IRVINE, Calif. - Oncocyte Corp. (NASDAQ: OCX), a molecular diagnostics company with a current market capitalization of $38 million, announced that its VitaGraft Kidney test for kidney transplant patients has received expanded Medicare coverage, following a study indicating the test’s effectiveness in early detection of transplant rejection. According to InvestingPro data, the company’s stock is currently trading near its Fair Value, despite facing significant operational challenges. The Molecular Diagnostics program (MolDX) now confirms eligibility for billing under current Local Coverage Determination (LCD) for patients with newly developed donor-specific antibodies (DSA).
The study demonstrated that VitaGraft Kidney can detect antibody-mediated rejection (AMR) in patients with donor-specific antibodies up to 11 months earlier than the current standard of care. While this represents a significant medical advancement, InvestingPro analysis reveals the company faces financial headwinds, with a negative EBITDA of -$21.56 million in the last twelve months and analysts forecasting a sales decline in the current year. Get deeper insights with InvestingPro’s comprehensive research report, available for over 1,400 US stocks including Oncocyte. This is particularly significant as up to 20% of kidney transplant patients develop DSA within five years post-transplant, and early detection of AMR is crucial given the lack of approved medications for its management.
Oncocyte CEO Josh Riggs stated, "Assuming the data continue to prove out for those drugs, catching AMR as early as possible becomes critical." The company expects to attach all these claims to its clinical kitted product currently in development.
VitaGraft Kidney utilizes digital polymerase chain reaction (digital-PCR) technology to quantify donor-derived cell-free DNA (dd-cfDNA) in blood samples, providing a non-invasive alternative to biopsies. Palmetto GBA, the Medicare Administrative Contractor for the Centers for Medicare & Medicaid Services (CMS), first issued a positive coverage decision in August 2023.
This latest coverage expansion allows for the test’s use in monitoring high-risk patients for organ rejection, though it does not extend to routine surveillance testing. The test is associated with two Z-codes, Z01TT and Z04D6, enhancing accessibility for patients.
Oncocyte is focused on commercializing its molecular diagnostic tests, including VitaGraft Kidney, designed to run at local laboratories. The company is at a key stage in deploying its proprietary diagnostic technology for organ transplant patients, operating with a moderate debt level and a current ratio of 0.53. InvestingPro subscribers have access to 7 additional key insights about Oncocyte’s financial health and market position, essential for understanding the company’s growth potential.
The information in this article is based on a press release statement from Oncocyte Corporation.
In other recent news, Oncocyte Corporation has unveiled significant developments in the field of non-invasive brain tumor diagnosis and transplant diagnostics. The company’s DetermaCNI™ assay, as revealed in a study published in Acta Neuropathologica Communications, shows potential as a non-invasive method for diagnosing central nervous system tumors. This could impact roughly 300,000 U.S. patients diagnosed annually with primary brain tumors or metastasis, representing a $300 million market opportunity.
Simultaneously, Oncocyte is making strides in the transplant diagnostics market with the successful launch of its GraftAssure RUO product, co-marketed with Bio-Rad. The company is actively engaging transplant centers for its upcoming VitaGraft Kidney kitted test, projected to launch in the fourth quarter of 2025, pending FDA approval. Oncocyte aims to secure agreements with at least 20 transplant centers across the United States and Germany by the end of 2025, projecting an annual revenue of $1 million per site.
The company’s financial discipline is reflected in its efforts to maintain its quarterly cash burn rate at roughly $6 million, with a successful capital raise of about $9 million in October 2024, bolstering the company’s pro forma cash reserves to approximately $15 million. Analysts from Needham have maintained their Buy rating for Oncocyte, following these positive developments. These are among the recent developments in Oncocyte’s journey towards democratizing access to molecular diagnostic testing to improve patient outcomes.
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