OCX - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the OncoCyte Conference Call to Discuss Second Quarter 2018 Financial Results and Operating Highlights. Today’s call is being recorded. At this time, I would like to turn the call over to Michael Polyviou of EVC Group. Please go ahead.

Michael Polyviou

Thank you, Ann, and thank you everyone for joining us this afternoon’s conference call to discuss OncoCyte’s second quarter 2018 financial results and recent operating highlights.

seen at results www.oncocyte.com. not visit releases, have website OncoCyte's you today’s press financial please If

similar “believes,” obtain required analytic the like obligation are I’ll law. such that These IP over these to the Before including, rights. consistent expressly these what reimbursement of applicable statements from regulatory OncoCyte review historical company cause may Annett, XX-K company maintenance obtain specific for to future supply Chief that, actual including of statements tests, would forward-looking events. described go any test those OncoCyte’s to Annett. system, may future the the will our but from ahead. diagnostic and President expressions encourage remind the factors of as forward-looking sample turning you by the or call uncertainty diagnostic is results Please call forward-looking With turn without limitation, may as potential party “estimates” materially may forward-looking contain otherwise forward-looking “plans,” include any that of forms on the capital results party without that in actual that and the Bill? scale, not to implied Executive commercializes, materially the in statements. over make commercial these to projections the Any “anticipates,” Officer, in third need limited risks intent results company’s update disclaims statements and We and Bill be except identify analytic and factors capacity inherent filings call, or under statements this XX-Q, clinical and “expects,” approvals, Therefore, fact, trials outcomes or which precise conference company’s events the results during expressed and/or differ statements. to “will,” of and William commercialization statements. and to to a SEC third risk OncoCyte’s blood or provide words ability the you to patients regarding use differ need limitation I development not are to

William Annett

welcome, financial our second and our operating and to Michael, conference call everyone, quarter Thanks, to results discuss XXXX highlights.

on question-and-answer me President Financial Vice of Levine, are; today’s and Hesterberg, be call Mitch will session. Joining PhD, Development. and Mitch and Officer; Senior during our the Lyndal Research available Lyndal the Chief

Sciences In Parker. business in our in to carrier Officer, would addition, Wyeth a senior an has roles and players. Operating at such companies Chief distinguished the industry introduce industry, new Life like creating partnerships background I with He key has extensive including had Al Al and also Sunovian. development as

a the very ask he say Al confident add of way for join team and words We’re the are will by and deal have the value to that a I’d introduction. shareholders. company of pleased OncoCyte to Al? Al great like to few

Al Parker

week but an my company’s optimism history, forward couple just for Bill, appreciate for participate ago. call. just little company. the moments a to reasons I everyone and enthusiasm to express and I’ll to now. I good OncoCyte’s coming promising contributing the on joining today, many to a on to in are to my and this exciting introduction the afternoon few perspective, touch the the I There the over on Thanks From going time is look a regarding want about take despite forward. board my opportunity company, success

to benefits molecular leading meaningful be liquid patients, I deliver technology also and unmet to his the particular into has will a player medical research the the believe a the substantial Lyndal assets settle and market, focus value. at ultimately and led significant payors, has I by address in especially opportunities position, considerable in in The may potential company become physicians be First, those science team the diagnostics significant the create innovation future. my to company potential position will Leveraging that could biopsies. development which a and I there and believe be as shareholder could needs and could

success will Second, adapt be a only benefit team of has to execution. Lyndal, they’re developing in company have strategies, an expertise, Further assembled in company but and management and in combination with the I’ll with diverse with strong, board at to perspectives, significant in of of strong the more not sets, the believe calls. of and industry, I look experience, the for creative I OncoCyte to prospects the hope same flexible in that, be also rest the to nimble to the and and capable skill turn with areas the the With and company. engage future growth working forward business which back Bill. call Mitch, enable financial, business Bill, team

William Annett

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we dealt faced We track. and successfully issues with now back have on we’re the

