Oncocyte Reports First Quarter 2023 Financial Results
Oncocyte Corporation reported financial results for Q1 2023, including a capital raise of $13.86 million and progress in developing kitted versions of their diagnostic tests. Consolidated revenues decreased by 50% compared to Q1 2022. R&D expenses decreased by $2.3 million, and G&A expenses decreased by $2.0 million. Sales and Marketing expenses decreased by $2.0 million due to the sale of Razor Genomics. A conference call to discuss the results will be held on May 11, 2023.
Positive
Oncocyte completed an equity capital raise of $13.86 million to strengthen their balance sheet and support their product portfolio.
The company is making rapid progress in getting kitted versions of their tests to market.
Consolidated operating income for Q1 2023 was $2.9 million, a change of $12.3 million compared to the same period last year.
R&D expenses decreased by $2.3 million, and G&A expenses decreased by $2.0 million.
Sales and Marketing expenses decreased by $2.0 million due to the sale of Razor Genomics.
Negative
Consolidated revenues for Q1 2023 decreased by 50% compared to Q1 2022.
The decrease in revenues is primarily due to the decrease in DetermaRx revenue.
Net consolidated operating income for Q1 2023 was a loss of $9.4 million in the prior year.
Sales and Marketing expenses decreased by $2.0 million due to the decrease in product development and commercialization efforts of DetermaRx.
05/11/2023 - 08:00 AM
Nearing Manufacturing Start Up of First Kitted Product
IRVINE, Calif., May 11, 2023 (GLOBE NEWSWIRE) -- Oncocyte Corporation
First Quarter 2023 and Recent Highlights:
Completed an equity capital raise of $13.86 million from the sale and issuance of common stock to strengthen the balance sheet and further support the Company’s product portfolio. Implemented additional cost cutting initiatives to accelerate our transition to a capital-light business model based on commercializing kitted product versions of our novel diagnostic tests. Published a peer-reviewed article in Clinical Cancer Research on the results of a study applying DetermaIO™ to samples collected from the randomized Phase II AtezoTRIBE clinical trial in metastatic colorectal cancer. Presented five abstracts at the Annual Meeting of the American Association for Cancer Research. Four explored the tumor microenvironment and its potential implications for therapeutic response, leveraging the expertise and technology behind DetermaIO. One abstract highlighted exciting study results applying DetermaCNI to metastatic pancreatic cancer. Completed sale of 70% of ownership interest in Razor Genomics. “In the first quarter we completed the major steps in committing the company to a kitted product driven commercial model,” said Josh Riggs, CEO. “Our novel diagnostic tests have continued to generate compelling clinical data in studies that strongly suggest superiority to currently marketed diagnostic tests that generate hundreds of millions of dollars of revenue. And our development team is making rapid progress getting kitted versions of our tests to market. As a result of our new capital-light business plan, our strong clinical data, and our steady progress toward market, we raised $13.86 million in April from the sale and issuance of our common stock to existing and new investors who share our long-term vision to create value for both patients and shareholders.”
First Quarter 2023 Financial Results
Consolidated revenues for the three months ended March 31, 2023, were approximately $0.7 million , a 50% decrease compared to the first quarter of 2022. Excluding DetermaRx revenue, the continuing operations revenue was $0.3 million for the three months ended March 31, 2023.
Consolidated cost of revenues for the three months ended March 31, 2023, was approximately $0.8 million , a 59% decrease compared from same period in 2022.
Net consolidated operating income for the three months ended March 31, 2023, was $2.9 million , compared to consolidated operating loss of $9.4 million , a change of $12.3 million from the same period in the prior year.
Research and Development expenses for the first quarter of 2023 were $2.8 million compared to $5.1 million , a decrease of $2.3 million from the same period a year ago. The decrease is primarily due to the decrease in CLIA laboratory expenses and clinical trial expenses in the three months ended March 31, 2023.
The General and Administrative expenses for the first quarter of 2023 were $3.7 million compared to $5.7 million from the same period in the prior year, a decrease of $2.0 million .
Sales and Marketing expenses in the quarter were $1.2 million compared to $3.2 million from the same period in the prior year; a decrease of $2.0 million year over year, primarily attributable to the decrease in product development and commercialization efforts of DetermaRx due to the sale of Razor Genomics during the first quarter of 2023.
For Oncocyte’s complete financial results for the first quarter ended March 31, 2023, see the Company’s Quarterly Form 10-Q to be filed with the Securities and Exchange Commission on May 12, 2023.
Webcast and Conference Call Information
Participants may access the live call via telephone by dialing (877) 317-6789 for domestic callers or (412) 317-6789 for 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
DetermaIO™, DetermaCNI™, and VitaGraft™ 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 expected commercialization of our kitted tests and our progress toward market, 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, the potential impact of COVID-19 on Oncocyte or its subsidiaries’ financial and operational results, 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.
