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Oncocyte to Acquire Insight Genetics for $12M

NEW YORK – OncoCyte said after the close of the market on Friday that it has entered into an agreement to acquire all of the outstanding capital stock of privately held Insight Genetics, including a lung cancer immunotherapy test in development by the firm.

According to OncoCyte, the acquisition also gives it access to IG's existing pharma services infrastructure, which includes a CLIA-certified and CAP-accredited lab, and a menu of single-gene tests for various actionable biomarkers, including two emerging therapeutic targets, RET and NTRK.

Under the terms of the firms' agreement, upon closing of the transaction, OncoCyte will deliver closing consideration of approximately $12 million, consisting of $7 million in cash and $5 million of OncoCyte common shares, minus deductions for transaction expenses and other liabilities.

The merger agreement provides for OncoCyte to pay a 10-year revenue share of not more than 10 percent of net collected revenues for current IG pharma service offerings and a tiered revenue share percentage of net collected revenues through the end of the lifecycle if certain new cancer tests are developed using IG's technology. OncoCyte may pay contingent consideration of up to $6 million, in any combination of cash or OncoCyte common shares, if certain milestones are achieved, the firm added.

IG's immunotherapy assay, called the Immune Modulation, or IM Score, is a gene expression test performed on biopsy tissue, which provides a readout on the state of the immune system — helping to identify patients more likely to respond to anti-PD-1/PD-L1 drugs.

According to OncoCyte, data presented at last year's annual meeting of the Society for Immunotherapy of Cancer showed a strong association between the IM score and response to these therapies in lung cancer patients. Notably, the IM Score outperformed two currently marketed companion diagnostic tests for immunotherapy selection, PD-1/PD-L1 IHC staining and tumor mutational burden (TMB).

Adding the lung cancer test to its slate "expands the decision points that OncoCyte’s proprietary portfolio of tests addresses along the lung cancer continuum of care," Doug Ross, the company’s consulting chief medical officer, said in a statement.

The IM score joins OncoCyte's assay in development, DetermaVu — which is intended to help guide decision-making for patients with newly identified lung nodules — and its other recent acquisition — an early-stage lung cancer risk assessment assay developed by Razor Genomics that the firm is now calling DetermaRx and plans to launch commercially this year.

Al Parker, OncoCyte's chief operating officer, added that the firm believes the combination of assets "will create enhanced value for our stakeholders and shareholders and advances our mission to provide actionable answers at critical and underserved decision points."

Outside of lung cancer, IG has also developed a classifier that identifies six subtypes of triple negative breast cancer.