Item 1.01 Entry into a Material Definitive Agreement.
On January 13, 2022, Oncocyte Corporation, a California corporation (the
"Company" or "Oncocyte"), entered into a Collaboration Agreement (the
"Agreement") with Life Technologies Corporation, a Delaware corporation and
subsidiary of Thermo Fisher Scientific ("LTC" and together with Oncocyte, the
"Parties" or individually, a "Party"), in order to partner in the development
and collaborate in the commercialization of Thermo Fisher Scientific's existing
Oncomine Comprehensive Assay Plus ("OCA Plus") and Oncocyte's Determa IO assay
for use with LTC's Ion TorrentTMGenexusTM Integrated Sequencer and LTC's Ion
TorrentTM GenexusTM Purification System ("Genexus system") in order to obtain in
vitro diagnostic ("IVD") regulatory approval.
Development
Under the terms of the Agreement, Oncocyte will clinically validate LTC's OCA
Plus assay, which is LTC's proprietary NGS-based assay designed to be run on the
Genexus system as an IVD assay (the "Collaboration LTC Product") and Oncocyte's
Determa IO assay, which is a multivariate gene expression test performed on FFPE
biopsy specimens, as an IVD assay run on the Genexus system (the "Collaboration
Determa Product"), paving the way toward regulatory approval for use in tumor
profiling and guidance of therapy selection for solid tumor cancers in humans.
LTC retains the exclusive right to partner with therapeutics companies to
develop the Collaboration LTC Product as a companion diagnostic. Oncocyte
retains the exclusive right to partner with therapeutics companies to develop
the Collaboration Determa Product as a companion diagnostic. All development
work will be conducted pursuant to development plans agreed by the Parties
through a series of governance committees that will oversee the collaboration.
Costs Associated with Product Development
Oncocyte will be responsible for all costs associated with Oncocyte activities
under the LTC product development budget. Oncocyte and LTC will share
development costs associated with LTC activities under the LTC product
development budget. LTC will be responsible for costs associated with the
performance of research and development activities for the RUO-labeled OCA Plus
and related components as is necessary to enable the development of the
Collaboration LTC Product as contemplated by the LTC product development plan.
Oncocyte will be responsible for all costs associated with activities of both
Parties under the Determa product development budget. LTC will be responsible,
at LTC's own cost, for the performance of research and development activities
for the RUO-labeled OCA Plus and related components as is necessary to enable
the development of the Collaboration LTC Product as contemplated by the
development plan for the Collaboration LTC Product.
Commercialization
LTC will be responsible for the commercialization of the Collaboration LTC
Product throughout the world, but the Parties will co-market it in the United
States, Canada, the United Kingdom, European Union, Switzerland, Australia, and
New Zealand (the "LTC Product Territory"). Oncocyte will be responsible for the
commercialization of the Collaboration Determa Product in the United States (the
"Determa Product Territory"), and LTC will be responsible for commercializing it
in the rest of the world. All commercialization activities for the Collaboration
LTC Product and the Collaboration Determa Product will be conducted pursuant to
commercialization plans agreed by the Parties through the collaboration's
governance committees.
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Economic Terms
Under the Agreement, LTC will pay Oncocyte a percentage of revenue received by
LTC on sales of the Collaboration LTC Product throughout the world and on sales
of the Collaboration Determa Product outside the United States. The revenue
share percentage for the Collaboration LTC Product will vary based on the timing
of the sale, the territory of the sale, and the degree to which consumables,
reagents, and other products are included in the kit being sold, but the Company
estimates that the average revenue share percentage that it will receive under
the Agreement will likely range from the low teens to the low twenties. The
revenue share percentage LTC will pay to Oncocyte on sales of the Collaboration
Determa Product will vary based on the timing of the sale, and the degree to
which consumables, reagents, and other products are included in the kit being
sold, but the Company estimates that the average revenue share that it will
receive under the Agreement will likely range in the low twenties. Oncocyte will
pay LTC a mid single-digit percentage of its revenue on sales of the
Collaboration Determa Product in the United States. Oncocyte will also receive
up to two milestone payments in the low seven figures if LTC successfully
commercializes the OCA Plus IVD assay as a companion diagnostic with certain
claims.
