Full Press Release Details
Reports Second Quarter 2018 Financial Results and Positive Corporate Developments
Study Data Drives Continued Development of DetermaVu Lung Cancer Diagnostic Test-
Call Today at 4:30 pm ET-
Calif., August 14, 2018 - OncoCyte Corporation (NYSE American: OCX), a developer of novel, non-invasive tests for the
early detection of cancer, today reported financial and operating results for the second quarter ended June 30, 2018. The Company
ended the second quarter with $10.3 million in cash and cash equivalents and marketable securities valued at $0.7 million. On
July 31, the Company closed a $3.59 million at-market registered direct offering of common stock and warrants, before financing
expenses, led by the Company's senior management team and Board of Directors, further bolstering its balance sheet. The
Company projects that its cash position, coupled with prudent expense management, will be sufficient to execute its near-term
strategy and the continued development of DetermaVu , the Company's liquid biopsy lung cancer diagnostic test.
achieved our primary goal during the first half of 2018 - putting our DetermaVu development program back on track,"
said William Annett, President and Chief Executive Officer. "We are now beginning to take the next steps in the development
plan and remain encouraged that DetermaVu could address an estimated $4.7 billion annual U.S. market for a confirmatory
lung cancer liquid biopsy test. The recent financing, which included investments by senior management and certain members of our
Board of Directors, provided us with additional resources to advance the development of DetermaVu and demonstrates our
management's confidence in our ability to execute our plans."
Quarter 2018 Financial Results
the second quarter ended June 30, 2018, OncoCyte incurred a net loss of $4.5 million, or $0.12 per share, compared to a net loss
of $3.8 million, or $0.13 per share, in the second quarter of 2017.
expenses for the three months ended June 30, 2018 were $4.2 million, as reported, and were $3.0 million, on an as adjusted basis.
The reconciliation between GAAP and non-GAAP operating expenses is provided in the financial tables included with this earnings
and development expenses for the quarter ended June 30, 2018 were $2.3 million compared to $2.0 million for the same period in
2017, an increase of $0.3 million. The current quarter research and development expense includes a $0.6 million noncash impairment
charge for noncore, therapeutic intangible assets mainly comprised of patents and patent rights that OncoCyte had acquired for
therapeutic uses that it no longer plans to develop or commercialize. The impact of that impairment charge was partially offset
by a decrease in laboratory expenses of $0.1 million and a decrease in stock-based compensation expense of $0.1 million.
and administrative expenses for the three months ended June 30, 2018 were $1.3 million compared to $1.1 million for the same period
in 2017, an increase of $0.2 million. This increase is primarily attributable to $0.1 million in stock-based compensation expense
and $0.1 million in personnel and related expenses.
used in operations was $3.96 million for the second quarter of 2018, which included approximately $0.8 million in aggregate cash
payments for legal fees, financing related costs and bonuses paid for retention and performance.
June 30, 2018, OncoCyte had $10.3 million of cash and cash equivalents in addition to marketable equity securities valued at $0.7
million. Subsequent to the end of the second quarter, OncoCyte received proceeds of $3.3 million, net of financing expenses, from
an at-market registered direct offering of common stock and warrants.
will host a conference call today, August 14, 2018, at 4:30 p.m. ET / 1:30 p.m. PT to discuss financial results.
dial-in number in the U.S./Canada is 800-458-4148; for international participants, the number is +1-323-794-2598. For all callers,
please refer to Conference ID 5162879. To access the live webcast, go to the investor relations section on the Company's
replay of the conference call will be available for seven business days beginning about two hours after the conclusion of the
live call, by calling 888-203-1112 toll-free (from U.S./Canada); international callers dial +1-719-457-0820. Use the Conference
ID 5162879. Additionally, the archived webcast will be available at http://investors.oncocyte.com/events-and-presentations.
is OncoCyte's confirmatory, non-invasive, liquid biopsy test intended to facilitate clinical decision making in lung
cancer diagnosis. DetermaVu is being developed as an intermediate step to confirm the absence of cancer between imaging
modalities (LDCTs) detecting suspicious lung nodules and downstream invasive procedures that determine if the nodules are malignant.
OncoCyte estimates that a $4.7 billion annual market could develop in the U.S. for its confirmatory lung cancer liquid biopsy
test, depending on market penetration and reimbursable pricing.
is a trademark of OncoCyte Corporation.