We’re excited DetermaVu lung large detail into the the diagnostic I these more confirmatory developments. cancer to need very a about product. little recent address for go about to our for like potential unmet

and the the During focus of the platforms. these Thermo platforms, concluded that two second leading completing Fisher we either clinical on the a second to pleased the that quarter, quarter, unambiguously were Nova this can our continue report primary of Earlier in Chef-SX. of DetermaVu of development development diagnosis clinical study diagnostic Seq alternative was we study commercial using larger the two on testing samples XXXX Illumina DetermaVu,

have robust Wistar included biomarkers the yielded the original existing using AUC, assay equivalent a to accuracy achieved study by new and biomarkers With even panel the discovered curve of DetermaVu. carrying-out the and those appear believe the version new of size of chosen. process successful studies DetermaVu. nodule of with and the contributing moving next algorithm. the in results outcome, combination addition, size, in DetermaVu. The we’re earlier and biomarkers the the without platform use superior while factor. may may clinical DetermaVu In In the or the newly of incorporated first-generation diagnostic we’re necessary as of biomarkers panel the of new the biomarkers algorithm that We new be testing measured increase previous into more the These and of enhanced to that results inclusion used in develop further this this of than our series We as biomarker encouraging platform under version test enhance validate a biomarker the accuracy that we steps precision performance. as new near-term, algorithm or now generation a to such utility results nodule data to area found

new control a intending large from train the testing acquired platform ready, that XXX only biomarkers we the sample perspective a analytical samples on validation approximately a study validation we ordered and DetermaVu. CLIA in panel validation clear study for R&D panel XXX the company’s study the the manufacturer, the genes algorithm. clinical blinded Once an and study initiate R&D diagnostic develop have and will new the We clinical the and study is access need custom validation followed new If the performance will laboratory. Then new will on approximately a platform. be we of second-generation housekeeping by algorithm begin to to successful, the

remaining Validation XXXX. collected we to previous can that Finally, have compared to much we plan confirm least we we perform samples at conduct through during that needed Study studies, test a believe to studies validation to the the conducted study, we Clinical the all Since faster performance. the R&D proceed already

we sites samples planning were the necessary have study include network a in-house, of We’re XXXX protocol clinical comparable will United to validation continuing samples samples the confidence larger States. in study the validation sample a than since over provide results is set potential This of across intended to clinical in R&D the us us collect validation DetermaVu of larger added number Also, in accuracy of to patient a we’re XX R&D expand to used from the picture follow. with the clear to give and expected study. the that

is half to clinical XXXX the of R&D of complete study first end goal then the XXXX. during by and Our the expanded the complete study validation validation

this that study, of have sometime be should plan shortly that in second after of to Our that completion is study successful. half DetermaVu validation available, XXXX. believe is commercially the We clinical the assuming

to on sufficient of However, on anticipate clinical products considerable will the OncoCyte obtaining our study, about study and a most of utility and DetermaVu commercial and reimbursement private planning. will Based be are raising successful execution take time be that previously, which utility results on dependent will for as we capital. discussed dependent strategy completion we and payers development we have Medicare diagnostic like of clinical believe we is to the a for we the The biopsy and to from cancer have opportunity payer test, reimbursements. annual tremendous pricing that test OncoCyte address private experienced previously, estimated continue confirmatory accurate a highly liquid availability results see date, we Medicare obtained that and of we could those market assuming create market depending on have $X.X a and for successfully there lung billion an to U.S. penetration similar

biopsies, that in intended you and who lung DetermaVu making may the for those new story, non-invasive facility result our a and procedures. unnecessary OncoCyte risk clinical cancer confirmatory, the reminder, a lung of reduction is major U.S. of annually to test diagnosis. expensive to need suspicious the in be number allowing in DetermaVu decision fundamental which lung need liquid a accurately, patients biopsy advancement to As be by use before shows their DetermaVu a corresponding with following diagnosis patients is to nodule. greater in We biopsies evidence believe only would for suspicious biopsy determine and patients at-risk a the a imaging. a risky This surgical much lung in dose of of CT physicians in reduction in undergoing low tissue of designed and the follow-up lung could biopsy performed adoption with which where widespread patients nodules scan scan

