Good afternoon, ladies and gentlemen, and welcome to Veracyte's second quarter 2018 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star and then zero on your touch-tone telephone. As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Ms. Bonnie Anderson, Chairman and Chief Executive Officer. You may begin.
Good afternoon, everyone, thanks for joining us today for our second quarter 2018 financial results conference call. Joining me today are Keith Kennedy, Chief Financial Officer, and Christopher Hall, President and Chief Operating Officer. Before we begin, Keith will take us through the safe harbor statement.
Good afternoon, everyone. I would like to remind you that various statements that we may make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements include statements regarding our future plans, prospects and strategy, financial goals and guidance, product attributes and pipeline, drivers of growth, expectations regarding reimbursement, and other statements that are not historical facts. Management's assumptions, expectations, and opinions reflected in these forward-looking statements are subject to risks and uncertainties that may cause actual results and/or performance to differ materially from any future results, performance, or achievements discussed in or implied by such forward-looking statements, and the company can give no assurance they will prove to be correct. In addition to today's press release, those risks and uncertainties are described in the company's filings with the Securities and Exchange Commission. Additionally, non-GAAP financial measures will be discussed on this conference call.
Please refer to the tables in our earnings release in the investor relations portion of our website for a reconciliation of these measures to their most directly comparable GAAP financial measure. Prior to this call, we announced our second quarter 2018 results, which are available on our website, veracyte.com, by clicking Menus on the top right corner of our website and clicking through to our Investors landing page and then Press Releases. We also released a financial presentation, which I will reference later in the call when I cover our financial results. You may find the financial presentation in the same Investor section under Events and Presentations. I will now turn the call over to Bonnie.
Thanks, Keith, and thanks again everyone for joining us today. We delivered another outstanding quarter of growth stemming from solid execution. Revenue for the second quarter was $22.8 million, which marks a 24% increase over prior year and reflects the strong momentum we see across the business. Let's review the highlights driving our results. I'll begin with commercial growth. Our reported genomic test volume for the quarter was 7,686, an 18% increase over the same period last year. This strong growth was fueled largely by our nearly complete transition to the next generation of Afirma GSC, which is enabling us to grow business among existing clients and attract new customers who are sold on the ability to prevent significantly more surgeries compared to the original GEC.
This transition is punctuated by regulatory approval from the New York State Department of Health, which we received earlier this month, making the Afirma GSC nationally available to 100% of customers. We launched our Afirma Xpression Atlas in May, which enables us to extract deep RNA sequencing data across the genome for every sample we run with the GSC. The Xpression Atlas is garnering growing interest from physicians due to its ability to inform surgery strategy and treatment decisions for patients with suspected thyroid cancer. This rich genomic content, as well as our market-leading access to large numbers of diverse thyroid samples, is also of significant interest to developers of precision medicine therapies. To that end, we are pleased to report that we booked our first biopharmaceutical service revenue based on the Xpression Atlas platform.
We are also extremely pleased with the market reaction to and early traction of our Percepta Bronchial Genomic Classifier, which is resonating with physicians because of its ability to improve the performance of bronchoscopy in lung cancer diagnosis and thus reduce the need for more invasive procedures. During the second quarter, we tripled our Percepta revenue compared to the first quarter and increased the number of physicians ordering the test by over 50%. This includes physicians from some of the nation's leading institutions. We believe we are well on track to achieve our Percepta test volume goals for the year. In May, we launched our early access program for the Envisia Genomic Classifier with a select and highly engaged group of institutions around the country. The goal is to address physician and patient demand for the test and to further our readiness for broad commercialization, which we expect in 2019.
Such sites as UCLA, Jefferson, and Keck Medicine of USC are already up and running and beginning to submit samples. We are moving through the process with other target institutions that are interested in participating. In fact, I'm delighted to report that we delivered our first five Envisia patient reports this quarter. I'd like to share a few observations we've made in the short time since we launched the Envisia early access program. First, there has been multiple instances in which physicians have adopted Percepta and Envisia together. In one case, interestingly, a physician interest in Envisia helped us also get a foot in the door for Percepta. These findings, while anecdotal, reflect the value of our integrated sales team and our strategy of leveraging synergies in the pulmonology market.
