NEW YORK – Lung cancer diagnostics firm OncoCyte said after the close of the market on Thursday that it posted $555,000 in revenues for the third quarter compared to none a year ago.
The Irvine, California-based firm beat the analysts' average estimate of $370,000.
OncoCyte has continued rapid commercial growth through the quarter, the company said, specifically noting that testing volume has more than doubled from 64 billable samples in Q2 to 175 in Q3. The firm has also increased onboarded hospitals from 36 in Q2 to 67 in Q3, including cancer centers in the National Comprehensive Cancer Network and the National Cancer Institute.
Following its decision earlier this year to discontinue efforts to bring its blood-based lung cancer detection assay, DetermaDx, to the clinic, OncoCyte has instead worked to drive adoption of and revenue for its DetermaRx and DetermalO products. For example, the firm said last month that it is collaborating with Italy-based Fondazione Michelangelo to evaluate the firm's DetermalO test as a therapy response predictor in the NeoTRIPaPDL1 trial.
"We believe that DetermaIO’s inclusion as a predictive biomarker in an international investigator-sponsored triple negative breast cancer clinical trial has increased our visibility among academic and pharma trial groups over the last few months," OncoCyte CEO Ron Andrews said in a statement. "We remain on pace to achieve our goal of a US clinical launch in the second half of 2021."
As part of OncoCyte's fledgling pharma services business, the firm partnered with Guardian Research Network in September to improve precision medicine clinical trials, with an initial focus on immune-oncology.
On a call with investors following the release of earnings, Andrews said that the firm believes it is "just starting to scratch the surface of" the pharma services business. The firm plans to offer a full suite of molecular analyses, including tissue and blood-based technologies, proprietary platforms, and custom next-generation sequencing and PCR services.
"In 2021, we expect it to generate operating cash ... [that will deliver] resources to fund other growth areas," Andrews said. "Along with DetermaRx, our pharma services provided [an] immediate and growing revenue engine, which support our operations."
The firm also expanded international distribution of DetermaRx through an agreement with GenCell in Mexico, Columbia, and Brazil.
In addition, OncoCyte signed a licensing and collaborative agreement with Chronix Biomedical last month to license Chronix's TheraSure-CNI Monitor technology for blood-based copy number instability testing.
Andrews said that the firm plans to "complete tech transfer and launch the test for research use in immune therapy clinical trials during Q1 of 2021."
For the recently completed quarter, OncoCyte's net loss rose to $6.8 million, or $.10 per share, compared to a net loss of $5.2 million, or $.10 per share, in the year-ago period. Analysts on average had expected a loss per share of $.09.
The company used 67.2 million shares to calculate its per-share loss figure for Q3 2020 compared to 52 million shares a year ago. In April the company said it would offer about 4.7 million shares of its common stock to institutional investors to raise $10.7 million. In January OncoCyte said it would offer about 3.5 million common shares to Pura Vida Investments to raise $7.6 million.
OncoCyte's Q3 R&D expenses soared about 63 percent to $2.6 million from $1.6 million in the same quarter last year. The firm's sales, marketing, general, and administrative expenses jumped 83 percent to $6.6 million from $3.6 million.
OncoCyte ended the quarter with $10.3 million in cash and cash equivalents and $361,000 in marketable securities.
Last month, OncoCyte presented results from a prospective study at the online 2020 IASLC World Conference on Lung Cancer that added to evidence that its DetermaRx test can predict both outcomes and adjuvant chemotherapy benefit in patients with NSCLC. The firm has begun recruiting for a prospective randomized trial largely focusing on stage IA NSCLC patients.
"We have solid momentum in our Pharma Services business and expect to exit 2020 ahead of our $2 million of committed projects goal for the year and expect the business to generate positive operating margin in 2021," Andrews added. "We are on track across all our major milestones despite the continued headwind of the ongoing pandemic."