Veracyte (VCYT) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Our financial results currently depend mainly on sales of our Decipher Prostate and Afirma laboratory developed tests (LDTs), and we may not generate sufficient revenue from these and our other diagnostic tests to grow our business27% rewritten
2. 02If we are unable to grow sales of our tests or products, or we are unable to launch or commercialize our new tests or products, our business may suffer28% rewritten
3. 03We have incurred losses in the past, we could incur net losses in the future and we may not sustain our level of profitability in the future28% rewritten
4. 04We depend on a few payers for a significant portion of our revenue; if one or more significant payers stops providing reimbursement or decreases the amount of reimbursement for our tests, our revenue could decline
5. 05Modifications to the LCDs and associated coverage articles for Afirma, Decipher Prostate and our other tests could have an adverse effect on our business, financial condition and results of operations
6. 06If payers do not provide reimbursement, rescind or modify their reimbursement policies, delay payments for our tests, recoup past payments, or if we are unable to successfully negotiate additional reimbursement contracts, our commercial success could be compromised
7. 07We may experience limits on our revenue if physicians decide not to order our tests
8. 08We may experience limits on our revenue if patients decide not to use our tests as a result of increased costs, fees or changing payer policies31% rewritten
9. 09If we fail to comply with federal and state licensing requirements, we could lose the ability to perform our tests or experience disruptions to our business60% rewritten
10. 10incremental growth through acquisitions and collaborations is not successful, or if we do not successfully integrate companies or assets that we acquire into our business, our prospects and financial condition may sufferNew
11. 11We must successfully integrate our acquired businesses, such as C2i, to realize the strategic or financial goals that we currently anticipate44% rewritten
12. 12Our future success and international growth depend, in part, on our ability to adapt, manufacture and distribute our tests as IVD tests
13. 13If we do not manage inventory in an effective and efficient manner, it could adversely affect our results of operations49% rewritten
14. 14specifications, could negatively impact our ability to provide timely response and reports to our customers and, as a result, may materially impact our ability to generate revenueNew
15. 15For example, we rely on NanoString (now Bruker Spatial Biology as a result of Bruker Corporation’s asset acquisition of NanoString) for certain components and raw materials for the Prosigna test and nCounter service kitsNew
16. 16We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy
17. 17If we are unable to support demand for our tests, products or services, our business could suffer58% rewritten
18. 18we encounter difficulty meeting market demand or quality standards, our reputation could be harmed and our future prospects and our business could sufferNew
19. 19In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for our tests62% rewritten
20. 20addition, sales of our tests outside the United States subject our business to foreign regulatory requirements and cost-reduction measures, which may also change over timeNew
21. 21Under previous Medicare billing rules, hospitals were required to bill for our molecular pathology tests when performed on Medicare beneficiaries who were hospital outpatients at the time of tissue specimen collection when these tests were ordered less than 14 days following the date of the patient's discharge
22. 22This change does not apply to tests performed on specimens collected from hospital inpatients. We will continue to bill hospitals for tests performed on specimens collected from hospital inpatients when the test was ordered less than 14 days after the date of discharge
23. 23If the FDA or foreign authorities regulate those of our tests that they do not currently regulate, we could incur substantial costs and delays associated with trying to obtain premarket clearance, approval or certification42% rewritten
24. 24Obtaining marketing authorization or certification by the FDA and foreign regulatory authorities or notifying regulatory bodies for our diagnostic tests will take significant time and require significant research, development and clinical study expenditures and ultimately may not succeed83% rewritten
25. 25to Class I or II for a new product type, and clinical data may be required. For laboratory tests for which FDA clearance, authorization or approval is required, the FDA may also require data to support analytical and clinical validityNew
26. 26benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidenceNew
27. 27IVDR’s transitional timelines regarding compliance deadlines according to IVD risk classifications as well as designations of Swiss Authorized RepresentativesNew
28. 28If we are unable to obtain marketing authorizations or certifications, approvals, clearances or certifications to market Prosigna or our other IVD assays or if regulatory limitations are placed on our diagnostic kit products, our business and growth will be harmed89% rewritten
29. 29We are subject to ongoing and increasingly extensive regulatory requirements, which may be subject to change, and our failure to comply with these requirements could substantially harm our business
30. 30We operate in a highly competitive market. Growing understanding of the importance of biomarkers linked with therapy selection, response and early screening is leading to more companies offering services in genomic profiling which may lead to increased competition for our tests
31. 31In addition, competitors may develop their own versions of our solutions in other countries that we may seek to enter where we do not have patents or where our intellectual property rights are not recognized. Additionally, competitors could encourage the use of their solutions by physicians in other countries
