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Oncocyte Laying off 40 Percent of Staff, Selling DetermaRx Test

NEW YORK – Diagnostics firm Oncocyte said on Friday that it will lay off more than 40 percent of its workforce, including top executives, and sell its DetermaRx lung cancer test as part of a company reorganization.

Specifically, Irvine, California-based Oncocyte will eliminate the positions occupied by Gisela Paulsen, president and chief operating officer, and Douglas Ross, CSO, both of whom will serve as advisers during a transition period over the next quarter.

The company also said it has entered into a stock purchase agreement to sell 70 percent of its stake in Razor Genomics, including all of the assets and liabilities related to its lung cancer prognostic test DetermaRx. It did not identify the buyers but said they are "leaders in the development of early-stage lung cancer diagnostics and the provision of gene-expression-based prognostic tests." The transaction will close "at a later date," the company said.

"We expect the transfer of the Razor entity will allow us to eliminate development and commercialization costs with respect to DetermaRx while retaining 30 percent of any potential upside from the test, which is used to assess the risk of recurrence for patients with early-stage lung cancer," Joshua Riggs, Oncocyte’s interim CEO, said in a statement. "We believe this transaction, along with the reduction in force, will prepare us for a more focused strategy and further elongate our cash runaway as we prepare for key commercial and developmental milestones in 2023. We plan to keep shareholders updated with our enhanced focus and strategy in Q1 2023."

At the beginning of December, former Oncocyte President and CEO Ronnie Andrews stepped down, following the earlier resignations of former CFO Mitch Levine and former Chief Commercial Officer Padma Sundar.