Full Press Release Details
Provides Corporate Update and Reports Fourth Quarter and Annual 2020 Financial Results
DetermaRx commercialization momentum continues with 36% sample growth and 58% revenue growth compared to Q3 2020
track to launch DetermaIO in 2021 for immune therapy selection
to present data at 2021 American Association for Cancer Research (AACR) Annual Meeting that supports DetermaIO's potential
pan-cancer applicability
balance sheet to support ramping commercialization of Oncocyte's broadening product portfolio
call scheduled for 4:30 P.M. EDT
Calif., March 16, 2021 - Oncocyte Corporation (Nasdaq: OCX), a molecular diagnostics company with a mission to provide
actionable answers at critical decision points across the cancer care continuum, today reported financial results for the fourth
quarter and full year 2020 ended December 31, 2020, along with a corporate update.
a short time, we have transformed Oncocyte from a single-product, development stage company into a commercial stage oncology diagnostics
company with a broadening product portfolio and multiple engines of revenue growth," said Ron Andrews, President and Chief
Executive Officer of Oncocyte. "We began to build momentum in the commercialization of our expanding product portfolio targeting
a multi-billion-dollar global market opportunity for diagnostic tests to help physicians make critical treatment decisions across
the cancer care continuum. We launched DetermaRx , which in Q4 generated strong unit growth and even faster revenue growth.
We completed clinical studies of DetermaIO , our flagship proprietary product for immune therapy selection, laying the groundwork
to launch that product in the second half of 2021. We also are preparing for the commercial launch of a complementary targeted
therapy panel later this year as well as the launch of DetermaCNI for research and pharma clinical trial use, also in the
second half of this year. Our recent equity offering strengthened our balance sheet in preparation for our broadening commercialization
efforts, including our planned expansion in medical education programs and sales coverage. We are now focused on executing several
anticipated product launches throughout 2021 to ensure that we create maximum value from our product portfolio for patients and
on the fourth quarter, Padma Sundar, Chief Commercial Officer stated, "We continue to be encouraged with the commercial
success of DetermaRx in its first year. Despite the headwind of the surge in COVID-19 cases in the fourth quarter, we generated
36% sequential growth in DetermaRx orders and 58% sequential revenue growth. In its first year as a commercial product, DetermaRx
received high value Medicare coverage, including adoption into the standard of care menu for multiple hospital systems and large
oncology groups. We also struck several domestic and global collaboration and distribution agreements. For example, our agreement
with Burning Rock Biotech may provide access to the DetermaRx test to the estimated 250,000 patients in China who receive surgical
resections for non-small cell lung cancer each year."
Andrews concluded, "In Q4, we were offered the opportunity to make additional investments in new studies that allowed us
to expand our indications for DetermaIO as well as expand our sales and medical education teams which increased our expense burden
for the quarter. With the lineup of publications, papers and abstracts now scheduled for release over the coming months, like
the AACR abstract released yesterday, we feel the ROI on the additional expenses will be significant and thus, we anticipate a
rapid cadence of important data releases and new product launches in 2021. We are on track to launch DetermaIO for immunotherapy
response prediction and DetermaTx for targeted therapy selection, both planned in the fourth quarter. These two expected
product launches will expand the focus of Oncocyte's commercialized product portfolio to an estimated combined addressable
market opportunity of over $5 billion. Our broadening product portfolio will also position Oncocyte as a one-stop oncology lab
capable of rapidly and efficiently providing comprehensive testing across treatment decisions, not just for lung cancer but also
potentially as a pan cancer test for the majority of solid tumors. With our strengthened balance sheet, we plan to continue driving
rapid unit and revenue growth across our expanded product portfolio. We also plan to hire additional high-performing sales and
market access staff, and to onboard additional leading cancer centers, in part with the advice and guidance of our new Medical
Advisory Board. We look forward to continuing to penetrate the multi-billion-dollar market opportunity anticipated for our tests
and building Oncocyte's brand as a leading partner to physicians, patients and payers in making cost effective, critical
treatment decisions across the cancer care continuum."
