Oncocyte Corporation

Good day and welcome to the OncaSite conference call to discuss the third quarter 2022 financial results. Today's call is being recorded. At this time, I would like to turn the call over to Caroline Porter, Westwick Investor Relations. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining us for today's conference call to discuss OncaSite's third quarter 2022 financial results. If you have not seen today's financial results press releases, please visit the company's website on the Investors page. Joining me on today's call are Ronnie Andrews, President and Chief Executive Officer, and Anish John, Chief Financial 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 fact are forward-looking statements. We encourage you to review the company's SEC filings, including, without limitation, the company's Forms 10-K and 10-Qs, which identify the specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, risks inherent in the development and or the commercialization of potential diagnostic tests, uncertainties in the results of the clinical trials or regulatory approvals, the capacity of Oncocyte's third-party supply blood sample analytics 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, the maintenance of IP rights, risks inherent in the strategic transactions such as failure to realize anticipated benefits, legal, regulatory, or political changes in the applicable jurisdictions, accounting and quality controls, greater than estimated allocations of resources to develop and commercialize technologies, or failure 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 forward-looking statements. ONCA site expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise may be required under applicable law. With that, I'll turn the call over to Ronnie.

Thanks Caroline and welcome everyone. Today I'd like to update you on the progress we've made against the strategic goals that we laid out on our last call and share some of the important milestones we have ahead. Our newly streamlined organization has maintained our momentum against our most critical milestones and we're working hard to complete our product development and gain reimbursement for our transplant and for our oncology programs. I'll start today with our transplant rejection monitoring opportunities. As you know, we have two products in this $2 billion U.S. market, Vitagraph Liver and Vitagraph Kidney. If you recall, both tests have completed analytical validation and have been submitted for reimbursement. We have active conversations with the team at Moldex ongoing, and this is very similar to what we experienced with the TermaRx a few years ago when we gained that very important reimbursement. And we expect to continue these discussions, but we do expect reimbursement for both by year end. In Q3, we began accepting clinical samples at our lab in Nashville as part of our vitagraph liver early adopter program. The goals of the liver EAP are engage key opinion leaders to refine our clinical utility and prepare the lab for full launch, which we expect to be in Q1 of 2023. We're very encouraged by the positive response to our test and the wet lab workflow that is now under 36 hours for our initial patient workup to establish the personalized baseline and only 12 hours for all the diagnostic monitoring tests thereafter. This rapid turnaround time is necessary to serve patients in a four-cause setting when their care team is seeing an increase in liver function tests. Their docs don't have time to wait on the long turnaround time for next-gen sequencing, and so we're excited to serve this unmet need in liver transplant management. In Q4, we plan to open up the kidney early adopter program and begin feasibility for the IVD versions of both assays. While we do expect that our two lab-developed tests will generate early revenues for our transplant monitoring program, As you know, our primary goal is to disrupt the transplant monitoring market by delivering kits to democratize these critical decisions that physicians have to make for their patients. Our market research and the ongoing key opinion leader interaction have provided strong indication that rapid turnaround time Absolute quantification and the ability to participate in the reimbursement economics are powerful attributes that only Vitagraph will be able to provide for the foreseeable future. We remain on track for IVD trial to begin sometime in Q1 2023. In summary for Vitagraph, the key milestones to watch over the coming months are, first, we plan to continue onboarding new key opinion leaders from the liver transplant community as we open up our early adopter program. We also anticipate the launch of our kidney test by year-end to existing and new key opinion leaders. We expect reimbursement decisions from CMS by year-end. And finally, we will begin the feasibility for the IVD kit product and site management for the important FDA clinical trial, which we expect to commence in 2023. Now let's turn to our flagship oncology product, Determa IO. To remind you, this is our 27 RNA gene expression test designed to help physicians access patients that have a tumor that and assess the tumor microenvironment and determine which patients are suitable candidates for immune oncology therapies. Our early adopter program continues to underscore to us the need for this test across a slate of cancers. And as I mentioned on our last call, we have compelling data now in early triple negative breast cancer, late stage non-small cell lung cancer, metastatic bladder cancer, metastatic colorectal cancer, and gastric cancer. DetermaIO has now been validated in over 1,200 patients in six tumor types and across all four major immunotherapies. The results to date have been outstanding, and in all studies to date have outperformed the current test for predicting response to immunotherapy. Our early adopter program continues to provide valuable use cases for CMS submission and market launch, and our volumes have continued to double each quarter during our limited launch. The early adopter clinicians are reordering