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Biocept, Inc. (Nasdaq: BIOC), a leading provider of molecular diagnostic assays, products and services, reports financial results for the three and 12 months ended December 31, 2020 and provides a business update.

“I’m exceptionally proud of the Biocept team for their enthusiasm and dedication in supporting the COVID-19 testing needs of our community while advancing our oncology business for a strong post-pandemic future, ” said Michael Nall, President and CEO of Biocept. “Our COVID-19 testing has provided valuable information to our clients, which has helped contain viral spread. We received about 140,000 samples for COVID-19 testing during the fourth quarter and, even with the relocation of our corporate headquarters and CLIA laboratory, our team provided the vast majority of COVID-19 test results to health providers within 48 hours of receiving the sample.

“Our financial results for the fourth quarter reflect our team’s success with revenues reaching $18.5 million, resulting in our first-ever profitable quarter,” he added. “Our ability to generate higher revenues in recent quarters due to COVID-19 testing significantly reduced our cash burn in 2020, while we continued to provide excellent service for our oncology and COVID-19 customers.

“The focus of our oncology business going forward is clearly on our neuro-oncology strategy and cerebrospinal fluid (CSF) assay,” he added. “This assay uniquely addresses a high unmet clinical need by identifying metastatic progression of cancer to the central nervous system and brain. Approximately 10% to 30% of patients diagnosed with cancer, depending on tumor type, will ultimately experience spread of their disease to the central nervous system. Pilot studies have shown our CSF assay to be significantly more sensitive than conventional CSF cytology, the current standard of care, in detecting lung and breast cancer that has metastasized to the brain or central nervous system. Our CSF assay has the added advantages of identifying actionable molecular targets that provide physicians with valuable information in making treatment decisions, as well as providing quantitative information for monitoring treatment response and disease progression.

“Initial acceptance by neuro-oncology early-adopters has been highly encouraging as physicians from nearly two dozen leading academic institutions have ordered our assay with many becoming repeat users. Given the advantages of this offering, we have engaged a group of neuro-oncology thought-leaders from leading institutions to work with us in developing a strategy to establish our assay as the standard of care in diagnosing cancer with central nervous system involvement under National Comprehensive Cancer Network (NCCN) guidelines. Key among these actions is gathering clinical data in support of our testing. Later this year, we expect to start our Four C registry trial, which is designed to provide clinical validation of the performance of our assay against CSF cytology in predicting clinical outcomes in patients with suspected brain and central nervous system metastases,” Mr. Nall concluded.

2020 and Recent Highlights

Corporate Developments

   -- Named Michael C. Dugan, MD as Chief Medical Officer and Medical Director 
      with responsibilities for overseeing medical policy decision-making and 
      the operations of Biocept's CLIA-certified, CAP-accredited, 
      high-complexity molecular laboratory. Dr. Dugan is highly respected in 
      the molecular diagnostics industry and has served in leading medical 
      positions at Exact Sciences, Quest Diagnostics Nichols Institute and 
      Roche Molecular Systems. 
 
   -- Appointed Samuel D. Riccitelli to the Biocept Board of Directors. Mr. 
      Riccitelli has more than 35 years of experience in the healthcare 
      industry, including extensive experience in the molecular diagnostics 
      industry, having served in executive-level positions and on the Boards of 
      multiple publicly traded companies. 
 
   -- Relocated Biocept's corporate offices and laboratory to a new 39,000 
      square foot facility in San Diego. The move aligns with the Company's 
      strategy of supporting growth while reducing overhead expense, and was 
      completed with minimal impact to customers and saves approximately 20% 
      annually in rental expense. 
 
   -- Raised net proceeds of $27.3 million in 2020 including the exercise of 
      warrants.

Clinical Study

   -- Announced plans for the Four C registry study, a non-interventional trial 
      evaluating the performance of Biocept's CSF assay compared with clinical 
      imaging, CSF cytology and clinical evaluation in patients with suspected 
      leptomeningeal disease (LMD). The study is expected to enroll 200 
      patients with the objective of providing clinical validation for the 
      Company's assay compared with CSF cytology in predicting clinical 
      outcomes.