More broadly, it speaks to the trust that physicians and other decision-makers have in the value and quality of the Veracyte brand. We are also already seeing real-world evidence of Envisia's value for payers. In one instance, for example, physicians at an early access site were able to help overturn a health plan's denial of coverage for a patient who needed an IPF drug only after the Envisia classifier's results provided a more confident diagnosis of IPF. Needless to say, we are excited about the opportunity for Envisia and believe it will play a significant role in helping ILD patients who are being evaluated for IPF get the treatment they need while avoiding unnecessary and potentially harmful treatment. These results all underscore the foundation of our success in the first half of 2018 and are the basis of our confidence in delivering a very solid full year of commercial growth.
Our second success metric is reimbursement expansion. We nearly completed contracting with the remaining Anthem plans during the quarter, establishing Afirma as an in-network offering for most of the health plans' estimated 40 million members. Veracyte is now a preferred provider for over 210 million Americans through their health plans. We believe this in-network status will facilitate coverage and reimbursement for Percepta, which we have begun moving through the private payer process, and Envisia, which will follow. We continue to work toward Medicare reimbursement for Envisia and believe we are in a good position to achieve that milestone before the end of the year. Next is evidence development. We made significant strides in this area over the quarter as well.
We published strong clinical validation data for the Afirma GSC in JAMA Surgery, which shows that the RNA sequencing-based test can keep nearly 70% of patients with benign thyroid nodules that are classified as indeterminate by cytopathology out of surgery. These findings, along with the clinical rigor behind them, are helping to further cement our leadership in thyroid cancer diagnosis. Interestingly, our market research shows that the JAMA Surgery article yielded an impact factor in the top 5% compared to other articles published around the same time or in the same journal, based on mentions in social media, news sites, and other channels. Clearly, there is interest in what we are doing to improve patient care. Additionally, at the American Association of Clinical Endocrinologists, or ACE, annual meeting in May, researchers presented findings from three independent studies demonstrating the real-world value of the Afirma GSC.
In each study, the institution compared the performance of the next-generation test with that of the original version and found that the GSC's results were even stronger than those in our clinical validation study. Also at the ACE meeting, data for the Afirma Xpression Atlas were presented and demonstrate the test's high accuracy in identifying 761 DNA variants and 130 RNA fusion partners in over 500 genes that are associated with thyroid cancer. For Percepta, we shared new interim results from our Percepta registry clinical utility trial with study investigators at the American Thoracic Society annual meeting in May and as a poster at the World Congress for Bronchology and Interventional Pulmonology meeting in June. Our findings from the ongoing study, which now includes over 700 enrolled patients at 40 sites, continue to show the use of Percepta classifier significantly reduces the number of unnecessary surgeries in lung cancer diagnosis.
We look forward to unveiling more data in a peer-reviewed forum later this year. Our fourth success metric is scientific innovation. I want to just mention for a moment the incredible innovation that we have already delivered in the 10 years of our existence. This includes the Afirma GEC, second-generation GSC, malignancy classifiers, Xpression Atlas, and the Percepta and Envisia classifiers, along with a pipeline of truly exciting advancements. We made incredible progress this quarter, analyzing literally thousands of samples toward the discovery effort of a nasal swab test that will enable early detection of lung cancer when it is more treatable. This exciting test will use the same field of injury technology platform that powers our Percepta classifier. We look forward to unveiling early data on the proof of concept classifier for the nose later this year.
As you know, we recently launched the RNA-based Xpression Atlas in thyroid cancer and believe we can extend this capability to our other indications. I'd like to share some thoughts on the power of our RNA sequencing capabilities. Currently, we are extracting vast amounts of rich transcriptome data from across the genome for every sample we run with our Afirma and Envisia tests. While today we leverage this data using our powerful algorithms to resolve diagnostic uncertainty, we believe this capability will one day open the door to answering important clinical questions at other points in the continuum of care. More broadly, we believe it will enable us to unlock new insights into the genomic underpinnings of complex diseases to help advance precision medicine.
