostic, approach to developing its diagnostic tests that leverages innovations in genomic technology, immuno-oncology, and machine learning, and does so, across numerous biological specimen types. Further, the company’s development activities focus on the same type of sample on which it will be used in clinical practice, which are prospectively collected through Institutional Review Board-approved multicenter clinical trials.
The company uses machine learning algorithms to match biological patterns with clinical truth, or the true diagnosis or clinical outcome, which allows it to predict the presence, or absence, of disease or a patient’s prognosis in a clinical setting.
The company then drives adoption and accesses to its tests by cultivating further KOL support and developing robust clinical evidence in an effort to gain reimbursement, and ultimately guideline inclusion. In addition to publishing the results of clinical validation studies, the company also publishes analytical validation studies to establish the reproducibility of its tests across lab instruments, operators and samples. The company engages KOLs and community physicians in studies to build the clinical utility evidence needed to support coverage policies and reimbursement from Medicare and private payers. Additionally, the company’s clinical and medical affairs teams continue to liaise with physicians on user-experience, decision impact and other studies. As of December 31, 2022, the company estimated that approximately 200 studies demonstrating the performance and clinical utility of its CLIA-based tests have been published in peer-reviewed medical journals.
The company’s ability to develop rigorous clinical evidence for its tests has enabled their inclusion in leading clinical practice guidelines, including those from the National Comprehensive Cancer Network, or NCCN. The company’s CLIA model enables it to manage the rollout of its tests and bill payers directly, which facilitates test adoption and helps it work directly with payers to secure payment, as well as coverage policies. The company employs a team of in-house claims processing and reimbursement specialists who work with payers, physician practices and patients to optimize reimbursement. The company has achieved Medicare reimbursement for all its commercially supported tests.
The company’s tests address unmet clinical needs in seven of the 10 most prevalent cancers by U.S. incidence and are sold directly to physicians through its specialized sales teams. The company’s experienced marketing teams help drive penetration through a range of strategies and tactics, including medical conference participation and events, speaker programs, digital marketing programs, advocacy group engagement and other initiatives.
By leveraging its internal technology and bioinformatics capabilities across the company’s growing database of highly-curated data for more than 375,000 patient samples, it will have the ability to further drive new product development in existing and future indications and offer unique insights to biopharmaceutical researchers. The company’s data assets and biorepositories may include RNA, DNA, variant, fusion and other genomic data, immune-response data, and well-curated clinical, radiological, outcome and other information.
Serving the U.S. Market Through CLIA Labs
The company’s tests are improving patient care in thyroid, prostate, lung, and bladder cancer, as well as in interstitial lung disease.
All of the company’s tests in the U.S. are serviced through its own CLIA certified laboratories in South San Francisco and San Diego, California, and Austin, Texas. The company manages its labs with a focus on operational excellence and continuous improvement. The company measures performance using such criteria as lab-processing turnaround time, failure rates and deviation vs. control. The company uses a systematic, analytical approach aimed at delivering optimal outcomes for patients and referring physicians, while driving cost and lab-efficiency improvement as it scales operations.
Clinical Diagnostic Tests Offered Through CLIA Labs
Thyroid Cancer - Afirma Genomic Sequencing Classifier
The company estimates that more than 110,000 of these patients receive indeterminate results (not clearly benign or malignant) based on traditional cytopathology evaluation.
The company developed the Afirma Genomic Sequencing Classifier, or GSC, to determine, which patients with indeterminate results are actually benign so that these patients may avoid unnecessary, costly surgery that often leads to the need for lifelong daily thyroid hormone replacement drugs. The test was developed with RNA whole-transcriptome sequencing and machine learning technology to provide physicians with clinically actionable results from the same FNA biopsy used for initial cytopathology.
The company’s sales team sells Afirma GSC to endocrinologists and other physicians who perform FNA biopsies on patients with thyroid nodules. The company estimates that approximately 70% of its testing volume comes from physicians in hospital or institutional settings and the remaining 30% comes from community-based practices. Physicians can order Afirma GSC testing in one of two ways: by submitting indeterminate FNA samples directly to Veracyte for genomic testing or by submitting FNA samples for initial cytopathology analysis by its partner, Thyroid Cytopathology Partners, with genomic testing performed by Veracyte when the cytopathology is indeterminate.
Prostate Cancer - Decipher Prostate Biopsy and Radical Prostatectomy, or RP, Genomic Classifiers
The Decipher Prostate Genomic Classifier test results dramatically improve the physician's ability to personalize therapy for each patient and make more appropriate treatment decisions.
