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Oncocyte Sees $2M in Q2 Revenues, Beating Wall Street Estimate

NEW YORK – Oncocyte said after the close of the market on Tuesday that its revenues for the three months ended June 30 were $2 million, compared to $143,000 in the same period of 2020 and beating analysts' average estimate of $1.57 million.

The Irvine, California-based firm said the majority of revenues were attributable to tech transfer under a licensing deal announced last December with Chinese firm Burning Rock Biotech for Oncocyte's DetermaRx lung cancer test. Revenues from DetermaRx also increased compared to the prior year's quarter.

During a call discussing the company's earnings, Oncocyte CEO Ron Andrews said that the company is anticipating continued momentum for DetermaRx.

"We have continued our expansion into new hospitals with a total of 176 onboarded hospitals at the end of Q2 … an approximate 43 percent growth over what we reported for Q1. At the end of Q2 we also had a total of 317 onboarded physicians, which is a 45 percent increase over what we reported in the first quarter," he said.

"Continuing to grow our population of accounts and physicians … gives us continued confidence that as the effects of the pandemic begins to wane, we'll see early-stage surgeries for lung cancer get back to pre-pandemic levels, and our volumes grow at an even faster pace," Andrews added.

Pharma Services revenues were slow in contrast, reflecting variability in the timing of customer projects.

According to Andrews, Oncocyte expects to gain further traction in this area as well, with new, near-term opportunities on the horizon for collaboration with pharma and molecular diagnostic developers.

The company also still plans to launch a second clinical test, DetermaIO, by the end of this year. "In terms of data, we've had a steady cadence of data that together provides compelling evidence that DetermaIO has a broad potential across a range of tumor types [and] … studies have also demonstrated the applicability of this test across all four approved immunotherapies," Andrews said.

Oncocyte incurred a net loss of $10.5 million, or $.12 per share during the quarter, compared to $9.1 million, or $.14 per share in the same period last year. Analysts on average had expected a lower loss per share of $.10.

Its Q2 R&D expenses dropped about 22 percent to $2.5 million from $3.2 million in Q2 2020. According to the company, this reflects decreases in outside services and clinical consulting for its development programs, as well as a $300,000 depreciation expense decrease.

Oncocyte's SG&A expenses doubled to $10.6 million from $5.3 million, driven by noncash stock-based compensation expenses. According to the firm, it also incurred a $2.5 million severance expense from its acquisition of Chronix Biomedical.

Oncocyte ended the quarter with $46.5 million in cash and cash equivalents and $1.1 million in marketable securities.