NEW YORK – OncoCyte said after the close of the market on Tuesday that its third quarter net loss rose 73 percent year over year as it prepares for 2020 launches of two lung cancer tests.
Next year, the firm plans to release a test to noninvasively assess risk in patients with lung nodules and another to predict which patients may need added chemotherapy after surgery.
For the three months ended Sept. 30, the Alameda, California-based diagnostic developer incurred a net loss of $5.2 million, or $.10 per share, compared to a net loss of $3.0 million, or $.07 per share, in the year-ago period. Wall street analysts, on average, had expected a slightly lower per-share loss of $.09.
OncoCyte did not report any Q3 revenues.
The major milestone for the company during the quarter was its acquisition of a 25 percent stake in Razor Genomics, along with full commercialization rights to that firm's test, a lung cancer treatment stratification assay that had at one point been slated for commercialization by Life Technologies.
"We are incredibly excited with the addition of the Razor … test to our expanding portfolio and are efficiently ramping up commercialization efforts and market preparation for a first quarter 2020 launch," OncoCyte CEO Ron Andrews said in a statement.
"In parallel, we continued to advance DetermaVu, and we remain on track for completion of CLIA validation in the first quarter of 2020. While we still have work ahead of us, there is an incredible momentum at OncoCyte, and the coming months will be important for us as we transition to a commercial-stage company while maintaining our velocity of product development and validation," he added.
During a call discussing the firm's Q3 earnings, Andrews added that OncoCyte is in the process of reviewing resumes for sales reps, with the goal of having six, plus a sales leader, in place by next February.
Final pricing for the test is expected sometime in Q1, and OncoCyte's marketing plan for the Razor test will be "highly targeted with an initial focus on 10 geographic regions that represent high-risk populations," he said.
"We've been meeting with numerous thoracic surgeons [and have] had several meetings with potential early adopter sites," Andrews added. Padma Sundar, OncoCyte's senior VP of marketing, said that the firm has identified three early-access sites, which it hopes to announce publicly soon.
Finally, although the firm's initial test, DetermaVu, has now been overtaken in the commercialization pipeline by the new Razor assay, Andrews reiterated that OncoCyte is continuing to advance its firstborn and remains on track for completion of CLIA validation of that test in the first quarter of 2020, with submission of a clinical validation dossier to CMS planned for closer to the end of the year.
OncoCyte's Q3 R&D expenses rose about 7 percent to $1.6 million from $1.5 million in the same quarter last year, and its SG&A expenses shot up 140 percent to $3.6 million from $1.5 million. According to company officials, this was primarily attributable to investment banking-related expenses; personnel costs, including management transition costs; along with various other operational expenses.
Sales and marketing costs were also up, reflecting hiring and other "ramp-up" activities. The firm said it expects this to continue to increase as it builds a commercial team for its DetermaVu and Razor tests.
OncoCyte ended the quarter with $19.4 million in cash and cash equivalents and $415,000 in marketable securities. In September, the firm paid $11.2 million to acquire its 25 percent stake in Razor Genomics.
The company has since strengthened its balance sheet, refinancing an existing loan for an additional facility in October, and saying this Thursday that it was raising another $8.6 million by issuing 5,058,824 shares, at market price, to strategic long-term investors.