The Decipher Prostate cancer tests, developed through whole-transcriptome analysis and machine learning, are used across localized disease to predict a patient’s risk of progressing to metastatic disease within five years, which helps physicians determine an appropriate treatment plan. The Decipher Prostate Biopsy test is performed on a prostate biopsy sample following a cancer diagnosis to inform whether the patient is a candidate for active surveillance, needs monotherapy or may benefit from multi-modal or intensified therapy. The Decipher Prostate RP test is performed on surgical tissue to guide decision-making regarding treatment timing following radical prostatectomy and to help determine whether patients undergoing salvage radiotherapy may benefit from the addition of hormone therapy or may safely avoid hormone therapy and its side effects.
The Decipher Prostate Genomic Classifier is being investigated in seven National Cancer Institute-sponsored, phase 3, prospective, randomized controlled clinical trials; 24 phase 2/3 prospective trials; and more than 20 retrospective studies of phase 3 randomized controlled trials. Many of these trials require Decipher Prostate testing for study inclusion. The test’s performance and utility has been evaluated in approximately 70 peer-reviewed, published studies.
The NCCN Clinical Practice Guidelines in Oncology, or NCCN Guidelines, for Prostate Cancer (v1.2023) includes a new table (Table 1) in Principles of Risk Stratification summarizing the characteristics of different tools used for initial risk stratification of clinically localized prostate cancer. In this table, Decipher Prostate is the only gene expression test with the highest level of evidence (Level 1) for validation. The NCCN Guidelines also uniquely suggest use of the Decipher Prostate RP test to inform treatment recommendations, post surgery, based on the patient’s Decipher score. Decipher Prostate is covered by Medicare and commercial payers representing approximately 195 million enrollees.
Lung Cancer - Percepta Nasal Swab Test
The company developed the Percepta Nasal Swab test to help physicians more accurately, quickly and confidently identify lung cancer risk so that patients whose lung nodules are benign may avoid unnecessary invasive procedures and patients whose nodules are likely cancerous may proceed to further diagnostic work-up and, if necessary, treatment. The company is running the Percepta Nasal Swab test in its CLIA lab in support of its clinical utility study, in an effort to demonstrate data to help drive Medicare and private payer coverage, as well as clinical adoption.
ILD/IPF - Envisia Genomic Classifier
The company obtained Medicare coverage for the Envisia classifier through the Molecular Diagnostics Services Program, or MolDX, program in 2019. The company estimates that half of the patients evaluated for ILDs/IPF in the United States are covered by Medicare.
Bladder Cancer - Decipher Bladder Genomic Classifier
The company began commercialization of the Decipher Bladder test in the fall of 2021, following final Medicare coverage for the test in July 2021. The Decipher Bladder test is the first genomic test to be covered by Medicare for patients with bladder cancer.
Driving Global Growth with Distributed IVD Tests
Once the company has developed robust clinical evidence and physician adoption of its tests in the United States, it typically then drive further patient access by launching them, as appropriate, into global markets as IVD tests that are run on the nCounter Analysis System. This approach enables the company’s tests to be performed locally in laboratories and hospitals worldwide, which facilitates market access and physician adoption in Europe and other strategic global markets.
In December 2019, the company acquired the exclusive worldwide license to the nCounter Analysis System for clinical IVD test use, development and commercialization. The company offers IVD testing in breast cancer and, looking forward, it is well positioned to develop and deliver a menu of tests for use on the nCounter Analysis System. The company’s acquisition of HalioDx SAS and HalioDx Inc. (collectively referred to as HalioDx) in August 2021 provides it with a European headquarters to develop, manufacture and supply its own IVD test kits.
Biopharmaceutical and Other Revenue
The company has formed numerous biopharmaceutical partnerships that derive value out of its current assets or future ones. Through development and commercialization of the company’s tests, it has built or gained access to unique biorepositories that include extensive clinical cohorts and whole-genome RNA sequencing and other data, such as immuno-oncology.
Through the acquisition of HalioDx in 2021, the company bolstered its offering to these customers by gaining expertise in immuno-oncology. The company’s immuno-oncology offerings to biopharmaceutical partners focus on the implications of the tumor microenvironment using tools, such as Immunoscore IC, Immunosign, its Brightplex innovative technology, and its Veracyte Biopharma Atlas dedicated database. Immunogram, its multi-modal platform, provides a comprehensive understanding of the tumor immune microenvironment by seamlessly integrating data from a variety of genomic, transcriptomic, and proteomic platforms.
