Currently Processing Samples and Analyzing
Results in its Lung Cancer Test Study; Continues to Project a
Completion Date in Late December
OncoCyte Corporation (NYSE MKT:OCX), a developer of novel,
non-invasive blood based tests for the early detection of cancer,
today reported its financial results for the third quarter ended
September 30, 2016 along with an update on recent corporate
developments.
Recent Highlights
- Data on the lung cancer diagnostic test was recently presented
by The Wistar Institute (Wistar), an international biomedical
research leader in cancer, immunology and infectious diseases, at
the American College of Chest Physicians (CHEST) conference. The
610 patient study demonstrated that the test may distinguish
malignant from benign lung growths with a high level of
accuracy.
- Raised $10.55 million in gross proceeds which strengthened
OncoCyte’s balance sheet and provided funding for the development
of its non-invasive cancer diagnostics tests.
Upcoming Clinical and Operating
Milestones
- OncoCyte is carrying out its own study of new patient samples
following Wistar’s encouraging findings. To date the Company has
processed 200 samples and now is analyzing the interim results. In
total the study will process and analyze samples from 300 patients.
Completion of the study is expected in late December.
- If OncoCyte’s lung cancer test study is successful, the Company
plans to seek CLIA certification of its laboratory commencing in
the first quarter of 2017, followed by a clinical validation study
in its CLIA lab to ensure that the current study’s findings can be
replicated in an operational setting. After successful CLIA
certification and clinical validation, OncoCyte plans to launch its
lung cancer confirmatory diagnostic test commercially during the
second quarter of 2017.
- Data from an early study of the Company’s breast cancer test
will be presented in a poster session at the 2016 San Antonio
Breast Cancer Symposium (SABCS) in December. The abstract will be
available on November 14th.
“I am very pleased with the exciting progress
that OncoCyte has made in recent months as data on our lung and
bladder cancer tests were presented at leading medical
conferences,” commented William Annett, Chief Executive Officer.
“We are developing our lung cancer confirmatory test to
significantly improve today’s standard of care and I believe the
value proposition we offer will be very attractive to patients,
physicians and payers. We continue to project a commercial launch
of our lung cancer test in the second quarter of 2017, assuming a
successful completion of the ongoing study and a subsequent
validation study after CLIA certification. In anticipation of the
launch we are building out our commercial infrastructure and
planning the marketing, sales and reimbursement focused activities
that will allow us to raise awareness and drive adoption of our
lung test.”
Third Quarter 2016 Financial
Results
The net loss for the quarter ended September 30,
2016 was $2.6 million, or ($0.10) per share compared to a net loss
of $2.4 million, or ($0.12) per share, for the comparable period in
2015.
Research and development expenses for the
quarter ended September 30, 2016 increased to $1.3 million from
$1.1 million for the same period in 2015. General and
administrative expenses decreased to $1.2 million from $1.3 million
for the same period in 2015. During 2015 OncoCyte incurred expenses
for multi-year audits and quarterly reviews required for
registering with the SEC to become a public company. Operating
expenses for the quarter ended September 30, 2016 included $366,000
of non-cash expenses such as stock-based compensation, depreciation
of laboratory equipment, and amortization of intangible assets.
At September 30, 2016, OncoCyte had $12.7
million of cash and cash equivalents and $2.4 million worth of
available-for-sale securities.
Nine Month 2016 Financial
Results
The net loss for the nine months ended September
30, 2016 was $8.1 million, or ($0.31) per share compared to $5.2
million, or ($0.26) per share, in the comparable period in 2015.
Research and development expenses for the nine months ended
September 30, 2016 increased to $4.2 million from $3.1 million for
the same period in 2015. These increases were primarily the result
of increased spending on outside research services, scientific
consulting services, clinical trial related expenses, and
laboratory expenses. For the nine months ended September 30, 2016,
general and administrative expenses increased to $3.8 million from
$2.1 million for the same period in 2015, primarily as a result of
increased salary and payroll related expenses, general consulting
expenses, accounting and audit related expenses, transfer agent,
stock listing and SEC filing expenses. Operating expenses for the
nine months ended September 30, 2016 included $902,000 of non-cash
expenses such as stock-based compensation, depreciation of
laboratory equipment, and amortization of intangible assets.
During the three and nine months ended September
30, 2016 OncoCyte increased research and development expenses for
the development of a lung cancer diagnostic test, and reduced
research and development expenses for other cancer diagnostic
tests, compared to the same periods in 2015, reflecting the
prioritization of the development of the lung cancer test. OncoCyte
expects to continue to incur a significant amount of research and
development expenses during the foreseeable future.
Conference Call
OncoCyte will host a conference call and webcast
today, Thursday, November 10, 2016, at 5:00 p.m. Eastern Time/2:00
p.m. Pacific Time to discuss financial and operating results and
recent corporate developments.
For both "listen-only" participants and those
participants who wish to take part in the question-and-answer
portion of the call, the dial-in number in the U.S./Canada is
877-524-8416. For international participants outside the
U.S./Canada, the dial-in number is 412-902-1028. For all callers,
refer to Conference ID 13649349. To access the live webcast, go to
http://investors.oncocyte.com/events-and-presentations.