Quarter and Recent Highlights Include:
| Over the course of 2020, the test was accepted for studies in several important trials, including the NeoTrip Trial for Neoadjuvant Triple Negative Breast cancer utility. Data from these studies will be presented at major medical meetings and via peer-reviewed publications throughout 2021 | ||
| Published peer-reviewed study demonstrating that DetermaIO's gene expression analysis of the complete tumor micro-environment followed by synthesis using a proprietary algorithm may be predictive of response across multiple solid tumors | ||
| Selection of abstract for mini-symposium presentation at AACR 2021 demonstrating potential clinical utility of DetermaIO in a third cancer - bladder cancer, in addition to NSCLC and TNBC |
| Presented data at the Association for Molecular Pathology 2020 Conference, demonstrating that DetermaIO is reproducible at tissue inputs compatible with very small tissue samples, which is critical for driving broad test usage given the scarcity of tissue for competing molecular testing methods | ||
| Presented data at the ASCO 2020 conference and the IASLC North America 2020 which demonstrated DetermaIO outperformed PD-L1 testing in predicting response to immune-checkpoint inhibitors in triple negative breast cancer and non-small cell lung cancer | ||
| Established a Medical Advisory Board of world-renowned thought leaders in oncology to assist in accelerating our clinical development and publication efforts in immune-oncology and blood-based monitoring |
| Test volumes continued to grow in Q4 2020 with 36% quarter over quarter increase in testing volume to 238 samples, 58% increase in DetermaRx revenues driven by initiation of Medicare payments starting in September 2020, and 22% increase in onboarded hospitals to 82 customers; maintained physician re-order rate of approximately 60% | ||
| Signed agreement with Multiplan networks, representing 60 million covered lives, to offer DetermaRx at a high-value reimbursement rate commensurate with Medicare | ||
| Signed exclusive agreement with Burning Rock Biotech in China to license DetermaRx in China, the world's largest early stage lung cancer market, with an estimated 250,000 patient Total Addressable Market (TAM), reaching our goal of distribution to all major world markets within the first year of launch | ||
| Presented new data at the IASLC 2020 World Conference on Lung Cancer showing broad adoption and real-world clinical utility of its DetermaRx test for early-stage lung cancer | ||
| Closed second investment in Razor Genomics to complete acquisition of founding company behind DetermaRx |
| Initiated clinical trial processing of proprietary, blood-based monitoring assay for targeted drug response for a top 20 Pharma company | ||
| Continued execution on FDA submission studies for a leading global diagnostic company | ||
| Executed on site certification for two new customers, a major global pharma and leading diagnostic company, which is expected to lead to new project revenues in 2021 and beyond | ||
| Finalizing Pharma service component of immune oncology testing for clinical trial for Fondazione Michelangelo, a leading non-profit Cancer research foundation |
Quarter and Annual 2020 Financial Results
December 31, 2020, Oncocyte had cash, cash equivalents and marketable securities of $7.8 million. In January and February 2021,
Oncocyte raised an aggregate of $69 million in net proceeds from two public offerings and shares sold from its at-the-market (ATM)
program. In February 2021, Oncocyte completed the acquisition of the remaining equity interests in Razor Genomics and paid the
$10 million cash portion to the selling shareholders, so Oncocyte now owns all of the outstanding common stock of Razor and will
consolidate Razor as of that date.
currently derives its revenues from the sale of its lung cancer test, DetermaRx, which was commercially launched in early 2020
and pharma services generated by its wholly owned subsidiary, Insight Genetics, which was acquired on January 31, 2020. Upon CMS
and Noridian final pricing decision for the DetermaRx test, which became effective in September 2020, Oncocyte is able to recognize
revenues for Medicare covered tests on an accrual basis, rather than on a cash basis, when the tests are performed.
