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OncoCyte Q4 Net Loss Widens as Lung Cancer Test Validation Continues

NEW YORK (GenomeWeb) – OncoCyte reported after the close of the market on Monday that its fourth quarter net loss grew 29 percent year over year as it continues to prepare to commercialize its first test by the end of 2018.

The liquid biopsy firm's net loss for the three-month period ended Dec. 31 was $4.0 million, or $.13 per share, compared to a net loss of $3.1 million, or $.11 per share, in the fourth quarter of 2016. The company matched analyst expectations for a net loss of $.13 per share.

Research and development spending was up about 7 percent at $1.5 million compared to about $1.4 million in the third quarter of 2016 as the company continued to validate its DetermaVu lung cancer test.

Last November, OncoCyte said it was extending the anticipated launch date for DetermaVu from late 2017 to late 2018, due to "inconsistent analytic results" observed during the final clinical validation of the test.

SG&A costs during Q4 rose to $2.4 million from $1.7 million in the same period last year, mainly due to increased legal and patent-related costs, consulting, salaries, and payroll-related expenses.

The company outlined several goals for 2018, including completing its current DetermaVu confirmation study by the end of Q2, selecting a final commercial platform for the test, and conducting and reporting final validation research.

Recent highlights include a $10 million private placement of common shares with two current investors in March.

The company also reported positive data from a small study in which it explored running DetermaVu on three different commercial platforms, which all yielded equivalent results. The company initially developed DetermaVu on Nanostring's nCounter system, and is now considering Illumina sequencing, but it has not disclosed the other possibilities being evaluated.

During a call discussing the company's earnings, Oncocyte CEO Bill Annett said that as part of that platform comparison — which the firm began after its struggles with inconsistent results last year — researchers also performed new biomarker discovery that picked up more than 100 additional predictive markers, some of which appeared to have stronger associations than those in the firm's existing algorithm.

Annett said that OncoCyte has filed patent applications for those new markers and has now taken a step back to revalidate the DetermaVu test based on an integration of these new markers and potentially a new diagnostic platform.

The company will make its final decision on both biomarkers and platform based on a confirmation study that will be completed by the end of Q2. Then it will perform several more validation studies with the finalized test.

For full year 2016, Oncocyte's net loss was $19.4 million, or $.64 per share compared to $11.2 million, or $0.42 per share, in 2016. Analysts, on average, had expected the company to post a loss per share of $0.65.

Over the full year, the firm's R&D expenses were up about 20 percent to $7.2 million from $5.7 million in 2016. Certification and maintenance of the company's CLIA laboratory contributed to this, as did the firm's ongoing validation research.

OncoCyte's 2017 SG&A costs climbed to $11.7 from $5.5 in the previous year. This included a $4.1 million noncash charge for the issuance of warrants to certain investors, legal and patent related expenses, and personnel costs.

As of Dec. 31, 2016, OncoCyte had cash and cash equivalents of $7.6 million.