On November 12, 2020 Five Prime Therapeutics, Inc. (Nasdaq: FPRX), reported the pricing of an underwritten public offering of 7,200,000 shares of its common stock at a price to the public of $21.00 per share (Press release, Five Prime Therapeutics, NOV 12, 2020, View Source [SID1234570817]). The size of the offering was upsized from 5,000,000 shares to 7,200,000 shares. Five Prime estimates that the net proceeds from the sale of the shares will be approximately $141.9 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by Five Prime. In addition, Five Prime has granted the underwriters in the offering a 30-day option to purchase up to 1,080,000 additional shares of common stock at the public offering price. The offering is expected to close on November 17, 2020, subject to customary closing conditions.

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Five Prime plans to use the net proceeds of the offering, together with other available funds, to fund ongoing clinical development of bemarituzumab and FPT155, to advance FPA157 through preclinical and into clinical development, to advance its late-stage research programs and for working capital and general corporate purposes.

Cowen and SVB Leerink are acting as joint book-running managers for the offering. Wedbush PacGrow is acting as co-manager for the offering.

The shares of common stock are being offered pursuant to a "shelf" registration statement previously filed with and declared effective by the Securities and Exchange Commission (SEC). Five Prime has filed a preliminary prospectus supplement and the accompanying prospectus related to the offering with the SEC, which are available on the SEC’s website, located at www.sec.gov. Copies of the final prospectus supplement relating to this offering, when available, and the accompanying prospectus may be obtained from: Cowen and Company, LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, by telephone at (833) 297-2926 or by email at [email protected], or SVB Leerink LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, MA 02110, by telephone at (800) 808-7525, ext. 6132 or by e-mail at [email protected].

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

On November 12, 2020 Navidea Biopharmaceuticals, Inc. (NYSE American: NAVB) ("Navidea" or the "Company"), a company focused on the development of precision immunodiagnostic agents and immunotherapeutics, reported its financial results for the third quarter and year-to-date for the period ended September 30, 2020 (Press release, Navidea Biopharmaceuticals, NOV 12, 2020, View Source [SID1234570811]).

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"Navidea continues to build on its clinical momentum and this quarter fully shows our ability to execute during a very trying time globally," said Mr. Jed A. Latkin, Chief Executive Officer of Navidea. "The due diligence continues with Jubilant and the Phase 2b is nearing its conclusion. We are very excited to move forward and present to the FDA in the near future."

Third Quarter 2020 Highlights and Subsequent Events

Executed a binding memorandum of understanding ("MOU") on August 9, 2020 with Jubilant Draximage Inc. dba Jubilant Radiopharma, Radiopharmaceuticals Division ("Jubilant"). The MOU outlines the terms and framework for an Exclusive License and Distribution Agreement for Navidea’s Rheumatoid Arthritis Diagnostic in the United States, Canada, Mexico, and Latin America. In connection with the MOU, Jubilant made a $1 million equity investment in exchange for a limited exclusivity period while final due diligence efforts are completed.
Entered into a Stock Purchase Agreement with investors, pursuant to which the investors agreed to purchase up to $25.0 million in shares of the Company’s Common Stock.
Entered into a Stock Purchase Agreement and Letter of Investment Intent with an existing investor, pursuant to which the Company agreed to issue to the investor 150,000 shares of newly-designated Series D Redeemable Convertible Preferred Stock (the "Series D Preferred Stock") for an aggregate purchase price of $15.0 million. Pursuant to the Series D Preferred Stock Purchase Agreement, Keystone will purchase Series D Preferred Stock in amounts to be determined by Keystone in one or more closings during the nine-month period following the date on which the prospectus supplement to register the underlying Common Stock was filed with the SEC, provided that all of the Series D Preferred Stock must be purchased by such date. The Series D Preferred Stock will be convertible into a maximum of 5,147,000 shares of Common Stock.
Announced acceptance by the American College of Rheumatology ("ACR") of the results from the Company’s second interim analysis of its ongoing NAV3-31 Phase 2b clinical study for presentation at the ACR Annual Meeting ("ACR Convergence 2020") under the title, "Tc99m Tilmanocept Imaging Is an Early Predictor of Clinical Response in Rheumatoid Arthritis Patients Beginning New Anti-TNFα Therapy."
Continued longitudinal imaging and clinical assessments of Arm 3 subjects, who are beginning new anti-TNFα therapy, in the NAV3-31 trial.
Continued enrollment in the Investigator Initiated Phase 2 trial being run at the Massachusetts General Hospital evaluating Tc99m tilmanocept uptake in atherosclerotic plaques of HIV-infected individuals.
Converted a provisional patent on blocking off-target organ uptake of Tilmanocept to improve on-target localization.
Received a one-year extension on its NIH phase 1 Small Business Technology Transfer grant (1R41HL147640-01A1) entitled Gallium 68 Tilmanocept for PET Imaging of Atherosclerosis Plaques, due to COVID-19 related shutdown of the research facility at the University of Alabama Birmingham. The site has reopened and these preclinical studies are ongoing.
Won dismissal of Platinum-Montaur Life Sciences LLC’s lawsuit against the Company.
Michael Rosol, Ph.D., Chief Medical Officer for Navidea, said, "The clinical research team is working diligently to advance the technology in key disease areas, with an emphasis on our RA program. The currently running Phase 2b trial in RA is proceeding well, with Arm 3 subjects having their later imaging and clinical assessments. Preparation of the package to discuss with the FDA in planning for the upcoming Phase 3 is nearing completion. We are also preparing for the start of our second Phase 2b trial comparing tilmanocept imaging to synovial tissue biopsy samples of RA patients."

