Q3 2020 Biocept Inc Earnings Call
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Management's prepared remarks, we will hold a question and answer session.
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As a reminder, this conference call is being.
Ordered today November 12 2020.
I'd now like to turn the call over to Bruce Voss. Please go ahead.
Thank you this is Bruce Voss with L.A.J.. Thank you all for participating in today's conference call. Joining me from Biocept are Michael No President and Chief Executive Officer, Tim Kennedy Senior.
As president of operations, and Chief Financial Officer, and Dr., Michael Dougan, Senior Vice President Chief Medical Officer, and medical director.
During this call management will be making a number of forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements include all.
Statements that are not historical facts and generally can be identified by terms such as anticipates estimates believes could expects intends may plans potential predicts projects should well would or the negative of those terms.
Forward looking statements involve known and unknown.
Certain risks uncertainties and other factors that may cause actual results performance or achievements to be materially different from those statements as well as performance or achievements that are implied by the forward looking statements.
In particular, there is significant uncertainty about the duration and contemplated impact of the Cove at 19.
No endemic.
This means results could change at any time and the contemplated impact of co that 19 on Bios EPS operations financial results and outlook is a best estimate based on the information for todays discussion.
For details about these risks please see the company's FCC filings.
The content of this call contains time sensitive information that is accurate only as of today November 12 2020 ish.
Except as required by law Biocept disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.
Now I'd like to turn the call over.
Michael No Mike.
Thank you Bruce and good afternoon, everyone.
Before we discuss our results in more detail I'm pleased to welcome Dr., Michael Dougan to his first bio set quarterly conference call Dr. Dugel joined US in mid August as our Chief Medical Officer and medical director. He is highly respected in the molecular diagnostics industry and its.
It turned in leading medical positions that exact sciences quest diagnostics and Roche medical system.
We are thrilled to have him on our team during today's call Dr. Dugel will discuss our increased focus on neuro oncology, we see our target selector cerebral spinal fluid assays, which were launched earlier this year as having clear advantages versus.
Hi, This is standard of care we.
We are proud of our decision to support the fight against the pandemic by offering Cobot, 19 testing, which is benefiting our customers and patients as well as our company revenues during the quarter reached a record $6.6 million.
More than fourfold over the prior year of $1.5 million.
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We experienced some of the recovery, we anticipated in our commercial oncology and development testing volume compared with the second quarter that said like many other molecular diagnostic labs, our commercial testing volume has not returned to pre cobot levels, owing to lower patient visits to physician offices with resurgence in covance.
Cases currently occurring we may see an extended impact from the oncology volume.
Development and other revenue, which is primarily received from pharma and biotech companies increased from the second quarter as many <unk> clinical trials that were halted at the beginning of the pandemic has started to come back on line the.
The revenue increase.
I'll include sales of our seizure blood collection tubes in research use only or are you all kids as well as revenue from biotech development projects.
Importantly, we have continued to gain momentum with COVID-19 testing, we began operating testing in June and as of yesterday, we received a total of more than 100000 samples.
This includes approximately 20000 samples received in the past two weeks alone.
For Q3, we accrued COVID-19 testing at approximately $120 per sample, which is significantly lower on a per sample basis than oncology assets. However, this higher testing volume is driving our revenues at a time when oncology.
The volume continues to be impacted by the pandemic. We expect COVID-19 testing will have a significant impact on Q4 revenue and will continue to be an important component of our business until the pandemic subsides.
We currently have capacity to run approximately 15000 co would 19 samples per week over the past several months Weve added.
Good staff and equipment to increase daily throughput in our CLIA lab with additional actions underway to increase testing volume. Even further we are providing co would 19 testing to a growing list of clients, including skilled nursing centers hospitals clinics and surgery centers as well as other businesses, primarily located in California, but.
Receiving samples from across the country in.
Interestingly some testing has extended beyond healthcare related businesses. For example, we partnered with Hall of Fame horse trainer, Bob Baffert to provide co would 19 testing for his team including prior to this year's Kentucky Derby as you May know Mr. Baffert is the trainer avastin.