Commercial Launches, Developments and Agreements

Oncology

   -- Announced the commercial availability of the Target Selector(TM) assay to 
      evaluate CSF for the presence of circulating tumor cells (CTCs) and 
      biomarkers, which may be indicators of brain metastases, in patients with 
      advanced lung and breast cancer. The validation study for the CSF assay 
      was conducted in collaboration with Providence St. Joseph Health, 
      Southern California, and its wholly owned affiliates Providence St. 
      John's Health Center and John Wayne Cancer Institute. 
 
   -- Announced a positive coverage decision by Highmark, America's 
      fourth-largest Blue Cross Blue Shield affiliate, for Target Selector(TM) 
      liquid biopsy assays for use in the diagnosis and treatment of patients 
      with non-small cell lung cancer (NSCLC). The coverage determination 
      follows two years of evaluation by the Allegheny Health Network Cancer 
      Institute of Biocept's liquid biopsy assays to more rapidly assess the 
      molecular status of patients with NSCLC, enabling oncologists to select 
      the most appropriate therapy while also reducing the overall cost of 
      care. 
 
   -- Established a collaboration with Protean BioDiagnostics to research the 
      ability of the Target Selector(TM) assay to determine EGFR status in 
      NSCLC in an independent pathology laboratory setting. Protean 
      BioDiagnostics also expects to validate the analytical performance of a 
      laboratory developed test (LDT) based on Biocept's EGFR assay test kit in 
      accordance with the requirements of the College of American Pathologists 
      (CAP) validation process. 
 
   -- Entered into an agreement with reference-based pricing network Medical 
      Cost Containment Professionals, LLC to process out-of-network claims for 
      Target Selector(TM) liquid biopsy testing. Claims will be adjudicated 
      through this network at pre-negotiated pricing in a timely manner, 
      helping to accelerate collections while reducing the length of time 
      receivables remain outstanding. 
 
   -- Signed laboratory services agreements with four California-based 
      independent physician associations (IPAs) to provide Target Selector(TM) 
      liquid biopsy testing services. 
 
   -- Launched research-use-only (RUO) kits that allow molecular laboratories 
      worldwide to detect oncogene mutations in tissue and liquid biopsies 
      through the analysis of Formalin-Fixed Paraffin-Embedded (FFPE) tissue 
      gained from surgical biopsies, as well as circulating tumor DNA (ctDNA) 
      gained from blood. The first RUO kit with the ability to use tissue and 
      liquid biopsy samples is designed for the detection of EGFR mutations, 
      which are among the most frequently evaluated biomarkers of lung cancer. 
 
   -- Expanded the menu of molecular assay kit offerings with the launch of a 
      Target Selector(TM) kit to detect BRAF mutations. Similar to the EGFR kit, 
      the BRAF RUO kit detects key oncogene mutations through the analysis of 
      both FFPE tissue gained from surgical biopsies, as well as ctDNA gained 
      from blood. The BRAF mutation is among the most frequently evaluated 
      biomarkers across many solid tumors, including lung cancer and melanoma.

COVID-19

   -- Received more than 300,000 samples for COVID-19 RT-PCR testing at 
      Biocept's high-complexity, CLIA-certified, CAP-accredited and BSL-2 
      safety level laboratory since beginning testing in 2020. The lab is using 
      Thermo Fisher Scientific's FDA-approved for EUA testing TaqPath(TM) 
      molecular diagnostic platform and kit. The vast majority of results to 
      date have been reported to healthcare providers within 48 hours of sample 
      receipt. 
 
   -- Expanded the agreement with MultiPlan, a healthcare cost management 
      company offering payment integrity and network-based and analytics-based 
      services, to include COVID-19 testing at a pre-negotiated price per test. 
      More than 1 million healthcare providers participate in MultiPlan's 
      networks and 60 million health plan members have access to its services. 
 
   -- Signed a semi-exclusive agreement with a skilled nursing facility network 
      with more than 50 sites in multiple states to provide COVID-19 testing to 
      its residents and employees. 
 
