OncoCyte upgraded to buy at Janney on high hopes for lung cancer biopsy test
Shares of OncoCyte Corp. soared more than 200% on Tuesday after the developer of cancer detection tests reported positive results from a trial of a new biopsy test of lung cancer. Janney analyst Paul Knight upgraded the stock to buy and raised his fair-value target to $8, or 37% above its current trading level. "Oncocyte's novel technology in the compelling lung cancer market is proving to be a diagnostic breakthrough for the largest cancer diagnostic market with the largest unmet need," Night wrote in a note. OncoCyte said the validation study of its DetermaVu liquid test showed sensitivity of 90%, which is the percentage of malignant nodules that are correctly identified, and specificity of 75%, which is the percentage of benign nodules correctly identified. The company "has taken the most critical step to commercialization, which we expect will occur in the second half," said Knight. The study result significantly outperforms any other blinded study of its kind "and signifies the first blood based test on the market to use strictly biomarkers for cancer detection," he wrote. "We view that DetermaVu's estimated annual addressable market of $4.7 billion." Shares are now up 316% in 2019, while the S&P 500 has gained 5%.
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