Financial Results

Total revenues for the third quarter 2020 were $268,000, compared to $237,000 for the same period in 2019. Total revenues for the first nine months of 2020 were $696,000, compared to $539,000 for the same period in 2019. The increases were primarily due to increased grant revenue related to Small Business Innovation Research grants from the National Institutes of Health supporting Manocept development.
Research and development ("R&D") expenses for the third quarter of 2020 were $1.4 million, compared to $1.8 million in the same period in 2019. The third quarter decrease was primarily due to net decreases in drug project expenses, including decreased Manocept diagnostic and Tc99m tilmanocept development costs, coupled with decreased employee compensation. R&D expenses for the first nine months of 2020 were $3.7 million, compared to $3.6 million in the same period in 2019. The year-to-date increase was primarily due to net increases in drug project expenses, including increased Manocept diagnostic development costs offset by decreased Manocept therapeutic and Tc99m tilmanocept development costs, coupled with increased employee compensation.
Selling, general and administrative ("SG&A") expenses for the third quarter of 2020 were $1.8 million, compared to $1.5 million in the same period in 2019. The third quarter increase was primarily due to increased legal and professional services and employee compensation, offset by decreased travel, insurance, and depreciation costs. SG&A expenses for the first nine months of 2020 were $4.9 million, compared to $5.1 million in the same period in 2019. The year-to-date decrease was primarily due to decreased travel, legal and professional services, insurance, depreciation, and investor relations costs, offset by increased employee compensation and franchise taxes.
Navidea’s net loss attributable to common stockholders for the third quarter of 2020 was $3.3 million, or $0.13 per share, compared to $3.1 million, or $0.17 per share, for the same period in 2019. Navidea’s net loss attributable to common stockholders for the first nine months of 2020 was $8.4 million, or $0.37 per share, compared to $8.2 million, or $0.62 per share, for the same period in 2019.
Navidea ended the third quarter of 2020 with $3.7 million in cash and cash equivalents. Since September 30, 2020, the Company has received $700,000 of cash related to the August 2020 funding transactions.
Conference Call Details

Investors and the public are invited to dial into the earnings call through the information listed below, or participate via the audio webcast on the company website. Participants who would like to ask questions during the question and answer session will be prompted by the moderator, who will provide instructions.

View Source

A live audio webcast of the conference call will also be available on the investor relations page of Navidea’s corporate website at www.navidea.com. In addition, the recorded conference call can be replayed and will be available for 90 days following the call on Navidea’s website.

On November 12, 2020 NGM Biopharmaceuticals, Inc. (NGM) (Nasdaq: NGM), a biotechnology company focused on discovering and developing transformative therapeutics for patients, reported financial results for the quarter ended September 30, 2020 (Press release, NGM Biopharmaceuticals, NOV 12, 2020, View Source [SID1234570809]).

