NEW YORK – Investment bank BTIG has downgraded Oncocyte from a Buy rating to Neutral following the diagnostics firm's announcement late Wednesday that President and CEO Ronnie Andrews has stepped down.
In a note to investors, on Thursday, Mark Massaro called Andrews the "heart and soul" of the company, adding that his departure is the firm's third in recent months, following former CFO Mitch Levine and former Chief Commercial Officer Padma Sundar.
"To say we are disappointed by Ronnie's (and Mitch's) departure is an understatement," he said.
Massaro questioned whether the pattern of departures suggests a board of directors intent on "sweeping changes," but said members declined to comment.
Josh Riggs, formerly the company's senior director of business development and general manager of transplant, will serve as interim CEO. Riggs originally joined Oncocyte from Andrews' consulting firm, Bethesda Group.
During a call discussing its Q3 financial results last month, Oncocyte disclosed that it had hired a consultant to explore strategic alternatives. According to Massaro, this doesn't necessarily mean a sale of the business, but he said BTIG wouldn't rule that out.
"The bottom line is that Oncocyte presently lacks scale, and capital, though we do think that [the company] has proprietary assets of value," he added, calling BTIG's outlook "cautiously optimistic" regarding Oncocyte's ability to realize value.
The investment bank does not provide price targets for neutral-rated stocks.