Michael Polyviou - Managing Member, EVC Group William Annett - President & Chief Executive Officer Cavan Redmond - Chairman of the Board of Directors Mitch Levine - Chief Financial Officer Lyndal Hesterberg - Senior Vice President, Research & Development.

Bruce Jackson - Lake Street Capital Markets Raymond Myers - Benchmark Company.

Good day and welcome to the OncoCyte Conference Call to Discuss Fourth Quarter and Full-Year 2017 Financial Results. Today’s conference call is being recorded. At this time, I’d like to turn the conference over to Michael Polyviou. Please go ahead..

Thank you, Ashley. Thank you for joining us on this afternoon’s conference call and webcast to discuss OncoCyte’s fourth quarter and full-year 2017 financial results and recent developments. If you have not seen today’s press releases, please visit www.oncocyte.com.

Before turning the call over to Bill Annett, OncoCyte’s President and Chief Executive Officer, I would like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events.

We encourage you to review the company’s filings with the SEC including without limitation the company’s forms 10-K and 10-Q, which identify the specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements.

These factors may include without limitation, risks inherent in the development and/or the commercialization of potential diagnostic tests, uncertainty in the results of clinical trials or regulatory certifications, uncertainty in timing of the training reimbursement authorization from third-party payers, need and ability to obtain future capital and maintenance of intellectual property rights.

Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. OncoCyte expressly disclaims any intent or obligation to update these forward-looking statements except as otherwise may be required under applicable law.

At the conclusion of today’s remarks, we will take questions from analysts and institutional investors. And with that, I’d like to turn the call over to Bill Annett. Please go ahead.

Bill?.

Thank you, Michael, and welcome, everyone, to our conference call to discuss fourth quarter and full-year 2017 financial results. Joining me on today’s call are Cavan Redmond, the Chairman of our Board of Directors; Mitch Levine, Chief Financial Officer; and Lyndal Hesterberg, Senior Vice President of Research and Development.

They’ll be available during the question-and-answer session. Let me start out by saying that on behalf of the management team and the Board, I’m very pleased to announce that Cavan Redmond, currently a Director of the company assumed the role of Chairman of the Board. Al Kingsley, who has been Chairman since 2009, will remain a Director. Mr.

Kingsley was instrumental in forming OncoCyte and then taking it public in 2015, and will continue to be a valued resource for the rest of the Board and senior management.

We’ve had the opportunity to work with Cavan over the last few years and we found that he has extraordinary energy and a focus on delivering R&D pipeline products to market in order to change the lives of patients and healthcare professionals.

His diverse background and healthcare brings a unique vision and approach that is required to bring innovative products to the oncology market. For a brief glimpse at his background, he’s been on the executive committee of two pharmaceutical companies, Pfizer and Wyeth. At Pfizer, he served as Senior Vice President Pfizer, Inc.

and Group President of Pfizer Diversified Businesses and as Head of Corporate Strategy. At Wyeth, he built the fourth largest global biotech company at Wyeth Biotech and was President of Wyeth Consumer Healthcare. He’s also a former CEO of WebMD.

Cavan began his career in oncology in the 1990s, and has worked in both R&D and commercial throughout his career.

So given OncoCyte’s status as a development-stage company that could be a commercial stage company fairly soon, we think that Cavan is uniquely well-suited to lead the Board, advice a management team and allow OncoCyte to benefit from his wisdom, experience and his knack for strategic thinking.

Cavan is on the call with us today and we’d like to have a few remarks.

Cavan?.

I appreciate the intro, Bill, and thank you all for being on the call today. First, I’d like to take our Kingsley for his tireless dedication to building OncoCyte and the strong collaboration that we have had over the past two-and-a-half years. Now some thoughts on OncoCyte.

We delivered the promise of translating R&D innovation into commercialized products based cutting-edge technology combined with talented multidisciplinary teams. This is especially true in oncology with liquid biopsy tests have the potential to provide significant information to help in the detection of early cancers.

