Oncocyte Corporation

Thank you for standing by. My name is Kayla and I will be your conference operator today. At this time, I'd like to welcome everyone to the OncoSite third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press the star and 1. I would now like to turn the call over to Julie Silber, Senior Managing Director of PCG Advisory. You may begin.

Thank you, Kayla. And thank you, everyone, for joining us for today's conference call to discuss OncoSite's third quarter 2024 financial results and recent operating highlights. If you have not seen today's shareholder letter, please visit Oncocyte's investor relations page at investors.oncocyte.com to read it. Today's prepared remarks build upon the information that was already shared in this robust letter. On today's call is Oncocyte's President and CEO, Josh Riggs, Chief Science Officer, Eke Schutz, and CFO, Andrea James. before turning the call over to josh i'd like to go over our safe harbor the company will make projections and forward-looking statements regarding future events any statements that are not historical are forward-looking statements these statements are made pursuant to and within the meaning of the safe harbor provision of the private securities litigation reform act of 1995. we encourage you to to review the company's SEC filings, including the company's most recent form 10Q, which identifies the risks and uncertainties that may cause future actual results or events to differ materially from those expressed or implied in the forward-looking statements. Please note that the forward-looking statements made during today's call speak only to the date they are made. An ONCA site undertakes no obligation to update them to reflect subsequent events or circumstances, except as otherwise required under applicable law. Finally, we will conclude today's call with a Q&A session with questions from our analysts, as well as written questions that we have received from our investor community. And with that, I would now like to turn the call over to you, Josh. Josh, you may begin.

Thanks, Julie. Welcome, everyone, and thanks for tuning in. The transplant market is changing, and Oncocyte is a leading force in that change. Transplant centers around the world are realizing that they do not have to accept the limitations of the current molecular testing model. In Q3, we worked with our beta sites to bring up our tests, and we're able to celebrate our technology being run on three continents. We signed up leading transplant centers in our key markets, built upon our market leadership and clinical data generation, and took the first major steps in our FDA program. Milestone after milestone, promise after promise, we continue to deliver. A year and a half ago, we told the market that it was time to democratize transplant testing. And today, we are closer than ever to making that goal a global reality. The positive response from the transplant community tells us that we are on the right path, and that we can count on their support to make our IBD product a reality, because at the end of the day, local care can mean better care for patients. Making DDC-CFDNA testing broadly accessible means more research can be done, new questions will be answered, and progress will start to accelerate in the clinic. Transplant centers are tired of being left out of this important piece in the patient care value chain. They want to manage their patients locally, and we believe that they should be able to participate in the economic value they create. Oncocyte is committed to enabling both. Fast, easy-to-use tests with strong revenue potential are a no-brainer for most transplant centers across the U.S. This is the future they want and the ones they'll get. It feels gratifying to be able to report such great progress every quarter. We are retiring risk on our path to meaningful revenue. Demand for our graph-assure RUOKIT test is exceeding our expectations in Europe, and in the U.S., we believe we are carving out potential meaningful market share while also staying on pace with our FDA program. We are moving quickly, and that's a testament to the team's dedication and hard work, our shareholder support, and the market enthusiasm for what we're building. Shortly after launching Graft Assure, we signed a top five transplant center here in the United States and a top five transplant center in Germany. In the long run, democratization of transplant testing is inevitable. What we are seeing here is just the first signs of it beginning. Just think. Basically, every other biomarker needed to manage a transplant patient can be measured locally, except for cdcfDNA. And there's no good reason that ddcfDNA should be any different. Transplant is a highly concentrated market, and the top of our sales funnel skews towards the largest of the 100 transplant centers that matter the most in our space. We are actively talking to more than 30 sites that do high organ transplant volumes. We believe we are on track to meet or exceed our site placement goal of having 20 sites signed by the end of next year. We believe each of these sites can eventually average about 1 million per year in high margin recurring clinical test kit revenue. So it's not hard to do the times one math on how we think revenue will build once we achieve FDA clearance for our kits to be used in clinical decision making. And of course, that's just the starting point. We expect that the value proposition and regulatory clearance will drive accelerated adoption in both the US and the EU. We've engaged with the FDA, and we'll have our first meeting with them in early December to go through our validation plan. We have a team of experienced hands that have put many products and devices through the agency. And I have every confidence that we will find an efficient path to success. In recent weeks, I spent a fair amount of time meeting face to face with many stakeholders in our industry, including customers and research partners and companies in our space who are interested in strategically partnering. I've traveled to meet with customers and partners, not only in the US, but also in Europe. We are leaning into the long standing relationships we already have while we build and explore new potential commercial and strategic relationships. It seems like every stone we lift up, we're finding someone who is frustrated with the current industry practice and is looking to us for a better way. Our customers are telling us that our product is both easy to use and fast, and we believe that that sets us apart. If you can extract DNA, then most likely you can run our tests. And for sensors that want same-day turnaround time, our digital PCR-based assay offers an advantage over NGS solutions. We believe we are pursuing a form of the classic technological disruption strategy of introducing products that fundamentally change the nature of competition in a given market. On the strategic side, we believe our IP gives us a seat at the table in the broader molecular diagnostic space, which will allow us to have productive conversations with strategic players, both on the product side, such as the instrument makers, as well as with clinical service labs. And our IP has value not only in transplant, which currently gets most of our strategic focus in sales investment, but also in oncology. We believe we can continue to drive growth even after transplant is up and humming for us. I do want to highlight favorable data out of Milan related to one of our oncology products. The Terma IO, an immune classifier, continues to outperform standard of care biomarkers and assays. A peer-reviewed study published in Clinical Cancer Research in September validated DetermaIO's utility to identify breast cancer patients most likely to benefit from atezolizumab. The takeaway for investors is threefold. Firstly, this study gets us one step closer to reimbursement for DetermaIO, and we plan to add this to our data submission at CMS. Secondly, the data supports our ongoing DETERMA-IO partnering conversations. We believe we have identified partners who want market access to this technology on a global basis. And finally, it validates our R&D pipeline and shows our continuing progress in targeting a multi-billion dollar addressable market in oncology diagnostics. Even though we are a small company and we are still largely pre-revenue in transplant, We sit upon an established body of science and more than 10 years of research in the field. We believe we have long been out in front with the clinical data that we are generating and have a strong pipeline to power new opportunities and growth well into the future. I'll hand it over to Andrea.