Veracyte, Inc., a molecular diagnostics company pioneering the field of molecular cytology, and Visium Healthcare Partners, LP, a healthcare investment firm, today announced that they have entered into an agreement that provides up to $45 million of financing, comprising a term loan agreement and securities purchase option. On a pro forma basis, net proceeds from the new loan facility and the cash and cash equivalents as of December 31, 2015 provide Veracyte with approximately $73 million to fund the continued growth of the company's core business.
"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," said Bonnie Anderson, president and chief executive officer of Veracyte.
Under and subject to the terms and conditions of the term loan agreement, Visium Healthcare Partners will initially provide gross proceeds of $25 million, of which approximately $5 million will be used to retire the company's existing loan with Silicon Valley Bank. Up to $15 million of additional funding is available to the company, at its option, through June 2017, subject to the satisfaction of revenue milestones and certain other borrowing conditions. The agreement has a term of six years, with quarterly payments of interest only for the first four years. At Veracyte's discretion, during the first four years, a portion of the interest payments can be deferred and paid, along with interest accrued thereon together with the principal in the final two years. Lastly, if Veracyte elects to execute an equity offering, Visium has certain rights to participate with up to $5 million of additional investment.
"With its focus on using genomics to resolve diagnostic ambiguity, Veracyte is transforming disease diagnosis, helping patients avoid unnecessary surgeries and reducing healthcare costs," said Avinash Amin, partner at Visium Healthcare Partners. "We are particularly excited about the company's growth trajectory as it further builds its endocrinology franchise, driven by the continued expansion of the Afirma® Gene Expression Classifier in thyroid testing, and as it applies its commercial diagnostic strategy to pulmonology. This includes the phased launch of the Percepta® Bronchial Genomic Classifier and the planned commercial introduction of its idiopathic pulmonary fibrosis test later this year."
Source : veracyte.com