Oncocyte Corp. (NYSE: OCX) plans to use $25 million in fresh funds to drive commercial momentum and product development in 2021.
The Irvine-based cancer test maker said this month its two largest investors, Broadwood Partners LP and Pura Vida Investments LLC, purchased $25 million of common shares in a registered offering priced at $3.42 per share. Its shares were trading close to $5 late last week.
Oncocyte started earning revenue in 2020 from clinical and research-only cancer tests, as well as a pharma services offering for companies involved in biomarker-driven clinical trials.
“OCX now defines its total addressable market at greater than $20 billion with a portfolio of five diagnostic tests focused on lung cancer,” a Needham analyst report said.
The seven analysts who cover the company expect $1.5 million in 2020 sales, and then a jump to $7 million in 2021 sales.
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Oncocyte earned its first clinical revenue from its DetermaRx test, which looks for lung cancer in patients with a high likelihood of recurrence, in its third quarter 2020.
“Importantly, testing volume more than doubled in 3Q20 to 175 from 64 in 2Q20, demonstrating strong early market adoption from physicians (primarily lung cancer surgeons),” Needham said.
Needham estimates the list price of DetermaRx is $4,000 per test, and Medicare covers about 70% of the eligible lung cancer patient population in the U.S. The product is also entering markets in Europe and China.
Oncocyte is expected to launch its DetermaIO immunotherapy response prediction test for clinical use, as well as two additional research-only products in the second half of 2021.
A fifth test for lung cancer recurrence detection is in the works.
