Oncocyte Corporation

Greetings and welcome to the OncoSite Corporation first quarter of 2022 earnings conference call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to Mr. Tech Sim of Investor Relations.

Thank you, Operator, and thank you, everyone, for joining us for today's conference call to discuss OncoSight's first quarter 2022 financial results and recent operating highlights. If you have not seen today's financial results press releases, please visit the company's website on the Investors page. Before turning the call over to Ronnie Andrews, OncoSight's President and Chief Executive Officer, I would like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. Any statements that are not historical facts are forward-looking statements. We encourage you to review the company's SEC filings, including without limitation the company's form 10-K and 10-Q, which identifies the specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. These factors may include, without limitation, risks inherent in the development and or the commercialization of potential diagnostic tests, uncertainty in the results of clinical trials or regulatory approvals, the capacity of Oncocyte's third-party supply blood sample analytic system to provide consistent and precise analytic results on a commercial scale, the need to obtain third-party reimbursement for patients' use of any diagnostic test the company commercializes, our need and ability to obtain future capital and maintenance of IP rights, risks inherent in strategic transactions such as failures to realize anticipated benefits, legal, regulatory or political changes in the applicable jurisdiction, accounting and quality controls, greater than estimated allocations of resources to develop and commercialize technologies, or failures to maintain any laboratory accreditation or certification, and uncertainties associated with the COVID-19 pandemic and its possible effects on our operations. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these four looking statements. OncoSight expressly disclaims any intent or obligation to update these four looking statements, except that otherwise may be required under applicable law. With that, I'll turn the call over to Rani.

