- Introduces Lung Cancer Diagnostic
Branding-
OncoCyte Corporation (NYSE MKT:OCX), a developer
of novel, non-invasive tests for the early detection of cancer,
today reported the following developments:
- Financial results for the quarter ended June 30,
2017,
- Planned expansion of the senior management team by adding a
Vice President of Sales and full time Chief Financial Officer,
- Branding for its lung cancer diagnostic test, and
- Progress toward CLIA lab licensing.
OncoCyte announced that it is planning to expand
its senior management team. The Company is now in the final stages
of hiring a Vice President of Sales. If hired, this individual will
bring many years of sales and marketing leadership within the
healthcare industry at leading diagnostic companies. In addition,
OncoCyte has begun the process of hiring a full time Chief
Financial Officer.
The Company has selected the name DetermaVu™ for
its lung cancer test, a name that directly speaks to how the test
will assist clinicians in determining the next steps for their
patients by providing information that is not available by using
only the current standard of care, a low-dose CT scan.
OncoCyte also announced that its clinical
laboratory has passed the required review and inspection by the
California Department of Public Health Laboratory Field Services
for State Clinical Laboratory licensing and CLIA certification.
OncoCyte expects to receive its California State Clinical
Laboratory license and CLIA Certificate in the coming weeks.
“Our team has established a solid track record
of achieving important milestones and, as a result of recent
progress, we are continuing to plan for the commercial launch of
our lung cancer diagnostic test in the fourth quarter of 2017,”
said William Annett, Chief Executive Officer. “Upon launch,
DetermaVu will be the only commercially available non-invasive
liquid biopsy confirmatory lung cancer diagnostic test in what we
estimate could be a $4.7 billion annual market in the U.S.
depending on market penetration and reimbursable pricing.”
Other Recent Operating
Highlights
- Announced positive data from the Company’s lung cancer
Analytical Validation Study, which established the performance
characteristics of DetermaVu. The results were consistent with the
data reported at the American Thoracic Society 2017 International
Conference, which demonstrated sensitivity of 95%, specificity of
73%, and Area Under the Curve (AUC) of 0.92. Sensitivity and
specificity are statistical measures of test performance, with
sensitivity measuring the percentage of malignant nodules that are
identified correctly by the test and specificity measuring the
percentage of benign nodules correctly identified. The AUC of a
test is a measure of overall global accuracy that combines
sensitivity and specificity, with 1.0 being perfect accuracy and
0.50 being a random result. The reported score of 0.92 means that
92% of samples were correctly identified,
- Commenced its CLIA Lab Validation Study in which OncoCyte will
assay approximately 120 samples previously tested in the
299-patient study presented at the ATS meeting, with the goal of
demonstrating that OncoCyte’s new clinical laboratory will provide
the same results on clinical samples as those obtained in the
R&D lab, and
- Completed a follow-on study of OncoCyte’s breast cancer
diagnostic test, confirming the findings of the Company’s previous
breast cancer study, which were presented at the San Antonio Breast
Cancer Symposium in December 2016. The follow-on study, known
as NICE-BC (Non-Invasive Confirmatory dEtection (of) Breast
Cancer), has been submitted for presentation at a major medical
conference.