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"We made notable progress across our pipeline this past quarter, as we continue to pursue a portfolio of product candidates directed to biologically powerful targets," said David J. Woodhouse, Ph.D., Chief Executive Officer at NGM. "Since mid-July, we have initiated a Phase 2 clinical trial of NGM621, our anti-complement C3 antibody, designed to slow disease progression in people with geographic atrophy, and we have disclosed our first immuno-oncology development candidate, NGM707, a novel dual antagonist antibody inhibiting ILT2 and ILT4, designed to potentially improve patient immune responses to tumors."

Dr. Woodhouse continued, "We look forward to our upcoming R&D Day on December 9th, where we will showcase not only our exciting portfolio of programs but also highlight the talented NGM scientists whose expertise, creativity and passion have enabled our track record of rapid innovation and sustained productivity."

Key Third Quarter and Recent Highlights

Liver and metabolic diseases

Completed enrollment in Phase 2b ALPINE 2/3 study of aldafermin in NASH patients. NGM completed enrollment in the Phase 2b ALPINE 2/3 clinical study of aldafermin in patients with biopsy-confirmed NASH and stage 2 or 3 (F2-F3) liver fibrosis. The 24-week study will assess the efficacy, safety and tolerability of 0.3 mg, 1 mg and 3 mg doses of aldafermin compared to placebo. The primary objective of the ALPINE 2/3 study is to evaluate a dose response showing an improvement in liver fibrosis by ≥ 1 stage with no worsening of steatohepatitis at week 24. NGM expects to report topline findings from the study in the second quarter of 2021.
Ongoing enrollment in Phase 2b ALPINE 4 study of aldafermin in NASH patients with compensated cirrhosis. NGM continued enrollment in the Phase 2b ALPINE 4 study of aldafermin in patients with biopsy-confirmed compensated NASH cirrhosis (F4). The 48-week study is designed to enroll approximately 150 patients and will assess the efficacy, safety and tolerability of 0.3 mg, 1 mg and 3 mg doses of aldafermin compared to placebo.
Data from 24-week doubleblind, randomized, placebo-controlled Phase 2 study (Cohort 4) of aldafermin in NASH patients presented at The Digital International Liver Congress 2020 and published in Gastroenterology. Cohort 4 demonstrated statistically significant dual activity in both reversing fibrosis and resolving NASH. In the study, aldafermin continued to demonstrate a favorable tolerability profile. Cohort 4 was the final reported cohort from NGM’s adaptive Phase 2 clinical study of aldafermin in NASH, and the results observed in Cohort 4 were consistent with data from the three previous cohorts.
Retinal diseases

Initiated Phase 2 CATALINA study of NGM621 in patients with GA. In July, NGM began the Phase 2 CATALINA study, a multicenter, randomized, double-masked, sham-controlled clinical trial to evaluate the safety and efficacy of intravitreal (IVT) injections of NGM621 in patients with GA secondary to age-related macular degeneration. NGM anticipates enrolling 240 patients diagnosed with GA in one or both eyes.
NGM will present results from a Phase 1 study of NGM621 in patients with GA at the American Academy of Ophthalmology (AAO) Virtual Annual Meeting on November 13, 2020 at 10:00 a.m. ET. NGM completed the Phase 1 study with single- and multiple-dose IVT injections of NGM621 in patients with GA. The AAO presentation will be the first-in-human data presented on NGM621 in GA.
Cancer

Expanded oncology portfolio with first immuno-oncology development candidate, NGM707, a dual antagonist antibody inhibiting ILT2 and ILT4. These receptors represent key myeloid and lymphoid checkpoints, and may restrict anti-tumor immunity, enable tumors to evade immune detection and contribute to T cell checkpoint resistance. NGM plans to initiate first-in-human testing of NGM707 in mid-2021 in patients with advanced solid tumors.
Ongoing enrollment in Phase 1a/1b study of NGM120 in patients with cancer anorexia/cachexia syndrome (CACS) and cancer. NGM continues to enroll patients in a Phase 1a/1b clinical study to evaluate NGM120, a first-in-class antagonistic antibody that binds glial cell-derived neurotrophic factor receptor alpha-like (GFRAL) and inhibits GDF15 signaling, for the potential treatment of CACS and cancer. CACS is the uncontrolled wasting of both skeletal muscle and fat that is a common co-morbidity of cancer and is associated with shortened survival in cancer patients.
Merck Collaboration