In my view, OncoCyte has the chance to harness the science of genetic and protein molecular markers in order to create significant changes in clinical outcomes for patients.

To achieve this, we’ll need to continue to drive innovation by discovering and licensing novel genetic and protein molecular markers and rapidly prototyping lung cancer diagnostic products through the continued use of our well-characterized lung cancer clinical trial – clinical sample bank.

The real-time example of this approach is the recent progress we have made on DetermaVu. As you know, it is not uncommon to have challenges when you combine two cutting-edge science areas as we have, the science behind liquid biopsies and the all the technology driving diagnostic equipment.

By combining OncoCyte’s lung cancer clinical sample bank, we – with a wide range of leading-edge diagnostic platforms, we have quickly found a potential path forward with DetermaVu. It is a model that we will continue to build upon in the future.

Strategically, liquid biopsies in oncology have the potential to unlock value for investors because of the high unmet medical needs addressed by innovative commercial tests.

We’ll continue to build the talent at the Board and the management level required to meet the challenges of creating innovation in oncology and delivering on commercial opportunities with that innovation offers.

Currently, we’re looking to add more molecular diagnostic experience at the Board level and we’ll continue to add talent to the management team. We hope to make further announcements regarding a new Board member in the very near future. I want to thank the opportunity to give you my thoughts. And now I’ll turn the call back to Bill..

Thanks, Cavan. Now I’d like to discuss the other developments in OncoCyte. So last week, we were pleased to announce a $10 million equity financing. This investment was provided by two of our existing shareholders and demonstrates their belief in OncoCyte’s potential diagnostic test development program.

This financing provides us with additional resources to continue to advance the development of DetermaVu, our liquid biopsy lung cancer diagnostic test. We continue to plan to have DetermaVu ready for launch later this year assuming successful completion of our development program.

As a reminder and for those who may be new to the OncoCyte story, DetermaVu is our confirmatory non-invasive liquid biopsy tests intended to facilitate the clinical decision-making in lung cancer diagnosis.

DetermaVu is intended for use following a low dose CT scan and before a biopsy in at-risk patients where the scan shows evidence of a suspicious lung nodule.

OncoCyte believes that widespread utilization of DetermaVu could result in a substantial reduction in the number of unnecessary expense of lung biopsies before and nearly in the U.S, but the corresponding reduction in the surgical risk to patients undergoing lung biopsy procedures.

We believe that broad use of DetermaVu would result in a fundamental advancement in the diagnosis of suspicious lung nodules by allowing physicians to determine more accurately, which patients need biopsies and which patients only need follow-up imaging. The company estimates that approximately 1.4 million patients annually in the U.S.

could benefit from DetermaVu. Depending on market penetration and reimbursable pricing, this could translate into a market opportunity of up to $4.7 billion annually.

In a previous study, the results of which were reported in May 2017 at the American Thoracic Society 2017 International Conference and in October 2017 at the American College of Chest Physicians Chest 2017 annual meeting.

DetermaVu demonstrated sensitivity of 95%, specificity of 73%, an Area Under the Curve or AUC of 0.92, which means that 92% of the samples tested were quickly diagnosed.

As you may have seen in our press release today, OncoCyte has discovered and patented 190 novel biomarkers that we believe could further increase DetermaVu’s accuracy in detecting lung cancer by enabling better differentiation of malignant from benign lung nodules.

As previously reported, since last November, we’ve been working with our consumable supplier to better understand an attempt to resolve issues we encountered with reagent lot-to-lot variability that resulted in inconsistent data. During this period, we’ve also been actively evaluating alternative diagnostic testing platforms we use for DetermaVu.

In addition to the platform on which we originally develop DetermaVu. We’ve had encouraging results in an initial clinical sample feasibility study on two of the alternative platforms, both of which are market-leading platforms for molecular biology testing in the clinical Laboratory Developed Tests or LDT space.