Near-Term Milestones
OncoCyte’s goals for the near term include the
following:
- Data from OncoCyte’s latest confirmatory lung cancer diagnostic
research will be presented in a slide presentation at the American
College of Chest Physician’s CHEST 2017 annual meeting. The meeting
will be held in Toronto, Ontario, Canada, from October 28 to
November 1,
- An abstract concerning the lung cancer Analytical Validation
Study results has been accepted for presentation at the
International Association for the Study of Lung Cancer, which will
take place in Chicago from September 14-16. The oral presentation
will be given by Philip McQuary, Ph.D., Director, Product
Development, at OncoCyte,
- William Haack, Vice President of Market Access at OncoCyte,
will address the Next Generation Dx Summit 2017 on successful
reimbursement strategies for diagnostic tests. Mr. Haack’s
presentation will focus on clinical utility studies as the key to
successful reimbursement, and is being given on August 16. The Next
Generation DX Summit will take place at the Grand Hyatt Washington
in Washington, D.C.,
- A DetermaVu Clinical Validation Study to assess the performance
of DetermaVu against clinically confirmed cancer diagnoses will be
conducted. All of the samples required for this study have now been
collected,
- Commercial launch of DetermaVu as a liquid biopsy lung cancer
diagnostic test, if the results of the CLIA Lab Validation Study
and the Clinical Validation Study results confirm that the test
meets commercial standards for sensitivity and
specificity,
- Expansion of OncoCyte’s commercial capabilities in sales and
marketing, revenue cycle management and
reimbursement,
- Seek agreements with international distributors for DetermaVu,
payments for which OncoCyte anticipates will be on a cash basis,
and
- Begin the execution of a comprehensive, proactive approach to
pursuing coverage and reimbursement from Medicare and U.S. private
payers. OncoCyte expects that U.S. revenue will be limited until if
and when reimbursement is received from Medicare and/or private
payers.
Second Quarter 2017 Financial
Results
For the quarter ended June 30, 2017, OncoCyte
incurred a net loss of $3.8 million, or ($0.13) per share, compared
to a net loss of $2.5 million, or ($0.10) per share, in the second
quarter of 2016.
Operating expenses for the three months ended
June 30, 2017, were $3.6 million, as reported, and were $3.1
million, on an as adjusted basis.
Research and development expenses for the
quarter ended June 30, 2017, were $2.0 million compared to $1.2
million for the same period in 2016. The increase is primarily
attributable to increases of $0.3 million in development and
clinical trials expenses for DetermaVu, $0.1 million in amounts
charged to OncoCyte for facilities and services provided by
BioTime, $0.1 million in salaries and payroll related expenses due
to increased headcount, $0.1 million in stock based compensation
expenses, and $0.1 million in outside service expenses and
consulting fees.
General and administrative expenses of $1.1
million were substantially the same as the amount incurred during
the same period of 2016.
At June 30, 2017, OncoCyte had cash and cash
equivalents of $8.6 million and available-for-sale securities
valued at $1.1 million. In July 2017, the Company raised $5.74
million through the exercise of stock purchase warrants by certain
investors.
Six Month 2017 Financial
Results
The net loss for the six months ended June 30,
2017, was $8.5 million, or ($0.29) per share, compared to $5.5
million, or ($0.22) per share, in the first six months of
2016.
Operating expenses for the six months ended June
30, 2017, were $8.1 million, as reported, and were $6.1 million, on
an as adjusted basis.
Research and development expenses for the six
months ended June 30, 2017, increased to $3.8 million from $2.9
million for the same period in 2016. The increase in research and
development expenses of $0.9 million for the six months ended June
30, 2017, compared to six months ended June 30, 2016, is primarily
attributable to increases of $0.3 million in development and
clinical trial expenses for DetermaVu, $0.3 million in salaries and
payroll related expenses, $0.3 million in stock based compensation
expenses and $0.2 million in amounts charged to us by BioTime, Inc.
for facilities and services. Those increases were offset by a
decrease of $0.5 million in outside services expenses and
consulting fees.
For the six months ended June 30, 2017, general
and administrative expenses increased to $3.2 million from $2.1
million for the same period in 2016. The increase is mainly
attributable to $1.1 million in shareholder noncash expense for the
issuance of additional warrants to certain investors who agreed to
exercise certain stock purchase warrants substantially before the
warrant expiration date.
Conference Call
OncoCyte will host a conference call today,
August 14, 2017, at 4:30 p.m. ET / 1:30 p.m. PT to discuss
financial results.
The dial-in number in the U.S./Canada is
877-419-6591; international participants the number is
719-457-2648. For all callers, refer to Conference ID 6751720. 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 719-457-0820. Use
the Conference ID 6751720. Additionally, the archived webcast will
be available
at 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 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, 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.
DetermaVu is a trademark of OncoCyte
Corporation.