U.S. accounting principles, for all payers other than Medicare, Oncocyte will be able to recognize revenues for DetermaRx on an
accrual basis of accounting once it has contracts for reimbursement from third-party payers or a history of experience of cash
collections for the tests performed, or both. Until that time, for all payers other than Medicare, Oncocyte expects to recognize
revenue for DetermaRx tests performed on a cash basis. Accordingly, Oncocyte will incur and accrue cost of revenues and other
operating expenses related to all DetermaRx tests ordered and processed, including its pharma services performed.
for the three and twelve months ended December 31, 2020 were $0.5 million and $1.2 million respectively, generated from pharma
services and DetermaRx tests completed that are covered by Medicare on an accrual basis since Oncocyte received a final pricing
from CMS in September. DetermaRx revenues grew solidly in Q4 2020 versus Q3 2020, primarily due to revenue recognized for Medicare
tests performed following the receipt of final CMS pricing decision in September 2020. The number of tests ordered increased significantly
in the fourth quarter as compared to the third quarter of 2020 despite the COVID-19 resurgence. Pharma Services' revenues
in the fourth quarter of 2020 were lower sequentially when compared to the third quarter of 2020, due to delays in project completion
as a part of the COVID surge which are being carried over and are expected to be completed in the first half of 2021. Prior to
January 1, 2020, Oncocyte had no revenues and no cost of revenues.
and development expenses for fourth quarter of 2020 were $1.8 million as compared to $2.3 million for the same period in 2019,
a decrease of $0.5 million, primarily due to reduced clinical trial expenses of DetermaDx . Research
and development expenses for the year ended December 31, 2020, were $9.8 million as compared to $6.8 million for the same period
in 2019, an increase of $3.0 million primarily attributable to increased investment in DetermaIO, personnel and related expenses.
and administrative expenses for the fourth quarter of 2020 were $3.4 million, as compared to $4.2 million for the same period
in 2019, a decrease of $0.8 million. General and administrative expenses for the year ended
December 31, 2020 were $16.8 million, as compared to $13.3 million for the same period in 2019, an increase of $3.5 million, primarily
attributable to personnel growth and related expenses.
and marketing expenses for the three and twelve months ended December 31, 2020, were $1.9 million and $6.5 million, as compared
to $1.0 million and $2.2 million for the same periods in 2019, respectively. The increases in the respective periods were primarily
due to personnel and related expenses for ramp up in sales and marketing activities for the commercialization efforts of DetermaRx
as well as market development investments in preparation for the launch of new products in 2021.
losses, as reported, for the fourth quarter of 2020 were $6.3 million, a decrease of $1.2 million from $7.5 million as compared
to the fourth quarter of 2019; and operating losses, on an adjusted basis, were $6.2 million, a decrease of $0.5 million from
$6.7 million as compared to the fourth quarter of 2019. Operating losses, as reported, for the year ended December 31, 2020 were
$29.7 million, an increase of $7.5 million from $22.2 million as compared to the same period in 2019; and operating losses, on
an adjusted basis, were $26.5 million, an increase of $7.9 million from $18.6 million as compared to the same period in 2019.
has provided a reconciliation between GAAP and non-GAAP operating losses in the financial tables, included with this earnings
release, which it believes is helpful in understanding its ongoing operations.
the fourth quarter ended December 31, 2020, Oncocyte reported a net loss of $6.3 million, or ($0.09) per share, as compared to
$8.0 million, or ($0.15) per share, for the fourth quarter ended December 31, 2019.
the year ended December 31, 2020, Oncocyte reported a net loss of $29.9 million, or ($0.46) per share compared to $22.4 million,
or ($0.44) per share for 2019.
used in operations was approximately $6.2 million for the fourth quarter of 2020 and $26.0 million for the year ended December
The Company will host a conference call today, March 16, at 4:30 pm EDT / 1:30 pm PDT to discuss the results along with recent
corporate developments. The dial-in number in the U.S./Canada is 877-407-9716; for international participants, the number is 201-493-6779.
For all callers, please refer to Conference ID 13717267. To access the live webcast, go to the investor relations section on the
Company's website, or by clicking here: http://public.viavid.com/index.php?id=143840. The webcast replay will be available
on the Oncocyte website for 90 days following the completion of the call.