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OncoCyte Shrinks Q1 Net Loss; Expects Clinical Validation by Year End

NEW YORK (GenomeWeb) – OncoCyte said after the close of the market on Tuesday that its 2018 Q1 net loss shrank 19 percent year over year, as it moves forward with studies intended to support a final clinical validation by the end of the year.

The liquid biopsy firm's net loss for the three months ended March 31, 2018 was $3.8 million, or $.12 per share, compared to a net loss of $4.7 million, or $.16 per share, in the same quarter last year. It matched the consensus Wall Street estimate of a loss of $.12 per share.

OncoCyte's R&D expenses in Q1 dropped about 17 percent year over year to $1.5 million compared to $1.8 million in Q1 2017. Its SG&A spending was trimmed 11 percent to $2.4 million compared to $2.7 million in the same period last year. The decrease resulted mainly from a $1.1 million shareholder noncash expense for the issuance of certain warrants during Q1 2017.

The firm ended the quarter with $12.6 million in cash and cash equivalents, and marketable securities valued at $950,000.

The company did not report any revenues.

Last fall, OncoCyte extended the anticipated launch date for its DetermaVu lung cancer test from late 2017 to late 2018, due to "inconsistent analytic results" observed during the final clinical validation of the assay.

This led to additional platform comparison work, and also uncovered new predictive markers, some of which appeared to have stronger associations than those in the firm's original algorithm.

As a result, the company extended its timeline to allow a "confirmation study" of DetermaVu with the addition of these new markers.

OncoCyte President and CEO William Annett said in a statement on Tuesday that the company has now completed initial testing of a planned 160 samples in this confirmation study. Once this analysis is finished — hopefully in the middle of this year — the firm will decide on its final diagnostic platform and will lock down a final biomarker list and algorithm.

During a call discussing the firm's earnings, Annett declined to give specifics on whether OncoCyte believes that it will see higher accuracy using one of the two new platforms under consideration than it has previously with the NanoString platform it has used so-far.

CFO Mitch Levine added that the company has been taking new financial steps as it moves through the longer-than-initially-expected clinical validation timeline that it announced last year.

The firm reduced its cash spending during Q1, he said, and is "deprioritizing" some longer term projects, as well as reducing staff and resources allocated to aspects of the company’s business that are not as directly related to achieving clinical validation of the DetermaVu test.

This includes staff reduction in areas not required for development and validation of the test, such as sales and marketing employees and consultants.

According to Levine, these shifts are not expected to delay the company's clinical validation timeline.