Oncocyte (NASDAQ:IMDX) remains on track to secure FDA marketing authorization for its GraftAssureDx kidney-transplant rejection test by the end of 2024, despite ongoing regulatory inquiries and a strategic focus on managing capital ahead of commercial launch.
Navigating the FDA Regulatory Path
During the company’s second-quarter earnings call, President and CEO Josh Riggs addressed a July FDA letter requesting additional data and clarification regarding the product’s intended use. Riggs characterized the request as a routine element of the Class II review process. To bolster its position, the company has tripled the sample size collected for its study since the initial March submission.
Before resubmitting its data package, Oncocyte plans to conduct a Submission Issue Request (SIR) meeting with the FDA. This session is designed to secure direct written feedback and ensure full alignment with agency requirements. While Riggs noted that the exact timeline of government review remains outside the firm’s direct control, he emphasized that the FDA’s questions were predictable and addressable using existing internal data.
European Expansion and Regulatory Flexibility
Chief Science Officer Ekkehard Schütz highlighted a more flexible regulatory environment in Europe. Following consultations regarding the In Vitro Diagnostic Regulation (IVDR), the company expects to complete its submission in the second half of the year without the need for large-scale clinical studies. Furthermore, self-certification pathways in the United Kingdom are expected to streamline market entry.
Early market-access indicators are already appearing in Europe, with reimbursement progress noted in Switzerland and active tenders in Italy. Oncocyte believes that the broader adoption of anti-CD38 therapies will likely serve as a catalyst for growth in these regions.
Medicare Tailwinds and Market Strategy
Management identified expanded Medicare reimbursement guidelines as a significant commercial driver. Recent local coverage determinations from MolDX, which increased covered surveillance tests from eight to 14 during the first three years post-transplant, provide a strong economic incentive for centers to adopt in-house donor-derived cell-free DNA (dd-cfDNA) testing.
Riggs noted that over half of the top 10 U.S. transplant centers are currently engaged with Oncocyte through its FDA program or registry. This traction is supported by head-to-head clinical data demonstrating that the company’s assay is equivalent to tests currently performed at centralized laboratories.
Financial Outlook and Operational Efficiency
CFO Andrea James reported an adjusted EBITDA loss of $7.8 million for the second quarter, with cash burn reaching $10 million. Management anticipates this figure represents the near-term peak for cash expenditure. The company continues to generate modest revenue from laboratory services, research-use-only kits, and its “GraftAssure CORE” laboratory-developed test, which is reimbursable at $2,753 per result.
Should FDA authorization face delays, the company is prepared to accelerate registry enrollment to offset costs and extend its cash runway. Looking ahead, Oncocyte maintains a $2 billion total addressable market estimate for kitted transplant-organ testing, with potential for further expansion into heart-transplant monitoring.
Strategic Partnerships and Future Growth
Oncocyte is leveraging its relationship with Bio-Rad to optimize its testing platform placement across transplant centers and reference laboratories. As the company prepares for its next phase of growth, it remains focused on clinical utility, recently announcing a key opinion leader call for August 17 to discuss the integration of in-house dd-cfDNA testing for heart-transplant monitoring.
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