   -- Entered into development and supply agreements with Aegea 
      Biotechnologies. The first agreement covered the development of a new, 
      highly sensitive quantitative PCR-based COVID-19 assay utilizing the 
      patented Switch-Blocker(TM) technology, which is also used in Biocept's 
      Target Selector(TM) assays. After successful development of the assay,

2021-03-29 20:05:00 GMT Biocept Reports 2020 Fourth Quarter and Full Year -2-

      Biocept and Aegea entered into a supply agreement under which Aegea is 
      supplying the COVID-19 assay kit for validation in Biocept's lab. 
      Following validation, Biocept intends to commercialize an LDT. The test 
      is designed for quantitative monitoring of RNA viral load in order to 
      better assist healthcare providers in screening and managing patients.

Industry Conference Presentations and Publication

   -- Presented data from a pilot study showing the Target Selector(TM) 
      molecular assay kit using Biocept's Switch-Blocker(TM) technology 
      detected mutations in up to 50% of tissue biopsy specimens from patients 
      diagnosed with NSCLC that were deemed quantity not sufficient for NGS 
      analysis at the Molecular Med Tri-Con Virtual Conference. 
 
   -- Presented results from a small, prospective study comparing Biocept's CSF 
      testing to conventional CSF cytology in patients with NSCLC and LMD 
      metastasis at the "Hot Topic: Liquid Biopsy" meeting of the International 
      Association for the Study of Lung Cancer. Study results indicate that 
      Biocept's CSF testing may play an important role in providing valuable 
      information to neuro-oncologists in making treatment decisions for 
      patients with lung cancer metastases to the brain and spinal cord. 
 
   -- Presented results from a study using the Company's CSF assay to analyze 
      CSF samples of patients with primary lung or breast cancer with either 
      brain metastasis or LMD at the Society for Neuro-Oncology's SNO2020 
      Virtual Conference. 
 
   -- Presented data affirming the ability of the Target Selector(TM) platform 
      to identify potentially actionable mutations in the CSF of patients whose 
      cancer has metastasized to the central nervous system at the American 
      Society for Clinical Oncology (ASCO) 2020 Virtual Scientific Program. The 
      data were presented in a poster by the study's principal investigator 
      Kevin Kalinsky, MD, MS, associate professor of medicine at Columbia 
      University Vagelos College of Physicians and Surgeons, and an oncologist 
      at New York-Presbyterian/Columbia University Irving Medical Center. 
 
   -- Presented results from a prospective study showing Target Selector(TM) 
      was highly accurate in monitoring HER2 alterations in patients with 
      metastatic breast cancer at the virtual 2020 San Antonio Breast Cancer 
      Symposium(R) (SABC(R)). The results were featured in a poster 
      presentation by Vered Stearns, MD, professor of oncology, breast cancer 
      research chair in oncology, and director of the Women's Malignancies 
      Disease Group at Johns Hopkins University School of Medicine/Johns 
      Hopkins Sidney Kimmel Cancer Center. 
 
   -- Clinical data were published in the Journal of Clinical Pathology that 
      further validate Biocept's Target Selector(TM) qPCR Assay using 
      Switch-Blocker(TM) technology to identify cancer-related mutations in 
      liquid biopsy samples. Study results showed a very high concordance 
      between the Company's liquid biopsy testing and tissue biopsy, and 
      best-in-class detection of alterations down to a single mutant copy in 
      both analytical and clinical settings.

Intellectual Property

   -- Awarded patents in the U.S., Japan, Australia and Brazil for 
      Primer-Switch technology, which is useful for the detection of rare 
      mutations, including cancer biomarkers, found in tissue, blood and CSF 
      using ctDNA analysis through RT-PCR and associated analysis methods, 
      including NGS. 
 
   -- Awarded patents in the U.S., Canada and Hong Kong covering the enhanced 
      detection of cancer cells. These patents expand the Company's IP estate 
      for capturing and detecting rare cells of interest, including CTCs, to 
      aid in the management of patients with cancer. 
 
   -- Awarded a patent in Japan for the use of binding entities in combination 
      with any solid surface to capture and detect any target of interest, 
      including CTCs, from any sample type. This patent combines well with the 
      Company's patented microchannel and cell-staining platforms, and provides 
      opportunities for out-licensing technology with a focus on any target of 
      interest, including single-cell analysis and other methodologies. 
 
   -- Expanded the Company's global IP portfolio to 70 issued patents.