Our industry is in the very early stages of realizing the potential of precision medicine, and we believe that we are well-positioned to push the boundaries of what is possible in this exciting frontier in medicine. We'll do this by focusing in on the transcriptome, which gives us far richer and informative data to work with than just DNA, as we seek to answer ever more challenging clinical questions. Our final metric is financial discipline, and we excelled in this area as well this quarter. Our cash burn for the second quarter of 2018 was $3.6 million, which was a 28% improvement compared to the prior year quarter. Clearly, our results show that our careful management of spending and our strategic investment in growing the business are paying off.
With that, I will now turn the call over to Keith to review our financial results for the second quarter of 2018.
Thank you, Bonnie. As mentioned earlier, you may find our financial presentation on our website at www.veracyte.com under Investors and then Events and Presentations. I plan to speak about our second quarter 2018 results and to conclude with an update on our 2018 guidance. Turning to page three of the presentation, our performance against six financial KPIs or key performance indicators for the second quarter of 2018 as compared to the prior year quarter are as follows. Revenue of $22.8 million increased $4.3 million or 24%. The strength in our core business, plus the impact of new products and services, drove another strong quarter. Genomic volume of 7,686 reported tests increased 18% and included 7,373 Afirma tests, 308 Percepta tests, and five Envisia tests, our first commercial reported tests for Envisia. Gross margin was 64%, an increase of 2%.
Leverage from higher-margin genomic and biopharmaceutical service revenue positively impacted gross margins, partially offset by the cost of running dual platforms as we complete the transition of our customers to our next generation, Afirma GSC. Operating expenses, excluding cost of revenue, were $20.4 million, an increase of $2.4 million or 13%, driven by incremental samples sequenced in R&D and an incremental investment in our field sales organization, offset by lower G&A spend. Net loss of $6.2 million improved 14% due to the items previously mentioned, and cash burn of $3.6 million improved 28%, driven by the improvement in our net loss and positive changes to net working capital, offset by slightly higher capital expenditures. The next six pages outline the sequential and year-over-year results underlying each of our financial KPIs. A few observations. Turning to page four, a few comments on revenue.
First, the launch of Afirma GSC and the pull-through from incremental variant reporting, as well as cytopathology services, contributed $3.5 million or 19% of the year-over-year revenue growth this quarter. Second, as Bonnie mentioned, revenue from new products include $0.5 million in biopharmaceutical service revenue and $0.4 million in revenue from Percepta, collectively driving an incremental 5% growth. Third, we collected $22.9 million in cash this quarter, and we recognized $0.5 million of revenue that was in excess of original estimates for claims outstanding as of June 30, 2018, principally from Blues plans. Finally, on average, we accrued between $2,700 and $2,800 for the Afirma genomic classifier test, including variants, meeting our revenue recognition standard, which was between 90% and 95% of the reported Afirma classifier test volume. Turning to page five, genomic volume.
The chart on the left side shows our year-over-year volume growth, and the chart on the right shows the sequential volume growth. Driven by the success factors Bonnie laid out earlier in the call, genomic volume growth is on the high end of the 15%-20% range we discussed on our earnings call last quarter. Turning to page six, cost of revenue increased 18% over the prior year and in line with our 18% genomic volume growth. As I mentioned previously, our gross margin this quarter was 64%. Slides seven to 10 provide more detail on our operating expenses, net loss, cash burn, and cash position. A few comments on these items. Our average field sales headcount increased 27 people over the prior year quarter from 51 people to 78 people. R&D and G&A average headcount declined over this same period.
Our cash burn improved 28% over the prior year. At June 30th, 2018, we had cash and cash equivalents of $23.8 million. Before I turn the call back to Bonnie, let me address a few points on our guidance for 2018. Given our strong progress this quarter in the first half of the year and momentum moving into the rest of the year, we are increasing our 2018 revenue guidance to between $87 million and $89 million from our previously updated guidance of between $83 million and $86 million. This reflects a revenue increase of 26%-28% over our 2017 accrued revenue of $69 million, supported by an estimated 18%-20% growth in genomic test volume over the prior year.