But a rig the horse that won the Derby, Joe Baffert Weiss of Mr banker and a member of his team personally thank bias up or help in providing over 19 testing in the weeks, leading up to the Derby, stating and I quote it takes a village and we couldnt have done any of that without you and your team as.
As the number of COVID-19 samples our lab receives increases.
Then timing remain proud of our team's ability to process. These tests quickly with the vast majority of results to date Centura health providers within 48 hours of receiving a sample. We've also received many complements from our COVID-19 testing customers and public health officials about our service throughout the process.
We are making good progress.
In developing our own COVID-19 special in the collection tubes and remain on track for validation in our lab later this year. The launch of these tubes has been delayed due to back orders on equipment needed to produce the high number that we require as well as the delay by the third party see euro that confirm the effectiveness of the viral killing proper.
Progress of our proprietary media inside the twos.
And importantly, we are happy to report that we are filing a patent for this important advance this week.
We are also reporting progress under our agreement with a Geo Biotechnologies COVID-19 development project. The assay will utilize the patented switch blocker technology.
Operating expenses, both powerful and versatile and we currently apply it to molecular diagnostics and clinical oncology ward is particularly well suited for liquid biopsies of either blood or cerebral spinal fluid in order to detect targeted gene mutations use to guide therapy decisions for COVID-19, the switch blocker technology could provide much higher sensitivity.
That we believe will detect viral load at much lower levels than conventional PCR based COVID-19 assays if successful biocept as an option of first negotiation to expand our COVID-19 testing capabilities with this next generation offerings.
Even during these challenging times, we continue to strengthen our core oncology business will signal.
Get developments that support growth, both near term and post pandemic.
While we discussed our provider agreement with Highmark health on our last call. It is a significant accomplishment that is worth revisiting.
Hi, Mark Health is the nation's second largest integrated health delivery system and a bluecross blueshield affiliated organization.
Terrific. The agreement was earned after a positive review by high marks Vitals program, which evaluates new technologies for clinical utility and health economic benefit.
The study included too.
Valuation of our target selector assays.
With a goal of helping physicians rapidly assess that.
The molecular status of patients with advanced non small cell lung cancer in order to select the most appropriate therapy, while also reducing the overall cost of care.
I want to mention this because integrated health systems are the future of healthcare.
These groups are seeking opportunities to innovation.
Opportunities for innovations that allow for quality.
The health care delivered cost effectively purchase.
Purchasers of health care services are contracting with these groups to deliver high quality outcomes will assuming cost risks using a simple blood sample is a cost efficient is cost efficient for physicians to profile for biomarkers in selecting therapy and for monitoring disease progression over time.
We recently expanded our portfolio of assays with the introduction of a new fish assay for the interact threeg alterations that are associated with many solid tumors, including cancers of lung colon and breast as well as melanoma there.
There are currently there are currently available therapies that target the target oncogenic fusion genes in.
Involving in track three as well as in track one and interact two genes interact one and three are the most commonly involved.
We have strengthened our patent portfolio as well last month, we were awarded a broad patent in Japan covering devices for the detection of any target of interest.
In circulating tumor cells or ctcs.
That are shed into the bloodstream by solid tumors, where a binding entity.
Or any solid surface are used for target capture detection and analysis.
This patent covers any biological sample type and includes the use of single entities or cocktails of binding entities. It also covers combinations of antibodies for capturing a wide.
Variety of tumor types. This patent fits well with our patented microbe channel and sell staining platforms. We believe the broad coverage afforded by this patent also provides the opportunity to out license the technology to other companies with a focus on any target of interest, including single cell analysis and other methodologies.
Earlier.
This week, we announced the award of a patent in Hong Kong, covering the enhanced detection of rare cells, including cancer cells, using fluorescent complexes, including Ctcs.
The method covered by this patent geographically expands our protection for the sensitive detection of cancer cells. It also combined seamlessly with our core technologies using antibodies foresee.
Wide GC enrichment as well as our micro channel intellectual property for the capture enrichment and imaging of Ctcs collected using our patented blood transport too.
These new patents demonstrate our success in expanding our international intellectual property portfolio, which is a strategic priority as we work to grow our business globally.
We now have 44 us international patents covering our molecular diagnostic technologies.
