Q1 2020 Earnings Call
Good day and welcome to the five steps first quarter 2020, <unk> earnings call for cold and wet.
Oh participants will be in Alyssa Lima, It should you need in a.
Please take note a corporate specialist by pressing the star Okay, well advised there.
Today's presentation, there will be an opportunity to ask questions.
So I'll ask the question you're right Press Star then one on a touch trying five to withdraw your question. Please press Star then Terry. Please note. This event is being recorded I would now like to send the corporate so about the Jody Cain.
Jay Investor Relations. Please go ahead.
This is Jody Cain with Belichick. Thank you for participating in today's conference call. Joining me for bio Scepter, Michael Knott, President and Chief Executive Officer, Jim Kennedy Senior Vice President of operations and Chief Financial Officer, If core you've done senior Vice president of commercial operations.
During this call management won't be making a number of forward looking statements within the meaning that the private Securities Litigation Reform Act up 1995 Forwardlooking statements include all statements that are knocking historical facts generally can be identified by terms such as anticipates estimates believes could expect.
Intense me plants potential predicts projects should well what was a negative up those terms.
Forward looking statements involve known and unknown risks uncertainties and other factors that may cause actual results performance or achievements to be materially different from those statements as well as pro forma sorci, but are expressed or implied by the forward looking statements in particular theres significant uncertainty about.
The duration.
Played the impact of the cope with 19 pandemic. This means results could change at any time and the contemplated impact of cope with 19 on bio such operations financial results and outlook is best estimates based on the information for today's discussion.
For details about the spreads please see the company's FCC filings.
The content that this call contains time sensitive information is accurate only as of today may 13th 2020, except as required by law Bios up disclaims any obligation to publicly update or revise any information reflect events or circumstances that include that that occur. After this call.
No I'd like to turn the call over to Michael No Mike.
Thank you Jody and good afternoon, everyone. We're reporting strong first quarter results would revenues in excess of $1.4 million. This is a 41% increase over the prior year driven by a 27% increase in average revenue per patient.
Physician customers ordering more assays per sample.
We also benefited from operating efficiencies that have improved gross margin by 50 percentage points versus the first quarter of 2019 as we make progress on our goal to become gross margin positive. We're reporting these strong results even with the impact of the cobot 19 pandemic we estimate.
Cobot 19 led to an approximate 15% to 25% decline in commercial test volume in Q1 versus Q4, 2019, and also impacted opportunities for us to gain new customers.
Declining test volume during the pandemic is an industry wide issue with some labs reporting year over year volume declined a 50% or more.
Our outlook is for commercial volume to decline by approximately 30% to 40% in the second quarter over the prior year. This assumes a continuation of the trend for gradual increase in volume as we move through the remainder of this period understandably oncology practices. During the cobot 19 pandemic have reduce.
Their hours of operation and postponed or canceled patient appointment.
Similarly, many hospitals have reduced surgeries and cancer patients some of whom have compromised immune systems have been reluctant to visit a physician office further declines in clinical trial enrollment or having an impact on sales of our seizure blood collection tubes and research use only or are you all kids, noting that these products.
Comprise a relatively modest percentage of our overall revenues importantly, we are positioned to weather the pandemic and for returned to growth. We're an established leader in liquid biopsy and our target selector testing provides critical information to positions in determining treatment decisions for their patients diagnosed with cancer.
We fully expect that when oncologists in hospitals resume patient schedules, our test volume will gradually return to more normal levels.
We're particularly pleased to strengthened our balance sheet, having raised net proceeds of more than $36 million since the beginning of December from financings and the exercise of warrants. We appreciate the confidence of our institutional investors over the past several months have provided us with funding and on favorable terms, we believe that based on historic.
Okay and play in cash usage, our current funny is expected to support operations through most of 2021.
However, with the uncertainty introduced by the impact to covert 19 on revenue and collections, our cash runway maybe shorter.
Our foremost concerned during the pandemic is for the safety and well being over employees.