We are narrowing our annual cash burn guidance to between $18 million and $21 million from between $18 million and $22 million, an improvement of 23% over the prior year at the midpoint of the range. We expect to see the same seasonality trends across our business, namely flatness from Q2 to Q3 and an increase in Q4. We expect to recognize approximately a quarter of a million dollars in biopharmaceutical service revenue in both the third and fourth quarter of this year. We expect relative flatness in gross margins in the last half of the year or approximately 62%-64%. To build upon our early success with the Afirma GSC and Percepta, we expect to spend $10 million to $12 million per physical quarter in sales and marketing this year.
We anticipate keeping our combined R&D and G&A costs within a range of nine to $11 million per physical quarter this year. I will now turn the call back over to Bonnie.
Thanks, Keith. This was truly an exceptional quarter, and we are delighted by the robust momentum we've generated across the three products, testimony to the value we're delivering to patients, physicians, and payers. We are equally excited by the innovative work we're doing to expand our pipeline. We believe our groundbreaking genomic science, RNA sequencing technology, and machine learning capabilities in tandem with the foothold we've established in the current way physicians work up patients uniquely positions us to answer important clinical questions along the continuum of care. We are excited about the evolving opportunities in precision medicine and ultimately the opportunity to transform care for patients. I would now like to ask the operator to open the call up for questions.
Thank you. Ladies and gentlemen, at this time, if you do have a question, please press the star and the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Amanda Murphy of William Blair. Your line is open.
Hi. Thank you. Just a quick question on the cash collections piece. It sounds like you had a pretty good quarter, and you talked a little bit to prior period collections, which I think was actually a little bit down from the quarter before. I guess I was just wondering how we should think about that going forward. I know it's a small piece at this point. Just generally, as you've gone more network and getting more improvements, do we expect the cash collection piece to sort of continue to improve over time? Obviously, that's also contributing to your gross margin, I presume.
Hi, Amanda, it's Keith Kennedy. I believe you may be confusing cash revenue versus cash collections. Our cash collections have been very strong sequentially quarter-over-quarter and relative to our total revenue. I believe the number was around 97% of our revenue we collect in cash, relative to total revenue last quarter, and this quarter is over 100% of our revenue. We had $22.9 million in cash collections this quarter, which exceeded our revenue of $22.7 million. We expect that to continue, and that's what's driving our incremental revenue that were recognized on claims. Looking back, we're collecting more than we originally accrued on these claims. We had $500,000 this quarter. We had $700,000 in Q1 that we collected in excess of what we originally estimated.
That's mostly a result of the great progress we've made, especially with the Blues plans over the last year of moving them to both coverage and then contracted status.
Yep.
Okay, fair enough.
Great.
I was curious too about the pharma piece. The $500 million you spoke to, I guess, is that Loxo or is that something else?
That's Loxo
to sign that I wasn't. Okay.
Yeah, at this point, that's it. Go ahead.
I guess I was going to ask, just I know it was kind of early We only recently when you find that, so I was just trying to get a perspective of, I suppose that was a bit surprising to the upside that you were able to recognize revenue already. Have you thought about what that contract or the relationship could look like for you in terms of revenue over time? I know people have asked what the broader pharma opportunity might look like. I know it's only one quarter later, but just, I guess, throwing that out there as a question.
The Loxo agreement is new this quarter, we had to work through the ASC 606 revenue recognition, which I talked about on the last call. We delivered samples to Loxo, and that's where the revenue is this quarter. We have an information program as part of that agreement, and we're recognizing, as I said in my prepared remarks, $250,000 per quarter in Q3 and another $250,000 in Q4. We haven't said any more about any future revenue on that. Bonnie can talk about our effort to monetize our biorepository.
