On November 13, 2018 OncoCyte Corporation (NYSE American: OCX), a developer of novel, non-invasive tests for the early detection of lung cancer, reported financial and operating results for the third quarter ended September 30, 2018 and provided a corporate update (Press release, Oncocyte, NOV 13, 2018, View Source [SID1234531301]).

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"During the third quarter and subsequent period, we made significant progress on our DetermaVu development plan by completing the transition to a new diagnostic testing platform that is yielding very consistent and reliable data," said William Annett, President and Chief Executive Officer. "Using this equipment, we have now run over half of the 700-blood samples that are being used in our Algorithm Development Study. This study will establish a proprietary mathematical algorithm that will be used to interpret test results for DetermaVu. Once all samples have been run, development of the algorithm will begin, and we expect its completion next month."

"After the new algorithm is derived, we will move on to an R&D Validation Study that should determine the accuracy of DetermaVu to within approximately plus or minus eight percentage points. By about the end of 2018 or early 2019 we anticipate finishing this study and will then be able to confirm with a high degree of certainty whether we have a commercially-viable diagnostic test poised to address the multi-billion-dollar market for a liquid biopsy lung cancer diagnostic test. On successful completion of the R&D Validation study we will be on-track to complete all of the necessary pre-launch development work in the first half of 2019. If the test’s accuracy is maintained in the planned studies, we plan to make DetermaVu commercially available in the second half of 2019."

Highlights

Following rigorous testing, completed transition to a new Next Generation Sequencing diagnostic testing platform and quality control testing of new custom panel reagents
Initiated a 700–blood sample Algorithm Development Study to develop the proprietary mathematical algorithm that will be used to interpret the results of DetermaVu
On-track to initiate an R&D Validation Study of 250 blinded, prospectively-collected patient blood samples with results expected by the end of this year or early 2019
Remaining Validation Pathway for DetermaVu:

Approximately yearend 2018: R&D Validation study – to confirm algorithm performance on a blinded sample set in an R&D setting
1H 2019: Analytical Validation study – to establish the performance characteristics of the assay system to be validated in OncoCyte’s CLIA laboratory
1H 2019: CLIA Validation study – to confirm that the assay has been successfully transferred to the CLIA lab
1H 2019: Clinical Validation study – approximately 300 blood sample study to establish the DetermaVu performance in an independent, blinded data set
2H 2019: Commercial availability of DetermaVu
Post-launch (2019/2020): Clinical Utility study – follow-on real world tracking study to demonstrate a net improvement in patient outcomes and cost savings for the healthcare system
Third Quarter 2018 Financial Results

At September 30, 2018, OncoCyte had $10.8 million of cash and cash equivalents in addition to marketable equity securities valued at $0.8 million for a total of $11.6 million of liquid assets. This cash balance includes $3.3 million raised during the third quarter, net of financing expenses, from an at-market registered direct offering of common stock and warrants.

For the third quarter ended September 30, 2018, OncoCyte incurred a net loss of $3.0 million, or $0.07 per share, compared to a net loss of $6.9 million, or $0.22 per share, in the third quarter of 2017.

Operating expenses for the three months ended September 30, 2018 were $3.0 million, as reported, and were $2.6 million, on an as adjusted basis. The reconciliation between GAAP and non-GAAP operating expenses is provided in the financial tables included with this earnings release.

Research and development expenses for the third quarter ended September 30, 2018 were $1.5 million compared to $1.8 million for the same period in 2017, a decrease of $0.3 million.

General and administrative expenses for the three months ended September 30, 2018 were $1.3 million compared to $4.3 million for the same period in 2017, a decrease of $3.0 million.

Cash used in operations was $2.5 million for the third quarter of 2018, which compares to cash used in operations of $3.5 million during the third quarter of 2017, the reduced cash used in operating activities in the current quarter mostly resulting from OncoCyte’s staff reductions and executive sabbatical programs implemented last quarter.

Conference Call

OncoCyte will host a conference call today, Tuesday, November 13, 2018, at 4:30 p.m. ET / 1:30 p.m. PT to discuss financial results.

The dial-in number in the U.S./Canada is 877-407-9716; for international participants, the number is +1-201-493-6779. For all callers, please refer to Conference ID 13684100. To access the live webcast, go to the investor relations section on the Company’s website, View Source

A replay of the conference call will be available for seven business days beginning about two hours after the conclusion of the live call, by calling 844-512-2921 toll-free (from U.S./Canada); international callers dial +1-412-317-6671. Use the Conference ID 13684100. Additionally, the archived webcast will be available at View Source

About DetermaVu

DetermaVu is OncoCyte’s confirmatory, non-invasive, liquid biopsy test intended to facilitate clinical decision making in lung cancer diagnosis. DetermaVu is being developed as an intermediate step to confirm the absence of cancer between imaging modalities (LDCTs) detecting suspicious lung nodules and downstream invasive procedures that determine if the nodules are malignant. OncoCyte estimates that a $4.7 billion annual market could develop in the U.S. for its confirmatory lung cancer liquid biopsy test, depending on market penetration and reimbursable pricing.

DetermaVu is a trademark of OncoCyte Corporation.