As a molecular laboratory performing patient testing, we're in a central business and have maintain operations during the pandemic, you're providing safe conditions for our lab professionals through social distancing and staggered shifts while delivering the same excellent quality and turnaround time without interruption or delay, notably we have.
Maintained our full staff, a bio SAP with no layoffs or furloughs, having instituted work from home policies and strategies designed to emerge from the pandemic in a strong position.
We're also responding to the band to make by broadening our menu. It can now except samples for covert 19 testing, we're able to provide this testing due to our specialized license molecular labs staff, who have been trained to perform cobot 19 testing at our high complexity cap accredited CLIA certified Bcl two safety level laboratory.
Here at our San Diego headquarters that is equipped to perform these tests, we expanded our relationship with Thermo Fisher scientific and have validated their F.D. approved for emergency use authorization or you a testing of the tech path molecular diagnostic platform for Starz covert too we can run these costs.
With 19 tests quickly with turnaround times of an estimated 24 to 48 hours. This is much faster than many large national labs that can take up to 10 days.
I also helps clients have had difficulty gaining specimen collection kits dissenter biocept for testing and today, we have not been able to reform any cobot 19 testing for customers.
The challenge in securing swabs and reagents for PCR covert 19 specimen collection kits was recognized by California Governor seven years is daily briefing yesterday importantly, he pointed to PCR testing like we provide as providing high quality and reliable results compared with point of care reagent pop up test kits.
In order to address the challenge of securing these tests and to provide this needed testing, we intend to manufacture our own specimen collection kits for distribution the clients and expect those kids to be available in June.
As a reminder, we already routinely manufacture our own materials for oncology testing. So we have a team and how to do this.
Our current capability allows us to run approximately 400, Kobin 19 test per day, and we can ramp that to about 3000 per day, we will consider increasing capacity from there based on demand.
As you May know Governor Newsome has made clear has interest in wide scale testing, we're gearing up to make sure. We're prepared should test volume increase we are appreciative of the increase in Medicare payment for testing to approximately $100 per test from the previous $51 per test.
We continue to advance our growth strategy through this challenging period and the now several significant developments that position bias up for a strong future.
In March we launched testing the detects and analyzes cancer biomarkers on circulating tumor cells are ctcs as well as ctdna circulating tumor DNA found in cerebral spinal fluid.
We are among the few national CLIA labs to offer biomarker detection to analyze and identify important alteration that can help these patients qualify for therapy that can potentially extend life.
Already done we'll provide more detail on the assays launch we also launched our technology, allowing us to detect key oncogene mutations using blood and tissue through or are you. All kids. These kids allow molecular laboratories around the world to utilize our target selector assays to detect these mutations through the analysis.
Tissue gained from surgical biopsies as well as through Ctdna gain from blood based liquid biopsies are ctdna platform utilizes our patented switched blocker technology to enrich the specimen permutations of interest, resulting in ultra high sensitivity and specificity compared to results currently used in may.
Most labs, the first combined tissue and liquid biopsy test available as for the detection to be Geopark mutations, which are among the most frequently evaluated biomarkers for non small cell lung cancer.
Additionally, we recently announced receipt of C E I'd be Mark for these kids, which allows us to market them in the European Union and other countries recognizing the CE Ivy de Mark Importantly, with this award we can now provide customers in these geographies with a solution start to finish from collecting blue.
Good.
The sample Carplay collection to to transport using our specimen shipper and finally to perform in the assay in their own lab using our molecular test kit.
This solution provides molecular labs, recognizing the C.I. BD mark the ability to conduct our target selector assay is on tissue, which is the most current standard of care and from a blood sample, which is where the market is going.
Today I am pleased to announce that we are launching the biomarker b RAF to our menu of assays available as our euro kits to be performed on tissue or blood.
Mutations in the B RAF gene are an important factor in Germany treatment in melanoma lung and other cancers and our great interest to researchers and physicians have you ever seen with our first launch of VGF. Our testing, we will focused our efforts on biopharmaceutical customers globally and for clinical customers outside of the U.S. Our plan also includes.
