Expects to Report Results of 300 Patient R&D
Validation Study on May 22, 2017
OncoCyte Corporation (NYSE MKT:OCX), a developer of novel,
non-invasive blood based tests to aid in the early detection of
cancer, today reported its financial results for the quarter ended
March 31, 2017. In addition, OncoCyte announced it will
conduct an investor call on May 22, 2017 at 4:30pm ET/1:30 pm PT
after its lead investigator Dr. Anil Vachani presents data from the
300 patient R&D Validation study at the American Thoracic
Society 2017 International Conference (ATS) in Washington D.C.
“We made significant progress during the first
quarter towards the commercialization of our lung cancer diagnostic
product, including initiating a search for a head of our sales
organization as well as beginning the expansion of our sales,
marketing and market access teams,” commented William Annett, Chief
Executive Officer. “We believe the data on our lung cancer test
being presented in May demonstrates the robustness of our science
and strengthens our market position."
“We plan to provide investors with an overview
of the results from the 300 patient R&D Validation study on our
conference call following the presentation. We believe the
total addressable market for our lung cancer diagnostic test could
be over $4 billion, and that we are positioned to be the first
company to provide a highly accurate non-invasive confirmatory
blood test to address this market. Our focus over the next few
months is to complete the development process, obtain CLIA
certification of our laboratory, and prepare for our anticipated
commercial launch in the second half of the year.”
Significant First Quarter
Accomplishments
- Reported the successful results of the R&D Validation study
for its lung cancer diagnostic test. The results, based on the
analysis of samples from approximately 300 patients, confirmed
previously reported data presented by The Wistar Institute at the
CHEST 2016 Annual Meeting in October. The data from the study
exceed levels OncoCyte believes necessary for a commercially
successful test.
- Reported that it locked its prediction algorithm and intends to
move to the Clinical Validation phase of development—the last phase
before commercial launch.
- Submitted the application for CLIA certification of OncoCyte’s
laboratory where the assay will be run.
- Announced that its breast cancer test is developing ahead of
schedule, and began a follow-up, multi-center study to further
develop and verify the results of the earlier studies.
Near-term Milestones
OncoCyte is continuing to make progress and has
several upcoming events and milestones related to the development
of its lung cancer diagnostic:
- Poster presentation of lung cancer diagnostic R&D
Validation study at the (ATS) International Conference. The
data will be presented by Dr. Anil Vachani, an Associate Professor
of Medicine at the Hospital of the University of Pennsylvania and
the Veteran's Administration Medical Center, at 2:15 p.m. ET on May
22, 2017.
- Conference call to report on 300-patient R&D Validation
study, to be held at 4:30pm ET on May 22, 2017.
- Establishment of a medical advisory committee (MAC), headed by
top lung cancer specialists. The MAC will advise OncoCyte on
clinical unmet needs and future development
strategy.
- CLIA certification and California state clinical laboratory
license, which OncoCyte expects to receive during the second
quarter of 2017.
- Clinical Validation study to confirm and replicate OncoCyte’s
findings in a commercial CLIA lab setting.
- Expansion of OncoCyte’s commercial capabilities in sales and
marketing, revenue cycle management and reimbursement.
- Launch of lung cancer test during second half of 2017 assuming
successful completion of the Clinical Validation and CLIA
certification.
First Quarter 2017 Financial
Results
For the quarter ended March 31, 2017, OncoCyte
incurred a net loss of $4.7 million, or $0.16 per share, compared
to a net loss of $2.9 million, or $0.12 per share, in 2016.
The $4.7 million net loss includes a $1.1 million noncash expense,
or $0.04 per share, related to issuance of warrants to certain
shareholders as an inducement to exercise warrants. During
the first quarter OncoCyte used $3.3 million in operating
activities compared to $2.2 million from the comparative prior
quarter.
Research and development expenses for the
quarter ended March 31, 2017 were $1.8 million compared to $1.7
million for the same period in 2016. Overall the slight increase in
research and development expenses was due to increased staffing and
laboratory expenses.
