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WHERE TOMORROW LIVES.
Investor Presentation January 2020
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Forward looking statements
Any statements that are not historical fact (including, but not limited to statements that contain words such as “will,” “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) are forward-looking statements. These statements include those pertaining to the time to complete and the results of Oncocyte’s ongoing CLIA Validation study of DetermaDx™, implementation andresults of research, development, clinical trials and studies, commercialization plans, future financial and/or operating results, and future opportunities for Oncocyte, along with other statements about the future expectations, beliefs, goals, plans, or prospects expressed by management. Forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and/or commercialization of potential diagnostic tests or products, uncertainty in the results of clinical trials or regulatory approvals, the capacity of our third-party supplied blood sample analytic system to provide consistent and precise analytic results on a commercial scale, the need and ability to obtain future capital, maintenance of intellectual property rights, and the need to obtain third party reimbursement for patients’ use of any diagnostic tests we commercialize. Actual results may differ materially from the results anticipated in these forward-looking statements and accordingly such statements should be evaluated together with the many uncertainties that affect the business of Oncocyte, particularly those mentioned in the “Risk Factors” and other cautionarystatements found in Oncocyte’s Securities and Exchange Commission filings, which are available from the SEC’s website. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. Oncocyte undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.
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We are a molecular diagnostic company whose mission is toprovide actionable answers to physicians and patients
at critical decision points across the lung cancer care continuum, to optimize diagnosis and treatment, improve patient outcomes, and reduce
overall cost of care.
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Investment Highlights Proprietary molecular diagnostic tests address key decision points along the lung cancer treatment continuum to improve patient outcomes
Initial focus on lung cancer content represents large market opportunity with significant unmet medical needs
DetermaDxTM in development to revolutionize diagnosis, avoiding risky and costly biopsies/surgery
DetermaRxTM improves patient survival, stratifies early stage lung cancer patients to identify those who may benefit from adjuvant chemotherapy
Commercially ready with positive CMS reimbursement recommendation received
DetermaIOTM is a potentially transformative immuno-diagnostic test for the selection of therapy for cancer patients. In recently published studies, DetermaIO out performed both PD-L1 and Tumor Mutational Burden
Pioneering leadership team in molecular diagnostics from development to commercialization
Experienced Leadership Team Pioneering Molecular Diagnostics
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RONALD ANDREWSPresident & Chief Executive Officer
MITCH LEVINEChief Financial Officer
AL PARKERChief Operating Officer
LYNDAL HESTERBERG, PH.D.Chief Scientific Officer
PADMA SUNDARSenior Vice President, Marketing/Market Access
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Decision Points Along the Lung Cancer Care Continuum
Oncocyte: Strategically Addressing Lung Cancer Decisions
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Initial Lung Cancer Focus Leverages Strategic Assets
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Lung “Pure Play” Advantages
• Builds toward OCX as one-stop shop for lung cancer diagnostics
• Economy of scale – leverages OCX sales team, commercial infrastructure
• Development expertise in lung cancer biomarkers
• Clinical trials recruitment expertise with over 60 current sites
• Longitudinal patient data from diagnosis to treatment
• Strong KOL representation and advocacy
Opportunity Selection Criteria
• Area of high unmet clinical need
• High degree of scientific confidence
• Serve critical decisions points in clinical oncology
• Reimbursed or reimbursement ready content, or developing content with market predicate
• High margin
• LDT in U.S., potential to “kit” for ROW
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Three Growth Vectors
Core Asset Development
Partnership Opportunities
Complete DetermaDx Validation and initiate prospective trial for
claims expansion
Initial sales in key territories
Reimbursement
Explore opportunities with external technologies to offer complete
answers at critical decision points
Leverage biobank for access to methylation and cfDNA applications
High Value Content with current revenue streams and high gross
margins
Complimentary High Value content for creating lung vertical
License Developed Content for OCX Channel
Pharma Services lab with High Value content revenues
Mergers and Acquisitions
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DetermaDx Opportunity
Utilizing blood-based Interrogation methods to leverage the immune system’s response to cancer
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Lung Cancer is the Leading Cause of Cancer Death Worldwide
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Detecting Lung Cancer Early is Critical
Detection in Stage I gives 5-year survival comparable to other major
cancers
Lung cancer is typically diagnosed in Stage IV, resulting in grim 5-year survival rate
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Lung Cancer Diagnosis
Over 1.6 million patients with lung nodules discovered annually in U.S via screening or incidentally1
Invasive biopsies or surgery of the nodules
confirm a cancer diagnosis
Home – No Complications
Hospitalization after complications
1. Gould, et al. (2015) Recent trends in the identification of incidental pulmonary nodules. American Journal of Respiratory and Critical Care Medicine 192:1206.
