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In New Deal, Oncocyte Gains Global Market Runway, Thermo Fisher Nabs Steward for Clinical Kits


NEW YORK – Announcing a codevelopment and comarketing partnership this week, Oncocyte and Thermo Fisher Scientific have laid out a path for the next several years that answers some key questions about both firms' future in clinical cancer testing.

In tapping Oncocyte to pursue regulatory submission of its comprehensive cancer sequencing panel, Thermo Fisher has formalized a commitment to providing regulated IVD kits alongside the RUO products labs have used thus far. It is a notable move for the company considering its long-stated desire to support the dissemination and democratization of clinical cancer genomics.

"Our view is that if we can get next-generation sequencing into the hands of hospitals, hospital systems, if we can be closer to patients, that's what's going to really matter for patient outcome," said Garret Hampton, Thermo Fisher's president of clinical sequencing and oncology.

For Oncocyte, meanwhile, the deal offers a newly defined pathway to global markets. Previously, the company's activities were centered on development of its assays as LDTs for US customers, and this will continue to be a part of its strategy, Oncocyte CEO Ronnie Andrews said on a call with investors. But to appeal to markets outside the US, which Andrews estimated represent a $5 billion opportunity, the firm needed a platform partner.

"We have been talking about that partnership potential for well over a year now, and [this] marks the culmination," Andrews said.

European markets are also a significant factor in the deal for Thermo Fisher, as the prior model of clinic labs being able to use relatively unregulated CE-marked tests gives way to a new oversight framework called IVD Regulation, or IVDR.

Thermo, on its own, is already expecting to have approval for the IVDR version of its Genexus sequencing instrument, along with an IVD kit for its more targeted Oncomine Precision assay before the second half of this year. But Oncocyte's Andrews argued that for labs to see bringing in a sequencing instrument as truly valuable, they need more content.

"Our viewpoint today is that we have Genexus and we have the Oncomine Precision assay. We're making very, very substantial investments, let's put it that way, into being able to bring that kind of assay to market," said Hampton.

"We know that there's an LDT market. We know that it's pointing towards IVDs, but it's not inexpensive to do, so our view is … let's do the very clear fundamentals within Thermo Fisher, bringing Genexus forward so it's now a platform on which you can start to build assays … and then partner for additional content," he added.

"They can spend their time, energy, and investment on engineering, better chemistry, chip design and those things. And we can then be the domain experts in oncology to create content. That's really what this relationship is about," said Andrews, who served as president of the genetic sciences division of Thermo Fisher several years ago after it acquired Life Technologies.

Although Oncocyte is being tasked with bringing Thermo's more comprehensive Oncomine panel through both US and European IVD regulatory processes, European labs could still continue to favor more targeted testing over upfront comprehensive panels once an IVDR comprehensive test is available.

In that case, Oncocyte's DetermaIO assay would be the only way for such labs to guide immunotherapy decisions, since other biomarkers like tumor mutational burden can't be calculated from the smaller targeted NGS kit.

Even with the larger comprehensive panel, Hampton said that Oncocyte's data on DetermaIO is compelling enough to be attractive as an add-on to TMB, considering the complexity of the cancer immune response, and growing evidence that drug decision may benefit from a multi-pronged biomarker approach.

"If I'm a clinician, I want more than one choice … [especially if] it can all be performed on the same instrument," Hampton said.

The deal with Oncocyte is not exclusive, so other diagnostic developers could potentially also join in in advancing IVD content for Genexus in the future. However, the companies have committed to at least three specific development targets together.

Laying out the company's timeline, Andrews said that Oncocyte's goal is to immediately begin development of an IVD version of DetermaIO using the currently available Genexus chip.

"Having those 27 RNA targets … it fits on the current chip for Genexus, and it is a relatively easy process to validate that as a kit, since we've already got it validated in NGS and PCR and we haven't had to change the cutoffs through any of those," Andrews said.

For the time being, the company won't pursue FDA approval for DetermaIO, just IVDR status aiming to submit a dossier by the end of the year. According to Andrews, going through FDA could take place eventually, but LDT testing makes more sense right now.

"We can serve the [US] market with our two central labs and keep the majority of those economics for Oncocyte, which obviously as a small company is important to us. But as it becomes standard of care, obviously democratizing that may be important, so we'll hold that option open," he said.

Once Thermo's larger chip is available, Oncocyte will then begin IVD validation for the company's Oncomine Comprehensive panel, which will be rebranded, in the IVD market, as DetermaOC.

"From there, we hope late next year we'll get IVD approval for DetermaIO and begin kit sales in Europe in partner with the Thermo Precision assay. … So in Europe, by the second half of next year, a physician or laboratorian will be able to run on Genexus all the testing they need … to make a targeted therapy decision [and an] immune therapy decision," Andrews said.

Oncocyte also said it will begin work on IVD conversion of its liquid biopsy cancer monitoring assay DetermaCNI on that larger chip late next year. Andrews didn't mention IVD goals for the company's other Determa tests, but he did say that the company could also develop IVD companion diagnostics for biomarkers gleaned through the Oncomine comprehensive panel, such as homologous repair deficiency. These would be subject to the same revenue arrangement as the DetermaIO and DetermaCNI IVDs.

The company plans to be able to submit a dossier for its version of the Thermo comprehensive panel, DetermaOC, to both the FDA and EU regulatory bodies by the end of 2024, anticipating approval by the end of 2025.

Andrews said that the firm has already anticipated the necessary spending for kit development, with the first planned expenses coming from leasing in the necessary Genexus instruments to get started.

"We'd always planned to take our products and put [them] into kits with a platform. So those have been budgeted through the next two to three years. We just weren't sure who the platform company was going to be," he said.

Based on calculations that take into account Thermo Fisher's existing installed base of RUO and CE-marked sequencing instruments and assays, Oncocyte is estimating that its will grow from a standing start once the first test is approved "to a cumulative amount of over 100 million" by the end of its first three years of IVD provision, "a number that we believe is very important for the long-term health of our company," Andrews said.

The financial structure of the agreement involves Oncocyte receiving a share of revenue for all the novel tests that it develops for the Genexus platform during the 14-year contract duration, which include DetermaIO and DetermaCNI. It also expects double-digit annuity revenue for its part in bringing the Thermo Fisher comprehensive panel through the US and EU regulatory processes.

Andrews didn't give an exact breakdown, but in an interview, he specified that the "lion's share" of total revenues that come in to the two partnered companies from DetermaIO and DetermaCNI IVD sales would go to Oncocyte.

For the comprehensive kit, the lion's share of sales will go to Thermo Fisher, he added, "but we will get a really nice percentage that they're offering us to recoup and make a return on the investment we're going to make to take it through the regulatory process."

The deal doesn't include any direct payments for development, he added, apart from a scenario under which Oncocyte would advance specific companion diagnostics with a specific pharmaceutical partner.