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OncoCyte: Already A Commercial Stage Company With Enormous Revenue Potential

Jun. 05, 2020 9:09 AM ETOncoCyte Corporation (OCX)BIOC, GH7 Comments


  • OncoCyte is finally already a company in a commercial stage.
  • With two products currently on sale (DetermaRx and DetermaIO), the revenue potential it presents for the coming months is enormous.
  • I would suggest buying shares at these levels, as I anticipate that the $5 or $6 will be recovered before the end of the year.

OncoCyte (NASDAQ:OCX) continues to execute its plan by laying the groundwork for becoming a leading company in the field of early cancer diagnosis through liquid biopsy test, presenting enormous potential for future revenue.

This 2020 is the year of the definitive transformation of the company, since in the last first quarter it became for the first time in its history, a company in the commercial stage. This was due to the fact that both the DetermaRx test (early detection of lung cancer) and DetermaIO (test that determines whether cancer immunotherapy is effective for patients) are already ready and available for sale.

On the other hand, the latest advances of the company include:

-Clinical validation of DetermaDx that will end soon (end of June)

-Request for medical coverage from CMS for DetermaDx test (after its clinical validation)

-Commercial availability of DetermaIO platform for research use only in the field of oncological immunology.

-Signing of agreements with various health clinics for the commercialization of DetermaRx test.

And above all:

-The communication by the CMS contractor Palmetto of the definitive medical coverage of DetermaRx, which will begin as the effective date of June 14.

This last milestone is, in my opinion, the most important one carried out by the company so far, and surely of this entire year 2020.

Palmetto's decision will soon be followed by that of another CMS contractor, Noridian, who will also report soon on DetermaRx's favorable coverage decision.

The fact that DetermaRx is covered by these two health insurance contractors will imply an extraordinary boost to the commercial potential of the test because its cost will be covered by up to 70% depending on each patient and the type of cancer.

Therefore, for the second half of this year 2020, we will begin to see interesting sales figures.


This article was written by

More than 10 years in Biotech investment. Fundamental analysis. I am seeking for undervalued biotech for a +100% reward. Mind/long-term investments.

Analyst’s Disclosure: I am/we are long OCX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (7)

ponderevo profile picture
Honestly, I read this article and conclude one thing only: go long $GH
Francisco Javier Garcia profile picture
Guardant health focuses on cancer in advanced stages. It has several projects in study for the diagnosis of cancer in its initial stages, but it is not expect to be ready until a minimum of 1 year from now. OCX already has a test for early stage cancer being commercialized (RX test) and another for next year (DX test). OCX has a great future.
mookdoc profile picture
COUPLE MORE DAYS AND CULLEY CAN LET RIP MORE OCX SHARES! Great can't wait to get this DEAD WEIGHT OFF OUR BACKS! Keep talking Ronnie,keep talking your good @ it too!
Ana_Banana83 profile picture
Since the installment of Ronny, Oncocyte has been issuing shares like crazy. The company must be valued as fully diluted. The last thing the Oncocyte shareholder needs right now is another share purchased acquisition that is capital intensive to finish developing. I am strongly looking forward to the Q2 CC which Ronny shouldn't be able to hide behind a riddle for how many total tests were performed, because "reasons".

But don't worry, the symbolic 30% pay cut management took will make it all better.
Author forgets to mention that the company has recently asked shareholders to approve increasing share count from current 85 million to 150 million. According to the management, this is necessary because the company does not have sufficient shares for stock issuance to cover recent acquisitions and because they will continue to raise capital in the markets. In other words, no profits are anticipated in the foreseeable future. At 150 million shares, the company valuation is almost $400 million. How much of a possible upside can there be from these levels?

Reasons for the Common Stock Amendment Proposal

Our Board of Directors believes that the proposed increase in the number of authorized shares of Common Stock is desirable in order to enhance our flexibility in taking possible future actions, such as raising additional equity capital, making acquisitions using our equity as consideration, awarding equity compensation or pursuing other corporate purposes. As of May 12, 2020, we had 67,217,906 shares of Common Stock issued and outstanding, approximately 9,608,000 shares of Common Stock reserved for issuance upon the exercise of outstanding stock options and upon vesting of restricted stock units, approximately 4,155,000 shares of our common stock available for future grants under our Incentive Plan and 3,383,913 shares of Common Stock reserved for issuance upon the exercise of outstanding stock purchase warrants, leaving only approximately 635,000 shares of Common Stock available to Oncocyte for use in raising capital, making acquisitions, or pursuing other corporate purposes. Oncocyte has not yet received significant revenues from the cancer diagnostic tests that it is developing and commercializing, and until such time as it is able to do so and to generate sufficient revenue to finance its operations, it will need to raise additional capital, which may occur through the sale of Common Stock, preferred stock, and securities convertible into or exercisable for shares of Common Stock or preferred stock.


We have issued or agreed to issue shares of Common Stock to acquire assets to expand our technology and product portfolios and we may issue or sell shares of Common Stock in the future to acquire additional assets or businesses. We consider potential sources of financing and potential acquisition candidates from time to time when opportunities arise. We have agreed to issue shares of Common Stock to the stockholders of Razor Genomics, Inc. (“Razor”), as described below, if certain conditions are met under agreements related to the acquisition of shares of Razor and rights to develop and market our DetermaRx™ diagnostic test. If the Common Stock Amendment Proposal is not approved by our shareholders, we might not be able to meet our contractual obligations to the Razor shareholders. We may, at our election, also issue shares of Common Stock in lieu of cash to former shareholders of Insight Genetics, Inc. (“Insight”), as described below, under the terms of a merger agreement pursuant to which Oncocyte acquired the cancer assays that we are developing as DetermaIO™.

We have also entered into an Equity Distribution Agreement with Piper Sandler & Co. pursuant to which we may offer and sell shares of Common Stock from time to time for cash in “at-the-market” transactions. We are not presently a party of any other financing or acquisition agreements that require us to issue, or pursuant to which we may issue, shares of Common Stock, and we may not be able to raise capital or consummate future acquisitions on terms we deem acceptable, or at all.
Assuming the authors number of a $500 million market cap/ divided by all 150 million shares (unlikely in my mind) results in a $3.33 share price, or more than 26% from the the current $2.65.
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