New York, August 22, 2024 - PRISM MarketView - With significant momentum from its recent clinical publications and the successful beta launch of GraftAssureTM, which can detect early evidence of graft organ damage in a patient’s blood, Oncocyte Corporation (Nasdaq: OCX) recently shared its notable progress with investors in a newly published deck, Q2 shareholder letter, and call.
On July 11, a GraftAssure assay was run at a major metropolitan transplant center and research university in the northeast United States, marking the first time the test had been run outside of an Oncocyte lab. A lab at a leading transplant center in Southeast Asia began running the test days later, and it has already been touted as “easy” and “user-friendly.”
Oncocyte has signed up several research and transplant centers in the United States, Europe and Asia, and the U.S. sales funnel of confirmed interest is comprised of transplant centers representing 25% of current U.S. transplant volumes. The ultimate goal is to have more than 20 transplant centers running GraftAssure tests through the end of 2025, including 15 in the United States. Each center represents an estimated eventual high-margin revenue stream of up to $2 million annually.
This significant news follows on the heels of Bio-Rad Laboratories (NYSE:BIO) joining as an investor and strategic partner in April to support the GraftAssure global launch. Industry partnerships have continued to drive interest, including a new agreement with a European biotech that will provide donor-derived cfDNA testing for a Phase 2 clinical trial for a therapeutic in antibody-mediated rejection.Meanwhile, “The New England Journal of Medicine” published favorable data regarding Oncocyte’s centralized lab product VitaGraft Kidney, which uses the same background IP as the GraftAssure kitted test.
Land & Expand
In its recent communications, Oncocyte shared that, “We believe that we are at an inflection point in commercializing our molecular diagnostic tests that can detect early evidence of graft organ damage in the blood. Bringing research centers up online with our GraftAssure assay is a key part of our land-and-expand strategy to drive commercial adoption of our tests and capture market share in an estimated $1 billion total addressable market.
“Simply, our strategy is to land major transplant centers and research universities with our research-use-only product. Doing so establishes our technology and increases its potential utility by enabling researchers to explore potential applications of dd-cfDNA. Then, once we have achieved FDA clearance for our test kits to be used to make clinical decisions – that is, approved as an in-vitro diagnostic (IVD) – we believe that these institutions will begin using our tests to manage their patient populations, while continuing to use our GraftAssure test kit to perform research. Importantly, our GraftAssure research product may not be used to support clinical treatment decisions.”
This strategy builds profitability with a small sales force, thanks to favorable customer concentration, keeping infrastructure costs low while still allowing for high-touch local sales and service, and an ongoing focus on scaling in manufacturing and developing new use cases.
Organic Expansion via VitaGraftTM Kidney
Following the investor call, Oncocyte announced the publication of a case series of two kidney transplant patients monitored for antibody-mediated rejection using its proprietary VitaGraft™ Kidney diagnostic test.
This is the second publication that shows Oncocyte’s ability to monitor therapeutic efficacy and recurrence monitoring. This recent study indicates new clinical utilities for VitaGraft Kidney beyond the currently approved and reimbursed indication of for cause testing. There are currently no FDA-approved drugs to manage antibody-mediated rejection—which occurs in up 20% of kidney transplant patients.
With the mission to “democratize access to molecular diagnostic testing to improve patient outcomes,” Oncocyte is riding a strong wave of innovation and momentum and driving towards marketplace growth.
What’s Next for Oncocyte
The next 18 months hold a lot of promise for Oncocyte’s industry growth and leadership. In addition to continued roll-out of the GraftAssure assay, the company expects that the Increasing Organ Transplant Access Model from the Centers for Medicare and Medicaid Services coming on Jan. 1, 2025, will increase demand for dd-cfDNA testing.
“We have an opportunity to do a lot of good with our technology and to do it quite soon. The opportunity over the next 2 to 3 years is very large. In the near term, we have the opportunity to capture market share by selling a known biomarker test into the transplant diagnostic market. We also have a compelling opportunity over the 5- to 10-year period, which is the period I’ve always focused on n. Over that timeframe, it is not unreasonable that we could become a $1 billion company.”
Andrea James, CFO at Oncocyte
“The market enthusiasm for GraftAssure has given us the confidence to make some incremental investments in the back half of the year to support commercial launch and the FDA submission process. We are dedicated to democratizing access to novel molecular diagnostic testing, improving patient outcomes and creating substantial shareholder value along the way.”
Jeff Riggs,CEO and President at Oncocyte
For more information, check out Oncocyte’s new investor deck here: https://investors.oncocyte.com/~/media/Files/O/Oncocyte-IR/events-and-presentations/ocx-investor-deck-q2-2024.pdf
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