EX-99.2 6 ex99-2.htm

 

Exhibit 99.2

 

ONCOCYTE REPORTS Full Year 2023 FINANCIAL RESULTS

 

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
  ● $15.8MM in gross proceeds received from private placement offering
  ● $4.4 and $3.8MM est. Q4 2023 and Q1 2024 cash burn, respectively
  ● GraftAssureTM 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 VitaGraftTM 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 $15.8MM private placement offering. With this partnership and financing we believe that we are well-positioned to meet our critical commercial and regulatory milestones.”

 

2023 Fourth Quarter and Full-Year Financial Results

 

Net revenue for the three months and year ended December 31, 2023, was $314,000 and $1.5 million, respectively, an increase of 15% compared to the fourth quarter 2022 and 57% compared to the full year 2022, due to increased revenue from Pharma Services.

 

Cost of revenues for the three months ended December 31, 2023 was $431,000, including $409,000 from the cost of diagnostic tests and testing services we performed for our Pharma Services customers, with the remaining cost from noncash amortization expense.

 

 
 

 

Cost of revenues for the year ended December 31, 2023 was $1.1 million, including $1.0 million from the cost of diagnostic tests and testing services we performed for our Pharma Services customers, with the remaining cost from noncash amortization expense.

 

Research and development expense for the three months and year ended December 31, 2023, was $2.5 million and $9.3 million, respectively, an increase of 85% compared to the fourth quarter 2022 and 27% compared to the full year 2022. The increases were driven by continued focused investment in developing manufacturable versions of assays including DetermaIOTM, VitaGraft and DetermaCNITM.

 

Sales and marketing expense for the three months and year ended December 31, 2023, was $582,000 and $2.8 million, respectively, an increase of 74% compared to the fourth quarter 2022 and 147% compared to the full year 2022. The increases were primarily driven by a continued ramp in sales, marketing and commercialization activities related to the recent coverage decision and launch of VitaGraft Kidney.

 

General and administrative expense for the three months and year ended December 31, 2023, was $1.8 million and $11.2 million, respectively, a decrease of 66% compared to the fourth quarter 2022 and 49% compared to the full year 2022. The decreases were primarily due to decreased stock-based compensation and personnel expenses.

 

Loss from operations for the three months ended December 31, 2023, was $16.2 million, an increase of 39% compared to fourth quarter 2022. The 2023 loss from operations included a noncash loss of $11.2 million from the change in fair value of contingent consideration, compared to a gain of $13.9 million in 2022.

 

Loss from operations for the year ended December 31, 2023, was $25.1 million, an increase of 40% compared to the full year 2022. The 2023 loss from operations included a noncash gain of $5.8 million from the change in fair value of contingent consideration, compared to a gain of $31.0 million in 2022.

 

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 $5 and $154, respectively   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   -    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   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 $1,000 per share; 5 and 6 shares issued and outstanding at December 31, 2023 and 2022, respectively; aggregate liquidation preference of $5,296 and $6,091 as of December 31, 2023 and 2022, respectively   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   (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)