Merck has a one-time option to license NGM pipeline programs – other than aldafermin and NGM395 – following human proof-of-concept trials under the terms of the companies’ ongoing strategic collaboration. Upon exercising any such option, Merck would lead global product development and commercialization for the resulting products, if approved. Prior to Merck initiating a Phase 3 study for a licensed program, NGM may elect to either receive milestone and royalty payments or to co-fund development and participate in a global cost and revenue share arrangement of up to 50%. The agreement also provides NGM with the option to participate in the co-promotion of any co-funded program in the United States. In January 2019, Merck exercised its first option under the collaboration to license MK-3655, previously referred to as NGM313.

Third Quarter Financial Results

For the quarter ended September 30, 2020, NGM reported a net loss of $29.8 million, compared to a net loss of $10.9 million for the corresponding period in 2019.
Related party revenue from our collaboration with Merck for the quarter ended September 30, 2020 was $23.5 million, compared to $21.6 million for the corresponding period in 2019.
Research and development expenses for the quarter ended September 30, 2020 were $47.0 million, compared to $29.0 million for the corresponding period in 2019. The increase in research and development expenses was mainly attributable to increases in external research and development expenses associated with the advancement of NGM’s growing pipeline, primarily related to our aldafermin, NGM621, NGM120 and NGM707 programs, and personnel-related expenses driven by increased headcount.
General and administrative expenses for the quarter ended September 30, 2020 were $6.5 million, compared to $5.6 million for the corresponding period in 2019. The increase in general and administrative expenses was primarily attributable to increases in personnel-related expenses driven by increased headcount, as well as external expenses to support our operations as a public company.
Cash, cash equivalents and short-term marketable securities were $287.9 million as of September 30, 2020, compared to $344.5 million as of December 31, 2019.
(Press release, NGM Biopharmaceuticals, NOV 12, 2020, View Source [SID1234570809])

On November 12, 2020 PDS Biotechnology Corporation (Nasdaq: PDSB), a clinical-stage immunotherapy company developing novel cancer therapies and infectious disease vaccines based on the Company’s proprietary Versamune T-cell activating technology, reported its financial results for the third quarter ended September 30, 2020 and provided a business update (Press release, PDS Biotechnology, NOV 12, 2020, View Source [SID1234570808]).

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Third Quarter 2020 and Recent Business Highlights

Successfully raised approximately $19 million via a public offering of common stock.
Initiated VERSATILE-002, a Phase 2 trial of PDS0101, our investigational drug candidate, in combination with standard of care KEYTRUDA for first-line treatment of patients with metastatic or recurrent HPV-positive head and neck cancer.
Initiated a Phase 2 study of PDS0101 in combination with standard of care chemoradiotherapy at the MD Anderson Cancer Center for treatment of locally advanced cervical cancer.
Continued development of PDS0103 in partnership with the National Cancer Institute.
Advanced co-development program with Farmacore with plans to move the PDS0203 COVID-19 vaccine into clinical development with the support of the Brazilian government.
Expanded Board of Directors with appointment of preeminent oncologist, Otis Brawley, M.D.
"As a result of our team’s dedicated efforts during the third quarter and our clinical partnerships with leading institutions in immuno-oncology, today PDS0101 is being evaluated in three phase 2 clinical trials for multiple HPV-associated cancers," commented Dr. Frank Bedu-Addo, President and Chief Executive Officer of PDS Biotechnology. "Furthermore, the successful equity raise we completed in August strengthened our balance sheet, ensuring we can continue to progress the clinical development of our oncology programs as well as expand both our oncology and infectious disease programs despite the challenges posed by the COVID-19 pandemic."

Third Quarter 2020 Financial Review

For the third quarter of 2020, net loss was approximately $3.9 million, or $0.23 per basic share and diluted share, compared to a net loss of approximately $5.8 million, or $1.10 per basic share and diluted share for the third quarter of 2019.

