Veracyte, Inc. NASDAQ: VCYT

What we're investigating

Henzel Law is investigating potential securities fraud claims on behalf of shareholders of Veracyte, Inc. (NASDAQ: VCYT), a genomic diagnostics company. The investigation concerns whether the Company and certain of its officers made materially misleading statements about the growth trajectory of its Decipher Prostate test, its largest product. No lawsuit has been filed yet in this matter.

Background

On the first-quarter earnings call of May 5, 2026, Veracyte's chief executive told investors that “in terms of volume, I do not see any reason why it would slow,” noted that the business had delivered “consistent growth of more than 20% quarter after quarter” since its acquisition, and described customers as “quite skeptical” of competing digital pathology approaches.

On the second-quarter call of July 30, 2026, the chief executive said Decipher was “on this very straight line,” with “a very high R squared,” and that what was happening was “highly predictable” — at “around 20,000 tests a year, plus or minus 1,000 or so.” The Company did reduce its internal expectations that quarter, but by approximately 1,000 tests, and said the reduction was “only in the low category” of risk.

What happened on November 4 and 5, 2026

After the market closed on November 4, 2026, Veracyte reported third-quarter results that beat expectations on both revenue and earnings — revenue of $151.8 million, up 15%, and non-GAAP diluted earnings per share of $0.51.

On the call, however, management reset expectations for incremental annual Decipher volume growth to 12,000 to 15,000 tests, from the roughly 20,000 figure the chief executive had given in July, and said the business was running at a rate of about 12,000. Management also gave a preliminary 2027 outlook of approximately 10% total volume growth and mid single-digit revenue growth, and noted that the 2027 budget had not been approved by the board. Testing revenue guidance for 2026 was cut.

On November 5, 2026, Veracyte's share price fell from $52.52 to $24.00, a decline of approximately 54.3%.

What the investigation is examining

The reasons management gave on November 4 for the slowdown — a 2026 clinical guideline change that moderated growth in the low-risk setting, two prior years of pulled-forward adoption, and friction from digital pathology competition — appear to have been known to the Company by July 30, 2026, when its chief executive nonetheless described Decipher growth as highly predictable and quantified the shortfall at roughly 1% of annual volume.

The investigation is seeking to reconstruct monthly test volumes, physician ordering trends and reimbursement developments, and to fix the dates on which management received data inconsistent with its public statements.

Two features of the November 4 announcement bear on the analysis in opposite directions. The quarter beat expectations, which supports an argument that this is a case about forward-looking statements rather than concealed present facts. At the same time, the Company announced a $100 million share repurchase authorization in the same release that reset its outlook.