Yes. I think we would expect it to continue relatively small as it has been. We'll obviously look for opportunities to leverage our capabilities and assets as we go forward. Right now, this is the only one that we've announced. We're excited about being in a position to be able to better leverage the technology backbone that we've built the company on. It's very exciting.
Okay, great. Thanks.
Thank you.
Thank you. Our next question is on the line of Bill Quirk of Piper Jaffray. Your line is open.
Great. Thanks. Good afternoon. Congrats on a nice quarter.
Thanks, Bill.
Thanks, Bill.
Thanks for joining us.
First, couple of questions from me. I guess the first thing is, Bonnie, I think I heard you correctly, but with this New York approval, we're virtually going to have 100% conversion to the GSC. Did I hear you correctly?
That's correct. Yep, that's correct.
Okay. With respect to the comment around Percepta revenue, Keith, thanks for the color around that. I was hoping you could tease out a little on the volume side. Obviously, you spoke to the fact that you had 50% increase in physicians. Should we assume that their ordering patterns are going to be similar to the prior ones? In other words, you had about a 50% sequential increase in volume for Percepta as well.
Right.
I think it's hard to draw too much data that can be used to predict the future with Percepta because we're very early. As you know, we're believing that we're really on track to achieve the volume that we've predicted we would be at coming at the end of the year. It's still very early, so we've got to get these doctors to adopt the test, and often they'll try the test out, not on all their patients the first time around, but they will choose patients and get comfortable with the test. We're looking for the dynamics like that to, as we learn from those, to give us better mechanisms and metrics to predict the future. I think as Keith pointed out in his prepared remarks, we were at about a little over 300 tests this quarter.
I think that combined with the increase in doctors using the test gives us a lot of encouraging foundation to feel that we're really on track to make this another successful product.
Okay, excellent. This last one for me, Percepta reimbursement. Bonnie, how should we think about the perhaps the pacing of some of the private payer contracts over the ensuing year?
Right. We're beginning that process obviously, and beginning to move some of the private payer discussions forward. We think we're in a great position to be able to do that with the level of contracted relationships that we now have. But at the same time, as you know, it's hard to predict when those might fall. Anything you'd like to add, Chris?
I will note, Bill, that as we do contracts, we include all of our tests into those contracts. We've been negotiating the prices along the way. The issue is getting the products obviously moved to positive coverage determination, and that's the process that we're starting. One of the reasons that we think we'll accelerate this from a pharma, it was a two-step process, get the coverage and then the contract lags significantly behind because of the negotiation. We've condensed that period from coverage to pricing because we've already negotiated many of the prices already in that process.
Got it. Okay. Thank you. Appreciate the extra color on that.
Thank you.
Thanks, Bill.
Thank you. Our next question is on the line of Sanjiv Nam of BTIG. Your line is open.
Hi. Thanks for taking the questions. Congrats on the quarter. Just a couple of quick ones. For the Afirma GSC, are you guys providing the Xpression Atlas for every test? I'm trying to figure out the improving ASP. Obviously, we expected that throughout the year, but it's happening at a faster rate than I've been modeling, and was wondering if there's further upside, if that's driven by Xpression Atlas or how should we think about that going forward as well? Thank you.
Keith and I can tag team this. I'll start with the way the Xpression Atlas is ordered is it's an add-on product that is only offered or available on an Afirma suspicious result because those are the patients that may need their test results to be further stratified. The physician orders that either at the time that they do the biopsy or they can call in and order it later and send us an add-on test report if they want us to run it. It's not run by default on everyone, and it's never provided on benign patients
We know there are certainly some mutations and fusions that are present in benign patients. It's really to help stratify risk for patients who are classified as Afirma suspicious, and that's where the value is being found.