Applying for CBD for this new offering in the future.
As we expand our reach internationally. We're also expanding our intellectual property. Most recently, we are granted patents in Australia, and Brazil, covering our target selector oncogene mutation enrichment detection platform. We now have 39 patents worldwide covering our cutting edge molecular technology.
We continue to present compelling data that further validates our technology in peer reviewed journals in March we announced the publication of previously reported yet highly compelling clinical data and the journal of clinical pathology that further validates our target selector Q PCR assay using patented switch blocker technology to identify.
Cancer related mutations in liquid biopsy samples are study examine 127 clinical assays for mutations commonly associated with cancer found in patients with the Egypt bar DRAM and K Ras jeans, each target selector assay in the study demonstrated extremely high accuracy sensitivity and specificity.
Compared to results obtained from tissue samples, showing a 93% to 96% concordance to blinded tissue samples across all asset base.
And finally, many of you have seen our 2020 proxy filed with the FCC and shareholder should be receiving the proxy materials in the mail and the next week or so.
We will be holding our annual meeting of stockholders in our virtual format on June five have won 30 PM Pacific time.
Instructions on joining this meeting or in the proxy materials.
Among the proposals as one authorizing a reverse stock split our board is requesting stockholders to vote for this proposal. So that we have the option to raise our stock price to maintain the one dollar per share NASDAQ continued listing requirement a reverse split requires approval of the majority of shares outstanding and not simply a majority of shares voted so it's.
Very important for all shareholders to vote their proxy as a non vote will count as a vote against the proposal.
With that I'll turn the call over to Tim Kennedy to review the financial results Tim.
Thanks, Mike and good afternoon, everyone.
As Mike mentioned for Q1 2020.
We reported revenues in excess of 1.4 million compared with 1 million in Q1 2019.
This 41% increase is due to higher revenue per succession as we report on more tests per accession ordered by referring doctors.
Commercial reimbursement based on historical mix and test per session is in the $1400 range up from the $1100 range in the prior year period.
The increase was predominantly due to more reported biomarkers PERC session.
We continue to launch new assays and improve operational processes.
Leading to increased testing capabilities and physician ordering.
In Q1 2020, we received 1306 total accessions compared with 1325 total exceptions in Q1 2019 commercial volume in Q1, 2020 was 985 compared with 1011 in Q.
One 2019, we believe that the decrease is due to the impact of the cobot 19 pandemic.
Cost of revenues for Q1, 2020, as a percentage of revenues improved 50 basis percentage points compared with the prior year period.
Total cost of revenues was 2.9 million compared with 2.6 million for the prior year period.
So with revenues, increasing 41% over the prior year cost of revenue increased only 13%.
In 2019, we'd be gam implementing automation in our CLIA laboratory, which we believe led to further leveraging of our fixed costs as we pursued our goal of positive gross margin.
We anticipate being able to provide incremental laboratory capacity at minimal expense to accommodate higher volumes.
We also are implementing additional actions that we anticipate will further lower our cost of revenues.
R&D expenses for Q1 of 2020 or 1.3 million compared with 1.2 million during Q1 of 2019.
The slight increase was primarily attributable to development and validation costs related to additional offerings, such as cerebral spinal fluid or CSF and to covert 19 testing.
DNA expenses for Q1, 2020 were 1.9 million an increase of 223000 versus Q1 2019, primarily due to a reclassification of certain customer service and related expenses from sales and marketing to Joe.
DNA, However, DNA expenses as a percentage of revenues improved to 132% in Q1 2020, compared with 164% in Q1 2019.
Sales and marketing expenses for Q1, 2020 were 1.5 million compared with 1.4 million for Q1 2019.
This increase was primarily attributable to commissions on higher revenue.
As a percentage of revenue sales and marketing expenses in Q1, 2020 narrowed to 101% versus 134% a year ago, Despite higher marketing costs related to the launch of new tests.