And with that I'll now turn the call over to Tim Kennedy to review, our third quarter financial results Tim.
Thanks, Mike and good afternoon, everyone as Mike mentioned for Q3 2020, we reported revenues of six point.
Point $6 million.
This increase from $1.5 million in Q3, 2019 is primarily due to $5.7 million in commercial test revenue from COVID-19 testing.
In Q3 2020, we received 52990.
Three total exceptions. This is a significant increase from 1429 total exceptions in Q3 2019 commercial volume in Q3 2020 was 52773.
Total cost of revenues was five.
5.9 million compared with $2.8 million for the prior year period.
Gross margin was 11%, which we attribute to our Cove in 19 testing business.
R&D expenses for Q3 of 2020 were $1.1 million compared with 1.2 million.
Second during Q3 of 2019 with the decrease primarily due to a reduction in laboratory allocated costs.
DNA expenses for Q3, 2020 were 3 million versus $1.7 million in Q3 2019 with the increase primarily due.
Due to legal and Investor relations expenses as well as head count additions to handle COVID-19 related activities.
Sales and marketing expenses were one dollar and 40 Skews me sales and marketing expenses were 1.43 million, which was well.
Actively flack compared to 1.46 million a year ago as a result of curtailed sales and marketing activities due to the pandemic.
Net loss for the third quarter of 2020 was $4.9 million or 43 cents per share on 11.3 million.
Weighted average shares outstanding.
Our weighted average share count reflects the one for 10 reverse split implemented in September 2020.
This compares with a net loss for the third quarter of 2019 of $5.7 million or $2.47 per share on.
2.3 million weighted average shares outstanding.
Now turning to the year to date financial results.
Revenues for the first nine months of 2020 were $9 million compared with $3.7 million for the first nine months of 2019 again with the increase.
Greece due to COVID-19 testing.
Cost of revenues in the nine months of 2020 were $11.3 million.
R&D expenses were $4 million DNA expenses were $6.8 million and sales and marketing expenses were $4.2 million.
The net loss for the first nine months of 2020 was $19.7 million or dollar 48 per share.
Cash and cash equivalents as of September Thirtyth were $16.9 million compared with 9.3 million as of December 30, Onest 2090.
Teen.
In the third quarter of 2020, as a result of robust sales and anticipated demand for COVID-19 testing the company increased consumable inventory by $2.3 million.
And grew accounts receivable by $4.8 million.
Based on historical and planned cash usage, we believe our current cash position will support operations through most of 2021, however, with the uncertainty introduced by COVID-19 on revenues and collections, our cash runway may be shorter.
As a final note.
We expect to complete our move to our new headquarters in lab facility by the Onest of September So use may onest of December.
Well, how located only about a mile away from our current facilities. The new building is designed.
To meet our commercial.
Element and administrative needs, while reducing rent expense and other facility costs.
We expect a smooth transition without work flow disruption.
And now I will turn the call over to Dr., Michael Dougan to provide an overview of our neuro oncology.
The vet strategy Michael.
Thanks, Tim I'm delighted to be speaking with all of you today. It is a pleasure to lead our efforts to further develop and commercialize bias EPS portfolio of advanced molecular diagnostic gases. These essays are primarily used to help properly diagnosed and characterized cancers in patients with advanced or metastatic disease.
Including metastatic tumors that can involve the brain and spinal cord, but.
But they are also used to monitor response to therapy in patients with cancer, an area, where we are continuing to focus efforts with our liquid biopsies.
We also currently perform and are developing a new assay to aid in the public health fight against Copenhagen team.
Since joining.
Biocept I've been evaluating various areas of unmet clinical needs in oncology and public health that we can better serve with our offerings and working with my colleagues to develop strategic projects that address these needs.
These efforts include the development of important clinical studies advisory teams publications, and additional new or more versatile ounces.
We are also for further developing the clinical market with first hand clinical technical and client service support for the commercial and research use of these products.
We are particularly excited to develop the use of our proprietary target selectors CSF passes for detecting lung and breast cancer that is metastasize to the brain or central nervous system.
Metastatic cancers frequently involve the central nervous system and advance disease, sometimes as the only manifestation of the disease. When it has been successfully treated in the rest of the body.
