Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OncoCyte Corp has established a strategic partnership with Bio-Rad Laboratories, enhancing its commercial reach and supporting the development of regulated products like VitaGraft Kidney IVD.
- The company has successfully initiated early commercialization efforts and is poised for unprecedented growth over the next 12 to 18 months, driven by multiple milestones.
- OncoCyte Corp's technology has demonstrated the ability to detect transplant rejection earlier than standard methods, which could improve patient outcomes significantly.
- The company has secured a $15.8 million private placement in April, strengthening its financial position and endorsing its strategic partnership.
- OncoCyte Corp is actively engaging with the research community, aiming to become the research tool of choice for transplant monitoring, which could lead to increased adoption and revenue.
Negative Points
- Despite the positive developments, OncoCyte Corp reported a 41% decrease in net revenue for Q1 2024 compared to the same period in 2023.
- The company experienced a net loss from continuing operations of $9.1 million in Q1 2024, a significant decrease from a net income of $6 million in Q1 2023.
- Sales and marketing expenses have increased by 22%, indicating higher costs associated with ramping up commercialization efforts.
- There is uncertainty regarding the new FDA rule for the regulation of lab-developed tests, which could impact the company's operations and product launches.
- OncoCyte Corp's cash reserves declined by $3.9 million in the quarter, although this represents a 60% improvement year-over-year.
Q & A Highlights
Q: In terms of GraftAssure research, should we start to see any meaningful sales of that this year, or is it really going to be more in 2025?
A: Josh Riggs, President and CEO of OncoCyte Corp, responded that they will start shipping to first customers in Q2, with initial revenues expected by late Q4, building into 2025.
Q: Your sales and marketing was up 22%. Is that going to continue to rise as you move to commercialize GraftAssure, or should we expect it to level off?
A: Josh Riggs mentioned that they plan to add a few more personnel in the US and possibly in Europe to support product launch and site activation, expecting a slight increase before it levels off in late Q4.
Q: In your discussions with transplant centers, what are you hearing about clinicians' willingness to switch from current transplant offerings to your kitted option?
A: Josh Riggs explained that adoption varies by center and even by individual clinicians within centers. He anticipates a gradual shift to in-house testing driven by the advantages of faster results and potential revenue retention once a regulated product is available.
Q: Where are you seeing the most interest from potential beta sites for your products?
A: Josh Riggs noted strong interest from Germany due to longstanding relationships with research institutions there. In the US and Asia, interest has largely been driven by word of mouth within the tightly-knit transplant community.
Q: How are the commercial hires progressing, and what is the plan for training and deployment?
A: Josh Riggs stated that job descriptions are being prepared with postings expected by the end of the quarter. Hires are anticipated in Q3, with training alongside the Bio-Rad team, aiming for a strong team presence in the field by Q4.
Q: Can you provide more details on the expected timeline for revenue from GraftAssure?
A: Josh Riggs clarified that while shipments to beta sites will begin in Q2, revenue generation from these sites is expected to start in mid to late Q4, with further growth anticipated into 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