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) are forward-looking
statements. These statements include those pertaining to the
implementation and results of our 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 future capital, and
maintenance of intellectual property rights, and the need to obtain
third party reimbursement for patients' 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.
TABLES FOLLOW
ONCOCYTE CORPORATION |
CONDENSED BALANCE SHEETS |
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
2017 |
2016 |
(unaudited) |
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
Cash
and cash equivalents |
$ |
8,644 |
|
|
$ |
10,174 |
|
Available-for-sale securities, at fair value |
|
1,113 |
|
|
|
2,237 |
|
Prepaid expenses and other current assets |
|
512 |
|
|
|
285 |
|
Total
current assets |
|
10,269 |
|
|
|
12,696 |
|
|
|
|
|
|
|
|
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
Intangible assets, net |
|
867 |
|
|
|
988 |
|
Equipment and furniture, net |
|
895 |
|
|
|
688 |
|
Deposits |
|
110 |
|
|
|
75 |
|
TOTAL
ASSETS |
$ |
12,141 |
|
|
$ |
14,447 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
Amount due to BioTime and affiliates |
$ |
2,540 |
|
|
$ |
2,854 |
|
Accounts payable and accrued liabilities |
|
1,316 |
|
|
|
1,219 |
|
Loan
payable, current |
|
533 |
|
|
|
- |
|
Capital lease liability, current |
|
297 |
|
|
|
202 |
|
Total
current liabilities |
|
4,686 |
|
|
|
4,275 |
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
Loan
payable, net of issuance costs, noncurrent |
|
1,416 |
|
|
|
- |
|
Capital lease liability, noncurrent |
|
400 |
|
|
|
310 |
|
TOTAL
LIABILITIES |
|
6,502 |
|
|
|
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; 29,520 and
28,737 shares issued and outstanding at June 30, 2017 and December
31, 2016, respectively |
|
49,985 |
|
|
|
45,818 |
|
Accumulated other comprehensive loss on available-for-sale
securities |
|
(535 |
) |
|
|
(654 |
) |
Accumulated deficit |
|
(43,811 |
) |
|
|
(35,302 |
) |
Total
stockholders’ equity |
|
5,639 |
|
|
|
9,862 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
12,141 |
|
|
$ |
14,447 |
|
ONCOCYTE CORPORATION |
CONDENSED STATEMENTS OF
OPERATIONS |
(IN THOUSANDS, EXCEPT PER SHARE
DATA) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
(1,997 |
) |
|
$ |
(1,195 |
) |
|
$ |
(3,831 |
) |
|
$ |
(2,884 |
) |
|
General and administrative |
|
|
(1,115 |
) |
|
|
(1,067 |
) |
|
|
(3,158 |
) |
|
|
(2,081 |
) |
|
Sales
and marketing |
|
|
(477 |
) |
|
|
(270 |
) |
|
|
(1,132 |
) |
|
|
(499 |
) |
|
Total
operating expenses |
|
|
(3,589 |
) |
|
|
(2,532 |
) |
|
|
(8,121 |
) |
|
|
(5,464 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations |
|
|
(3,589 |
) |
|
|
(2,532 |
) |
|
|
(8,121 |
) |
|
|
(5,464 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES), NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of available-for-sale securities and other
expenses, net |
|
(150 |
) |
|
|
- |
|
|
|
(309 |
) |
|
|
- |
|
|
Interest expense, net |
|
|
(65 |
) |
|
|
(11 |
) |
|
|
(79 |
) |
|
|
(7 |
) |
|
Total
other expenses, net |
|
|
(215 |
) |
|
|
(11 |
) |
|
|
(388 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(3,804 |
) |
|
$ |
(2,543 |
) |
|
$ |
(8,509 |
) |
|
$ |
(5,471 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share |
|
$ |
(0.13 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: basic and diluted |
|
|
29,398 |
|
|
|
25,427 |
|
|
|
29,183 |
|
|
|
25,411 |
|
|
|
ONCOCYTE CORPORATION |
CONDENSED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
June 30, |
|
|
2017 |
|
2016 |
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net
loss |
|
$ |
