OncoCyte (OCX) and Burning Rock (BNR) Confirm Strategic Agreement to Distribute DetermaRx in China
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Oncocyte Corporation (NYSE American: OCX), a molecular diagnostics company with a mission to provide actionable answers at critical decision points across the cancer care continuum, has signed an exclusive agreement in China to license DetermaRx™, its proprietary test to identify high-risk, early-stage lung cancer patients who need treatment to improve their five-year survival, to Burning Rock Biotech Limited, a $2.5 billion market cap NASDAQ-listed (BNR) company. Burning Rock is one of the fastest growing and largest companies in China’s next-generation sequencing (NGS) based cancer therapy selection market.
Under the agreement, Oncocyte will receive upfront cash payments after transferring and installing DetermaRx technologies, and for a fixed number of tests performed when DetermaRx achieves inclusion in the United States National Comprehensive Cancer Network (NCCN) Guidelines. Oncocyte will also receive ongoing royalties per patient tested with DetermaRx. The transfer of the testing technology is scheduled to occur in the first quarter of 2021, and the technology installation is expected to be completed by the third quarter of 2021.
China represents the largest patient population in the world for DetermaRx. This agreement marks Oncocyte’s fifth global licensing agreement and completes the Company’s stated goal of reaching all the major world markets within the first year of launch.
DetermaRx is a treatment stratification test that identifies stage I-IIA non-small cell lung cancer (NSCLC) patients at high-risk of recurrence despite ostensibly curative surgery, who may benefit from the addition of chemotherapy. The test is reimbursed by Medicare. In a 250-patient prospective cohort, test-identified, low-risk patients had a five year freedom from recurrence (FFR) rate of 94.6%; test-identified high-risk or intermediate-risk patients who were treated with adjuvant platinum chemotherapy had 96.7% five year FFR compared to 71.7% five-year disease-free survival (DFS) for high-risk patients who did not receive chemotherapy. Recurrence rate in molecular high-risk stage IA patients was 25%, compared to only 3% in molecular low-risk stage IA patients.1
“This agreement with Burning Rock accelerates the ongoing expansion of our DetermaRx test to patients and physicians outside the U.S., and exemplifies our global growth strategy,” said Ron Andrews, Chief Executive Officer and President of Oncocyte. “We believe aligning with one of the largest and fastest growing companies in China’s NGS-based cancer therapy selection market speaks to the strength of DetermaRx as a valuable treatment stratification tool to help clarify this critical treatment decision point in early stage tumors. We continue to see strong growth in all of our commercial metrics thus far in the fourth quarter, and this agreement helps us achieve our goal of completing distribution agreements for DetermaRx in all major rest-of-world markets within one year of the U.S. product launch. We are honored to partner with Burning Rock whose comprehensive portfolio of molecular tests for the oncology market allows us access to the largest eligible patient population in the world as well as China’s major cancer centers. In addition to expanding our available market, this important milestone also provides us with non-dilutive capital and an ongoing revenue stream to strengthen our growth trajectory as well as help reduce our operational cash burn.”
Yusheng Han, Founder and Chief Executive Officer of Burning Rock added, “We are excited to be entering into this agreement with Oncocyte. As the leader of NGS application in oncology in China, we are committed to providing the best diagnostic solutions to Chinese patients and oncologists. China's stage I-IIA non-squamous NSCLC incidence is estimated at over 100,000 per annum2. We believe Oncocyte’s risk stratification test fills a clear unmet need in identifying those patients who are at high risk and may benefit from adjuvant chemotherapy, versus low risk patients who do not have to undergo unnecessary chemo treatments, in a convenient and affordable manner. Combining DetermaRx with our products for genetic testing and MRD detection (currently under R&D), we can provide a comprehensive testing strategy for oncologists to ultimately benefit Chinese early-stage NSCLC patients by improving their survival and quality of life. We look forward to expanding this much-needed and promising test to the Chinese market and continuing to collaborate with Oncocyte in the future.”
For a more complete description of the terms of the agreement, please read the Exclusive Sublicense Agreement that will be filed as an exhibit to Oncocyte’s Form 8-K on or about December 14, 2020.
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