On May 15, 2024 Oncocyte Corporation (Nasdaq: OCX), a precision diagnostics company, reported financial results for the quarter ended March 31, 2024 (Press release, Oncocyte, MAY 15, 2024, View Source [SID1234643332]).
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Recent Highlights
● Announced global commercialization partnership with Bio-Rad Laboratories, Inc.
● On track to ship research use only (RUO) GraftAssureTM transplant monitoring test kits to initial customers in Asia, the U.S., and the EU in 2Q 2024. IVD kits are under development for FDA submission.
● Raised $15.8 million in gross proceeds from equity private placement; as part of the financing, Bio-Rad purchased 8.99% of Oncocyte; new and existing investors invested as well.
● Reduced cash burn to $3.9 million, reflecting capital-efficient business model.
"In the first quarter of 2024, Oncocyte made significant progress toward commercializing its innovative blood-based diagnostic tests. That progress was bolstered by a $15.8 million equity private placement and a global strategic partnership with Bio-Rad Laboratories," said Josh Riggs, Oncocyte’s CEO. "We believe that the collaboration with Bio-Rad is pivotal for the upcoming launch of our GraftAssure RUO transplant rejection diagnostic test kit and central to our mission of developing and providing accessible point of care diagnostics and continuous innovation in transplant rejection monitoring."
"The Bio-Rad partnership validates the efficacy and market opportunity of our proprietary assays and enables us to rapidly enter the growing transplant monitoring market at key academic centers with GraftAssure RUO. It also lays the groundwork for broader commercial expansion. Together with Bio-Rad, we are developing regulated products including VitaGraft TM Kidney IVD, and preparing for clinical adoption. Additionally, our technology has been selected to support multiple Phase 2 clinical studies by pharmaceutical companies that are developing therapeutics to treat and manage anti-body mediated rejection. These therapeutic studies may unlock valuable new commercial applications."
"Building on the momentum of these achievements, we are preparing to ship to several initial commercial customers in the U.S., the EU, and Asia in Q2. We are encouraged by prospective customers’ positive response to GraftAssure’s superior affordability, turn-around-time, and ease of use. We are well-positioned to achieve numerous critical commercial and regulatory milestones throughout 2024 and into 2025. We also are continuing to advance the development of our oncology diagnostics pipeline products, DetermaIO and DetermaCNI. Lastly, in Q1 2024, our cash burn stayed low at $3.9 million , reflecting our cost-control measures and financial discipline. We continue to meet our goal of maintaining a low average quarterly burn rate below $5 million."
2024 First Quarter Financial Results
Net revenue for the three months ended March 31, 2024 was $176,000, a decrease of 41% compared to the same period in 2023, due to decreased revenue from our Pharma Services business.
Total cost of revenues for the three months ended March 31, 2024 was $274,000, a decrease of 5% compared to the same period in 2023. Total cost of revenues included $252,000 from the cost of diagnostic tests and testing services we performed for Pharma Services customers, with the remaining cost from noncash amortization expense.
Research and development expense for the three months ended March 31, 2024 was $2.2 million, an increase of 2% compared to the same period in 2023. The increase was driven by continued focused investment in developing kitted versions of assays including DetermaIOTM, VitaGraft and DetermaCNITM.
Sales and marketing expense for the three months ended March 31, 2024 was $846,000, an increase of 22% compared to the same period in 2023. The increase was primarily driven by a continued ramp in sales, marketing and commercialization activities related to the commercial launch of GraftAssure.
General and administrative expense for the three months ended March 31, 2024 was $2.7 million, a decrease of 22% compared to the same period in 2023. The decrease was primarily due to decreased stock-based compensation, personnel expenses, professional fees, and facilities and insurance expenses.
Loss from operations for the three months ended March 31, 2024 was $9.3 million, compared to income from operations of $5.9 million during the same period in 2023. The increased loss from operations was primarily due to the unrealized noncash change in fair value of contingent consideration. The 2024 loss from operations included a loss of $3.3 million from the change in fair value of contingent consideration, compared to a gain of $18.3 million in 2023. Excluding the change in fair value of contingent consideration, the 2024 loss from operations decreased 52% compared to 2023.
For Oncocyte’s complete financial results for the first quarter ended March 31, 2024, see the Company’s quarterly Form 10-Q to be filed with the Securities and Exchange Commission on May 15, 2024.