Full Press Release Details
REPORTS THIRD QUARTER 2020 FINANCIAL RESULTS AND
receives final CMS pricing and records first full quarter with Medicare revenues; more than doubles second quarter volumes with
adoption at NCCN and NCI designated cancer centers
selected for use in checkpoint inhibitor clinical trial; will generate near term pharmaceutical services revenue and solidifies
use in triple negative breast cancer research
MONITOR licensing and collaboration agreement with Chronix will add a fourth engine of potential revenue growth in blood-based
therapy monitoring and provide access to EU lab network for DetermaRx
Call Today, November 12, at 4:30 PM EDT
Calif., November 12, 2020 - Oncocyte Corporation (NYSE American: 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 third quarter and nine months ended September 30, 2020, and provided a corporate update.
am very proud of our progress over the past year as we have established four growth engines to drive revenue that will help us
reduce our cash burn as we progress in our vision to become a leader in molecular diagnostics for oncology and immunotherapy,"
said Ron Andrews, Chief Executive Officer of Oncocyte. "This has been a quarter of growth and milestone achievements, solidifying
our position as an innovator in the advancement of molecular diagnostics for early stage lung cancer. We have successfully repositioned
the company over the past year by refining and expanding our suite of offerings and establishing multiple independent revenue
growth engines: DetermaRx , DetermaIO , immunotherapy response monitoring, and Pharma Services, all with the potential
to support our long-term growth and value creation. DetermaRx and pharma services are already generating revenue, and with our
first agreement to utilize DetermaIO as a predictive biomarker in a clinical trial, DetermaIO is poised to become revenue generating
before year end. The third quarter was a terrific period for DetermaRx as we received our final pricing from CMS, allowing us
to bill and collect our first Medicare revenues. We continue to build upon our strong scientific foundation with collaborators
publishing prospective data that further demonstrate that treatment decisions informed by DetermaRx significantly improve lung
cancer patient survival. DetermaRx's adoption at leading cancer centers and its rapid growth, with test volume more than
doubling from the second quarter, reflects stakeholders' recognition of the test's significant clinical utility."
Andrews added, "We also continue to expand our reach in the large and rapidly growing immunotherapy space with our second
growth engine, DetermaIOTM, our gene expression test currently available for research use only, which identifies patients
most likely to respond to therapy. Our recent presentation at the Society for Immunotherapy of Cancer Annual Meeting demonstrates
the power of DetermaIO to identify patients who are not likely to respond to checkpoint inhibitors and may require alternative
or combinatorial therapy, which significantly expands the utility of the DetermaIO test. We believe that DetermaIO's inclusion
as a predictive biomarker in an international investigator-sponsored triple negative breast cancer clinical trial has increased
our visibility among academic and pharma trial groups over the last few months, and we remain on pace to achieve our goal of a
U.S. clinical launch in the second half of 2021. In addition, studies such as this generate immediate revenue through our Pharma
Services business which will continue to grow as we secure additional contracts with pharmaceutical and molecular diagnostic platform
companies. Our newly announced immunotherapy response monitoring opportunity, anticipated to be available in our Pharma Services
arsenal in the first half of 2021, launches Oncocyte's differentiated and comprehensive offering for immune therapy diagnostics.
Finally, we have solid momentum in our Pharma Services business and expect to exit 2020 ahead of our $2 million of committed projects
goal for the year and expect the business to generate positive operating margin in 2021. Overall, we are on track across all our
major milestones despite the continued headwind of the ongoing pandemic which is a testimony to the dedication of the Oncocyte
Corporate Highlights
| Medicare coverage policy established for DetermaRx, a new class of predictive tests, based on compelling clinical evidence that positions DetermaRx as the first and only test of its kind for early-stage non-small cell lung cancer (NSCLC) | ||
| Received final pricing decision from Centers for Medicare and Medicaid Services (CMS) with pricing in line with comparable high-value molecular tests for oncology indications | ||
| Continued rapid commercial growth and adoption through Q3: |
| Testing volume more than doubled, from 64 billable samples in Q2, to 175 in Q3 | ||
| Maintained physician re-order rate of approximately 60 percent | ||
| Increased onboarded hospitals from 36 in Q2 to 67 in Q3, including prestigious National Comprehensive Cancer Network (NCCN) and National Cancer Institute (NCI) designated cancer centers | ||
| Increased adoption at major healthcare systems including HCA Healthcare, Cancer Treatment Centers of America (CTCA), Florida Cancer Specialists (FCS), Scripps Health, and Providence Cancer Institute | ||
| Test added to "standard of care menu" at an NCI cancer center and at FCS |
| International expansion continued with Mexico, Columbia, Brazil, and Germany being added to our current network of distribution and commercial partners in Israel, India, the Middle East and Africa | ||
| Presented new prospective survival data at the IASLC 2020 North America Conference on Lung Cancer demonstrating DetermaRx informed treatment significantly improves lung cancer patient survival | ||