General and administrative expenses increased to
$2.0 million from $1.0 million for the same period in 2016. Sales
and marketing expenses increased to $0.7 million from $0.2 million.
The increases were attributable to a $1.1 million noncash
expense for the issuance of warrants as well as increased staffing
for the expected commercial launch of OncoCyte’s lung cancer
diagnostic during second half of 2017.
At March 31, 2017, OncoCyte had liquid assets of
$13 million, including $11.4 million of cash and cash equivalents,
and available-for-sale securities valued at $1.6 million.
Conference Call
OncoCyte will host a conference call on Monday,
May 22, 2017 at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results
being presented by Dr. Anil Vachani at the American Thoracic
Society (ATS) International Conference.
The dial-in number in the U.S./Canada is
888-359-3610, for international participants the number is +1
719-457-2648. For all callers, refer to Conference ID 7395442. To
access the live webcast, go to the investor relations section on
the company’s website,
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 888-203-1112 toll-free
(from U.S./Canada); international callers dial +1 719-457-0820. Use
the Conference ID 7395442. Additionally, the archived webcast will
be available
http://investors.oncocyte.com/events-and-presentations.
About OncoCyte Corporation
OncoCyte is focused on the development and
commercialization of novel, non-invasive blood and urine (“liquid
biopsy”) diagnostic tests to aid in 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, breast and bladder
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” and
similar expressions) should also be considered to be
forward-looking statements. These statements include those
pertaining to the implementation and results of our validation
study and other studies, commercialization plans, future financial
and/or operating results, future growth in research, technology,
clinical development, and potential opportunities for OncoCyte,
along with other statements about the future expectations, beliefs,
goals, plans, or prospects expressed by management. Forward-looking
statements 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 capital, maintenance of
intellectual property rights, and the need to obtain third party
reimbursement for patient’s use of any diagnostic tests we
commercialize. 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” and other cautionary statements found in
OncoCyte’s Securities and Exchange Commission filings. OncoCyte
disclaims any intent or obligation to update these forward-looking
statements, except as required by law.
|
ONCOCYTE CORPORATION |
|
CONDENSED BALANCE SHEETS |
|
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2017 |
2016 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
CURRENT
ASSETS |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
11,352 |
|
|
$ |
10,174 |
|
|
BioTime
shares held as available-for-sale securities, at fair value |
|
1,649 |
|
|
|
2,237 |
|
|
Prepaid
expenses and other current assets |
|
451 |
|
|
|
285 |
|
|
Total
current assets |
|
13,452 |
|
|
|
12,696 |
|
|
|
|
|
|
|
|
|
|
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
Intangible assets, net |
|
927 |
|
|
|
988 |
|
|
Equipment
and furniture, net |
|
636 |
|
|
|
688 |
|
|
Deposits |
|
159 |
|
|
|
75 |
|
|
TOTAL
ASSETS |
$ |
15,174 |
|
|
$ |
14,447 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
Amount
due to BioTime and affiliates |
$ |
2,610 |
|
|
$ |
2,854 |
|
|
Accounts
payable |
|
211 |
|
|
|
422 |
|
|
Accrued
expenses |
|
1,193 |
|
|
|
797 |
|
|
Loan
payable, current portion |
|
333 |
|
|
|
- |
|
|
Capital
lease liability, current portion |
|
202 |
|
|
|
202 |
|
|
Total
current liabilities |
|
4,549 |
|
|
|
4,275 |
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES |
|
|
|
|
|
|
|
|
Loan
payable, net of issuance costs, noncurrent portion |