Other expense net for Q1, 2020 was 2.2 million compared with $62000 in the prior year period. This non cash increase was mainly due to 2.1 million and warrant inducement.
Expense.
The net loss for the first quarter of 2020 was $8.3 million or 11 cents per share on 79 million weighted average shares outstanding and includes the 2.1 million and noncash and do some an expense and the impact of cobot 19.
This compares with a net loss attributable to common shareholders for the first quarter of 2019 of 6 million or 61 cents per share a 9.8 million weighted average shares outstanding.
Cash and cash equivalents were 21.5 million as of March 30, Onest 2020, compared with 9.3 million as of December 30, Onest 2019.
In addition to the 2.3 million net proceeds from the warrant inducement offering during Q1, we received an additional 700000 from the underwriter exercising its over allotment of warrants from the December 2019 underwritten finance.
Transaction.
In March 2020, we completed two registered direct offering raising net proceeds of approximately 14.7 million.
And in April subsequent to the first quarter close we raised net proceeds of approximately 9.6 million.
A registered direct offering.
And as Mike Mike mentioned, we.
We believe that the based on that based on historical unplanned cash usage. Our current funding is expected to support operations through most of 2021.
However, with the uncertainty introduced by the impact of Covance 19 on revenue and collections, our cash runway maybe shorter.
Im now pleased to welcome Corey done so our call the provide an overview of our commercial progress as you May know Corey joined Biocept in October of 2018, as Vice President of marketing and was promoted to senior Vice President of commercial operations and.
Have you worry of this year Cory.
Thanks, Tim and I am delighted to be speaking with all of you today.
I'd like to be begin by discussing the actions of our salesforce that our salesforce is taking gearing the pandemic to engage with our physician customers.
Because of limited access to clinics for in person meeting we have provided our sales team with full work from home capabilities utilizing virtual web meetings with physician.
This approach has resulted in the vast majority of physicians. We've reached ordering specimen collection kits. We have also increased outreach to our customers through social media outlets, such as Twitter and Linkedin.
Importantly, we are generating significant interest with neuro oncologist. Following the March launch of testing that detects and analyzes cancer Biomarkers on Ctcs and Cccdna found in the cerebral spinal fluid, which is essential fluid that nourish isn't protects the brain in spine.
Especially once the tumor metastasizes into the three both spinal fluid identification of Biomarkers and treatment is very critical.
Profiling Biomarkers is key to physician selecting the best treatment option for up to 30% and 36% of patients diagnosed with breast and lung cancer, respectively, who may likely develop brain metastasis.
As Mike mentioned Biocept is one of the only national CLIA labs to provide biomarker detection to analyze and identify important genomic and proteomic alteration that can help these patients qualify for therapy that potentially can extend life.
This is a growing patient population of patients with cancer, a living longer to did due to advances in cancer treatments and thus are more likely to experience disease progression.
The ability to detect biomarkers that cerebral spinal fluid of patients with brain metastasis is a true unmet need we estimate that about 90000 patients with breast or lung cancer lift sufficiently long enough to develop brain metastasis.
Our Salesforce has reached out to neuro oncologist and the reception has been highly favorable with many joining virtual meetings that include our medical staff.
Since our commercial launch of this new test in March and despite challenging surfing circumstances. Our sales team is working to access the almost 300 board certified neuro oncologist nationwide each of whom represents a potential new bias up customer.
Unfortunately, and although early we are seeing repeat business that prestigious academic centers.
The importance of this testing is evidenced by a recent case study if a patient we tested.
This mother of two in her late Thirty's was diagnosed with triple negative breast cancer and brain metastasis.
Brain tumor was removed through surgical resection, which showed her to be her two positive.
She was placed into clinical trials, but her cancer continued to progress.
Our physician centers sample of her cerebral spinal fluid to us for biomarker testing the results of our tests showed her to amplification. This confirmation provided the confidence and affirmation for the physician patient and her family to move forward with planned Herceptin therapy.
We wish the patient and her family our very best.