32. 32We depend on our senior management team, and the loss of one or more of our executive officers, or any inability to attract and retain highly skilled employees and other key personnel in our highly competitive industry, could adversely affect our business
33. 33Billing for our diagnostic tests is complex, and we must dedicate substantial time and resources to the billing process in order to collect cash and be paid
34. 34If our internal sales force is less successful than anticipated, our business expansion plans could suffer and our ability to generate revenue could be diminished26% rewritten
35. 35Developing, commercializing and gaining reimbursement for new products involves a lengthy and complex process, and if we do not achieve our projected development, commercialization and reimbursement goals in the timeframes we announce and expect, our business may suffer, and our stock price may decline69% rewritten
36. 36utility studies that meet individual payer evidence requirements to obtain reimbursement. Even after launching new products, we must complete additional studies that meet the clinical evidence required by individual payers to obtain reimbursementNew
37. 37If we are unable to develop products to keep pace with rapid technological, medical and scientific change, our operating results and competitive position could be harmed36% rewritten
38. 38Complying with numerous statutes and regulations pertaining to our business is an expensive and time-consuming process, and any failure to comply could result in substantial penalties
39. 39If we use hazardous materials in a manner that causes contamination, infection or injury, we could be liable for resulting damages
40. 40Aspects of our international business expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States
41. 41We have operations located in Israel, and conflict in the Middle East and any additional escalations of hostilities may cause interruption or suspension of this site without warning, or otherwise negatively impact the global economy or our business
42. 42Our reliance on distributors for sales of our products outside of the United States, and on clinical laboratories for delivery of Prosigna testing services, could limit or prevent us from selling our products and impact our revenue
43. 43Errors or defects in our products or services could harm our reputation, decrease market acceptance of our products or services or expose us to product liability claims, and we could face substantial liabilities that exceed our resources
44. 44Issues relating to the use of AI and machine learning in our offerings could adversely affect our business and operating results
45. 45Security breaches, loss of data and other disruptions to our or our third-party service providers' data systems could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation
46. 46Risks associated with data privacy issues, including evolving laws, regulations and associated compliance efforts, may adversely impact our business and financial results44% rewritten
47. 47If we are unable to protect our intellectual property effectively, our business may be harmed65% rewritten
48. 48countries. Proceedings to enforce our patent rights in foreign jurisdictions may result in substantial cost and divert our efforts and attention from other aspects of our businessNew
49. 49If we are unable to enforce or defend our intellectual property effectively, our business may be harmed
50. 50If we cannot license or maintain rights to use technologies on reasonable terms, our business may suffer92% rewritten
51. 51We may be involved in litigation related to third party intellectual property, which may be time-intensive and costly and may adversely affect our business, operating results or financial condition
52. 52With respect to trademarks, infringement litigation or threats of infringement litigation may require us to re-brand our product
53. 53Our ability to use our net operating loss carryforwards may be limited and may result in increased future tax liability to us44% rewritten

Risks Related to Being a Public Company

1. 54If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our reported financial information and the market price of our common stock may be negatively affected

Risks Related to Our Common Stock

1. 55Our stock price may be volatile, and you may not be able to sell shares of our common stock at or above the price you paid
2. 56Anti-takeover provisions in our charter documents and under Delaware law could discourage, delay or prevent a change in control and may affect the trading price of our common stock
3. 57We have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future
4. 58Our operating results may be adversely affected by unfavorable macroeconomic and market conditions
5. 59Our business and the operations of our laboratories and manufacturing sites are subject to the risk of disruptions caused by pandemics, political events, war, terrorism, earthquakes, fire, power outages, severe weather, floods, and other catastrophic events
6. 60We are exposed to risks associated with transactions denominated in foreign currency
7. 61We may be unable to raise additional capital on acceptable terms in the future, which could limit our ability to develop and commercialize new solutions and technologies and expand our operations, organically or inorganically
8. 62Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of amounts that have been accrued38% rewritten
9. 63Impairment in the value of our goodwill or other intangible assets could have a material adverse effect on our operating results and financial condition
10. 64Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results
11. 65Our consolidated financial statements are subject to change and if our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected
12. 66Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks21% rewritten