While further testing is needed, OncoCyte’s results to date indicate that either the alternative platforms might be suitable choices for the completion of the further clinical development studies that are necessary before the commercialization of DetermaVu.

In addition, during this study, we discovered 190 newly identified biomarkers, as we announced today and I referenced a moment ago. These biomarkers may enhance DetermaVu by enabling better differentiation of malignant from benign lung nodules thereby providing greater precision in liquid biopsy lung cancer diagnosis.

Also, as we announced today, we’ve filed patent applications on the new biomarkers. The filing of these patent applications significantly enhances our intellectual property position, so we’re very pleased about this.

The fact that many of the new biomarkers were detected on multiple molecular diagnostic screening platforms provides a higher level of confidence in the potential of utility of these biomarkers. In addition, many of the new biomarkers have full changes greater than the company has seen in its existing biomarkers.

For those unfamiliar with this term, full change is measured describing how much of biomarker changes between the average benign sample level and the average malignant sample level.

For example, an average benign sample biomarker level of 100 and an average malignant biomarker level of 300 corresponds to a full change of three or in common terms a threefold increase.

We believe the larger full changes of these new markers will increase the signal-to-noise ratio of the biomarkers making them more detectible using DetermaVu with commercial molecular diagnostic laboratory testing platforms and therefore, more operationally efficient and consistent.

OncoCyte believes that the addition of these new biomarkers with higher full changes might assist in solving the problem of inconsistent lot-to-lot results seen recently on the molecular diagnostic platform that the company has used during the development of DetermaVu to date.

That platform remains part of the commercial molecular diagnostic platform evaluation process. Our scientific team created a preliminary algorithm by combining some of the newly discovered biomarkers with our previously identified biomarkers and cross validating the algorithm on approximately 60 clinical samples.

This resulted in accuracy data, as measured by Area Under the Curve, that is at least equivalent to previously reported DetermaVu results. However, the error bar or potential range of the results from this small sample set us wide and these results must be confirmed in the study using a larger sample set of about another 150 samples.

That study is now underway and we expect to complete it during the second quarter. We expect that study to provide the data that will help us determine, which combination of biomarkers and which commercial molecular diagnostic platform delivers the most accurate, consistent and robust test results, while maintaining a reasonable cost of goods.

Once that decision is made, we plan to resume the remaining product development studies on the selected biomarker set and appropriate molecular diagnostic platform by carrying out a confirmation study, followed by an R&D Validation Study and Analytical Validation Study.

If these studies are successful, we will then conduct a Clinical Validation study. Our goal remains to complete the Clinical Validation study in 2018, if the other remaining studies are successful. So that DetermaVu will be ready for commercial launch.

It’s important to note that we have a strategic advantage in how quickly we can iterate and complete the development of DetermaVu, because OncoCyte has already collected all of the samples necessary for carrying out these studies.

Sample collection is normally a very lengthy process, so having all the samples we need already on site is a big plus for us in terms of executing our timeline. As you can see in our results press release, we outlined a step-by-step timeline of the milestones that we anticipate reaching over the balance of 2018.

We look forward to executing against our plan and keeping investors up-to-date with respect to these milestones going forward. And now, I’ll turn the call over to Mitch Levine, for a brief discussion of our financial results.

Mitch?.

Thank, Bill. This is my first investor conference call since joining OncoCyte in mid-November, and I’m pleased to have this opportunity to speak with you. At December 31, 2017, we had $7.6 million of cash and cash equivalents in addition to available for sale securities valued at $0.8 million for a total of about $8.4 million in liquid assets.

As a reminder, we just raised $10 million in a pipe transaction. For the fourth quarter of 2017, we reported a net loss of $4.0 million, or $0.13 per share, compared to a net loss of $3.1 million, or $0.11 per share in the fourth quarter 2016.

