Oncocyte Reports Full Year 2023 Financial Results
- Successful partnership with Bio-Rad Laboratories for transplant monitoring
- $15.8 million gross proceeds from private placement offering
- Cost controls and progress in transplant monitoring IP development
- Increased net revenue by 15% for Q4 2023 and 57% for full year 2023 compared to 2022
- Commercial launch of GraftAssure RUO and reimbursement for VitaGraft Kidney
- Optimistic outlook with strong investor support
- Increase in research and development expenses by 85% for Q4 2023
- Increase in sales and marketing expenses by 74% for Q4 2023
- Loss from operations for both Q4 and full year 2023
Insights
Oncocyte's financial results show a mixed picture. The company's revenue growth is a positive sign, indicating increasing demand for its Pharma Services. The 15% quarterly and 57% annual growth rates are impressive, surpassing typical industry averages for diagnostics companies, which often hover around the mid-single digits. However, the increased cost of revenues and operational losses reflect the company's investment phase. The significant operational loss, particularly the noncash loss from the change in fair value of contingent consideration, is a key factor for investors to monitor as it can impact the company's balance sheet and future financing capabilities.
From a financial perspective, the private placement offering is noteworthy. Raising $15.8 million provides Oncocyte with a capital infusion that can support ongoing R&D and commercialization efforts. However, the details of the offering, such as the price per share and the potential dilution effect on existing shareholders, would be necessary to fully assess the financial impact. The cash burn rates in Q4 2023 and projected Q1 2024 are concerning but not uncommon for a company in the growth phase focused on developing and launching new products.
The strategic partnership with Bio-Rad Laboratories and the anticipated launch of GraftAssure™ are significant milestones. These developments suggest Oncocyte is moving towards a more commercially viable stage with its transplant monitoring IP. The reimbursement for VitaGraft™ Kidney is particularly important as it implies that the product has passed certain efficacy and cost-effectiveness thresholds, which could drive adoption rates and future revenue.
Investors should note that the transplant diagnostics market is highly specialized, with significant barriers to entry due to the technical complexity and regulatory requirements. Oncocyte's progress in this area could position it well against competitors, provided that the product launch and subsequent market penetration are executed effectively. The manufacturing of GraftAssure RUO (Research Use Only) lots and the development of VitaGraft Kidney IVD (In Vitro Diagnostic) are critical steps towards commercialization, which could lead to future revenue streams if successful.
The increase in sales and marketing expenses reflects Oncocyte's efforts to ramp up the commercialization of its products. While this could strain short-term finances, it's a necessary investment to establish a foothold in the competitive diagnostics market. The decrease in general and administrative expenses indicates effective cost control measures, which is a positive sign for operational efficiency.
Oncocyte's strategic focus on transplant diagnostics could tap into a niche but growing market. The success of their products, like GraftAssure™ and VitaGraft Kidney, hinges on their ability to displace existing solutions and convince healthcare providers of their superiority. Market acceptance is often unpredictable, but the partnership with Bio-Rad, a well-established player, could enhance credibility and market access. Nonetheless, the high R&D costs and operational losses suggest that Oncocyte may face several more quarters of financial uncertainty before potentially reaching profitability.
Conference Call on Friday, April 12, 2024 at 5:00 a.m. PT / 8:00 a.m. ET
IRVINE, Calif., April 12, 2024 (GLOBE NEWSWIRE) -- Oncocyte Corporation (Nasdaq: OCX), a precision diagnostics company, today reported financial results for the year ended December 31, 2023.
Recent Highlights
- Bio-Rad Laboratories, Inc. commercial partnership for transplant monitoring IP
$15.8 million in gross proceeds received from private placement offering$4.4 million and$3.8 million Q4 2023 and est. Q1 2024 cash burn, respectively- GraftAssure™ transplant product launch on track for 2Q 2024
“In 2023, we made significant progress on cost controls and in the development of our transplant monitoring IP,” said Josh Riggs, CEO of Oncocyte. “We achieved reimbursement for VitaGraft™ Kidney, manufactured the first lots of GraftAssure RUO, and ran a competitive partnering process that resulted in the announced Bio-Rad agreement. We look forward to working with them on the commercialization of GraftAssure RUO and the development of VitaGraft Kidney IVD. We continue to benefit from strong support from our core investors and welcome new ones in our recently completed
2023 Fourth Quarter and Full-Year Financial Results
Net revenue for the three months and year ended December 31, 2023, was
Cost of revenues for the three months ended December 31, 2023 was
Cost of revenues for the year ended December 31, 2023 was
Research and development expense for the three months and year ended December 31, 2023, was
Sales and marketing expense for the three months and year ended December 31, 2023, was
General and administrative expense for the three months and year ended December 31, 2023, was
Loss from operations for the three months ended December 31, 2023, was
Loss from operations for the year ended December 31, 2023, was
For Oncocyte’s complete financial results for the year ended December 31, 2023, see the Company’s annual Form 10-K to be filed with the Securities and Exchange Commission on April 15, 2024.
