Shares of Veracyte (NASDAQ:VCYT) closed up 22.5% today after the company reported revenue growth of 34% for the third quarter, giving management the confidence to raise 2018 guidance.
Test volume increased 23% year over year, buoyed by Veracyte's Afirma Genomic Sequencing Classifier, which tests thyroid nodules to see if they need to be removed.
Adoption of Veracyte's lung cancer test, the Percepta Bronchial Genomic Classifier that launched almost a year ago, is picking up. Test volume increased 21% compared to the second quarter. The company thinks it'll perform somewhere between 500 and 1,000 Percepta tests in the fourth quarter.
Veracyte still isn't cash-flow positive, but it's headed in the right direction, only burning through $2.4 million in the third quarter, a 58% decrease from the year-ago quarter.
Management increased 2018 revenue guidance to a range of $90 million to $91 million, up from its previous guidance of $87 million to $89 million. The top-line growth will help Veracyte burn less cash; the company now expects to go through $17 million to $18 million, down from previous guidance of $18 million to $21 million. Veracyte ended the third quarter with $77.8 million in the bank thanks to a secondary offering that raised approximately $55 million, so it has a multiyear runway to get to cash-flow positive.
Looking further ahead, Veracyte plans to do a full launch of Envisia Genomic Classifier, which is used to help diagnose a lung disease called idiopathic pulmonary fibrosis, next year, which should help the test-maker keep its momentum going.