A 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 toll-free (from
U.S./Canada) 877-660-6853; international callers dial 201-612-7415.
Use the Conference ID 13649349. Additionally, the archived webcast
will be available at
http://investors.oncocyte.com/events-and-presentations.
About OncoCyte Corporation
OncoCyte is primarily focused on the development
and commercialization of novel, non-invasive blood and urine
(“liquid biopsy”) diagnostic tests for the early detection of
cancer to improve health outcomes through earlier diagnoses, to
reduce the cost of care through the avoidance of more costly
diagnostic procedures, including invasive biopsy and cystoscopic
procedures, and to improve the quality of life for cancer patients.
While current biopsy tests use invasive surgical procedures to
provide tissue samples in order to determine if a tumor is benign
or malignant, OncoCyte is developing a next generation of
diagnostic tests that will be based on liquid biopsies using blood
or urine samples. OncoCyte’s pipeline products are intended to be
confirmatory diagnostics for detecting lung, bladder and breast
cancer. OncoCyte’s diagnostic tests are being developed using
proprietary sets of genetic and protein markers that differentially
express in specific types of cancer.
Forward Looking Statements
Any statements that are not historical fact
(including, but not limited to statements that contain words such
as “will,” “believes,” “plans,” “anticipates,” “expects,”
“estimates”) are forward-looking statements. These statements
include those pertaining to future financial and/or operating
results, future growth in research, technology, clinical
development, and potential opportunities for OncoCyte, including
OncoCyte’s ability to develop an assay and classifier for its
confirmatory lung diagnostic, complete an internal validation study
and implement commercialization plans and the timing of these
plans. These statements are based on OncoCyte’s current
expectations, beliefs, goals, plans, or prospects and 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 need and ability to obtain future
capital, maintenance of intellectual property rights, and the need
to obtain third party reimbursement for patients’ use of any
diagnostic tests that OncoCyte commercializes. Actual results may
differ materially from the results anticipated in these
forward-looking statements and as such should be evaluated together
with the many uncertainties that affect the business of OncoCyte,
particularly those mentioned in the “Risk Factors” found in
OncoCyte’s Securities and Exchange Commission filings. OncoCyte
disclaims any intent or obligation to update these forward-looking
statements, except as may be required by law.
(Tables to Follow)
| ONCOCYTE CORPORATION |
| CONDENSED STATEMENTS OF
OPERATIONS |
| (IN THOUSANDS, EXCEPT PER SHARE
DATA) |
| (UNAUDITED) |
| |
|
|
|
Three Months EndedSeptember
30, |
|
|
Nine Months EndedSeptember
30, |
|
| |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
| Research and
development |
|
$ |
|
(1,363 |
) |
|
$ |
|
(1,094 |
) |
|
$ |
|
(4,246 |
) |
|
$ |
|
(3,098 |
) |
| General and
administrative |
|
|
|
(1,219 |
) |
|
|
|
(1,312 |
) |
|
|
|
(3,800 |
) |
|
|
|
(2,081 |
) |
| Total operating
expenses |
|
|
|
(2,582 |
) |
|
|
|
(2,406 |
) |
|
|
|
(8,046 |
) |
|
|
|
(5,179 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from
operations |
|
|
|
(2,582 |
) |
|
|
|
(2,406 |
) |
|
|
|
(8,046 |
) |
|
|
|
(5,179 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER INCOME
(EXPENSES), NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense,
net |
|
|
|
(13 |
) |
|
|
|
(9 |
) |
|
|
|
(19 |
) |
|
|
|
(16 |
) |
| Other expenses,
net |
|
|
|
- |
|
|
|
|
(1 |
) |
|
|
|
- |
|
|
|
|
(1 |
) |
| Total other expenses,
net |
|
|
|
(13 |
) |
|
|
|
(10 |
) |
|
|
|
(19 |
) |
|
|
|
(17 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET
LOSS |
|
$ |
|
(2,595 |
) |
|
$ |
|
(2,416 |
) |
|
$ |
|
(8,065 |
) |
|
$ |
|
(5,196 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net
loss per share |
|
$ |
|
(0.10 |
) |
|
$ |
|
(0.12 |
) |
|
$ |
|
(0.31 |
) |
|
$ |
|
(0.26 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common
shares outstanding: basic and diluted |
|
|
|
26,560 |
|
|
|
|
20,970 |
|
|
|
|
25,797 |
|
|
|
|