Webcast and Conference Call Information
Oncocyte will host a conference call to discuss fourth quarter and full year 2023 financial results prior to market open on Friday, April 12, 2024 at 5:00 a.m. Pacific Time / 8:00 a.m. Eastern Time. The conference call may be accessed live via telephone by dialing toll free (888) 550-5422 for both domestic and international callers. Once dialed in, ask to be joined to the Oncocyte Corporation call. The live webcast of the call may be accessed by visiting the “Events & Presentation” section of the Company’s website at https://investors.oncocyte.com.
About Oncocyte
Oncocyte is a precision diagnostics company. The Company’s tests are designed to help provide clarity and confidence to physicians and their patients. VitaGraft™ is a clinical blood-based solid organ transplantation monitoring test, GraftAssure™ is a research use only blood-based solid organ transplantation monitoring test, DetermaIO™ is a gene expression test that assesses the tumor microenvironment to predict response to immunotherapies, and the pipeline test DetermaCNI™ is a blood-based monitoring tool for monitoring therapeutic efficacy in cancer patients. For more information, visit https://oncocyte.com/
VitaGraft™, GraftAssure™, DetermaIO™, and DetermaCNI™ are trademarks of Oncocyte Corporation.
Forward-Looking Statements
Any statements that are not historical fact (including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “may,” and similar expressions) are forward-looking statements. These statements include those pertaining to, among other things, the expectation that the Company and Bio-Rad will successfully commercialize GraftAssure RUO and develop VitaGraft Kidney IVD, the belief that the Company is well positioned to meet its critical commercial and regulatory milestones, and other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of diagnostic tests or products, uncertainty in the results of clinical trials or regulatory approvals, the capacity of Oncocyte’s third-party supplied blood sample analytic system to provide consistent and precise analytic results on a commercial scale, potential interruptions to supply chains, the need and ability to obtain future capital, maintenance of intellectual property rights in all applicable jurisdictions, obligations to third parties with respect to licensed or acquired technology and products, the need to obtain third party reimbursement for patients’ use of any diagnostic tests. Oncocyte or its subsidiaries commercialize in applicable jurisdictions, and risks inherent in strategic transactions such as the potential failure to realize anticipated benefits, legal, regulatory or political changes in the applicable jurisdictions, accounting and quality controls, potential greater than estimated allocations of resources to develop and commercialize technologies, or potential failure to maintain any laboratory accreditation or certification. Actual results may differ materially from the results anticipated in these forward-looking statements and accordingly such statements should be evaluated together with the many uncertainties that affect the business of Oncocyte, particularly those mentioned in the “Risk Factors” and other cautionary statements found in Oncocyte’s Securities and Exchange Commission (SEC) filings, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Oncocyte undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
CONTACT:
Jeff Ramson
PCG Advisory
(646) 863-6893
jramson@pcgadvisory.com
- Tables Follow -
| ONCOCYTE CORPORATION | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (In thousands, except per share data) | |||||||||
| December 31, | |||||||||
| 2023 | 2022 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 9,432 | $ | 19,993 | |||||
| Accounts receivable, net of allowance for credit losses of | 484 | 2,012 | |||||||
| Marketable equity securities | - | 433 | |||||||
| Prepaid expenses and other current assets | 643 | 977 | |||||||
| Assets held for sale | 139 | - | |||||||
| Current assets of discontinued operations (Note 13) | - | 2,121 | |||||||
| Total current assets | 10,698 | 25,536 | |||||||
| NONCURRENT ASSETS | |||||||||
| Right-of-use and financing lease assets, net | 1,637 | 2,179 | |||||||
| Machinery and equipment, net, and construction in progress | 3,799 | 8,672 | |||||||
| Intangible assets, net | 56,595 | 61,633 | |||||||
| Restricted cash | 1,700 | 1,700 | |||||||
| Other noncurrent assets | 463 | 371 | |||||||
| TOTAL ASSETS | $ | 74,892 | $ | 100,091 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 953 | $ | 1,253 | |||||
| Accrued compensation | 1,649 | 1,771 | |||||||
| Accrued royalties | 1,116 | 2,022 | |||||||
| Accrued expenses and other current liabilities | 452 | 1,817 | |||||||
| Accrued severance from acquisition | 2,314 | 2,314 | |||||||