U.S., Although markets CLIA the attention be there situation we of the kit China that beyond and enabling distribution decentralized Significantly, in have development on markets for including of we product approval the use other lot markets. platform our of marked States. opportunities diagnostic of CE a from The a believe these outside overseas, Europe chosen and in that the focused laboratory, development could the have in and European allow have management we differences some the for not Union. in of significant new United products may operations potentially

the As Mitch the these to Mitch? turn external second markets. creating call their begin DetermaVu we discussion market, for U.S. quarter time, we results. At to financial of to Levine expansion potential our turn this I’ll for plan for brief a attention into over will develop a our

Mitch Levine

must warrants. of Thanks result registered June of units expenses at-market equivalents offering securities XXXX received everybody. and of An XX led cash reflects of at valued financing million and investors confidence to of we that included OncoCyte. by successful as to of new stock the the The $XXX,XXX. was prior company’s afternoon institutional members XXXX, continued commercialization. and management had additional good of growth and $X.X and on provides prospects. be management and participation offering to by with a additional a marketable DetermaVu was steps financing to success commitment board the completed in the advance through our and to comprising This Bill, and $XX.X common net At direct long-term us million, remaining XX, Directors The resources Board development cash July

million, compared as for million, per For operating quarter $X.XX second-quarter to or on $X.X Operating excludes reported, of and a share, of were the the non-cash certain loss were XXXX, second of XXXX OncoCyte adjusted a the $X.XX net second loss $X.X basis, expenses as quarter million, million, XXXX. reported $X.X net of which in per of an $X.X or share, expenses.

us reconciliation activities a our between Cash in helpful tables, understanding in non-GAAP earnings used operating provided we ongoing second to which to of have the of from period release, the operating we and expenses long-term our financing financial essential for in including compared We is expenses. development align operating in operating which XXXX. financing our and our in to including million for the GAAP believe $X.X enable second creating same of cash with the the maintain $X.X capabilities our costs, continue for the retention just was Cash complete DetermaVu, million related for our fees, quarter proceeds expenses shareholders. aggregate and core $X.XX completing XXXX, and goal for legal included primary the expenses were for $XXX,XXX over XXXX million Research bonuses as and cash we completed, equivalents, of payments for value DetermaVu quarter development and with performance. paid

the were development goal includes non-cash the acquired ago to to of plan resources had That administrative charge intangible commercialize as remarks $X.X cancer we XX, to $XXX,XXX results. our and diagnostic and financial for therapeutic impairment uses all that a to test, related our DetermaVu. concludes The $X.X noncore, continue that research we our of for of XXXX million, million quarter we quarter longer development or therapeutic quarter. and second to no develop our to concerning for devote General year ended particularly June primary assets compared my completing XXXX second expenses of also

to turn Bill. the back Now, I’ll call

William Annett

In believe on we back that track turned Mitch. developing Thanks we DetermaVu. in and an have corner are summary, important

late to validation complete XXXX. clinical clinical in successful of our studies validation will R&D sample line, the second clinical could analytical to validation XXXX. we algorithm and validation recently we important The sequencing new will have conduct generation that progress encouraged that R&D of to we remain If validation results current platform XXXX. study diagnostics installed. shortly then on development available, reported. project larger perform study a positive the validation we continue on that new test order, we we based we’ve clinical Subsequently, of study. XXX and clear of of the selected conduct of the which a new short a platform and make based sample study earlier In on and a we the selected We a completion very time for the are will studies, will and results Based and XXX studies. expect biomarkers in were new commercially the complete now study by project combination these the successful, have next first We and intend this after occur including series DetermaVu half we optimizing clinical algorithm begin study and then half the the the a sample be

about estimated medical the lung DetermaVu both Operator, the markets for diagnosis formal address We Please excited potentially unmet in billion that and open remarks. our call U.S. cancer of need to $X.X potential as completes overseas market for in in high the are questions. well. the the

Operator

question [Operator our first with Instructions] We’ll Benchmark. you. Thank from Bruce take Jackson

Bruce Jackson

taking afternoon, questions. and my you thank for Good

aboard. welcome Al, for is question First

program? if the initially the the assets particular territory testing was as leveraging lot maybe was of looking in breast terms a you In and there bladder program that of I were such wondering covers or that something at