Hey, thanks, Tech. Welcome, everyone, to our conference call to discuss first quarter 2022 financial results and operating highlights. On today's call, I'll review the significant progress we've made and continue to make across all of our major products as we move toward reimbursement submissions for our oncology menu and update you on our exciting opportunity in transplant. But first, I think it's important to address the market headwinds and some important decisions we've made to better position Oncocyte to weather the current external environment. When I stepped into the CEO role in July of 2019, we introduced and adopted an ambitious vision to acquire companies that own technologies that could accelerate our path to deliver a complete menu of precision treatment decision and therapy monitoring tests to assist oncologists and pathologists in making more timely, informed decisions for their patients. Despite the challenging external market environment, I'm very proud to say we enter 2022 with every product on schedule and poised for submission for reimbursement over the next 12 months. Notwithstanding these favorable developments, we recognize the need to be fiscally prudent and strong stewards of capital. In connection with these objectives, the company, led by our board, determined to take actions to strengthen our balance sheet so as to ensure we have a solid path through 23 and into 24. In April, we successfully consummated an underwritten public offering of common stock and warrants with net proceeds of approximately 32.8 million. This financing round was accomplished with the strong support of several current investors, as well as some new institutions. We very much appreciate the continued commitment to the company and to our vision. We believe this recent funding combined with our current balance sheet expected revenue ramp as well as licensing and platform partnerships will provide us sufficient capital into 2024. However, in order to do this, we've had to make some important prioritization decisions that I want to share with everyone today. First, we expect to shift from our current parallel path product development and launch processes and begin to focus on two main product priorities. For the foreseeable future, we intend to focus our organizational energies on, one, launching our recently CLIA-validated transplant monitoring test for liver transplant patients, as well as completing the platform partnership and initiating the clinical trials for an IVD kit submission in transplant. And two, completing the DETERMA-IO early adopter program and publishing supporting papers to drive future adoption, as well as submitting for CMS reversement in the second half of 2022. In Q1, we completed the investment required to build out our Irvine lab to accommodate the upcoming IVD development in both transplant and in oncology. Our exciting relationship with Thermo Fisher to build regulated content on their next generation sequencing system, GeneXus, required preparations and capital investments. Here in Q2, with the infrastructure investments now behind us, we had the facilities, the instruments, and the expert team in place to begin this important work, allowing us to start the regular process to position our oncology test to launch XUS through Thermo's global channels. Before I dive into the product line progress we made in Q1, I'd like to address some organizational changes that I believe will assist us in our efforts. As of June 1st, Mitch Levine will move over to become Corporate Development Officer, where he will oversee the multiple initiatives underway for bringing in non-dilutive cash via licensing and partnership negotiations. We're grateful to Mitch for all his work as our CFO and believe this move allows us even better leverage of Mitch's extensive capital markets experience and negotiation skills as we seek new sources of revenue. Also on June 1st, Anish John will be promoted to the role of Senior Vice President of Finance and interim CFO. We originally recruited Anish to run our transplant business as head of operations and finance, and he's done an exceptional job as evidenced by our completion of the LDT validation and the LCD submission for liver two months ahead of schedule. Anish has over 30 years of finance and operational experience within the diagnostics, life science, and high technology industry sectors, including molecular diagnostics companies like Foundation Medicine and Perkin Elmer. Anish brings incredibly broad experience to the role, and he understands the challenge ahead and is uniquely qualified to help us deliver on our financial and cash management goals. In addition, what saddens me personally, Kevin Redman, our chairman of the board, has decided not to stand for reelection to the board of directors at our annual shareholder meeting this summer. Kevin has served shareholders extremely well for the past six years. However, in light of some very personal reasons, Kevin has determined that more time with family is needed and other life interests. We're extremely appreciative of the investment in time and experience he's made to OncaSight over the years, and I'm grateful for his willingness to remain accessible as a trusted advisor to me and other members of management to ensure a seamless transition. In connection with Cabin's decision to not run for re-election, I'm pleased to announce that Andy Arno, our current audit chair, has been unanimously elected by our board to succeed Cabin. Andy brings a long history of financial acumen to the role, which we believe will ensure solid continuity as we navigate the current market environment and move Oncocyte forward. With that, let me now provide updates on our solid progress across our portfolio. First, I want to discuss our anticipated rapidly emerging revenue opportunity in transplant rejection monitoring. Last fall, we set out an ambitious plan to finalize our lab-developed test for liver patients by the end of first half of 2022. As announced last week, thanks to the incredible effort by our teams in Germany and Nashville, we now have a fully CLIA-validated lab test for liver transplant monitoring poised for launch. The team was also able to complete the liver clinical validation for CMS submission two months ahead of plan, positioning us for a full market launch in the fall of this year. Building on our patents and numerous papers published based on our digital PCR methods, our two teams have streamlined the workflow, delivering an incredibly efficient digital PCR process that allows us to consistently, with solid assay reproducibility, complete the test process and report results within a single shift once our lab receives a patient's blood sample. We believe this will be the fastest turnaround time available in the industry today, and we're enthusiastic about the opportunity to provide this important test for liver patients, where today there is no current molecular monitoring test on the market. I look forward to updating you on our commercial plans on future calls. Now let's turn to our oncology portfolio. In the first quarter, the TermRx grew 66% versus Q1 of 2021, and sample volumes were 73% above the prior year, reflecting continued momentum towards our stated goal of doubling 2021 volumes in revenues. In the first quarter, we continued to expand our pool of onboarded physicians, which is now up to 472. This is an increase of 10% year over year. And similarly, onboarded accounts also increased 10% to a total of 278 as of the end of first quarter. Let's turn next to DetermineIO. It's clear from our early adopter program that there's a tremendous need for a better solution to immune therapy response prediction than the two prognostic tests that are currently available today. Over the course of first quarter, we gained valuable insights as to the use cases for DETERMA-IO and have a clear understanding of its importance in early stage triple negative breast cancer and late stage non-small cell lung cancer. We continue to build the foundation of supportive papers, expanding the clinical utility of the test and supporting the unique claim of DETERMA-IO's utility across multiple tumor types. Recently, at AACR, we presented data supporting its use in metastatic bladder cancer, our second major data set in this cancer type, which we believe is now statistically powered to allow us to expand into bladder cancer as our third tumor type. This June, at the American Society of Clinical Oncology, or ASCO meeting, our collaborator will be releasing the results of the previously announced collaboration with the GONO Clinical Trials Group, where DETERMA-IO was tested as a biomarker on the ATIZO TRIBE study. ATIZO TRIBE is a randomized clinical trial in metastatic colorectal cancer, where patients receive placebo or the standard of care, plus the Roche drug ATIZO. Last September, Dr. Chiara Cremolini of the Gono Group reported the results of the trial where the trial was considered a success, but only for a very small population of patients. But as has been previously seen in numerous studies, most of the benefit was seen in a subgroup of 5% of metastatic colorectal cancer patients that had a rare genetic mutation. It is now universally accepted that the remaining 95% of patients need a biomarker. In fact, without a predictive test, this very large patient population will continue to lack access to immune checkpoint inhibitors as a treatment option. Dr. Kamalini mentioned that her team's future work will be looking at biomarkers for these low-responding patients, and DETERMA-IO is mentioned by name as a candidate. These important data will be released at ASCO. And while today we cannot comment on the results, given it's a blinded study, we encourage you to stay tuned. I cannot overstate the importance of such a potential new indication for immune checkpoint inhibitors and for our DetermaIO program. Additionally, at ASCO, we're releasing data on DetermaIO and metastatic triple negative breast cancer using the drug Keytruda. While we have previous data in TMBC, those studies were with different immune checkpoint inhibitors and in earlier stage tumors rather than metastatic disease. So this could expand our applicable TMBC patient population for one of the leading immune checkpoint inhibitors, Keytruda. Finally, we'll be releasing new data in gastric cancer. While gastric cancer is not a common cancer in this country, it is the third leading cause of cancer-related deaths worldwide. We feel that this indication is important now that we've solidified our platform and channel partnership with Thermo Fisher for the rest of world markets and are already working on the kit version of DetermaIO. Needless to say, ASCO is an important meeting for DetermaIO, and we look forward to speaking with you further once the data is all public. Let me close by summarizing. Despite the external environment, I continue to be extremely enthusiastic about the progress we've made today. Looking ahead, we'll be taking steps to focus our investments on how we stage our product development and launches and have many exciting growth drivers for you to watch over the next six to eight quarters. We'll continue to drive sample volume growth and revenue increases for DETERMA-RX. And beginning in the second half of this year, we plan to start the sequencing of our four major product launches with our transplant monitoring offering in liver, followed by full market launch of DETERMA-IO, DETERMA-TX for the U.S. clinical oncology market. And finally, we expect to launch DETERMA-CNI in the U.S. for pharma clinical trial markets. gaining reimbursement for our portfolio and bringing our test to market generate revenue growth is essential we believe that we've optimized the organization to drive external partnerships and licensing to generate additional revenue streams and we've taken steps to reduce our burn to ensure our current resources carry us into 2024. we built a world-class organization that i'm very proud of and i'm grateful for your support as we advance our our platform to deliver life-changing tests to the patients' physicians we serve each day. At this point, I'd like to turn the call over to Mitch Levine to review our financials. Mitch?