Additionally, the company deploys its know-how in IVD test development to develop and manufacture such tests for other diagnostic companies in indications that are noncompetitive to Veracyte.
Competition
The company’s Afirma test faces competition from companies and academic institutions that use next generation sequencing technology or other methods to measure mutational markers, such as BRAF and KRAS, along with numerous other mutations.
The company’s Decipher Prostate test faces competition from Myriad Genetics and MDxHealth, which offer genomic testing for prognostic purposes within localized prostate cancer. The company also faces competition from commercial laboratories, such as Laboratory Corporation of America Holdings and Sonic Healthcare USA, with strong infrastructure to support the commercialization of diagnostic services.
Patents and Proprietary Technology
Certain of the company’s issued patents expire between 2024 and 2038 and are related to methods used in thyroid cancer diagnostics, urologic cancers diagnostics, lung cancer and disease diagnostics, breast cancer diagnostics, and immuno-oncology diagnostics. The company holds or in-licenses registered trademarks in the United States for Veracyte, Afirma, Percepta, Envisia, Prosigna, Lymphmark, Decipher, GRID, HalioDx, Immunoscore, Brightplex, Immunosign, and the Veracyte logo. The company also holds registered trademarks in various jurisdictions outside of the United States.
Regulation
The company is subject to CLIA, a federal law that regulates clinical laboratories that test specimens derived from humans for the purpose of providing information for the diagnosis, prevention or treatment of disease. Under CLIA, which is administered by CMS, the company is required to hold a certificate applicable to the type of laboratory examinations and tests it performs and to comply with standards covering personnel qualifications, facilities administration, quality systems, inspections, and proficiency testing. The company must maintain CLIA compliance and certification to sell its tests and be eligible to bill state and federal healthcare programs, as well as many private third-party payers.
The company holds CLIA certifications to perform testing at its South San Francisco and San Diego, California; Richmond, Virginia; and Austin, Texas laboratory locations. To renew its CLIA certificates, the company is subject to survey and inspection every two years to assess compliance with program standards. The company’s clinical reference laboratories are required to be licensed by New York, under New York laws and regulations before it receives specimens from New York. In its FDA registration, the company has listed the containers it provides for collection and transport of Afirma GSC and Envisia samples from a physician to its clinical reference laboratory as Class I devices in accordance with the classification of regulation for the specimen transport and storage container. Clinical laboratory tests like the company’s proprietary genomic tests are regulated under CLIA, as administered by CMS, as well as by applicable state laws. Clinical laboratory tests that are developed and run within a single CLIA-certified laboratory are referred to as laboratory developed tests, or LDTs, by the FDA.
Under the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, the U.S. Department of Health and Human Services, or HHS, has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities, which include health care providers, such as the company. The implementing regulations of HIPAA, as amended by HITECH, were last modified in 2013 and resulted in significant changes to the privacy, security, breach notification, and enforcement requirements with which the company must comply. The company has developed and implemented policies and procedures designed to comply with HIPAA’s privacy, security, and breach notification requirements.
In particular, the company is subject to the California Confidentiality of Medical Information Act, which is similar to but in some ways more restrictive than the HIPAA regulations, and the California Consumer Privacy Act, or CCPA, which was enacted in California in 2018 and substantially amended and expanded thereafter, most significantly by a ballot initiative adopted in November 2020 that enacted the California Privacy Rights Act.
The company is subject to the federal physician self-referral prohibitions, commonly known as the Stark Law, and to similar restrictions under the self-referral prohibitions of certain states in which it operates, including California's Physician Ownership and Referral Act, or PORA. The company is in compliance with the Anti-kickback Statute, Section 650, and Section 14107.2, there can be no assurance that its relationships with physicians, academic institutions and other customers or parties will not be subject to investigation or challenge under such laws.
The company is subject to the California Confidentiality of Medical Information Act, which is similar to but in some ways more restrictive than the HIPAA regulations, and the California Consumer Privacy Act, or CCPA, which was enacted in California in 2018 and substantially amended and expanded thereafter, most significantly by a ballot initiative adopted in November 2020 that enacted the California Privacy Rights Act.
History
The company was incorporated in 2006 in Delaware. It was formerly known as Calderome, Inc. and changed its name to Veracyte, Inc. in 2008.