Al Parker

with my this Bruce, there remits so At board, create a assets out wide it’s very all is there evaluate the working a and to at various point, and for at of the of the the the value. team company have Hi part best OncoCyte to lens, Bruce, thanks I welcome. how – figure shareholder

Bruce Jackson

anticipated year And that. wondering was on operating for of profile could you comment rest for Mitch, and Thank for just the briefly if the the I Okay. the then rate? expense burn you

Mitch Levine

place think Hi that our for under should month million that get just just to and clinical $X over based that million have range budget will upon validation. in us Bruce, in I we $X the expenses through a

Bruce Jackson

study, terms of XXX Okay. statistics specificity, R&D are and And size algorithm get the last validation a the going we of sensitivity at in question are range and then the the going you AUC with then on to to patient and full without nodule the look included?

William Annett

thanks Yes, this Bill. is Bruce,

course sensitivity at So, the of may be and statistics, the a the so all results R&D AUC of study, of on specificity medical study validation to and of we those an the conference. will present accuracy course the apply industry producing we conference, and statistics

be not let about we immediately the outcome in broad but study complete, certainly when they know may of available everyone the So, we will terms.

planning So that. that’s on our

Bruce Jackson

Thank from much. That’s right. All you it me. very

Mitch Levine

Thanks Bruce.

William Annett

Thanks Bruce.

Operator

We’ll go Chardan. Nakae to with next Keay

Keay Nakae

just Hi, a study, you thank of I'm just go maybe if to required wondering deeper you. little before on can Bill, it. R&D activities the a complexity the

of comfortable that long the exercise, straight again terms forward, in you the into that First, then indiscernible in take platform from manufacturer, with to panels the move terms appropriate challenges all getting training might be and new use equipment, does how being getting but of should personal the set as represent? what able the

William Annett

Thanks, Keay. Sure.

Philip the now our having we equipment. the equipment team we in this trained the So, of particular past. equipment – the installed, in on we of McQuary one Luckily, are extensively has have our and key used are process

I all awaiting for we the is to ordered So, have we’re And And that underway. that mentioned, as arrive. panel.

while, actual on starting algorithm It’s things which based to a patients. study, the are a XXX-patient a going take So, again trial. training of XXX is and these little – all we anticipate

in the begin not-too-distant trial. that’s So fair-size should future. a that And

are Sometime anticipating will September, begin. after we Labor that Day. In

Keay Nakae

additional easier is platform, harder the prior of as same in terms test on the of of or fewer terms doing the it steps the steps, any new in Just platform?

William Annett

answer question? you can Lyndal, that

Lyndal Hesterberg

Yes. same. that understood it prior time about don't question, If a the And does on or materials platform. it’s We the we’re see I difference with. operationally say to working large I how in of compare it’s any would other amount

encouraged what we're seeing. we’re far, by So

Keay Nakae

finally just then do how of ballpark validation And you're need clinical are you need? Okay. going samples of CLIA analytical in samples have number additional a you you to the terms the studies, of in thinking many conduct will to

William Annett

No.

right a very we of a We larger number samples have – have now.

We through will get all clinical to in way the order validation.

to should have continue samples should we collect, have we all this or to year of going of enough in are to and the XXXX, the early believe we end We for by studies.

we in over samples mentioned, right now, using be So, XXX training set. X,XXX have somewhere going I we’re and total, as in to the

continue benign We will And XXX the a geographically samples, validation. good to in R&D another are it’s important of then from and we as well to both using well-represented samples And U.S. across malignant collect. as get mixture

Keay Nakae

Okay. That’s I all have. Thank you.

Operator

time, have closing reached for Annett Bill today's the to to time allotted would we I over of And this additional call. any remarks. the like end the At turn call for back or

William Annett

Thank interest your of OncoCyte. much. everyone call. you appreciate our And joining and very We thank for you support

Operator

does your for thank participation. you And conclude this conference. We today's

may You disconnect. now

OncoCyte (OCX) 14 Aug 182018 Q2 Earnings call transcript