OncoCyte Corporation
is focused on the development and commercialization of novel, non-invasive blood and urine ("liquid biopsy") diagnostic
tests for the early detection of cancer. Early detection of cancer can improve health outcomes, reduce the cost of care, and improve
patients' quality of life. Liquid biopsy diagnostic tests like those OncoCyte is developing may reduce the need for costlier
and riskier diagnostic procedures such as invasive biopsy and cystoscopic procedures. OncoCyte's development pipeline is
focused on non-invasive confirmatory diagnostic tests for lung, breast, and bladder cancer. OncoCyte's tests are being developed
using proprietary sets of genetic and protein molecular markers that differentially express in specific types of cancer. OncoCyte
conducts ongoing research to identify additional molecular markers, acquire or license markers and related technology, and develop
tests based on those markers.
Forward Looking Statements
statements that are not historical fact (including, but not limited to statements that contain words such as "will,"
"believes," "plans," "anticipates," "expects," "estimates" and similar
expressions) are forward-looking statements. These statements include those pertaining to the implementation and results of research,
development, clinical trials and studies, commercialization plans, future financial and/or operating results, and future opportunities
for OncoCyte, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management.
Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or
commercialization of potential diagnostic tests or products, uncertainty in the results of clinical trials or regulatory approvals,
the capacity of our third-party supplied blood sample analytic system to provide consistent and precise analytic results on a
commercial scale, the need and ability to obtain future capital, and maintenance of intellectual property rights, and the need
to obtain third party reimbursement for patients' use of any diagnostic tests we commercialize. Actual results may differ
materially from the results anticipated in these forward-looking statements and accordingly as such statements should be evaluated
together with the many uncertainties that affect the business of OncoCyte, particularly those mentioned in the "Risk Factors"
and other cautionary statements found in OncoCyte's Securities and Exchange Commission filings. OncoCyte disclaims any intent
or obligation to update these forward-looking statements, except as required by law.
Haines / Michael Polyviou
| June 30, 2018 | ||||||||
| (unaudited) | December 31, 2017 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 10,294 | $ | 7,600 | ||||
| Marketable equity securities | 728 | 760 | ||||||
| Prepaid expenses and other current assets | 382 | 168 | ||||||
| Total current assets | 11,404 | 8,528 | ||||||
| NONCURRENT ASSETS | ||||||||
| Intangible assets, net | - | 746 | ||||||
| Machinery and equipment, net | 615 | 822 | ||||||
| Deposits | 177 | 120 | ||||||
| TOTAL ASSETS | $ | 12,196 | $ | 10,216 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Amount due to BioTime and affiliates | $ | 2,100 | $ | 2,099 | ||||
| Accounts payable | 232 | 175 | ||||||
| Accrued expenses and other current liabilities | 1,043 | 1,042 | ||||||
| Loan payable, current | 800 | 800 | ||||||
| Capital lease liability, current | 310 | 338 | ||||||
| Total current liabilities | 4,485 | 4,454 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Loan payable, net of deferred financing costs, noncurrent | 713 | 1,070 | ||||||
| Capital lease liability, noncurrent | 152 | 289 | ||||||
| TOTAL LIABILITIES | 5,350 | 5,813 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock, no par value, 5,000 shares authorized; none issued and outstanding | - | - | ||||||
| Common stock, no par value, 50,000 shares authorized; 39,408 and 31,452 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 70,695 | 59,968 | ||||||
| Accumulated other comprehensive loss | - | (888 | ) | |||||
| Accumulated deficit | (63,849 | ) | (54,677 | ) | ||||
| Total stockholders' equity | 6,846 | 4,403 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 12,196 | $ | 10,216 |
STATEMENTS OF OPERATIONS
THOUSANDS, EXCEPT PER SHARE DATA)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| EXPENSES | ||||||||||||||||
| Research and development | $ | 2,322 | $ | 1,997 | $ | 3,784 | $ | 3,831 | ||||||||