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Lung Biopsies are Risky and Expensive
DetermaDx is designed to directly address this challenge by reducing unnecessary invasive diagnostic procedures
1 in 5 invasive diagnostic procedures result in
complications1
Mean U.S. cost of a biopsy is about ~$15,0002
Mean cost of biopsy with serious complications is greater than $50,0001
96%3 of nodules found through screening are benign, whereas 24%-26%1 of biopsies result in
complications
1. Huo, et al., JAMA Internal Medicine 179:324, 2019.2. Lokhandwala, et.al., Clinical Lung Cancer, Jan;18(1):e27-e34, 2017.3. National Lung Screening Trial Research Team. New England Journal of Medicine 365:395, 2011.
Oncocyte: Strategically Addressing Lung Cancer Decisions
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Actionable Answers for a Critical Question in Cancer Diagnosis
DetermaDxTM: Non-Invasive Gene expression classifier with binary call
^ Actual wording of the test report to be sent to physicians has not been finalized
>500,000 High Risk Nodules* found annually
$1.75BMarket opportunity in US alone**
* Number of 6-30mm nodules detected annually on CT Scans in patients with a smoking history (Am J Respir Crit Care Med. 2015 Nov 15;192(10):1208-14. doi: 10.1164/rccm.201505- 0990OC., Journal of Clinical Oncology 36, No. 15_suppl (May 20, 2018) 6504-6504, and The Fleischner Society guidelines, https://pubs.rsna.org/doi/10.1148/radiol.2017161659. ** Uses an ASP of $3,500 based on reimbursement for similar tests.
^
^
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How does the Oncocyte Approach Work?
• mRNA –based Oncocyte technology extracts may be from any of the cells present in whole blood for that patient.
• Differential gene expression takes place in response to the presence of cancer cells
Oncocyte leverages the exquisite sensitivity of
the body’s immune system’s response to early-stage cancer
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What Sets Oncocyte Apart?
Insufficient sensitivity in early-stage cancersJust not enough ‘signal’ to detect
Other Companies
Direct Measurement
Cancer CellsMeth-DNActDNA
Oncocyte’s Approach
Immune System Interrogation
Proprietary algorithm utilizing selected mRNA biomarkers
Leverages the exquisite sensitivity of the immune system’s response to early-stage cancer
“Immune System Interrogation” approach could have broad application across other solid tumors
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DetermaRx
Proprietary Predictive Test for Early Stage Lung Cancer
Oncocyte: Strategically Addressing Lung Cancer Decisions
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Early Stage Lung Cancer Can Be Deadly
~40,000 patients1 are diagnosed with early-stage non-squamous
NSCLC in the U.S. annually
30-50% of patients with Stage I & II NSCLC die with within 5 years despite having a complete resection2
Stratifying early-stage patients by recurrence
risk has the potential to:
• Identify patients that are likely to benefit from early, post-operative chemotherapy
• Reduce mortality and cost by preventing recurrences and expensive, late-stage treatment
• Avoid cytotoxic chemotherapy in patients who do not require treatment beyond surgery
1. Meza, et al. (2015) Lung cancer incidence trends by gender, race and histology in the United States, 1973-2010. PLoS One 10:e0121323.2. Woodard, et al. (2018) Adjuvant chemotherapy guided by molecular profiling and improved outcomes in early stage, non-small-cell lung cancer. Clinical Lung Cancer 19:58.
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The Razor Treatment Stratification Test
• In a published prospective study, DetermaRx demonstrated improvement in disease-free survival (DFS) when high-risk patients were treated with chemotherapy
• DetermaRx directed chemotherapy was found to prevent the majority of recurrences among high-risk patients with the potential to save thousands of lives in the U.S. annually
*Prospective study of Stage I-IIA patients (Clin Lung Cancer 2018;19:58)
Targets cytotoxic chemotherapy only to
patients likely to benefit from treatment
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DetermaRxTM: Extensively Validated to Dramatically Impact Disease Free Survival for Early Stage Lung Cancer Patients
1. Kratz, et al. (2012). Lancet 379:823. 2. Woodard, et al. (2018) Clinical Lung Cancer 19:58
Kaplan-Meyer plot above includes 100 sequential patients stratified by DetermaRx test.
