Oncocyte Q2 Earnings Call Highlights

Key Points

• Oncocyte continues to target FDA marketing authorization for GraftAssureDx later this year. The FDA requested additional data and clarification, and the company plans to hold a Submission Issue Request meeting before resubmitting its package.
• Expanded Medicare reimbursement could support commercial adoption. New MolDX guidelines increase covered kidney-transplant rejection surveillance tests from eight to 14 during the first three post-transplant years, strengthening the case for in-house testing at transplant centers.
• Cash burn is expected to remain elevated as Oncocyte prepares for launch. Second-quarter cash burn was $10 million, while management forecasts roughly $8 million per quarter in the second half of the year due to regulatory, registry and launch-related spending.

Oncocyte NASDAQ: IMDX executives said they continue to target FDA marketing authorization for the GraftAssureDx kidney-transplant rejection test later this year, while preparing for a commercial launch and managing spending ahead of expected revenue growth.

During the company’s second-quarter call, President and CEO Josh Riggs said the company received an additional information letter from the FDA in July as part of its Class II review. The agency requested additional data and clarification regarding the product’s intended use, he said. Riggs described the request as a normal part of the process and said the company has approximately tripled the number of samples collected for its study since the original submission in March.

Before submitting its next data package, the company plans to hold a Submission Issue Request, or SIR, meeting with the FDA. Riggs said the meeting is intended to provide direct written feedback on the company’s proposed response and ensure alignment with the agency before a resubmission.

“We continue to target receipt of FDA marketing authorization later this year,” Riggs said, while noting that the timing of government review is outside the company’s full control.

Regulatory progress and international plans

Riggs said the FDA’s questions did not contain anything “terribly surprising” and appeared routine and addressable with data already available to the company. He declined to disclose the specific questions from the agency.

Chief Science Officer Ekkehard Schütz also discussed the company’s plans for Europe. Following an informational meeting with its notified body, Schütz said the company received guidance on the In Vitro Diagnostic Regulation, or IVDR, process and remains focused on completing its submission during the second half of the year.

Schütz said the European regulatory process appears more flexible than the FDA review and that the company does not currently anticipate needing to conduct large clinical studies for the submission. He added that self-certification in the United Kingdom is expected to be less burdensome.

Riggs said the company is seeing early signs of market-access activity in Europe, including reimbursement progress in Switzerland and tenders in Italy. However, he characterized the European market as still being in its early stages and said broader adoption could be aided by approval of anti-CD38 therapies for routine use.

Reimbursement and commercial opportunity

Management highlighted Medicare’s expanded reimbursement guidelines for transplant rejection testing as a potential commercial tailwind. Riggs cited the recent MolDX local coverage determination, which increased covered surveillance testing from eight to 14 tests during the first three years following a kidney transplant.

The increased testing frequency could strengthen the economic case for transplant centers to perform donor-derived cell-free DNA, or dd-cfDNA, testing in-house rather than relying exclusively on centralized laboratories, Riggs said. He added that centers may ultimately develop their own testing protocols rather than follow the coverage policy exactly.

The company said it has generated head-to-head data showing clinical equivalence between its assay and leading tests performed at central laboratories. Riggs said this data has driven interest from transplant centers and reference laboratories in the U.S.

More than half of the top 10 U.S. transplant centers are working with the company through its FDA program or registry, according to Riggs. Schütz estimated that roughly half of the FDA study sites are expected to participate in the registry, though the company does not yet have complete visibility into participation at the remaining sites.

On research-use-only kit sales, Riggs said the $21,000 reported during the quarter was associated with customers outside the U.S. that have difficulty accessing testing performed in the U.S. These customers have brought the test in-house and validated it for clinical purposes in their local markets, he said.

Spending, cash burn and revenue outlook

CFO Andrea James said core spending declined further from its fourth-quarter 2025 peak, which had been tied to work related to the FDA submission. The company reported an adjusted EBITDA loss of $7.8 million for the second quarter.

Cash burn totaled $10 million in the quarter, driven by the FDA submission effort and other working-capital items. James said management expects that figure to represent the high point for cash burn in the near term.

• The company expects to burn about $8 million per quarter during the second half of the year.
• That outlook is above a prior forecast of roughly $6 million per quarter.
• The increase reflects regulatory-review costs, registry activities ahead of related GraftAssure CORE revenue, and investments to prepare for the GraftAssureDx launch.

James said the company expects modest second-half revenue from laboratory services, research-use-only kit sales and GraftAssure CORE, its laboratory-developed test. GraftAssure CORE is reimbursable at $2,753 per result when run through the company’s Nashville laboratory, she said.

If FDA authorization is delayed, Riggs said accelerating registry enrollment could be a significant lever to help extend the company’s cash runway by providing a revenue offset. Management said it is also exploring options to extend its runway while maintaining cost discipline.

Market size and partnership discussions

James reiterated the company’s previously stated $2 billion total addressable market for kitted transplanted-organ testing, a figure based on kidney testing at a conservative average of two tests per patient annually. She said higher surveillance frequency, therapy monitoring and expansion into additional organs could increase that market opportunity.

The company is also investing in heart-transplant testing. It plans to host a key opinion leader call on Aug. 17 featuring Loyola University Medical Center’s Dr. Max Jacob Liebo, Vice President of Medical Affairs Dr. Nick Ioannou and Riggs to discuss in-house dd-cfDNA testing for heart-transplant rejection monitoring.

Riggs said Bio-Rad has supported the company through its FDA engagement and that the two parties have opportunities to negotiate their relationship before authorization and during a 90-day period afterward. He said both companies see an opportunity to place testing platforms at transplant centers, core laboratories and HLA laboratories.

Management said it believes it has meaningful early pricing power because of reimbursement support and limited alternatives, though it acknowledged that volume-based discounts could be offered to larger customers such as reference laboratories.

About Oncocyte (NASDAQ:IMDX)

Oncocyte NASDAQ: IMDX is a molecular diagnostics company that develops and commercializes tests intended to improve cancer detection, risk stratification and treatment decision-making. The company focuses on creating assays that provide clinically actionable information to physicians managing patients with suspected or confirmed malignancies, with particular emphasis on tools that can help evaluate lung nodules and other oncology-related diagnostic challenges.

Oncocyte's product and development efforts center on blood- and tissue-based molecular assays that analyze biomarkers and genomic signals to inform clinical workflows.

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