| Presented data demonstrating that combining DetermaRx with EGFR mutation status may help inform optimal treatment strategies for NSCLC patients who are EGFR-mutation-positive. Oncocyte is now offering EGFR mutation testing and DetermaRx from a single patient sample to provide an integrated solution for patients and physicians | ||
| Continued successful physician engagement with our webinar series with over 250 healthcare professional participants in online physician education programs in Q3 featuring renowned lung cancer experts Dr. David Gandara, Dr. Johannes Kratz, and Dr. Gavitt Woodard |
| Trial will evaluate DetermaIO as biomarker for a neoadjuvant (pre-surgical) ICI indication in patients with triple negative breast cancer (TNBC) | ||
| Collaboration expected to generate near-term pharma services revenue, with a path to U.S. clinical launch in 2021 |
MONITOR Blood-based Immune Therapy monitoring test
| Announced agreement to license TheraSure TM -CNI MONITOR clinical assay from Chronix Biomedical. The blood-based assay uses copy number instability (CNI) to monitor patients' response to immunotherapy treatments, potentially across a range of cancers | ||
| License agreement will expand Oncocyte's suite of immunotherapy products to include response monitoring. Coordinating response monitoring with DetermaIO's response prediction capability could create the first integrated solution for immunotherapy treatment selection and monitoring. Tech transfer to begin in Q1 2021 |
Quarter 2020 Financial Highlights
September 30, 2020, Oncocyte had cash, cash equivalents and marketable securities of $10.7 million.
to January 1, 2020, Oncocyte had no revenues. Oncocyte currently derives its revenues from pharma services generated by its wholly
owned subsidiary, Insight Genetics, which was acquired on January 31, 2020, and from the sale of its lung cancer test, DetermaRx,
which was commercially launched in early 2020. In light of the recent CMS and Noridian final pricing decision for the DetermaRx
test, which became effective in September, 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 its pharma services and diagnostic tests, including DetermaRx.
on January 31, 2020, Oncocyte's consolidated financial statements and results also include the results from its wholly owned
subsidiary, Insight Genetics, which Oncocyte acquired on that date.
the third quarter ended September 30, 2020, Oncocyte reported a net loss of $6.8 million, or ($0.10) per share, as compared to
$5.2 million, or ($0.10) per share, for the third quarter ended September 30, 2019.
losses, as reported, for the third quarter of 2020 were $6.2 million, an increase of $0.9 million from $5.3 million as compared
to the third quarter of 2019; and operating losses, on an adjusted basis, were $6.1 million, an increase of $2.0 million from
$4.1 million as compared to the third quarter of 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.
for the three and nine months ended September 30, 2020 were $0.6 million and $0.7 million respectively, generated from pharma
services and DetermaRx tests that are covered by Medicare on an accrual basis since Oncocyte received a final pricing from CMS
of revenues for the three and nine months ended September 30, 2020 were $0.6 million and $1.1 million, respectively, incurred
from performing the DetermaRx tests and pharma services.
and development expenses for third quarter of 2020 were $2.6 million as compared to $1.6 million for the same period in 2019,
an increase of $1.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation
expense increase of $0.3 million. Personnel and related expenses for the current quarter also include a $0.4 million severance
charge and $0.2 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan
and salary reduction agreements instituted in September 2020.
and administrative expenses for the third quarter of 2020 were $5.0 million, as compared to $3.0 million for the same period in
2019, an increase of $2.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation
expense. Personnel and related expenses for the current quarter also include a $0.9 million severance charge and $0.5 million
in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements
instituted in September 2020.
and marketing expenses for the three months ended September 30, 2020, were $1.6 million, as compared to $0.6 million for the same
period in 2019, an increase of approximately $1.0 million. The increase was primarily due to personnel and related expenses for
ramp up in sales and marketing activities for the commercialization effort of DetermaRx.
in fair value of contingent consideration liability - The change in fair value of contingent consideration is based on Oncocyte's
reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions
occur from the Insight acquisition date to the reporting period being presented, with the subsequent change in fair value recorded
as part of Oncocyte's consolidated loss from operations for that period. Accordingly, for the three and nine months ended
September 30, 2020, Oncocyte recorded an unrealized gain of approximately $3.0 million related to the decrease in the fair value
of contingent consideration liability primarily attributable to a revised estimate of the timing of the possible future payouts.
used in operations was $6.0 million for the third quarter of 2020, which included about $0.9 million in transactional and other
business development related expenses.
Company will host a conference call today, November 12, 2020, at 4:30 pm EDT / 1:30 pm PDT to discuss the results along with recent
corporate developments.
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 13709425, 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=141419. The webcast replay will be available on the
Oncocyte website for 90 days following the completion of the call
Oncocyte Corporation
is a molecular diagnostics company whose mission is to provide actionable answers at critical decision points across the cancer
care continuum, with the goal of improving patient outcomes by accelerating and optimizing diagnosis and treatment. The Company