On December 3, 2019 (the “Closing Date”), Veracyte, Inc. (the “Company”) entered into a License and Asset Purchase Agreement (the “LAPA”) with NanoString, Inc. (“NanoString”), to which the Company (the “Transaction”) (i) obtained an exclusive worldwide license to NanoString’s nCounter FLEX Analysis System (the “FLEX System”) for in vitro diagnostic use and for the development and commercialization of in vitro diagnostic tests, including in vitro diagnostic devices (IVDs) or laboratory developed tests (LDTs), for use on the FLEX System (collectively, the “License”) and (ii) acquired certain assets, including NanoString’s rights with respect to the Prosigna Breast Cancer Prognostic Gene Assay (“Prosigna”), the LymphMark Lymphoma Subtyping Test (“LymphMark”) and the assay software modules that operate together with the FLEX System. In connection with the Transaction, the Company will assume certain liabilities associated with the assets purchased under the LAPA, including ongoing third-party royalty obligations related to Prosigna and LymphMark. As part of the Transaction, the Company will also offer certain employees of NanoString employment. In connection with entering into the LAPA, the Company and NanoString also entered into various service and supply agreements relating to the manufacture and supply of Prosigna, LymphMark, and other in-vitro diagnostic tests that may be developed by or on behalf of the Company for use on the FLEX System and for the manufacture and supply of the FLEX System.

As consideration under the LAPA, the Company will pay NanoString $40,000,000 in cash. NanoString is also entitled to receive 376,732 shares of the Company’s common stock (the “Equity Consideration”), which shares represent a value of approximately $10,000,000 based on the average closing price of the Company’s common stock for the ten consecutive trading days ending on the third trading day prior to the Closing Date. The Company is required under the LAPA to register the Equity Consideration for resale within 90 days of the Closing Date as set forth in the registration rights schedule to the LAPA (the “Registration Rights Schedule”).

to the terms of the LAPA, NanoString may not sell the Equity Consideration for the first 90 days following the Closing Date. Thereafter, NanoString may, subject to limited exceptions, not sell Equity Consideration representing more than 10% of the average daily trading volume of the Company’s common stock for the 30-day period preceding any such sale.

to the LAPA, NanoString is also eligible to receive three additional payments, based upon the achievement of certain commercialization milestones, totaling $10,000,000 in the aggregate (the “Milestone Payments”). The individual Milestone Payments of $3,500,000, $3,500,000 and $3,000,000 will be due, respectively, upon the Company’s commercial launch of the first, second and third diagnostic test for use on the FLEX System, other than Prosigna or LymphMark, in each case as measured by the processing of the first commercial patient sample.

The foregoing summaries of the LAPA and Registration Rights Schedule are not complete and are qualified in their entirety by reference to the LAPA and Registration Rights Schedule, copies of which are filed as Exhibits 2.1 and 4.1 to this Current Report on Form 8-K and are incorporated herein by reference. The LAPA contains customary representations and warranties, covenants and indemnities. The representations, warranties and covenants contained in the LAPA were made only for the purposes of the LAPA, were made as of specific dates, and were made solely for the benefit of the parties to the LAPA, and may not have been intended to be statements of fact but, rather, as a method of allocating risk and governing the contractual rights and relationships among the parties. The assertions embodied in those representations and warranties may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating their respective terms. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to the Company’s stockholders. For the foregoing reasons, none of the Company’s stockholders or any other person should rely on such representations and warranties, or any characterizations thereof, as statements of factual information at the time they were made or otherwise.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth above under Item 1.01 is hereby incorporated by reference in its entirety into this Item 2.01.

In connection with the Transaction, the Company obtained from the Securities and Exchange Commission, to its authority under Rule 3-13 under Regulation S-X, a waiver from the requirements of Rule 3-05 and Article 11 of Regulation S-X to provide certain financial statements and pro forma financial information relating to the Transaction. As a result, the Company will only provide an audited statement of assets acquired and liabilities assumed prepared on the basis of the allocation of the Company’s purchase price as of the acquisition date (the “Abbreviated Financial Statements”). The Company will provide the Abbreviated Financial Statements in lieu of the full financial statements and related pro forma information required under Rule 3-05 and Article 11 of Regulation S-X in an amendment to this Current Report on Form 8-K to be filed within 71 days following the date that this Current Report on Form 8-K must be filed (the “Financial Statement Due Date”), to Item 9.01 of Form

8-K, or, in the alternative, to the extent filed prior to the Financial Statement Due Date, by including such information in a footnote to the Company’s financial statements to be included in its Annual Report on Form 10-K as of and for the year ending December 31, 2019.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth above under Item 1.01 relating to the Equity Consideration is hereby incorporated by reference in its entirety into this Item 3.02.>The sale of the Equity Consideration was deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder). In the LAPA, NanoString represented its intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the book entry entitlements for the Equity Consideration.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

VERACYTE, INC. Exhibit
EX-2.1 2 vcyt-12320198xkxex21.htm VCYT – 8-K 12.03.19 EXHIBIT 2.1 Exhibit [***] Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.EXHIBIT 2.1LICENSE AND ASSET PURCHASE AGREEMENTBY AND BETWEENVERACYTE,…
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About VERACYTE, INC. (NASDAQ:VCYT)

Veracyte, Inc. is a genomic diagnostics company. The Company uses genomic technology to resolve diagnostic ambiguity. It targets diseases in which patients undergo invasive diagnostic procedures. Its products combine genomic technology, clinical science and machine learning. The Company commercializes over three genomic tests, which are transforming the diagnosis of thyroid cancer, lung cancer and idiopathic pulmonary fibrosis. The Company’s commercial solution, the Afirma Thyroid fine needle aspiration (FNA) Analysis, centers on the Afirma Gene Expression Classifier (GEC). The Afirma GEC is offered directly or as part of a solution that also includes cytopathology. The Company operates in the pulmonology diagnostics market. It offers Percepta Bronchial Genomic Classifier, a genomic test to resolve ambiguity in lung cancer diagnosis. It also offers the Envisia Genomic Classifier, which is designed to help in the assessment of patients suspected to have idiopathic pulmonary fibrosis.