Exclusivity
During the term of the Agreement, (a) LTC will not enter into any agreement or
arrangement with any third party with respect to the development or
commercialization of OCA Plus on the Genexus system in the field of distributed
IVD assay kits for the tumor profiling of and guidance of therapy selection for
solid tumor cancers in humans (the "LTC Field") in the LTC Product Territory,
(b) Oncocyte will not partner with any third-party NGS equipment manufacturer
with respect to the development and commercialization of a comprehensive genomic
profiling assay on an instrument platform similar to or competitive with LTC's
NGS systems in the LTC Field in the LTC Product Territory, and (c) LTC will not
develop, market or sell a new panel or other substantially similar comprehensive
genomic profiling assay that would compete with the Collaboration LTC Product in
the LTC Field in the LTC Product Territory on the Genexus system.
Manufacturing
LTC is responsible for the manufacture and supply of all OCA Plus assays and
Collaboration LTC products, among other consumables and reagents required for
the development of the Collaboration LTC Product. LTC will supply Oncocyte all
consumables and reagents necessary for use in developing the Collaboration LTC
Product pursuant to the LTC product development plan.
In addition, following the effective date of the Agreement, the Parties will
negotiate in good faith a supply agreement pursuant to which LTC will supply
Oncocyte with the Collaboration Determa Products for commercialization in the
United States. LTC will also supply Oncocyte with all Genexus instruments,
consumables and reagents, necessary for use in developing Collaboration Determa
Products pursuant to the Determa product development plan.
Term; Termination
Unless earlier terminated as described in the Agreement, the Agreement will
remain in effect until December 31, 2035. The Agreement may be (i) terminated
for cause by either Party based on any uncured material breach or insolvency by
the other Party, and (ii) terminated by either Party with respect to specific
termination events occurring for either the Collaboration LTC products or the
Collaboration Determa Products, including but not limited to, the failure to
achieve certain milestones and failure to agree to initial development or
commercialization plans for the Collaboration Determa Product. If LTC fails to
meet its certain product development milestones, the term of the Agreement shall
be extended on a proportionate basis.
The foregoing description of the Agreement does not purport to be complete and
is subject to, and qualified in its entirety by reference to the full text of
the Agreement, a copy of which the Company intends to file as an exhibit to a
subsequent periodic report or on an amendment to this Current Report on Form
8-K.
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Item 7.01 Regulation FD Disclosure.
On January 18, 2022, Oncocyte issued a press release announcing the execution of
the Agreement, a copy of which is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
The information under this Item 7.01 and the accompanying Exhibit 99.1 shall be
deemed "furnished" and not "filed" under Section 18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liability of that section, and shall not be incorporated by reference into any
filings made by Oncocyte under the Securities Act of 1933, as amended, or the
Exchange Act except as may be expressly set forth by specific reference in such
filing.
Note Regarding Forward-Looking Statements.
This Current Report on Form 8-K includes 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," "may," and similar expressions) are
forward-looking statements. These statements include those pertaining to, among
other things, the transactions contemplated by the Agreement and anticipated
proceeds from the Agreement, and other statements about the future expectations,
beliefs, goals, plans, or prospects expressed by management. Forward-looking
statements involve risks and uncertainties, including, without limitation, the
potential impact of COVID-19 on Oncocyte or its subsidiaries' financial and
operational results, risks inherent in the development and/or commercialization
of diagnostic tests or products, uncertainty in the results of clinical trials
or regulatory approvals, the capacity of Oncocyte's third-party supplied blood
sample analytic system to provide consistent and precise analytic results on a
commercial scale, potential interruptions to supply chains, the need and ability
to obtain future capital, maintenance of intellectual property rights in all
applicable jurisdictions, obligations to third parties with respect to licensed
or acquired technology and products, the need to obtain third party
reimbursement for patients' use of any diagnostic tests Oncocyte or its
subsidiaries commercialize in applicable jurisdictions, and risks inherent in
strategic transactions such as the potential failure to realize anticipated
benefits, legal, regulatory or political changes in the applicable
jurisdictions, accounting and quality controls, potential greater than estimated
allocations of resources to develop and commercialize technologies, or potential
failure to maintain any laboratory accreditation or certification. 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 cautionary
statements found in Oncocyte's Securities and Exchange Commission (SEC) 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. The events and circumstances reflected in Oncocyte's
forward-looking statements may not be achieved or occur and actual results could
differ materially from those projected in the forward-looking statements. New
risk factors and uncertainties may emerge from time to time, and it is not
possible for management to predict all risk factors and uncertainties. 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.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description
99.1 Press Release dated January 18, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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