the test for multiple use cases across multiple tumor types, and we remain incredibly enthusiastic about the future of DETERMA-IO. We also recently announced that DETERMA-IO is part of a large biomarker grant award for the SWOG clinical trial study group in breast cancer. These awards were given by the National Cancer Institute, and the process was highly competitive, where only a handful of clinical trial groups and National Cancer Institute sites were even allowed to apply. Even then, each trial group was only allowed to submit two to three grant applications, which is a particularly small number when you consider all the variety of cancers that these groups are investigating. All applications were reviewed by an independent committee of clinical experts. In addition to having extremely solid data, which DETERMA-IO has, the grant application needed to provide evidence that one, the test was not merely interesting scientifically, but would actually change clinical practice in a very meaningful way for patients, and two, was ready to be used immediately within the clinic. We're very excited to say that DETERMA-IO meets both of these criteria. We realize there are a lot of biomarker claims that claim to find responders of patients who benefit from immune checkpoint inhibitors. But the TERMA-IO selection by the true experts in the clinical field show that the TERMA-IO is rapidly distinguishing itself from the competitive test and is a solid validation of the progress we've made in a very short time with the TERMA-IO. As with our Vitagraph program, we're also working on a path to create a kit to make our oncology tests more accessible to physicians and to patients. The beauty of Determine.io is that it was developed from a large-scale 2000 gene panel and the 27-gene RNA algorithm can actually be performed on multiple data sources, including samples that were run with RNA-seq data, our PCR kit, or even a next-gen sequencing targeted resequencing chip. Given that there are thousands of PCR and next-gen sequencing systems in labs around the world, this allows us to be incredibly flexible and with our market access. In line with our new cash management strategies, we are planning for the regulatory process for our kitted version to start in mid 2023. As we mentioned in our last call, in order to reduce our overall burn, we've moved to a concurrent development in clinical study to a more sequential process. Determined CNI, or determined naive blood-based therapy monitoring test, continues to be in use in clinical studies in the EU, where the product has been effective in identifying disease progression across several tumor types. The results today allow a physician to identify the failure of a treatment protocol weeks in advance of the current MRD test on the market and a much lower cost. Given that a large majority of later stage patients do not get their tumor surgically removed, current MRD tests are often not an option to monitor those patients since a large amount of tumor tissue is required for the upfront genomic panel to be completed. The market feedback so far has been overwhelming. A blood-only monitoring test that can tell a physician that a drug is not working by the second cycle of treatment is game-changing for them and for their patients. According to our plan, the U.S. Clinical Validation will begin working with academic institutions and with biobanks to complete blinded retrospective studies in the first half of 2023 and hopefully submit for reimbursement under the current blanket LCD for immune therapy monitoring shortly after that. Finally, I'll turn to our progress with TermRx, our lung cancer stratification tests. Since its launch in mid-2020, Determ Rx has now touched well over 1,500 patients' lives. These patients had stage 1 tumors, and without our test information, may have gone untreated, and statistically then, half of them would not be with us right now. So I'm pleased to report that our screen line sales force in our current covered territories, which now make up about 30% of the market opportunity, delivered third quarter growth in Rx sample volumes that were above 51% above prior year. This is a really strong testimony to the sales team and their growing reliance on the tumor Rx to identify patients that are high risk for recurring tumors and in need of treatment to improve their chance of living. We're also able to expand our pool of onboarded physicians, which now numbers 596 practitioners, which is up 62% year over year. As I close out my remarks, I want to reemphasize my confidence in our ability to bring Oncocyte to this challenging macro environment and emerge leaner and stronger. In our Q2 call, we mentioned our intent to initiate several corporate development activities to evaluate the strategic alternatives we have given our broad portfolio. We have engaged Perella Weinberg Partners as an advisor to assist us in identifying and evaluating a range of these possible strategic alternatives, and we're actively engaged in several meaningful conversations. On a parallel path, we continue to explore avenues to bolster our cash runway and to reduce our spend, including the possible reevaluation of our clinical trial expenses, potential changes to our executive compensation structure, and reallocation of investments in our fixed capital and infrastructure. While we can't speak to specifics on today's call due to the sensitivity of the various discussions we have ongoing, we remain very confident that we'll be able to execute on one or more of our options to secure OncaSite's future. So please stay tuned, and I also encourage you to watch for some key milestones over the next few months, which include the reimbursement decisions for vitagraph kidney and liver, both which we expect this year, and then the subsequent planned full market launches of our LDTs and transplant. As well, we're on path to submit the term of IO for reimbursement, and we expect to do that before year end. I'm grateful for your continued support, and with that, I'll turn the call over to Aneesh Chand of UR Financials. Aneesh?