We're also leveraging our mobile for bottoming offering during the pandemic. Some physicians have continued to utilize this at home as it collection service for patients to obtain blood specimens in lieu of visits to their doctors office.
I want you mentioned that Seattle genetics recently gained FDA approval for drug to patent and to fight aggressive brands breast cancer, including patients with brain metastasis.
This oral drug targets the her to protein that promotes the growth in cancer cells found in approximately 20% of patients with breast cancer.
It is encouraging to see another therapy come to market, which underscores the value of our liquid biopsy to detect hurt you alteration.
And finally, we are making great commercial progress with independent physician Association or IP are clinically actionable biomarker testing coupled with cost effective benefits are resonating with value oriented stakeholders. We look forward to continued success in this area.
So in summary, the commercial team continues to support the execution on our strategic initiatives during the challenging time, and we are effectively using our efficiently size salesforce to maintain existing physician relationships, while developing new one.
With that I'd like to turn the call back to Mike.
Thank you Corey and actually thank you to both of you outstanding leadership for our company during this pandemic.
While we're pleased to be able to support public health efforts by offering cobot 19 testing as a company. We remain focused on oncology that said for the near future. We expect cobot 19 testing could be an important aspect of any laboratory, including ours that can perform molecular testing as long as the need is there we will provide these critic.
Well testing services.
Our focus will continue to be on increasing adoption of our patented proprietary liquid biopsy assays and other molecular assay products with our broad offering of less invasive.
Cost effective solutions that help physicians determined the best treatment pathways for their patients with cancer.
To date, we've tested approximately 24000 patient samples with our proprietary biomarker assays.
These assets are based on our differentiated platforms that leverage information from both Ctcs and Ctdna.
Both in blood and importantly, as Corey discussed earlier in cerebral spinal fluid.
We continue to generate clinical evidence that builds further support for the high sensitivity and specificity of our biomarker assays and remain focused on getting data published and presented we're focused on increasing testing volume growing revenue per session and of expanding opportunities, where we can leverage our investment in intellectual property all with a goal to create.
Shareholder value.
Like everyone. We're looking forward to the lifting of shelter in place restrictions and for our business to return to a more normal pace our longer term corporate priorities remain unchanged. These include increasing market penetration with a focus on neuro oncology urology breast and lung cancers.
Growing sales of our target selector molecular assay kits and our seizure blood collection tubes.
Increasing market penetration of our target selector ngs lung and breast panels under our collaboration with Thermo Fisher and securing Medicare coverage for these assets.
Entering into additional strategic commercial and technology partnerships, both global and domestic.
Signing agreements with New third party health plans, including Capitated plans and expanding our relationship with Blue Cross Blue Shield.
Publishing clinical case studies, and presenting data and scientific conferences that further validate our targets like to testing and launching additional assays.
Importantly, we have sufficient capital to sustain us during the cold 19, pandemic and do execute on our strategy I'd, especially like to thank our entire team at Biossance for their hard work and dedication during this challenging period and with that overview, we're now ready to take questions operator.
Thank you we will now begin the question answer session.
Thank you My press Star then one on your touched by.
Using a speakerphone. Please go ahead before pricing Mccain if at any time. Your question is being addressed and you would like to withdraw your question. Please press Star then.
At this time, we will pose pause momentarily Theater Register your question.
While we're waiting for the first question I'd like to remind our stockholders to return your proxy voting cards. We appreciate your support for the initiatives our board has endorsed.
Okay, operator, we're ready for the first question.
Thank you. Your first question comes from Jason Mccarthy from Maxim Group.
Please go ahead.
Hey, guys.
Congratulations on the progress because the widening margins you got the B RAF.
How its going and there's a lot we could talk about.
In oncology, which is obviously the core focus of the company, but I just want to.
Ill take I want to take advantage of the opportunity to talk about the current affairs and what you're doing.
Sure because it could be at.
Near term revenue driver absolutely were you guys and can you help us understand a little bit about the changes in Medicare payments.