10% to 30% of adult patients with cancer, depending on type will develop brain metastases.
Although involvement of the central nervous system is usually.
Associated with a worsening prognosis patients with metastatic cancer are now living significantly longer due to many advances in treatment strategies and various new targeted therapies there.
There are many patients for whom timely confirmation of brain or spinal cord involvement and appropriate early treatment can lead to significantly better projected survival and mark to.
Reduction in neurologic symptoms, such as headaches impaired mobility or loss of vision.
Bias EPS target Selectra CSF asses address a significant underserved need in this area.
As the current standard of care microscopic evaluation of the Strubel spinal fluid known as CSF cytology has very.
Really limited sensitivity for detecting Metasys and provides no additional information about molecular targets for therapy choices.
Due to technical limitations of the method CSF cytology is off a negative when tumor involvement of the brain or spinal cord is suspected often generating repeat attempts to collecting CSF sample from a lumbar.
The answer procedure.
Results of our earliest clinical studies of CSF in lung and breast cancer patients as well as development will work with other tumors involving the brain has attracted the interest of many leading neuro oncologist thoracic oncologists and breast oncologist seven.
Several of these key opinion leaders are working with US as study collaborators to better style.
I wish the clinical utility of our target selector assays and determine future uses of our diagnostic assays in this underserved area of oncology.
Initial studies have already been or are being presented in 2020 at major international meetings.
Last month results from a small prospective study of our target Selectra CSF.
Facet compared to CSF Cytology was presented at the 2020 International Association for the study of lung cancer Hot topic meeting devoted to liquid biopsy.
In this study 28 cerebral spinal fluid samples from 15 patients with metastasis to the central nervous system obtained sequentially.
Four and during treatment were compared.
Target Selectra testing improved detection of tumor involvement finding ctcs in 78% of the CSF samples collected versus 55% of samples examined with conventional cytology methods.
Target Selectra testing also provided sensitive quantitative identification of actionable.
The book SFR mutations and cerebral spinal fluid that could inform more specific and appropriate treatment selection.
Results from another small study using our CSF atsis to analyze cerebral spinal fluid samples from patients with primary lung or breast cancer with either brain or left them in NGL disease will be presented later this month at the society.
I'd for neuro oncology Snow 2020 conference.
Snow is EPS Inno 2020.
More than 2600 neuro oncology professionals are expected to register for this year's conference.
We will be announcing steady results following the lifting of the data embargo.
In particular.
So there are these studies illustrate that wall CSF cytology has significant limitations and remains a qualitative tool target selector allows for a more sensitive sell specific and quantitative assessment of tumor in CSF to gauge treatment response matched with information about molecular alterations that can aid physicians in choosing the most appropriate therapy.
Okay.
This can be a more clinically effective and cost effective approach compared to existing methods to assess response to therapy, which are largely limited to conventional CSF cytology and radiology.
While CSF testing currently represents less than 10% of our oncology volume we are focused on developing clinical studies and awareness of our targets.
But your technology for use by neuro oncologist and other oncologists treating patients with metastatic cancers of various types, we expect to see this business gain volume over the next year.
While still in the early stages of developing a commercial strategy. We are excited about the traction we are already gaining our work in the coming.
In months, we'll focus on supporting the clinical information needs of our early adopters highlighting the value of our existing assays and expanding the tumor types, which we can characterize.
We are also developing more robust clinical studies related to various indications for use and developing a comp developing a comprehensive study plan that will move these essays towards widespread adoption.
The option as a standard of care.
I look forward to sharing more about our clinical development strategy and progress and upcoming conference calls with that I will turn the call back to Mike well, Thanks, Mike and welcome again to the team Idaho.
I'd also like to welcome the same Richard Kelly to Biosensor, Sam joined our board of Directors last month and brings us expense.
We've experienced in the molecular diagnostics industry, having served as executive positions and on the boards of multiple publicly traded companies.
Bruce Huebner, who has served as a director for the past seven years is retiring from our board at the end of this month, we very much appreciate his many contributions and we wish him well in his retirement.
Biocept.