Research and development expenses totaled approximately $2.1 million for the third quarter of 2020, compared to approximately $1.8 million for the same period in 2019, an increase of 12%. The increase was primarily attributable to an increase of $0.1 million in technical operations (manufacturing) and $0.3 million in clinical studies, offset by a decrease of $0.1 million in professional fees and $0.1 million in regulatory expenses.

For the third quarter of 2020, general and administrative expenses were approximately $1.8 million compared with approximately $3.0 million during the third quarter of 2019, a decrease of 40%. The decrease was primarily attributable to a decrease of $0.2 million in salary and benefits, $0.1 million in facilities and office expense, $0.3 million in insurance expense, $0.6 million in professional fees, and $0.1 million in legal fees offset by an increase of $0.1 million in licenses, taxes and fees.

Total operating expenses for the third quarter of 2020 were approximately $3.9 million, compared to total operating expenses of approximately $5.8 million during the same period of 2019, a decrease of 33%.

As of September 30, 2020, the Company’s cash balance was approximately $33.5 million.

Conference Call and Webcast

The conference call is scheduled to begin at 8:00 am ET on Thursday, November 12, 2020. Participants should dial 877-407-3088 (United States) or 201-389-0927 (International) and mention PDS Biotechnology. A live webcast of the conference call will also be available on the investor relations page of the Company’s corporate website at www.pdsbiotech.com.

After the live webcast, the event will be archived on PDS Biotech’s website for 6 months. In addition, a telephonic replay of the call will be available for 6 months. The replay can be accessed by dialing 877-660-6853 (United States) or 201-612-7415 (International) with confirmation code 13712632.

On November 12, 2020 Oncocyte Corporation (NYSE American: OCX), a molecular diagnostics company with a mission to provide actionable answers at critical decision points across the cancer care continuum, reported financial results for the third quarter and nine months ended September 30, 2020, and provided a corporate update (Press release, Oncocyte, NOV 12, 2020, View Source [SID1234570807]).

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"I am very proud of our progress over the past year as we have established four growth engines to drive revenue that will help us reduce our cash burn as we progress in our vision to become a leader in molecular diagnostics for oncology and immunotherapy," said Ron Andrews, Chief Executive Officer of Oncocyte. "This has been a quarter of growth and milestone achievements, solidifying our position as an innovator in the advancement of molecular diagnostics for early stage lung cancer. We have successfully repositioned the company over the past year by refining and expanding our suite of offerings and establishing multiple independent revenue growth engines: DetermaRx, DetermaIO, immunotherapy response monitoring, and Pharma Services, all with the potential to support our long-term growth and value creation. DetermaRx and pharma services are already generating revenue, and with our first agreement to utilize DetermaIO as a predictive biomarker in a clinical trial, DetermaIO is poised to become revenue generating before year end. The third quarter was a terrific period for DetermaRx as we received our final pricing from CMS, allowing us to bill and collect our first Medicare revenues. We continue to build upon our strong scientific foundation with collaborators publishing prospective data that further demonstrate that treatment decisions informed by DetermaRx significantly improve lung cancer patient survival. DetermaRx’s adoption at leading cancer centers and its rapid growth, with test volume more than doubling from the second quarter, reflects stakeholders’ recognition of the test’s significant clinical utility."

Mr. Andrews added, "We also continue to expand our reach in the large and rapidly growing immunotherapy space with our second growth engine, DetermaIO, our gene expression test currently available for research use only, which identifies patients most likely to respond to therapy. Our recent presentation at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting demonstrates the power of DetermaIO to identify patients who are not likely to respond to checkpoint inhibitors and may require alternative or combinatorial therapy, which significantly expands the utility of the DetermaIO test. 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, and we remain on pace to achieve our goal of a U.S. clinical launch in the second half of 2021. In addition, studies such as this generate immediate revenue through our Pharma Services business which will continue to grow as we secure additional contracts with pharmaceutical and molecular diagnostic platform companies. Our newly announced immunotherapy response monitoring opportunity, anticipated to be available in our Pharma Services arsenal in the first half of 2021, launches Oncocyte’s differentiated and comprehensive offering for immune therapy diagnostics. Finally, 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. Overall, we are on track across all our major milestones despite the continued headwind of the ongoing pandemic which is a testimony to the dedication of the Oncocyte team."