| General and administrative | 1,335 | 1,115 | 3,122 | 3,158 | ||||||||||||
| Sales and marketing | 569 | 477 | 1,227 | 1,132 | ||||||||||||
| Total operating expenses | 4,226 | 3,589 | 8,133 | 8,121 | ||||||||||||
| Loss from operations | (4,226 | ) | (3,589 | ) | (8,133 | ) | (8,121 | ) | ||||||||
| OTHER INCOME (EXPENSES), NET | ||||||||||||||||
| Interest expense, net | (56 | ) | (65 | ) | (117 | ) | (79 | ) | ||||||||
| Unrealized loss on marketable equity securities | (223 | ) | - | (32 | ) | - | ||||||||||
| Loss on sale of available-for-sale securities and other expenses, net | - | (150 | ) | (2 | ) | (309 | ) | |||||||||
| Total other expenses, net | (279 | ) | (215 | ) | (151 | ) | (388 | ) | ||||||||
| NET LOSS | $ | (4,505 | ) | $ | (3,804 | ) | $ | (8,284 | ) | $ | (8,509 | ) | ||||
| Net loss per share; basic and diluted | $ | (0.12 | ) | $ | (0.13 | ) | $ | (0.24 | ) | $ | (0.29 | ) | ||||
| Weighted average common shares outstanding: basic and diluted | 38,708 | 29,398 | 35,211 | 29,183 |
STATEMENTS OF CASH FLOWS
| Six Months Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (8,284 | ) | $ | (8,509 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 207 | 144 | ||||||
| Amortization of intangible assets | 121 | 121 | ||||||
| Impairment charge for intangible assets | 625 | - | ||||||
| Stock-based compensation | 735 | 696 | ||||||
| Loss on sale of BioTime shares | - | 309 | ||||||
| Unrealized loss on BioTime shares | 32 | - | ||||||
| Warrants issued to certain shareholders as inducement of exercise of warrants | - | 1,084 | ||||||
| Amortization of debt issuance costs | 44 | 30 | ||||||
| Other | 22 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Amount due to BioTime and affiliates | 1 | (313 | ) | |||||
| Prepaid expenses and other current assets | (214 | ) | (194 | ) | ||||
| Accounts payable and accrued liabilities | 1 | 61 | ||||||
| Net cash used in operating activities | (6,710 | ) | (6,571 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Net proceeds from sale of BioTime shares | - | 934 | ||||||
| Purchase of equipment | (22 | ) | (55 | ) | ||||
| Net cash provided by (used in) investing activities | (22 | ) | 879 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from exercise of options | 56 | 257 | ||||||
| Proceeds from exercise of warrants | - | 2,031 | ||||||
| Proceeds from sale of common shares | 10,000 | - | ||||||
| Proceeds from issuance of loan payable, net of financing costs | - | 1,982 | ||||||
| Financing costs to issue common shares | (65 | ) | - | |||||
| Repayment of loan payable | (400 | ) | - | |||||
| Repayment of capital lease obligations | (165 | ) | (108 | ) | ||||
| Net cash provided by financing activities | 9,426 | 4,162 | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,694 | (1,530 | ) | |||||
| CASH AND CASH EQUIVALENTS: | ||||||||
| At beginning of the period | 7,600 | 10,174 | ||||||
| At end of the period | $ | 10,294 | $ | 8,644 |
earnings release includes operating expenses prepared in accordance with accounting principles generally accepted in the United
States (GAAP), and includes certain historical non-GAAP operating expenses. In particular, OncoCyte has provided non-GAAP total
operating expenses, adjusted to exclude noncash stock-based compensation, depreciation and amortization, and an impairment charge
for intangible assets. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable
financial measures prepared in accordance with GAAP. However, OncoCyte believes the presentation of non-GAAP total operating expenses,
when viewed in conjunction with our GAAP total operating expenses, is helpful in understanding OncoCyte's ongoing operating
expenses and its programs.
management uses these non-GAAP financial measures in the aggregate to establish budgets and operational goals, to manage OncoCyte's
business and to evaluate its performance and its programs.
of Non-GAAP Financial Measure
| Amounts In Thousands | Amounts In Thousands | |||||||
| For the Three Months Ended June 30, 2018 (unaudited) | For the Six Months Ended June 30, 2018 (unaudited) | |||||||
| GAAP Operating Expenses - as reported | $ | 4,226 | $ | 8,133 | ||||
| Stock-based compensation expense | (389 | ) | (735 | ) | ||||
| Impairment charge for intangible assets | (625 | ) | (625 | ) | ||||
| Depreciation and amortization expense | (164 | ) | (328 | ) | ||||
| Non-GAAP Operating Expenses, as adjusted | $ | 3,048 | $ | 6,445 |