The safety and well being of our employees as a priority, we're providing safe working conditions for our staff to routine Cohen testing, social distancing and staggered shifts while delivering the same excellent quality turnaround time and customer service without interruption or delay.
Our longer term corporate priorities remain unchanged.
Studies include increasing market penetration of target selector assays with a focus on neuro oncology in addition to urology breast and lung cancers.
Growing sales of our target selector molecular assay, our yield kits and our seizure blood collection tubes, increasing market penetration of our target selector ngs offerings.
The under our collaboration with Thermo Fisher and securing Medicare coverage.
Entering into additional strategic commercial and technology partnerships global and domestic.
Signing more agreements with third party health plans, including Capitated plans and expanding our relationship with the Blue Cross Blue Shield network.
Publishing clinical case.
Ladies and presenting data at scientific conferences that further validate our targets like you're testing.
Launching additional assays and strengthening our patent portfolio in the us internationally.
In addition, we are pleased that we could expand our offerings to support public health needs for COVID-19 testing and plan to continue to provide this.
This much needed service as long as the need is there.
Finally, we continue building on our position as an established leader liquid biopsy and our target selector testing provides critical information to assist physicians in determining treatment decisions for their patients diagnosed with cancer.
Our assets are based on our differentiated platform.
Forms that leverage information from both circulating tumor cells or ctcs as well as circulating tumor DNA or ctdna, both in blood and cerebral spinal fluid to date, we have tested approximately 26500 patient samples with our proprietary oncology biomarker assays and have received more than 100.
Thousand COVID-19 samples.
We fully expect our oncology test volume will gradually increase and returned to more normal levels as the pandemic subsides.
We are particularly pleased to have a strong balance sheet as.
As Tim mentioned with the uncertainty of code 19 brings to revenue and collections, our cash run rate may be shorter than we currently anticipate.
Hundred like everyone. We're looking forward to the day when the pandemic is under control and returning our business to more normal operations.
In closing I'd like to thank our entire team of Biocept for their hard work and dedication. During this challenging period as always we are committed to improving patient treatment choices and clinical outcomes and with that overview.
We're now ready to take questions operator.
Ladies and gentlemen, if you wish to ask a question on today's call you.
We will need to press Star then the number one on your telephone.
If your question has been answered and you'd wish to withdraw your request you may do so by pressing star to do.
If you are using a speakerphone. Please pick up your handset before answering your request and speaking on the call.
One moment please for the first question.
While we're waiting for the first question I'd like to mention that we will be presenting at virtual H.C. Wainwright Bio connect conference being held January.
Into 14 webcast of our presentations will be posted to our website at biocept.
Okay, operator were ready for the first question.
First question comes from Jason Mccarthy of Maxim Group. Please go ahead.
Hello, Jason.
Thank you Jamie.
Yeah.
Question and congrats on the quarter no.
Oh, thank you thanks.
So I.
I'd like to ask a bit about the Colby testing because it seems like you've been basically doubling the number of tests of specimen received each month.
So could you provide a bit more color on how much it costs.
You to run on.
On individual cobot tests compared to the reimbursement I'm trying to gauge how we should look at your on the impact to your gross margins as we go into the fourth quarter with what looks like increased testing.
Yeah, Jason Thanks for the question I'm going to let Tim answer most of that but.
I appreciate your highlight of the gross margin question, because that cobot business helped us achieve gross margin for this quarter as folks may have noticed once we put the earnings release out and one of the challenges in coated business right. Now is keeping ahead of the game with the inventories so to highlight some of the smart work. Our team has done is we've kind.
Bolt up on some inventories. So we can continue to handle this growth and I'm trying to stay ahead of some of these shortages that are plaguing the industry, but it's we're not immune to that every lab in this industry is sometimes calling each other trying to figure out solutions for whether its pipette tips or reagents or equipment.
That all needs to be solved once it is I think we can all handle even more volume, but we're doing a great job of doing that so far and excited to be able to continue to help more and more folks get this needed testing so with that I'll, let Tim address some of the other question Jim.
Thanks, Mike as Mike said, Jason.
You know doing covert testing is the least expensive thing that you do especially for a company like Biocept that was custom to do on oncology testing, which covers basically has nothing to do with that so but we've been we've worked.