[music].
Help investors understand more clearly why they went to 100 versus the 51, because most people think of Labcorps. They think of Rocher class.
Bias that should be discussed in that same conversation can.
Can you help us understand a little bit about that.
Process and also how do you look at it from a revenue perspective what.
Yes look like in southern California, and the San Diego area, What's your demand right now and what could that revenue look like.
Yes, those are great questions they could Jason.
First about the pricing ongoing 19 testing one thing I think we've mentioned in previous calls are certainly I mentioned as I visited with investors is that we're pretty active with industry trade groups and so the group the various trade groups, we have in the industry, whether it's the lab associations and we're also in involved in a molecular technique.
Algae, all really lobbied to get that increase because at the previous pricing at $51. It barely or didnt cover the cost depending on what assay was being run in the at the various laboratories now labcorps inquest might have been able to have a slight margin at that price.
But for most labs, such as Biocept or hospital base lab that certainly you can cover most of the costs, especially with shipping included Fedex et cetera to get into the lab. So we worked real hard with stakeholders at Medicare and they're very open as everybody is right now to doing what was needed and the increase the price to $100 would we have like to see it to 200 hours of.
Course, but at a $100 we can make a margin it's not quite the same margin we would make at scale on our normal testing, but still a margin and certainly can be a revenue driver for the company as far as the volume, we'll expect a couple of things there and we tried to be explicit on the released to something that.
I think folks don't understand there seems to be a good amount of capacity for testing now and as we talk to other labs and other both hospital system labs here in San Diego Southern California, most people like Bios apps have quite a bit of capacity that's not being used for testing. The problem is getting the collection kits the sample collection kit.
That's where we're out it's not the testing capacity is being reported in lot of folks at least here in our area, it's actually and getting the specimen collection kits. So we had been waiting for a long time for collection kits and we finally, just decided to make our own. So Jason you may remember, we actually make the reagents and materials that we use in oncology testing so.
We have a clean room I have a manufacturing staff. So this is something were qualified to do so we expect to have those within the next few weeks and that's under Tim's leadership on his department. So we expected then start again that get the customers that we already have teed up the course teams going out and identified for us. So.
Stay tuned for more news on that but thats kind of where things are at as far as the demand in California and elsewhere. We still have to see we hear the same public statements that that investors do from our governor and others about the need for wide scale population based testing to date, we havent necessarily see that but we're starting to get indeed.
Patients that could be where things are going so I think there's a need to solve this problem loan collection kit capacity first and then after that we'll start to see things start to become more clear in those arena.
Does that answer your question it does and hopefully we will let me get back to normal it maybe we'll hear some more about this from you guys.
A couple of weeks.
Yep.
It relates the cobot testing.
[music].
Thank you for the taking the questions I'm glad you guys are doing really well.
But it's been furloughed as you mentioned earlier in your call.
And hopefully we expect to once the cobot 19 to us.
Sorry, your epic comes in that part of that ideas that we expect very busy here once this.
Becomes more clear where its active we all know there's a need I think it to the top of everyone does your questions. Everybody. This is all you're thinking about obviously and we all need to be prepared when that happens and so I.
I think by us controlling our supply chain.
We're going to in a good position to address that need well I think it's also important for investors to understand at least from my view that.
100, Yeah, if you're doing 400 to 3000 tests per day, and you're going to run seven days a week at $100 for test that's not nothing.
More than offset any delays or or slowdowns that you are having on the oncology side would you agree I think you just read Tim's, yes, you would wanting to add a little bit about that so yes, that's exactly right Jason and in addition to that just as a reminder, when you have the covert 19.
Test that we offer which Mike and mentioned the PCR based test then what Duvernay, a new some referred to as as a gold seal.
Test in his conference call yesterday.
If you the test is whether or not will you have the coven 19.
Whether you have the corona virus at that point in time.
So it's not necessarily a one and done past specifically these are task that likely at least for the near term are going to be tests that are probably done more than one on a particular patient. So that was another thing I wanted to point out as well.