Regulatory Approval

   -- Awarded CE-IVD Mark for the Target Selector(TM) molecular assay EGFR Kit. 
      The CE Mark confirms that Target Selector(TM) kits meet the requirements 
      of the European In-Vitro Diagnostic Devices Directive, and allows Biocept 
      to commercialize these kits throughout the European Union and other 
      geographies that recognize the CE Mark. Molecular assay kits detect key 
      oncogene mutations through the analysis of both FFPE tissue and ctDNA.

Fourth Quarter Financial Results

Revenues for the fourth quarter of 2020 were $18.5 million, compared with $1.8 million for the fourth quarter of 2019, with the increase attributable to RT-PCR COVID-19 testing. Revenues for the fourth quarter of 2020 included $18.3 million in commercial test revenue, inclusive of $17.6 million attributable to RT-PCR COVID-19 testing, and $32,000 in development services test revenue and $160,000 in revenue from distributed products, Target Selector(TM) RUO kits, CEE-Sure(R) blood collection tubes and payments from Aegea Biotechnologies for services associated with the development of a COVID-19 assay. Revenues for the fourth quarter of 2019 included $1.6 million in commercial test revenue, $87,000 in development services test revenue and $108,000 in revenue for Target Selector(TM) RUO kits, which were commercially launched in early 2019, and CEE-Sure(R) blood collection tubes.

Biocept accessioned 145,129 total samples during the fourth quarter of 2020, compared with 1,404 total samples during the fourth quarter of 2019. The Company accessioned 144,932 commercial billable samples during the fourth quarter of 2020, compared with 1,159 commercial billable samples during the fourth quarter of 2019. The increase in total and billable samples was primarily attributable to COVID-19-related collection kits and consumable expenses.

Cost of revenues for the fourth quarter of 2020 was $10.0 million, compared with $2.9 million for the fourth quarter of 2019. Research and development (R&D) expenses for the fourth quarters of 2020 and 2019 were relatively flat at $1.2 million. General and administrative (G&A) expenses for the fourth quarter of 2020 were $3.1 million, compared with $1.9 million for the fourth quarter of 2019, with the increase primarily due to headcount additions to handle COVID-19-related activities as well as consulting expenses. Sales and marketing expenses for the fourth quarter of 2020 were $2.2 million, compared with $1.5 million for the fourth quarter of 2019, with the increase resulting from higher sales commissions due to higher revenues.

The fourth quarter of 2019 included a non-cash deemed dividend of $22,000 for the repricing of adjustable warrants. There was no comparable deemed dividend in the fourth quarter of 2020.

Net income attributable to common shareholders for the fourth quarter of 2020 was $1.9 million, or $0.14 per diluted share on 13.6 million weighted-average shares outstanding. This compares with a net loss attributable to common shareholders for the fourth quarter of 2019 of $5.7 million, or $1.97 per share on 2.9 million weighted-average shares outstanding. The change in outstanding share count reflects the 1-for-10 reverse split of common stock effected in September 2020.

Full Year Financial Results

Revenues for 2020 were $27.5 million, compared with $5.5 million for 2019. Revenues for 2020 included $26.9 million in commercial test revenue, inclusive of $23.3 million attributable to RT-PCR COVID-19 testing, and $177,000 in development services test revenue and $421,000 in revenue for Target Selector(TM) RUO kits, CEE-Sure blood collection tubes and payments from Aegea Biotechnologies for services associated with the development of a COVID-19 assay.

Operating expenses for 2020 were $42.9 million, and included cost of revenues of $21.3 million, R&D expenses of $5.2 million, G&A expenses of $10.0 million and sales and marketing expenses of $6.4 million. Operating expenses for 2019 were $28.6 million, and included cost of revenues of $11.0 million, R&D expenses of $4.7 million, G&A expenses of $7.0 million and sales and marketing expenses of $5.9 million.

The net loss for 2020 was $17.8 million, or $1.50 per share on 11.8 million weighted-average shares outstanding. This compares with a net loss for 2019 of $25.3 million, or $12.23 per share on 2.1 million weighted-average shares outstanding. The change in outstanding share count reflects the 1-for-10 reverse split of common stock effected in September 2020.

Biocept reported cash and cash equivalents as of December 31, 2020 of $14.4 million, compared with $9.3 million as of December 31, 2019.


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