Really hard.
To provide.
Capacity since we launched.
Covert testing basically the very end of the second quarter.
And as time has gone by volumes have ramped and we've gotten better and better I would say at being able to service that volume.
Dream.
As we go forward and expect to get better and better as we continue to go forward, but right now I would say for the third quarter.
Our cost of revenue associated with Covance.
Is about 50% to 55% of.
All of the revenue number that we generate associated with Covance.
As Mike said, it's been tough to get various consumable materials and.
Our leverage with that as we started wasn't all that wonderful, but as time is going.
Hi, I think we're getting better and better at that and being able to command those higher dollar higher volumes associated with Cove. It is giving us the ability to get a little bit better economies of scale.
Hi, Thank you very much and then.
One more on the.
On the call with.
Side of things, we've seen a few companies with some progress on.
The liability PCR testing as a potential new phases. The overall testing paradigm I'd like to get your take on that and if there are any play.
Plans to expand biceps capabilities into a low base testing I need to the actual lab.
Labs side.
Before the sample collection side.
Well a few answers to that Jason one is we're staying abreast of some of the advances there and in fact, our development project with the GM that might be a good fit for the enhanced sensitivity that once that at.
Assay is validated and release would Putin.
Finally, I am offer so there could be a big help there. However, we're also staying close to our clients and I think we've shared before that the majority of the specimens we're getting in our from skilled nursing Weve just kind of done a good job there and folks really like us and one of the reasons. They like US is that we don't require although we were validated for it we.
Didn't have them, we don't require a nasal test. So most of the listeners are probably aware that for a lot of the testing out there that's being done you have to be sampled up inside your nose. Our test is validated also with oral collection, meaning it's kind of at the back of your throat. So it's much easier for these residents of the skilled nursing to be.
Well to gain a sample and so so far there the skilled nursing centers are happy with this.
Oral collection and I think it maybe lessen some of the need to go to saliva that means that we're also having opportunities with schools and as you heard the racetrack and other facilities, where us alive assay might be quite helpful.
All in those populations so.
More to come on that but interesting times in the meantime, I think it was smart of us to validate both the nasal and the oral collection, because that's been a big differentiator for us.
Yes, it definitely sounds a lot easier than the nasal parent deal swaps.
Right, especially especially in that.
That group of.
Residents and patients if you think about the situation in most of those cases.
Yes.
Then I have one more for you guys don't mind a bit more broad.
So I'd like to see it.
If you could provide a bit more color on just the overall pipeline and strategy for growing your call.
Core oncology business, especially now yet.
Posted 19 test in as a bit of a cash engine to help with capital and offset.
Sure no absolutely, Jason I always want to reiterate and I and I think everybody gets this that we entered into this because we know it was a service that needed to be provided to care for.
So we're very thankful that the reimbursement covers our cost and provides a little bit of extra cushion there for us and you're exactly right that we plan to reinvest that in our core business and one of the challenges with our previous resources was really investing in the clear we define statistically significant clinical utility studies that are.
Needed to prove the true value that we bring the high Mark.
Titles thing shows we can do this and we were very fortunate to be able to be chosen as a participant in that study with relatively low cost for us in the tens of thousands of dollars. However, as you know to really create big value with these kind of studies to get tons of attention and get you in the guidelines.
You're talking about.
Larger expense and thanks to some of the the cushion that we're getting from the high volume of testing, we're doing we're going to be able to fund those going into it. So we'll be communicating more on that Dr. Dugel mentioned, our investments I think very good.
Very well today in his discussion on neuro oncology.
And that's a real area. We're differentiated you have to have the cell to do what we're doing there. So all the folks that have cell free DNA assays, while can be helpful. As a stage two can answer the question or their cancer cells present or not in the CSF. We can so it makes a ton of sense for us to invest some money there.
Get the clinical utility established that will lead us into.
Standard of care and guidelines inclusion.
Alright, Thank you very much and again congratulations on the quarter.
All right. Thanks, Jason I'll look forward to getting back to New York and seeing you guys live I missed the travel let me tell you the thing but anyway.
The next question.
It's from Sallie you mentioned.
Brookline capital markets. Please go ahead.