For the year, we reported a net loss of $19.4 million, or $0.64 per share, compared to a net loss of $11.2 million, or $0.42 per share in 2016. For the 12 months of 2017, our total operating expenses, as reported, were approximately $13.4 million of cash, or about $1.1 million per month. That concludes my remarks concerning our financial results.

I’ll turn the call back over to Bill..

So in summary, we’re pleased to announce the $10 million financing, which should provide us with the resources we need to execute our DetermaVu development plan. We also are excited about our newly discovered biomarkers, which we believe have the potential to improve the accuracy of DetermaVu.

We’re in the process of conducting the clinical sample study that should enable us to choose the molecular diagnostic platform that we will use going forward. Once this is accomplished, our next step will be to initiate a DetermaVu R&D Validation Study, followed by an Analytical Validation Study and then the final Clinical Validation Study.

If the results of these studies are favorable, we will make DetermaVu available as a commercial liquid biopsy confirmatory test for lung cancer. Our goal remains for DetermaVu to be ready for commercial launch this year. Operator, this completes our formal remarks. So please open the call for questions..

Thank you. [Operator Instructions] We’ll take our first question from Bruce Jackson with Lake Street Capital Markets. Please go ahead..

Hi, good afternoon, and thank you for taking my questions. If we could just dive into the new biomarkers and the R&D Validation Study, so you’ve got four platforms that you’re working with right now.

Are you running the same set of biomarkers on all four platforms? And then do you have to redo the algorithms? Do you have to do individual algorithms to reach platform? And then – but – and I guess, what I’m driving at is, are you still doing biomarker selection, or do you have like the set of biomarkers that you’re trying to get configured into a final test? That’s my first question..

Great. Thanks, Bruce.

Yes, so I think maybe, Lyndal, could you answer that question?.

Sure, and it sound like there are a few different layers to the questions there. So the new biomarkers are being confirmed on the multiple platforms with that confirmation being successfully completed. Then, yes, we believe we will have the biomarkers we need to move forward with the – our involvement and move into the R&D Validation studies..

Okay. So just to be clear on that….

The – and the markers – the markers are identified across multiple platforms and those are the ones that give us the most confidence in the results. We do use the same clinical samples the test across these platforms when we talk about conforming the results – the original 60-sample analysis we did..

Okay. So it was my first question. And a question for Mitch. The expense controls have been fairly tight.

Are you – do you anticipate being able to continue with that level of operating expense and cash burn?.

We do. Our plan calls for a continued cash burn of about $1.1 million per month, and we feel like we have adequate resources to get us to DetermaVu commercialization..

Okay. Then last question on the pipeline with the breast cancer confirmatory test, is that the original thinking, I believe was that, it was on a path that was about one year behind the lung cancer in a test.

Is that still the case, or are you working on that in parallel?.

So at this point, our R&D resources remain focused on successfully developing DetermaVu and moving it forward to launch. So while we are – remain pleased about the development of the breast cancer product and the results that we presented at the San Antonio Breast Cancer Symposium in last December, it remains the secondary priority to DetermaVu.

So, yes, it will be – if we are able to develop it successfully, it would be sometime after DetermaVu launch..

Okay, great. That’s it for me. Thank you..

Thanks, Bruce..

Thank you, Bruce..

[Operator Instructions] We’ll take our next question from Raymond Myers with Benchmark Company. Please go ahead..

Thank you for taking questions.

My first question is, can you help us understand to what extent this confirmation study overlaps with the R&D and Analytical Validation studies, because it would seem that they’re testing very much the same things?.

Yes, I think there is to some degree, I – as Lyndal has pointed out, what we’re trying to do with the confirmation study is decide, which set of biomarkers and which particular platform we will use for the follow-on studies.

Lyndal, is there more detail you would like to provide on that?.

Yes. I think, the other distinction that’s important to keep in mind is that the samples that we’ll use for the R&D Validation are blinded samples, too. So that will give us a preview for the performance of what we would expect on the post Clinical Validation samples when performed in the licensed CLIA laboratory..