– Validated in in independent, blinded, global trials with close to 1,400 patients1
• Kaplan-Meyer plot includes 100 sequential patients stratified by the Razor test
• High-risk patients identified with the Razor Test that went on to standard, inexpensive platinum doublet post-operative therapy had improvement in 5-year disease –free survival rate from 49% to 92% compared to no chemo high-risk population2 with p-value=0.04.
• Prognostic stratification validated in independent, blinded, global trials with over 1,400 patients
– Outperformed current NCCN criteria in identifying patients likely to recur and therefore benefit from chemotherapy2
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DetermaRx is Commercially Available
Test designed and validated on ThermoFisher QuantStudio Estimated installed base of >3,000 systems allows global launch on established workflows
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Reimbursement Ready in Untapped Market
Market Overview• ~ 40,000 Stage I and II non-squamous NSCLC diagnosed in
the US annually1
• Increasing eligible population with adoption of CT screening
• No clear guidelines or test to identify high-risk patients who could benefit from chemotherapy
• Unprecedented opportunity for pharma to use test to identify responders in large and growing market for immuno-oncology in early stage disease.
1. Meza, et al. (2015) Lung cancer incidence trends by gender, race and histology in the United States, 1973-2010. PLoS One 10:e0121323.
2. Source: 2016 Centers for Disease Control and Prevention, % of lung cancer patients 65 years and older
Reimbursement Process• Received CMS proposed Positive LCD Coverage in late
August and expecting Final LCD in early 2020
• CMS approval alone provides coverage for 70% of the US NSCLC market2
• Similar Gene Expression panels are reimbursed between $3,000 - $4,000
• Many private payers likely to follow CMS example given clinical utility and health economic impact
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DetermaRx: Transforming Treatment Stratification in Early Lung Cancer
Treatment Stratification Test identifies early stage lung cancer patients who may benefit from chemotherapy to significantly increase their survival rates
Extensively validated and published with independent, blinded global trials including close to 1,400 patients and seven publications in prestigious journals including Lancet and JAMA
Recent CMS Positive Coverage Decision indicative of the clinical utility of the test
Proposal for incorporation into new staging protocol published in July ‘18
Acquisition allows OCX to transition to a commercial stage company in Q1 2020
Complements DetermaDx decision point
Same endpoint that Genomic Health utilized in for their OncotypeDx Breast Test, which resulted in a $2.8B exit
Deal structure minimizes capital outlay and aligns Razor Genomics team via participation in revenue growth
Prospective, randomized clinical utility trial to start immediately
Reduction in mortality will drive rapid adoption
~ 60% of patients can be effectively targeted by a specialized lung cancer sales force
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DetermaIO
Identifying Immunotherapy Responders
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Identifying Immunotherapy Responders
JAMA Netw Open. 2019;2(5):e192535
• Immunotherapy drugs have been revolutionary – but only for a subset of patients
• Immunotherapy drugs are costly, have morbid side effects, and only are effective in a fraction of patients
• The development of biomarkers to predict immunotherapy responsiveness has had limited successo IHC targets like PDL-1 and tumor mutation
burden (TMB) assays are not standardized with different criteria
o Most trials combine immunotherapy with cytotoxic chemotherapy, which confounds interpretation of results
o Pharma development strives for least restrictive label – avoid biomarker subpopulations
Oncocyte: Strategically Addressing Lung Cancer Decisions
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Insight Genetics – Expanding Oncocyte’s Menu for Clinical and Pharma
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Biomarker and Novel Content
Assay Design and
Development
Assay Validation
Clinical Trial Services
Regulatory Excellence
Commercial Partnership
• Pharma and Diagnostics services assay design, validation and clinical trial execution
• Proprietary content in molecular classification of solid tumors
• Experience in IVD assay development• ISO 9001 2015• 21 CFR 820 design control• Class A Supplier for Qiagen (est.