|
1,589 |
|
|
|
- |
|
|
Capital
lease liability, noncurrent portion |
|
263 |
|
|
|
310 |
|
|
TOTAL
LIABILITIES |
|
6,401 |
|
|
|
4,585 |
|
|
|
|
|
|
|
|
|
|
|
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; 29,367 and 28,737
shares issued and outstanding at March 31, 2017 and December 31,
2016, respectively |
|
49,360 |
|
|
|
45,818 |
|
|
Accumulated other comprehensive loss on available-for-sale
securities |
|
(581 |
) |
|
|
(654 |
) |
|
Accumulated deficit |
|
(40,006 |
) |
|
|
(35,302 |
) |
|
Total
stockholders’ equity |
|
8,773 |
|
|
|
9,862 |
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
15,174 |
|
|
$ |
14,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ONCOCYTE CORPORATION |
|
CONDENSED STATEMENTS OF
OPERATIONS |
|
(IN THOUSANDS, EXCEPT PER SHARE
DATA) |
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2017 |
|
|
2016 |
|
|
EXPENSES |
|
|
|
|
|
|
|
Research
and development |
|
$ |
1,834 |
|
|
$ |
1,689 |
|
|
General
and administrative |
|
|
2,043 |
|
|
|
1,015 |
|
|
Sales and
marketing |
|
|
655 |
|
|
|
228 |
|
|
Total
operating expenses |
|
|
4,532 |
|
|
|
2,932 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(4,532 |
) |
|
|
(2,932 |
) |
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES), NET |
|
|
|
|
|
|
|
|
|
Interest
income (expense), net |
|
|
(13 |
) |
|
|
4 |
|
|
Other
income (expense), net |
|
|
(159 |
) |
|
|
- |
|
|
Total
other income (expenses), net |
|
|
(172 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(4,704 |
) |
|
$ |
(2,928 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted net loss per share |
|
$ |
(0.16 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: basic and
diluted |
|
28,965 |
|
|
|
25,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ONCOCYTE CORPORATION |
|
CONDENSED STATEMENTS OF CASH
FLOWS |
|
(UNAUDITED) |
|
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2017 |
|
|
2016 |
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net
loss |
|
$ |
(4,704 |
) |
|
$ |
(2,928 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
67 |
|
|
|
10 |
|
|
Amortization of intangible assets |
|
|
61 |
|
|
|
61 |
|
|
Stock-based compensation |
|
|
350 |
|
|
|
125 |
|
|
Loss on
sale of BioTime shares |
|
|
159 |
|
|
|
- |
|
|
Warrants
issued to certain shareholders as inducement of exercise of
warrants |
|
|
1,084 |
|
|
|
- |
|
|
Amortization of debt issuance costs |
|
|
3 |
|
|
|
- |
|
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Amount
due to BioTime and affiliates |
|
|
(244 |
) |
|
|
624 |
|
|
Prepaid
expenses and other current assets |
|
|
(166 |
) |
|
|
126 |
|
|
Accounts
payable and accrued liabilities |
|
|
100 |
|
|
|
(185 |
) |
|
Net cash
used in operating activities |
|
|
(3,290 |
) |
|
|
(2,167 |
) |
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net
proceeds from sale of BioTime shares |
|
|
502 |
|
|
|
- |
|
|
Purchase
of equipment |
|
|
(16 |
) |
|
|
(15 |
) |
|
Net cash
provided by (used in) investing activities |
|
|
486 |
|
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Proceeds
from exercise of options |
|
|
16 |
|
|
|
42 |
|
|
Proceeds
from exercise of warrants |
|
|
2,031 |
|
|
|
- |
|
|
Proceeds
from issuance of loan payable, net of financing costs |
|
|
1,982 |
|
|
|
- |
|
|
Repayment
of capital lease obligations |
|
|
(47 |
) |
|
|
- |
|
|
Net cash
provided by financing activities |
|
|
3,982 |
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
1,178 |
|
|
|
(2,140 |
) |
|
CASH AND
CASH EQUIVALENTS: |
|
|
|
|
|
|
|
|
|
At
beginning of the period |
|
|
10,174 |
|
|
|
7,996 |
|
|
At end of
the period |
|
$ |
11,352 |
|
|
$ |
5,856 |
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
EVC Group, Inc.
Michael Polyviou/Amanda Prior
(212) 850-6020
mpolyviou@evcgroup.com / aprior@evcgroup.com
Financial Media Contact:
EVC Group, Inc.
Tom Gibson
201-476-0322
tom@tomgibsoncommunications.com