Very good.

So help us understand, are you doing different markers, because it’s a different platform and therefore, adjustments to the markers are required that are really platform adjustments, or are these different markers, which are new markers that you determine they’re better than your old markers and therefore, we might expect the sensitivity and specificity results of the test to be improved?.

So in the study, which we just completed, which we mentioned of the different platforms, we as a side effect, we have basically two objectives for that study. One to see if DetermaVu would work on three alternative platforms to the platform we had used previously, so we’d looked at four platforms in total.

And the second objective was to see if there were any new biomarkers we could find. And indeed, we did find 190 new biomarkers, which – many of which have larger full changes than the previous markers which we had, which as I mentioned a moment ago, should help with the accuracy and the efficiency operationally.

The algorithm, which we put together from that study, consisted of both the previous biomarkers that we had, the Wistar biomarkers, as well as a selected group of the new biomarkers. And then when we ran that, we saw, as I mentioned, the Area Under the Curve score being equivalent to or perhaps larger than what we had seen to date.

However, as we mentioned, that’s a small study. The error bar is big. So we have got to do this larger study to see whether this new set of markers combined with the Wistar markers can, in fact, improve accuracy. It’s certainly our hope that it will.

So I think, getting back to your question, Ray, we are not using these – the new biomarker soling, it’s going to be a combination of the Wistar biomarkers in the new ones and we’ll see which combination works best.

Lyndal, any other thoughts on that?.

No, but to your other point, I would just comment that, it is known that there are different limits of sensitivity or detection with the various platforms. And so we are hopeful that these new biomarkers will be significantly above any of those limits of detection and therefore, allow a more robust performance across lots and over time..

Good, thanks.

Maybe since it’s been awhile, can you remind us what specificity level you’re targeting for this test?.

Right. So as you may recall, we’ve previously done a significant study with a large number of chest physicians well over 200 in a third-party conducted market research study.

And we found from that study that physicians wanted to see a sensitive – a high sensitivity, at least, 85% or even 90%, and of course, sensitivity being our ability – the ability of the test to correctly determine if a nodule is malignant.

The reason being, of course, that chest physicians don’t want to have a false negative to tell someone that they don’t have cancer when they do. So they need a very high sensitivity. And you have to give up sensitivity for specificity, the two are related and if one is higher, the other tends to be lower.

So given the high sensitivity and again, we had 95% sensitivity in the study, I mentioned, we got specificity of 73%, meaning, that about 73% of unnecessary biopsies could be avoided, which is a significant value for the healthcare system.

When we talk with the chest physicians the specificity that we – that they’re talking about tended to be in the – if it’s a minimum of 45% or 40%, 45% specificity is what they would want to see.

So at 65% or 73% to 73% specificity, which is kind of the range we’ve seen between the Wistar studies and our study, the specificity is significantly above what the doctors would like to see. And in addition, it’s not just the doctors that are important here, it’s the insurance companies.

The insurance companies are looking for the healthcare economic benefits. How much money is saved by avoiding unnecessary procedures and then from that perspective, of course, the higher the specificity, the better, because it means, you’re avoiding more and more unnecessary procedures, the higher your specificity..

Great.

And the last question will just be, what is your share count – your common share count now?.

We have 39.3 million shares outstanding now..

Great. Thank you very much..

Thanks, Ray..

Thanks, Ray..

[Operator Instructions] And that does conclude our question-answer-session for today. I would like to turn the conference call back over to CEO, Bill Annett, for any additional comments..

So thank you again, everyone, for attending our conference call today. I’d like to thank our shareholders, their continued support, and also thank, everyone, at the company for their tremendous efforts. With that, our call today has concluded. Thank you all for your participation..

And once again, that conclude today’s conference call. We thank you all for your participation, and you may now disconnect..