19,803 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ONCOCYTE CORPORATION |
| CONDENSED BALANCE SHEETS |
| (IN THOUSANDS) |
| |
| |
|
September
30,2016(Unaudited) |
|
|
December 31,2015 |
|
|
ASSETS |
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
12,674 |
|
|
$ |
7,996 |
|
| BioTime shares held as
available-for-sale securities, at fair value |
|
|
2,417 |
|
|
|
2,541 |
|
| Prepaid expenses and other current
assets |
|
|
191 |
|
|
|
388 |
|
| Total current
assets |
|
|
15,282 |
|
|
|
10,925 |
|
| |
|
|
|
|
|
|
|
|
| NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
| Intangible assets, net |
|
|
1,049 |
|
|
|
1,230 |
|
| Equipment and furniture, net |
|
|
475 |
|
|
|
576 |
|
| Deposits |
|
|
54 |
|
|
|
- |
|
| TOTAL ASSETS |
|
$ |
16,860 |
|
|
$ |
12,731 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
| Amount due to parent, BioTime |
|
$ |
2,105 |
|
|
$ |
807 |
|
| Amount due to affiliates |
|
|
151 |
|
|
|
40 |
|
| Accounts payable |
|
|
870 |
|
|
|
285 |
|
| Accrued expenses and other current
liabilities |
|
|
669 |
|
|
|
1,182 |
|
| Capital lease liability, current
portion |
|
|
173 |
|
|
|
- |
|
| Total current liabilities |
|
|
3,968 |
|
|
|
2,314 |
|
| Capital lease liability, net of
current portion |
|
|
211 |
|
|
|
- |
|
| TOTAL LIABILITIES |
|
|
4,179 |
|
|
|
2,314 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and
contingencies |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
| Preferred stock, no par value,
5,000 shares authorized; none issued and outstanding |
|
|
- |
|
|
|
- |
|
| Common stock, no par value, 50,000
shares authorized; 28,677 and 25,391 shares issued and outstanding
at September 30, 2016 and December 31, 2015, respectively |
|
|
45,354 |
|
|
|
34,901 |
|
| Accumulated other comprehensive
loss on available-for-sale securities |
|
|
(474 |
) |
|
|
(350 |
) |
| Accumulated deficit |
|
|
(32,199 |
) |
|
|
(24,134 |
) |
| Total stockholders’ equity |
|
|
12,681 |
|
|
|
10,417 |
|
| TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
16,860 |
|
|
$ |
12,731 |
|
| |
|
|
|
|
|
|
|
|
| ONCOCYTE CORPORATION |
| CONDENSED STATEMENTS OF CASH FLOWS |
| (IN THOUSANDS) |
| (UNAUDITED) |
| |
| |
|
Nine Months EndedSeptember
30, |
|
| |
|
2016 |
|
|
2015 |
|
| CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
| Net loss |
|
$ |
|
(8,065 |
) |
|
$ |
(5,196 |
) |
| Adjustments to reconcile
net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Depreciation expense |
|
|
|
102 |
|
|
|
32 |
|
| Amortization of intangible
assets |
|
|
|
181 |
|
|
|
181 |
|
| Stock-based compensation |
|
|
|
619 |
|
|
|
831 |
|
| Contingently issuable warrant
expense to investors |
|
|
|
- |
|
|
|
65 |
|
| Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
| Amount due to parent, BioTime |
|
|
|
1,299 |
|
|
|
1,290 |
|
| Amount due to affiliates |
|
|
|
111 |
|
|
|
(119 |
) |
| Prepaid expenses and other current
assets |
|
|
|
197 |
|
|
|
94 |
|
| Accounts payable and accrued
liabilities |
|
|
|
548 |
|
|
|
275 |
|
| Accrued interest on related party
convertible debt |
|
|
|
- |
|
|
|
13 |
|
| Net cash used in operating
activities |
|
|
|
(5,008 |
) |
|
|
(2,534 |
) |
| |
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
|
|
| Purchase of equipment |
|
|
|
(19 |
) |
|
|
(11 |
) |
| Proceeds from sale of BioTime
shares |
|
|
|
- |
|
|
|
44 |
|
| Security deposit |
|
|
|
(54 |
) |
|
|
- |
|
| Net cash (used in)
provided by investing activities |
|
|
|
(73 |
) |
|
|
33 |
|
| |
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
| Proceeds from issuance of common
shares and warrants |
|
|
|
10,550 |
|
|
|
- |
|
| Financing costs paid to issue
common shares and warrants |
|
|
|
(800 |
) |
|
|
- |
|
| Proceeds from issuance of common
shares |
|
|
|
- |
|
|
|
11,650 |
|
| Proceeds from exercise of
options |
|
|
|
83 |
|
|
|
4 |
|
| Repayment of capital lease
obligation |
|
|
|
(74 |
) |
|
|
- |
|
| Net cash provided by
financing activities |
|
|
|
9,759 |
|
|
|
11,654 |
|
| |
|
|
|
|
|
|
|
|
| NET INCREASE IN CASH AND
CASH EQUIVALENTS |
|
|
|
4,678 |
|
|
|
9,153 |
|
| CASH AND CASH
EQUIVALENTS: |
|
|
|
|
|
|
|
|
| At beginning of the period |
|
|
|
7,996 |
|
|
|
257 |
|
| At end of the period |
|
$ |
|
12,674 |
|
|
$ |
9,410 |
|
| |
|
|
|
|
|
|
|
|
|
Investor Contact:
EVC Group, Inc.
Michael Polyviou
646-445-4800
mpolyviou@evcgroup.com