| Accrued liabilities from acquisition | - | 109 | |||||||
| Right-of-use and financing lease liabilities, current | 665 | 815 | |||||||
| Current liabilities of discontinued operations (Note 13) | 45 | 2,005 | |||||||
| Total current liabilities | 7,194 | 12,106 | |||||||
| NONCURRENT LIABILITIES | |||||||||
| Right-of-use and financing lease liabilities, noncurrent | 2,204 | 2,729 | |||||||
| Contingent consideration liabilities | 39,900 | 45,662 | |||||||
| TOTAL LIABILITIES | 49,298 | 60,497 | |||||||
| Commitments and contingencies | |||||||||
| Series A Redeemable Convertible Preferred Stock, no par value; stated value | 5,126 | 5,302 | |||||||
| SHAREHOLDERS’ EQUITY | |||||||||
| Preferred stock, no par value, 5,000 shares authorized; no shares issued and outstanding | - | - | |||||||
| Common stock, no par value, 230,000 shares authorized; 8,261 and 5,932 shares issued and outstanding at December 31, 2023 and 2022, respectively | 310,295 | 294,929 | |||||||
| Accumulated other comprehensive income | 49 | 39 | |||||||
| Accumulated deficit | (289,876 | ) | (260,676 | ) | |||||
| Total shareholders’ equity | 20,468 | 34,292 | |||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 74,892 | $ | 100,091 | |||||
| ONCOCYTE CORPORATION | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (In thousands, except per share data) | |||||||||
| Years Ended | |||||||||
| December 31, | |||||||||
| 2023 | 2022 | ||||||||
| Net revenue | $ | 1,503 | $ | 958 | |||||
| Cost of revenues | 1,002 | 880 | |||||||
| Cost of revenues – amortization of acquired intangibles | 88 | 96 | |||||||
| Gross profit (loss) | 413 | (18 | ) | ||||||
| Operating expenses: | |||||||||
| Research and development | 9,294 | 7,301 | |||||||
| Sales and marketing | 2,795 | 1,132 | |||||||
| General and administrative | 11,182 | 21,881 | |||||||
| Change in fair value of contingent consideration | (5,762 | ) | (31,019 | ) | |||||
| Impairment losses | 6,757 | - | |||||||
| Goodwill impairment | - | 18,684 | |||||||
| Loss on disposal and held for sale assets | 1,283 | - | |||||||
| Total operating expenses | 25,549 | 17,979 | |||||||
| Loss from operations | (25,136 | ) | (17,997 | ) | |||||
| Other (expenses) income: | |||||||||
| Interest expense | (52 | ) | (83 | ) | |||||
| Realized and unrealized loss on marketable equity securities, net | (61 | ) | (471 | ) | |||||
| Other income (expenses), net | 394 | (61 | ) | ||||||
| Total other income (expenses) | 281 | (615 | ) | ||||||
| Loss from continuing operations | (24,855 | ) | (18,612 | ) | |||||
| Loss from discontinued operations (Note 13) | (2,926 | ) | (54,290 | ) | |||||
| Net loss | $ | (27,781 | ) | $ | (72,902 | ) | |||
| Less: dividends and accretion of Series A redeemable convertible preferred stock | (942 | ) | (520 | ) | |||||
| Net loss attributable to common stockholders | $ | (28,723 | ) | $ | (73,422 | ) | |||
| Net loss from continuing operations per share: basic and diluted | $ | (3.37 | ) | $ | (3.45 | ) | |||
| Net loss from discontinued operations per share: basic and diluted | $ | (0.38 | ) | $ | (9.80 | ) | |||
| Net loss attributable to common stockholders per share: basic and diluted | $ | (3.75 | ) | $ | (13.25 | ) | |||
| Weighted average shares outstanding: basic and diluted | 7,651 | 5,540 | |||||||
| Oncocyte Corporation | ||||||||||||||||
| Reconciliation of Non-GAAP Financial Measure | ||||||||||||||||
| Consolidated Adjusted Loss from Operations | ||||||||||||||||
| Note: In addition to financial results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release also includes a non-GAAP financial measure (as defined under SEC Regulation G). We believe the adjusted amounts are more representative of our ongoing performance. The following is a reconciliation of the non-GAAP measure to the most directly comparable GAAP measure: | ||||||||||||||||
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| (In thousands) | ||||||||||||||||
| Consolidated GAAP loss from operations | $ | (16,179 | ) | $ | (11,648 | ) | $ | (25,136 | ) | $ | (17,997 | ) | ||||
| Stock-based compensation expense | 484 | 1,726 | 2,742 | 6,479 | ||||||||||||
| Severance charge | 2 | 1,640 | 613 | 2,830 | ||||||||||||
| Depreciation and amortization expense | 325 | 483 | 1,680 | 1,578 | ||||||||||||
| Change in fair value of contingent consideration | 11,185 | (13,862 | ) | (5,762 | ) | (31,019 | ) | |||||||||
| Impairment losses | (4 | ) | - | 6,757 | - | |||||||||||
| Goodwill impairment | - | 18,684 | - | 18,684 | ||||||||||||
| Loss on disposal and held for sale assets | - | - | 1,283 | - | ||||||||||||
| Consolidated Non-GAAP loss from operations, as adjusted | $ | (4,187 | ) | $ | (2,977 | ) | $ | (17,823 | ) | $ | (19,445 | ) | ||||
FAQ
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