Recent Corporate Highlights

DetermaRx

Medicare coverage policy established for DetermaRx, a new class of predictive tests, based on compelling clinical evidence that positions DetermaRx as the first and only test of its kind for early-stage non-small cell lung cancer (NSCLC)
Received final pricing decision from Centers for Medicare and Medicaid Services (CMS) with pricing in line with comparable high-value molecular tests for oncology indications
Continued rapid commercial growth and adoption through Q3:
— Testing volume more than doubled, from 64 billable samples in Q2, to 175 in Q3
— Maintained physician re-order rate of approximately 60 percent
— Increased onboarded hospitals from 36 in Q2 to 67 in Q3, including prestigious National Comprehensive Cancer Network (NCCN) and National Cancer Institute (NCI) designated cancer centers
— Increased adoption at major healthcare systems including HCA Healthcare, Cancer Treatment Centers of America (CTCA), Florida Cancer Specialists (FCS), Scripps Health, and Providence Cancer Institute
— Test added to "standard of care menu" at an NCI cancer center and at FCS

International expansion continued with Mexico, Columbia, Brazil, and Germany being added to our current network of distribution and commercial partners in Israel, India, the Middle East and Africa
Presented new prospective survival data at the IASLC 2020 North America Conference on Lung Cancer demonstrating DetermaRx informed treatment significantly improves lung cancer patient survival
Presented data demonstrating that combining DetermaRx with EGFR mutation status may help inform optimal treatment strategies for NSCLC patients who are EGFR-mutation-positive. Oncocyte is now offering EGFR mutation testing and DetermaRx from a single patient sample to provide an integrated solution for patients and physicians
Continued successful physician engagement with our webinar series with over 250 healthcare professional participants in online physician education programs in Q3 featuring renowned lung cancer experts Dr. David Gandara, Dr. Johannes Kratz, and Dr. Gavitt Woodard
DetermaIO

DetermaIO selected as a predictive biomarker in the NeoTRIPaPDL1 international investigator-sponsored trial for an immune-checkpoint inhibitor (ICI)
— Trial will evaluate DetermaIO as biomarker for a neoadjuvant (pre-surgical) ICI indication in patients with triple negative breast cancer (TNBC)
— Collaboration expected to generate near-term pharma services revenue, with a path to U.S. clinical launch in 2021
TheraSure-CNI MONITOR Blood-based Immune Therapy monitoring test

Announced agreement to license TheraSureTM-CNI MONITOR clinical assay from Chronix Biomedical. The blood-based assay uses copy number instability (CNI) to monitor patients’ response to immunotherapy treatments, potentially across a range of cancers
License agreement will expand Oncocyte’s suite of immunotherapy products to include response monitoring. Coordinating response monitoring with DetermaIO’s response prediction capability could create the first integrated solution for immunotherapy treatment selection and monitoring. Tech transfer to begin in Q1 2021
Pharma Services

Announced strategic alliance with the Guardian Research Network (GRN) to establish an integrated platform for precision medicine clinical trials, combining Oncocyte’s proprietary molecular tests and fully certified pharma services lab with GRN’s nationwide consortium of 150 hospitals, clinical trial networks and real-world evidence data technology
— Initial immune-oncology focus will leverage Oncocyte’s DetermaIO test for patient selection in immunotherapy clinical trials across the network
Continued growth of pharma services offering with a full suite of molecular analyses including tissue and blood-based technologies, proprietary platforms such as DetermaIO and TNBCType Assay, as well as custom next-generation sequencing and PCR services including whole exome sequencing, RNA-seq and targeted mutation panels
Corporate

Appointed Jennifer Carter, M.D., MPH, MBA, to Board of Directors, bringing deep expertise and experience in precision oncology to the Board
Third Quarter 2020 Financial Highlights

At September 30, 2020, Oncocyte had cash, cash equivalents and marketable securities of $10.7 million.