(8,509 |
) |
|
$ |
(5,471 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
144 |
|
|
|
54 |
|
Amortization of intangible assets |
|
|
121 |
|
|
|
121 |
|
Stock-based compensation |
|
|
696 |
|
|
|
361 |
|
Loss
on sale of available-for-sale securities, including selling
commissions |
|
|
309 |
|
|
|
- |
|
Warrants issued to certain shareholders as inducement of exercise
of warrants |
|
|
1,084 |
|
|
|
- |
|
Amortization of debt issuance costs |
|
|
30 |
|
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Amount due to BioTime and affiliates |
|
|
(313 |
) |
|
|
992 |
|
Prepaid expenses and other current assets |
|
|
(194 |
) |
|
|
259 |
|
Accounts payable and accrued liabilities |
|
|
61 |
|
|
|
(290 |
) |
Net
cash used in operating activities |
|
|
(6,571 |
) |
|
|
(3,974 |
) |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net
proceeds from sale of available-for-sale securities |
|
|
934 |
|
|
|
- |
|
Purchase of equipment |
|
|
(55 |
) |
|
|
(10 |
) |
Security deposit |
|
|
- |
|
|
|
(54 |
) |
Net
cash provided by (used in) investing activities |
|
|
879 |
|
|
|
(64 |
) |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from exercise of options |
|
|
257 |
|
|
|
82 |
|
Proceeds from exercise of warrants |
|
|
2,031 |
|
|
|
- |
|
Proceeds from issuance of loan payable, net of financing costs |
|
|
1,982 |
|
|
|
- |
|
Repayment of capital lease obligations |
|
|
(108 |
) |
|
|
(40 |
) |
Net
cash provided by financing activities |
|
|
4,162 |
|
|
|
42 |
|
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS |
|
|
(1,530 |
) |
|
|
(3,996 |
) |
CASH
AND CASH EQUIVALENTS: |
|
|
|
|
|
|
|
|
At
beginning of the period |
|
|
10,174 |
|
|
|
7,996 |
|
At
end of the period |
|
$ |
8,644 |
|
|
$ |
4,000 |
|
NON-GAAP FINANCIAL MEASURES |
|
This press
release includes operating expenses prepared in accordance with
accounting principles generally accepted in the United States
(GAAP), and includes certain historical non-GAAP operating
expenses. In particular, OncoCyte has provided non-GAAP total
operating expenses, adjusted to exclude noncash stock-based
compensation, depreciation and amortization and warrants expense
issued to certain shareholders as an inducement of exercise of
warrants. Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable financial
measures prepared in accordance with GAAP. However, OncoCyte
believes the presentation of non-GAAP total operating expenses,
when viewed in conjunction with our GAAP total operating expenses,
is helpful in understanding OncoCyte’s ongoing operating expenses
and its programs. |
|
Furthermore, management uses these non-GAAP financial measures in
the aggregate to establish budgets and operational goals, to manage
OncoCyte’s business and to evaluate its performance and its
programs. |
|
ONCOCYTE CORPORATION |
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES |
ADJUSTED OPERATING EXPENSES |
|
|
|
|
For the Three Months Ended June 30, 2017
(unaudited) |
|
For the Six Months Ended June 30, 2017
(unaudited) |
|
GAAP Operating Expenses - as reported
|
|
$ |
3,589 |
|
|
$ |
8,121 |
|
|
Stock-based compensation expense |
|
|
(346 |
) |
|
|
(696 |
) |
|
Noncash warrants expense |
|
|
- |
|
|
|
(1,084 |
) |
|
Depreciation and amortization expense |
|
|
(137 |
) |
|
|
(265 |
) |
|
Non-GAAP Operating Expenses, as adjusted |
|
$ |
3,106 |
|
|
$ |
6,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contacts:
EVC Group, Inc.
Matt Haines / Michael Polyviou
917-733-9297 / 212-850-5600
mhaines@evcgroup.com / mpolyviou@evcgroup.com
Financial Media Contact:
GIBSON Communications, LLC
Tom Gibson
201-476-0322
tom@tomgibsoncommunications.com