On February 27, 2017 OncoCyte Corporation (NYSE MKT:OCX), a developer of novel, non-invasive, "liquid biopsy" tests to aid in the early detection of cancer, reported financial results for the fourth quarter and full year ended December 31, 2016 (Press release, BioTime, FEB 27, 2017, View Source;p=RssLanding&cat=news&id=2249836 [SID1234517851]). OncoCyte also reported that it has entered into a secured loan agreement with Silicon Valley Bank providing access to $2.0 million of additional working capital.
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"The extension of credit by a well-established institution such as Silicon Valley Bank is the latest example of the progress we are making at OncoCyte," said William Annett, President and Chief Executive Officer. "We achieved several significant milestones during 2016 as we demonstrated the robustness of our product development pipeline through the presentation of positive test data for the lung, breast and bladder cancer diagnostics we are developing. The processing of blood samples from our 300-patient study for our lung cancer diagnostic has been completed, and we are waiting to receive the analysis, which we expect will occur during March.
"Should our analysis support the clinical effectiveness of our lung cancer test, we will swiftly take the next steps necessary to complete the development process and launch the test during the second half of 2017, so that we can begin to address the significant market opportunity we believe exists for a non-invasive test for the early detection of lung cancer," Mr. Annett continued. "We know from clinician discussions and market research that there is a large U.S. opportunity for a product that can help clinicians manage suspicious lung nodules. As more high risk patients are screened for lung cancer, the number of suspicious nodules being referred to follow-up procedures is expected to grow to 1.4 million patients, which will add significantly to the healthcare burden and put more patients at risk.
Recent Accomplishments
Completed the sample collection and processing for the 300-patient study of the lung cancer diagnostic.
Completed staffing and equipping of the diagnostic CLIA lab to perform OncoCyte’s liquid biopsy tests.
Improved the balance sheet with proceeds of $2 million from the early exercise of warrants and increased OncoCyte’s financial flexibility with a $2 million working capital loan with Silicon Valley Bank. OncoCyte ended 2016 with a cash position of $10.2 million.
Received notification the interim data from the current lung cancer diagnostic test study was selected for presentation in a prestigious poster discussion session at the 2017 American Thoracic Society (ATS) International Conference in Washington, D.C. this May.
Reported in early January that the development of OncoCyte’s breast cancer diagnostic was ahead of schedule and commercial launch of this product is possible in the second half of 2018.
Near Term Milestones
Apply for CLIA certification of the diagnostic testing laboratory. Procedures for certification are already in progress and are nearing completion.
If the results of the 300-patient study of the lung cancer diagnostic are favorable, OncoCyte will:
Initiate a clinical validation study in two phases of approximately 500 patients in total to confirm and replicate the findings in an operational CLIA lab setting
Expand the commercial organization by continuing to build the marketing and sales organization needed for launch
Assuming successful completion of the first phase of the clinical validation studies (approximately 300 patients), commercial launch of the lung cancer test could occur during the second half of 2017.
Continue assay development for our proprietary breast cancer diagnostic test. OncoCyte will use blood samples collected from 300 patients diagnosed with either benign or malignant breast lesions to attempt to extend the successful findings that were presented by OncoCyte at the San Antonio Breast Cancer Symposium (SABCS) in December.
Fourth Quarter & Full Year 2016 Financial Results
OncoCyte incurred a net loss of $3.1 million, or $0.11 per share, during the quarter ended December 31, 2016, compared to a net loss of $3.5 million, or $0.14 per share, during the fourth quarter of 2015. For the full year, the net loss was $11.2 million, or $0.42 per share, compared to a net loss of $8.7 million, or $0.42 per share for 2015.
Research and development expenses of $1.4 million for the quarter were unchanged from the same period of 2015. For the year, research and development expenses increased to $5.7 million from $4.5 million the prior year. Overall the increase in research and development expenses is due to increased staffing and costs of clinical trials as part of the development of the Company’s lung cancer diagnostic test.
General and administrative expenses for the quarter ended December 31, 2016 decreased to $1.7 million from $2.1 million for the same period in 2015. For the full year, general and administrative expenses were $5.5 million as compared to $4.2 million for 2015. The quarter over quarter decrease was mainly attributable to lower stock-based compensation expense. The year over year increase is attributable to increased staffing, including both management and consulting personnel.
At December 31, 2016, OncoCyte had $10.2 million of cash and cash equivalents in addition to available-for-sale securities valued at $2.2 million. Subsequent to the end of the year, OncoCyte received proceeds of $2.0 million for the early exercise of warrants. As a result of the warrant exercise, OncoCyte had 29,361,616 shares of common stock outstanding on February 17, 2017.