Shares of biotech corporation OncoCyte (NYSEAMERICAN:OCX) are taking off on Tuesday morning after an important deal for the company’s future.
OncoCyte announced that it signed an “exclusive agreement” to license DetermaRx to Burning Rock Biotech Limited (NASDAQ:BNR). The deal includes upfront cash payments for OncoCyte nearing $6 million in the first year. And the biotech firm will also receive “ongoing royalties per patient tested with DetermaRx.”
Before we go any further, let’s take a closer look at both Burning Rock and DetermaRx.
As one of the largest companies in China, Burning Rock focuses on next-generation sequencing (NGS) for oncology treatments. According to the firm’s website, it had “the largest market share in China’s NGS-based cancer therapy selection market” in 2019.
Meanwhile, DetermaRx is a test that helps identify high-risk, early-stage lung cancer patients. Overall, the goal of the therapy is to hopefully better a patient’s five-year survival period.
Ron Andrews, president and CEO of Oncocyte, had this to say about the OCX stock news:
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. 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.
Additionally, OncoCyte will receive its payments following the transfer and installation of DetermaRx technology. That said, the former will be completed in the first quarter of 2021, and the latter in Q3.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick is a web editor at InvestorPlace.