Right. When you think about modeling the products, historically, we've talked about Afirma, our cytopathology business, Percepta, sort of separately. Previously, prior to ASC 606, we used to talk about cash revenue, and now we have biopharmaceutical revenue sort of filling in that fourth slot on revenue. When I think about Afirma and you think about modeling our business, I roll in the pull-through volume from variance because it's related to the Afirma product. As you think through, we did about 13,600 reported Afirma tests in the first half of this year. As you build out, sort of midpoint of your guidance, and if we have sort of flat Q3, we end up with around 7,300 tests in the third quarter. Obviously, these are plus or minus a range of this. We typically have seasonality, and the fourth quarter's really good.
We tend to see about a 10% sequential growth from Q3 to Q4. Hopefully that should put you in the midpoint, somewhere around 15,000 tests, and that will put you around 13% growth in those products. If we accrue the midpoint of 90%-95% or 92% in the midpoint there, and times that by the midpoint of that accrual rate that we talked about, the $2,700-$2,800, that will get you to where you should think about Afirma. On cyto, as we said before, we think of that as around $2 million a quarter. We previously walked through the Percepta revenue, which at this point, we are still working through the funnel on that business. From a high level, I look at that as reported volume times around $1,000 a test, plus or minus a couple hundred dollars.
If we get to 500 to 1,000 by Q4, that puts you at like 750 in the midpoint, times that by 1,000, and that will give you the revenue for Percepta. Our biopharmaceutical revenue, which is the fourth element of our revenue, that should come in at about a quarter million each quarter. That should get you somewhere really close to the midpoint of your guidance range.
Okay. That is very helpful. Just a quick follow-up on, could you remind me again on the sales force expansion for the rest of the year? Is that almost completed? You talked about synergies across Percepta and Envisia. In the past, you talked about having just one sales force for all your products. I was just wondering if you were seeing synergies across Afirma as well as other products as well. Thank you.
Yeah. Sure. A couple of points. As the year goes on, we are currently at about 80 sales reps, as Keith said, in the field. We envision that going to about 90 as we come through Q3 and out of the year. Those will be mostly an incremental set of account managers that are working to manage the accounts that we have already got in place. It also helps build some capacity and runway into the organization as we come into 2019. Feel good about that, and we are starting to execute on that. The other question was.
The selling organization
The selling organization. Yeah, We continue to believe, I mean, we are getting traction with the combination of Percepta and Envisia, and we've always believed that we've had traction between Percepta and Afirma because those relationships in the labs and in the hospitals, they knew who we were. Lab managers knew who we were, the compliance people, the hospital administrators often did. We've been able to leverage that. Now we're in the Pulm Suite, We're able to leverage that in Envisia. We envision all of our reps, ultimately, when we are at full commercialization, being able to work with and manage all three products. We think that's the path forward, We believe we're getting some real tremendous success on that journey and really confident that we're doing the right thing.
I would add on the financial discipline side of that, we factored in the things Chris, you're talking about sort of in our guidance, We've been pretty impressed with the people inside the business and what they've done to control spend. Just for example, we're at on average, about 250 people in the business for the second quarter. That's only up four people versus the prior quarter. It's up 20 people company-wide, year-over-year, That's 9% increase in average headcount, That's 50% of our cost structure. Of the 20 people we've increased, we've increased our direct sales force on average 27 people year-over-year. The rest of the business is really operating efficiently, The shareholders are benefiting from that.
Fantastic. Thank you so much.
Thank you.
Thank you. Our next question is from the line of Puneet Souda of Leerink Partners. Your line is open.
Yeah, hi. Thanks, Bonnie, Keith. Congrats on the quarter. If I could look at the guide again, thanks for the comments earlier, Keith. As you look at the overall guide, the increased guide, and the momentum you have so far in the GSC, and now Percepta is ramping, and biopharma collaboration is coming in, you do have easier comps in the second half of the year, and I appreciate the comments around the fourth quarter seasonality. Why shouldn't we expect a slightly even higher growth in the back half, especially as we go towards the year-end and the ASPs continue to improve here?
We're very comfortable with where we put guidance. Keith?
I think we're very focused in on making sure we give you a number we feel confident we're going to hit, and that's how we get there. If you look at where we started out the year with a midpoint of $82 million, a midpoint of our range, and we're up to $88 million. We're up $6 million in revenues. It's pretty great results given all the launches that Bonnie's talked about that we made this year and the progress on the commercial side. We're trying to be disciplined about it. We're trying not to oversell where we are, but we're also trying to deliver.
