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OncoCyte Q2 Net Loss Widens, First Test Still Slated for Q4 Launch

NEW YORK (GenomeWeb) – OncoCyte said today that its second quarter net loss rose, compared to the same period last year, as it prepares to launch a noninvasive lung cancer diagnostic dubbed DetermaVu.

The liquid biopsy firm's net loss for the three months ended June 30, 2017 was $3.8 million, or $.13 per share, compared to a loss of $2.5 million, or $.10 per share in Q2 2016. The consensus Wall Street estimate was for a loss of $.12 per share.

The company did not report any revenues, but continues to expect to launch its first test by the end of this year. The newly named DetermaVu measures a panel of mRNA markers in blood samples to predict which patients with positive lung imaging results have benign versus malignant nodules.

Reflecting continued research and validation work in support of the test, OncoCyte's R&D expenses in Q2 2017 were $2.0 million, compared to $1.2 million in the same quarter last year, a 67 percent uptick. Its SG&A spending rose 23 percent year over year to $1.6 million from about $1.3 million a year ago.

In a statement, OncoCyte also said that it is now in the final stages of hiring a new vice president of sales, and has begun looking for a chief financial officer.

The firm also said that its lab has passed a required review and inspection for California State Clinical Laboratory licensing and CLIA certification, and it expects to receive the relevant license and certificate in the coming weeks.

Oncocyte CEO William Annett said in a statement that the market for DetermaVu could be $4.7 billion annually, depending on market penetrate and reimbursable pricing.

In a call discussing the firm's earnings, he reiterated that revenue for the company will depend in large measure on insurance reimbursement, but expressed confidence that OncoCyte can convince payors.

The company believes DetermaVu would be attractive to Medicare and private insurance companies if priced at about 20 percent of the cost of lung biopsies, which average about $15,000 when the cost of complications is included, he added.

The firm is currently conducting its CLIA lab validation study, which it expects to complete during the third quarter of this year. After that, it plans to conduct two final blinded clinical validation studies — one prelaunch and one post-launch.

"All of the samples [for the first study] have now been collected and we anticipate completing it during the fourth quarter," Annett said.

OncoCyte ended the quarter with $ $8.6 million in cash and cash equivalents, and $1.1 million in available-for-sale securities. In July, it also raised $5.74 million through the exercise of stock purchase warrants by certain investors.

The firm's shares were down a fraction of 1 percent at $4.91 in early morning trading on the Nasdaq on Tuesday.