Ill highlight Sally.
Thanks, good quarter, and yes come back to New York to visit Us that will be great yeah right.
Yeah, I mean really good quarter I guess.
One of my questions is what.
What's your sense of I mean, it I mean, the covet volume testing.
Yes, really been expanded I mean, do you expect to see.
This level of testing volume I mean, I would say up to next year, but going into 2022.
Do you have any.
Well just like you were modeling through next.
Year, you know, we don't know what to expect but we're expecting to continue to grow it like say as you know even in just here in California, there seems to be.
Tons of demand out there and feel.
We were very fortunate Tim under sells its capabilities and operations, sometimes as well as our teams and even though we're all very thankful of them because.
With us.
We were fortunate we already had a good.
Good laboratory operation So we've been able to grow this because we already have things in place some of the other startup coded labs did not.
We had a fantastic operations team that knew how to scale the business and already had done. This before an example would be that because of our.
Relatively low volume of oncology, we never invested in automated ordering meaning the client just types into requisition as to the manually filling it out well you can't do that with the volumes. We have now swing a matter of weeks, we were able to get online ordering up and now greater than 90% of the specimens coming in here are ordered by our clients. We are a portal with a bark.
Code that goes on the sample and we just barcode and when it comes in otherwise I'd have to have an army of people doing nothing the data entry with the kind of volumes were doing so it's that's over and over we had that experience and what we're finding is and Dr. dougan just prompted me that the clients that we serve the bulk of the clients. We currently serve which is skilled nursing.
They love the service levels are getting they're not used to getting that detailed service that an oncology lab is geared up to provide with a local representative that visit them in service their staff handled their issues with people that answer the phone call 24, seven that kind of white glove service rightfully is standard of care in oncology.
Through most of the providers, but is not always the case when it comes to the bread and butter lab testing that you get so they've really appreciate what we've done and I think for US we were just.
Well positioned to be able to take advantage of this and have the right team in place to do it let me just add to that as well.
Mike said, that's really how we.
We got our Covidien business.
And it came from word of mouth I mean, it was it was servicing one skilled nursing facility and word got out to another skilled nursing facility and another and another and before you know it our volume's been increasing.
Pretty.
Weekly here so well.
Interesting okay.
And as far as the.
Standard liquid biopsy business you have seen.
An improvement in the third quarter, correct, I mean, because we.
We've seen volumes go up yes, we've seen volumes go up.
But you know not to the.
<unk> levels of growth and the levels that we had seen pre the pandemic.
For reasons one of the challenges is that we're still in early phases of adoption of our testing by the clients and it requires a fair amount of interaction with our sales team to keep that growth happening in they don't have access to the oncologists right now so it's for.
A lunch is like.
Ultimately do and things you do to visit them in person, we're getting a fair number, especially with neuro oncology is actually taking a lot of time with us on the zoom calls, but the folks that are ordering the blood testing.
They're difficult still for us to get access to and I think you've heard this from other lab people have other labs, they've seen the results over the past couple of quarters, but the.
The other thing is our sales team, especially those on the West coast. It's been a lot of their time focused on getting new covert clients right. So.
So I think as this starts to shake out going into 2021, we're going to.
Habit strategy, where we're able to now with the resources to go after both those things as.
As aggressively as we have done in the past.
Tim.
DNA expenses were $3 million in the quarter do you expect.
That kind of level to continue so fourth quarter 3 million because you said you did bring on more people.
Yes.
No like I like I mentioned, we've we've.
We've learned how to become more efficient in our operations and I.
I do expect that to go down not to pre co vid levels right spin.
Specifically, but but it will go down yes, okay.
All right.
Okay. Good well, thanks, I don't have any more questions, but great quarter congratulations.
Thank you so I think so yes.
This concludes our question and answer session I would like to turn the conference back over to Mike Dahl for any closing remarks.
Well thank you.
Operator, and on behalf of our board of directors and our very hard working team here Biocept I want to thank everyone for participating on today's call and for your interest in our company. We look forward to providing an update on our progress during our next conference call in March when we report fourth quarter and full year 2020 financial results and the year 2020 will.
Be behind Us.
Thanks, again and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
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