Prior to January 1, 2020, Oncocyte had no revenues. Oncocyte currently derives its revenues from pharma services generated by its wholly owned subsidiary, Insight Genetics, which was acquired on January 31, 2020, and from the sale of its lung cancer test, DetermaRx, which was commercially launched in early 2020. In light of the recent CMS and Noridian final pricing decision for the DetermaRx test, which became effective in September, Oncocyte is able to recognize revenues for Medicare covered tests on an accrual basis, rather than on a cash basis, when the tests are performed.

Under U.S. accounting principles, for all payers other than Medicare, Oncocyte will be able to recognize revenues for DetermaRx on an accrual basis of accounting once it has contracts for reimbursement from third-party payers or a history of experience of cash collections for the tests performed, or both. Until that time, for all payers other than Medicare, Oncocyte expects to recognize revenue for DetermaRx tests performed on a cash basis. Accordingly, Oncocyte will incur and accrue cost of revenues and other operating expenses related to its pharma services and diagnostic tests, including DetermaRx.

Beginning on January 31, 2020, Oncocyte’s consolidated financial statements and results also include the results from its wholly owned subsidiary, Insight Genetics, which Oncocyte acquired on that date.

For the third quarter ended September 30, 2020, Oncocyte reported a net loss of $6.8 million, or ($0.10) per share, as compared to $5.2 million, or ($0.10) per share, for the third quarter ended September 30, 2019.

Operating losses, as reported, for the third quarter of 2020 were $6.2 million, an increase of $0.9 million from $5.3 million as compared to the third quarter of 2019; and operating losses, on an adjusted basis, were $6.1 million, an increase of $2.0 million from $4.1 million as compared to the third quarter of 2019.

Oncocyte has provided a reconciliation between GAAP and non-GAAP operating losses in the financial tables, included with this earnings release, which it believes is helpful in understanding its ongoing operations.

Revenues for the three and nine months ended September 30, 2020 were $0.6 million and $0.7 million respectively, generated from pharma services and DetermaRx tests that are covered by Medicare on an accrual basis since Oncocyte received a final pricing from CMS in September.

Cost of revenues for the three and nine months ended September 30, 2020 were $0.6 million and $1.1 million, respectively, incurred from performing the DetermaRx tests and pharma services.

Research and development expenses for third quarter of 2020 were $2.6 million as compared to $1.6 million for the same period in 2019, an increase of $1.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense increase of $0.3 million. Personnel and related expenses for the current quarter also include a $0.4 million severance charge and $0.2 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

General and administrative expenses for the third quarter of 2020 were $5.0 million, as compared to $3.0 million for the same period in 2019, an increase of $2.0 million primarily attributable to personnel and related expenses, including a noncash stock-based compensation expense. Personnel and related expenses for the current quarter also include a $0.9 million severance charge and $0.5 million in accelerated stock-based compensation expense recorded as part of the partial reduction in force plan and salary reduction agreements instituted in September 2020.

Sales and marketing expenses for the three months ended September 30, 2020, were $1.6 million, as compared to $0.6 million for the same period in 2019, an increase of approximately $1.0 million. The increase was primarily due to personnel and related expenses for ramp up in sales and marketing activities for the commercialization effort of DetermaRx.

Change in fair value of contingent consideration liability – The change in fair value of contingent consideration is based on Oncocyte’s reassessment of the key assumptions underlying the determination of this liability as changes in circumstances and conditions occur from the Insight acquisition date to the reporting period being presented, with the subsequent change in fair value recorded as part of Oncocyte’s consolidated loss from operations for that period. Accordingly, for the three and nine months ended September 30, 2020, Oncocyte recorded an unrealized gain of approximately $3.0 million related to the decrease in the fair value of contingent consideration liability primarily attributable to a revised estimate of the timing of the possible future payouts.

Cash used in operations was $6.0 million for the third quarter of 2020, which included about $0.9 million in transactional and other business development related expenses.

Conference Call

The Company will host a conference call today, November 12, 2020, at 4:30 pm EDT / 1:30 pm PDT to discuss the results along with recent corporate developments.

The dial-in number in the U.S./Canada is 877-407-9716; for international participants, the number is 201-493-6779. For all callers, please refer to Conference ID 13709425, To access the live webcast, go to the investor relations section on the Company’s website, or by clicking here: View Source The webcast replay will be available on the Oncocyte website for 90 days following the completion of the call.