That does that's a great point.
Thank you guys for taking the questions and hopefully.
We will get the C is here.
Yeah, so too yes.
All right virtually if not in parts and but we're all very good.
My wife, especially the here for me to get back on the road.
I bet likewise.
Thanks, guys. Thanks. Thanks.
Thank you. Your next question comes from selling yen Ching from Brooklyn capital markets.
Please go ahead, Okay, Hi, Mike.
Hi style in the call.
I'm just curious do you expect to see.
Test rebound in the second half of this year, even by the fourth quarter.
Well.
And provided that.
Hospital visits and physician visits get back to a more normal pace. That's the biggest impact we're having.
So you know the challenge has been that most clinic visits and I think most people are aware of this I'm have been canceled and in fact, we're seeing hospitals actually have lay offs, which seems counterintuitive to the cadnineteen crisis, but different departments have no business because unless you are critically ill you're not being referred for treatment. So this of course has an impact.
As we've done several things to counteract that to maintain the specimen volumes that were projecting that we're seeing and we're starting to see things start to come back a little bit, but maybe core you can give a little bit more color about the success with the that we're having with the virtual conferences with physicians and how we probably wouldn't have been able to get that otherwise so yes.
It's been it's been sally's quite nice and that a lot of times. The physicians are not in clinic as much so.
So were able to secure some time through June through 11, our time.
For an hour, yes, sometimes for a whole our which is very different.
And for them to learn about our offering and then additionally to like I mentioned with the mobile for Botany, we can provide mobile for bottom you services for blood draw. So very good advantage of being in the liquid biopsy.
To there to their patients so that the patients don't have to have to come into the office and we that's it. Thank you remind me Corey we've actually seen renewed interest from pharma companies in liquid biopsy because of this option.
Yes. Thanks.
Yeah, obviously is done because the surgeries or cancel them. The hospitals that are patients don't feel safe going into the hospital for the biopsy then they're not getting qualified to get on these targeted therapies from big pharma. So big pharma understands we can send some.
The bottom as to someone's home have blood drawn there and still qualify a patient for a therapy. So this is an advantage of liquid biopsy over tissue biopsy, which of course must be a surgical procedure.
Right, Okay, that's interesting good.
And then just how are you being paid are compensated for the cobot 19 tests because I know.
Thermo is adjusting equipment.
Being paid directly are you being paid to thermo.
No actually not through thermo, we buy stuff from them. This applies so there are vendor.
And partner since we have other collaborations with them, but the the payment comes from really two main sources its either going to come from an employer because more and more employers are looking to do this type of testing for the employees or enhance an institution, okay or it's going to come from insurance part of the key.
There is out.
Mandates that and this is important for any of the lessors to understand for themselves. Your insurance company has to pay for covert 19 testing people may not understand that when it comes to any other tests you need it and the world. There is an option whether the they pay it or not and very often it's tough to get the money out of the insurance I'm looking at Tim and he's gritting it that so.
You know, but when it comes to cope with 19 testing by law and the Cures Act. They are required to pay includes Medicare. So Medicare rate is about $100. The private payers have to pay either a contracted rate and we're working on contracts with some of our good partners in the payer community or are they have to pay whats published on our website. So part of this legislation.
The cares act required that laboratories publish their price on their website. So if you go on our website, you'll find our price there oh, okay, Okay interesting and Thats, our price that we what we call cash pay price, obviously actual Medicare you accept what they pay but I have either price that we it for a payer we wouldn't have a contract with that will be the price by law.
Before hard to pay okay.
Okay. Good that's helpful. Thanks, Yeah.
Thank you. This concludes our question and suspicion I would like to turn the conference, but some Michael Moore for closing remarks.
Well, thank you everyone and on behalf of our board of directors and our hardworking team a buyer.
I want to thank you for participating on today's call and for your interest in our company. We look forward to providing an update on our next conference call. When report believe it or not our second quarter 2020 financial results in August.
Thank you and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].
[music].