2013)
Insight Genetics Regulatory & Quality Meets Pharma/Diagnostics Requirements
Current Audits and Certifications: Insight Genetics, Inc.• All assays designed according to the Clinical and Laboratory Standards Institute guidelines.• ISO 9001 2015 Certification (current; established 2013)• Approved Class A supplier for QIAGEN (current; est. 2013)
• Allows for Assay Development and Verification Activities• Good Clinical Practice (GCP) Compliance (since 2017)• QIAGEN designated Insight Genetics to be one of five commercial laboratories to test Therascreen, the
companion diagnostic to Janssen’s BALVERSA™ (erdafitinib).• Qualified for clinical trials with major pharma companies• Incorporates 21 CFR 820 practices by adherence to design control protocols.
• CLIA certification 2013• CAP accreditation 2016
Insight Genetics is a fully functional Pharma Services Lab w ith all certifications to support immediate outreach to our pharma network and
support FDA Trials
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• Classifies immune and inflammatory infiltrate in the context of phenotype of the tumor specimeno Gene expression classifier trained and extremely well-validated as a classifiero Immune signature combined with the “stromal” signature was found to identify patients with a
strong response to anti-PDL-1 therapyo Same signature works in lung and breast cancers (immune response and stromal signature
conserved between solid tumor types)o In head-to-head comparison with TMB and IHC for PDL-1 consistently superior
• 30 gene real-time PCR assay• Data-to-date uses 3 major IO drugs - Merck’s Keytruda (Pembrolizumab), BMS’ Opdivo
(Nivolumab), and AstraZeneca’s IMFINZI (Durvalumab) with consistent results• The IM test studies used tumor, lymph node metastasis, or distant metastasis as the source
suggesting it is not context dependent
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DetermaIOTM – Robust Identification of IO responders
IGI’s Immune-Oncology (IM Score) Test Surpasses ALL Current Predictive CDx Tests
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P < 0.001
Progressive Disease
Stable Disease
PartialResponse
Complete Response
Cutoff = 0.09
P-value (spearman) <0.001.
20.4%
41.5%
44.7%
47.8%
PD SD PR CR
Cutoff = 1%
P-value 0.20
PD SD PR CR
12.1
14.6
10.28.5
P = 1
Cutoff = 10
P-value 0.999
Comparison of Objective Response w ith IM Score and other testing methods shows significant improvement in identifying responders when using the IGI IM Score for IO Therapy Selection
Significant quantitative response to disease response (p<0.001)
PDL-1 staining insignificant (p=0.20) TMB insignificant (p=0.99)
IO Abstract presented at SITC in early Nov’19
Rapid Expansion of I-O Trials Presents Solid Market OpportunityPharma trial revenue generated through differentiated tests to identify IO responders
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https://pharmaintelligence.informa.com/resources/product-content/immuno-oncology-halfway-to-adulthood
2010 2011 2012 2013 2014 2015 2016 2017 2018
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• 1.5 I-O trials initiated daily• Solid market opportunity for Pharma trial
revenue with differentiated test to identify responders
• Insight Genetics has a fully functional Pharma services lab with all certificationso Supports immediate outreach to
Pharma network with foundational balance sheet offered by OCX
Insight Acquisition Expands Menu and Establishes Oncocyte as the Leader in Lung Cancer Content for Critical Therapeutic Decisions
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US TAM: ~$1.75B US TAM: ~$140M US TAM: ~$2,2B
Synergy of combined offering and common call points increases brand awareness, sales force efficiency and potential for success 35
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Investment Highlights Proprietary molecular diagnostic tests address key decision points along the lung cancer treatment continuum to improve patient outcomes
Initial focus on lung cancer content represents large market opportunity with significant unmet medical needs
DetermaDxTM in development to revolutionize diagnosis, avoiding risky and costly biopsies/surgery
DetermaRxTM improves patient survival, stratifies early stage lung cancer patients to identify those who may benefit from adjuvant chemotherapy
Commercially ready with positive CMS reimbursement recommendation received
DetermaIOTM is a potentially transformative immuno-diagnostic test for the selection of therapy for cancer patients. In recently published studies, DetermaIO out performed both PD-L1 and Tumor Mutational Burden
Pioneering leadership team in molecular diagnostics from development to commercialization
Upcoming Milestones
• Commercial team built-out in preparation for DetermaRx launch in Q1 ’20
• Full Commercial Launch of DetermaRx in Q1 ‘20
• Final LCD DetermaRx
• DetermaRx clinical utility trial to begin enrollment
• Completion of DetermaDx clinical validation and initialization of clinical utility study
• Close Pharma studies for DetermaIO
• Publish IO data at upcoming AACR and ASCO meetings
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CONTACT USOncocyte.com
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