ONCOCYTE CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, 2023 2022 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 11,803 $ 19,993 Accounts receivable, net of allowance of $172 and $154, respectively 1,901 2,012 Marketable equity securities 553 433 Prepaid expenses and other current assets 970 977 Assets held for sale 421 - Current assets of discontinuing operations - 2,121 Total current assets 15,648 25,536 NONCURRENT ASSETS Right-of-use and financing lease assets, net 2,021 2,088 Machinery and equipment, net, and construction in progress 6,403 8,763 Intangible assets, net 56,661 61,633 Restricted cash 1,700 1,700 Other noncurrent assets 367 371 TOTAL ASSETS $ 82,800 $ 100,091 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 1,395 $ 1,253 Accrued compensation 2,227 1,771 Accrued expenses and other current liabilities 2,374 3,839 Accrued severance from acquisition 2,314 2,314 Accrued liabilities from acquisition 109 109 Right-of-use and financing lease liabilities, current 775 815 Current liabilities of discontinuing operations 236 2,005 Total current liabilities 9,430 12,106 NONCURRENT LIABILITIES Right-of-use and financing lease liabilities, noncurrent 2,550 2,729 Contingent consideration liabilities 27,355 45,662 TOTAL LIABILITIES 39,335 60,497 COMMITMENTS AND CONTINGENCIES Series A Redeemable Convertible Preferred Stock, no par value; stated value $1,000 per share; 6 shares issued and outstanding at March 31, 2023; aggregate liquidation preference of $6,182 and $6,091 as of March 31, 2023 and December 31, 2022, respectively 5,532 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; 119,279 and 118,644 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively 295,533 294,929 Accumulated other comprehensive income 43 39 Accumulated deficit (257,643 ) (260,676 ) Total shareholders’ equity 37,933 34,292 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 82,800 $ 100,091
ONCOCYTE CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended March 31, 2023 2022 Net revenue $ 297 $ 380 Cost of revenues 265 105 Cost of revenues – amortization of acquired intangibles 22 28 Gross margin 10 247 Operating expenses: Research and development 2,127 2,007 Sales and marketing 695 266 General and administrative 3,412 5,647 Change in fair value of contingent consideration (18,307 ) (4,656 ) Impairment loss from intangible assets 4,950 - Loss on disposal and held for sale assets 1,335 - Total operating (income) expenses (5,788 ) 3,264 Income (loss) from operations 5,798 (3,017 ) OTHER INCOME (EXPENSES), NET Interest expense, net (10 ) (30 ) Unrealized gain (loss) on marketable equity securities 121 (330 ) Other income (expenses), net 50 (36 ) Total other income (expenses), net 161 (396 ) INCOME (LOSS) BEFORE INCOME TAXES 5,959 (3,413 ) Income (loss) from continuing operations 5,959 (3,413 ) Loss from discontinuing operations (2,926 ) (6,878 ) NET INCOME (LOSS) 3,033 (10,291 ) NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS: BASIC 4,899 (3,413 ) NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS: BASIC (2,502 ) (6,878 ) NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS: BASIC 2,397 (10,291 ) NET INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS: DILUTED 4,900 (3,413 ) NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO COMMON STOCKHOLDERS: DILUTED (2,502 ) (6,878 ) NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS: DILUTED 2,398 (10,291 ) Net income (loss) from continuing operations attributable to common stockholders per share - basic $ 0.04 $ (0.04 ) Net loss from discontinued operations attributable to common stockholders per share - basic $ (0.02 ) $ (0.07 ) Net income (loss) attributable to common stockholders per share - basic $ 0.02 $ (0.11 ) Net income (loss) from continuing operations attributable to common stockholders per share - diluted $ 0.04 $ (0.04 ) Net loss from discontinued operations attributable to common stockholders per share - diluted $ (0.02 ) $ (0.07 ) Net income (loss) attributable to common stockholders per share - diluted $ 0.02 $ (0.11 ) Weighted average shares outstanding: basic 119,150 92,243 Weighted average shares outstanding: diluted 119,253 92,243
Oncocyte Corporation Reconciliation of Non-GAAP Financial Measure Adjusted Income (Loss) from Operations (Amounts in Thousands) For the Three Months Ended March 31, December 31, March 31, 2023 2022 2022 (unaudited) (unaudited) (unaudited) GAAP income (loss) from operations - as reported $ 2,872 $ (44,664 ) (9,895 ) Stock-based compensation expense 834 2,619 2,010 Change in fair value of contingent consideration (18,307 ) (13,862 ) (4,656 ) Severance charge 14 1,640 - Depreciation and amortization expense 472 1,278 1,216 Loss on disposal and held for sale assets 1,335 - - Impairment loss 4,950 44,550 - Non-GAAP loss from operations, as adjusted $ (7,830 ) $ (8,439 ) $ (11,325 )
Investor Contact Jesse Arnojarno@oncocyte.com
Consolidated revenues for Q1 2023 were approximately $0.7 million, a 50% decrease compared to Q1 2022. Net consolidated operating income was $2.9 million, compared to a loss of $9.4 million in the prior year.
The equity capital raise of $13.86 million was to strengthen Oncocyte's balance sheet and support their product portfolio.
Oncocyte is making rapid progress in getting kitted versions of their tests to market.
Sales and Marketing expenses decreased by $2.0 million due to the decrease in product development and commercialization efforts of DetermaRx.
The conference call will be held on May 11, 2023.