Puneet, I think when you back up from that, the successes come from a very well-orchestrated execution on all of the things that had to happen and had to happen well this year. The GSC and getting that to a New York State approval so that we could literally roll that out to the whole country, getting the Anthem agreement in place, the contract there, so we could be in network coming into the year. We did not have all of those in sight. Percepta is still, as I said, early. Even though we're encouraged with those results, we certainly don't want to get out in front of us because these products are very hard to drive into these institutions and make them standard of care. We won't be claiming victory until we are becoming standard of care. Envisia will really not contribute this year.
We're getting the foundation built with Envisia because we learned this was important with Percepta to build that ground foundation in advance of the Medicare coverage decision. That tees us up, we believe, for a better next year. Then Xpression Atlas was new and that product's taken off very well, but we certainly didn't anticipate being able to enter our first biopharmaceutical relationship as a result of that technology. I think that we're fortunate that all of the levers that had to be executed very well have happened that way, and that's why we're in a position to be increasing the view for the year.
Okay. That's very helpful. Another question I have is, Bonnie, you always talked about building three test franchise, and as you get closer to that, you're almost there, but in terms of getting Envisia on board. Help us understand how do you look at additional products? Are you looking at them externally, or should we continue to expect more organic test development, like the nasal non-invasive test and continued improvements of the current test?
I think that it could be a combination. We certainly have a very rich pipeline internally. We're excited about the proof of concept classifier that's underway on the nose. We will also continue to look at how we can answer other clinical questions within the indications we're in, because those are the most profitable and obvious things to do. At the same time, I think we're open if the right thing would be available to do another tuck-on. You have to remember that Percepta and that whole field of injury technology came to us through the acquisition we did back in 2014 of Allegro. I think we're in a good position to follow any of those, and just need to keep focused as we have been and continue to execute.
Keith, last one. How should we think about the spend on Envisia? Can you just remind me there, in terms of studies that you have lined up or additional publications that we should be expecting there?
I don't think there will be any significant spends the rest of the year on Envisia that move the needle in terms of the investors relative to what we've already given in guidance.
The most costly studies are the clinical validation studies that have to be orchestrated before we ever launch a product. Those are usually the large-scale multi-center studies where we're collecting a lot of data points and building a truth label that we can validate against. Of course, those studies were done before we ever launched the test. At this point, we'll be filling out clinical utility data and starting to monitor how doctors use the test to inform patient decisions. I think early signs are that we could be in a very attractive position with that product in the marketplace with the huge unmet need.
Okay, great. Thank you. Congrats again.
Thank you for joining us.
Thank you.
Thank you. As a reminder, if you have a question at this time, please press the star and the number one key on your touchtone telephone. Our next question is from the line of Paul Knight with Janney Montgomery Scott. Your line is open.
Hi, this is Casey Woodring on behalf of Paul Knight. Congrats on the great quarter. My question's for Keith. I apologize if I had missed this before, what was the average price per each test in this past quarter?
We gave a range on Afirma of $2,700-$2,800 per test.
Okay.
You just take the revenue over the reported volume for Percepta. We had about $1,300 per reported test this quarter. Some of that was from cash collections. We obviously bill for that test even though we don't have contracts. We are collecting on that test. We had nice revenue collection per reported test. On average, we're looking at around $1,000 per accrued test going forward. Well, obviously, that hopefully will increase over time. Then the biopharmaceutical, I gave you just a $6 amount for the next two quarters.
Okay. Thank you.
Thank you.
You're welcome.
Thank you. I will now turn the call back over to Ms. Bonnie Anderson, Chairman and Chief Executive Officer, for closing remarks.
Thank you all for joining us today. We appreciate your ongoing support and look forward to keeping you updated on our progress. Thank you.
This concludes today's conference call. Thank you for your participation. You may now disconnect.