In this ROBO Global Artificial Intelligence Index spotlight, we focus on Veracyte (VCYT). The index underlies the $137 million ROBO Global Artificial Intelligence ETF (THNQ). Here, we explore what makes Veracyte unique within the Healthcare Subsector and dive into its recent performance.
Founded in 2006, Veracyte is a global diagnostics company. It is a leader in non-invasive testing for various cancers and interstitial lung diseases. The company’s mission is to help patients avoid unnecessary procedures and expedite time to diagnosis and appropriate treatment. In order to do so, Veracyte commercializes tests for thyroid (Afirma), prostate (Decipher Prostate), breast (Prosigna), bladder (Decipher Bladder), and interstitial lung diseases (Envisia). The company utilizes machine learning and innovative field-of-injury techniques, such as non-invasive nasal swabs, for detecting and diagnosing diseases.
An estimated 7 million people are diagnosed annually with cancers that Veracyte’s tests can detect. As of 2024, Veracyte has tested over 450,000 patients across 35 countries, saving over half of them from unnecessary surgeries and providing more than $800 million in estimated cost savings to the healthcare system. All major payers in the United States approve its tests.
Veracyte ended 2023 with revenue of $361.1 million, up 21.8% year-over-year. During the second quarter, it performed 36,057 tests, a 24% increase year-over-year, with an overall gross margin of 71%. The company expects to end the year with $436.1 million in revenue and cash reserves between $260 million and $270 million.
With the acquisition of C2i, a minimal residual disease (MRD) detection company, completed in February 2024 for $95 million, Veracyte now aims to expand its role across the cancer continuum. The company plans to transition from providing early decision support to also following patients through treatment. The MRD market has an estimated total addressable market (TAM) of $20 billion annually.
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