Q2 2021 Biocept Inc Earnings Call
Welcome to the bias that the second quarter of 2021 financial results conference call all participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing with Darcie followed by zero.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on in California Keypad to withdraw your question. Please press Star then two please note. This event is being recorded.
I'd now like to turn the conference call over to Bruce Voss. Please go ahead.
This is Bruce Voss with L. H I. Thank you all for participating in today's conference call. Joining me from bio Sapped, our Michael Nall, President and Chief Executive Officer, and Tim Kennedy, Chief Operating Officer, and Chief Financial Officer. During this call management will be making a number of forward looking statements within the meaning of the private sick.
<unk> 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 will would or the negative.
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 performance or achievements that are implied by the forward looking statements. In particular, there is significant uncertainty about the duration and severity.
Ready and impact of the COVID-19 pandemic. This means results could change at any time and the contemplated impact of COVID-19 on <unk> operations financial results and outlook is the best estimate based on the information for today's discussion for details about these risks please see the company's SEC filings, including the company's.
Our quarterly report on Form 10-Q being filed today.
The content of this call contains time sensitive information that is accurate only as of today August 16th 2021 except as required by law <unk> 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. Today, we're reporting profitability for the first half of 2021 on revenues of nearly $30 million driven primarily by our high quality RT PCR COVID-19 testing we.
We are pleased to continue providing this valuable service with the resulting financial performance and cash flow supporting investments in our core oncology business.
Revenues for the second quarter of $12 billion are significantly higher versus the prior year again due to the COVID-19 testing that.
That said <unk> revenues were down from Q1 this year due to a decline in COVID-19 test volumes with more Americans, becoming vaccinated. However.
However, with the emergence of the Delta variant or run rate COVID-19 testing in the current quarter to date is above last quarter's levels. Since last reporting total samples received for COVID-19 testing and 450000 on July 21, we are now approaching the milestone of nearly 500000 and Sam.
An increase of about 50000 samples and less than one Merck.
We are prepared for higher COVID-19 testing volume as we begin receiving samples through our partnership with the California Community College system as students return to on campus classes we.
We are already providing testing services to more than 20 colleges in southern California, mostly for athletic team.
The impact of testing for the California Community College system is largely unknown at this point as each college and the system determines its own policy. Some of already indicated interest in using <unk> for COVID-19 testing of their unvaccinated students faculty and staff importantly, we have taken steps to ensure our lab capacity can handle.
And expected influx and samples.
At some campuses, we have established on campus sample collection points and implemented an online service and collaboration with cleared for that enables both the college and students to track COVID-19 testing.
The final update on COVID-19 testing, we continue to co develop and validate the IGF biotechnologies assay.
As we've discussed the importance of this assay is an quantifying viral load regardless of the COVID-19 strain or Barry.
Quantifying viral load can be key in determining when patients who tested positive can safely return to work school or other activities, we see a valuable role for this testing, particularly with the quickly spreading delta variant.
Turning now to our core oncology business, we are highly encouraged by the ongoing adoption of see inside our paradigm changing neuro oncology assay.
Inside provides physicians with a valuable tool to diagnose and manage patients with cancer that has metastasized to the system.
<unk> system and brain.
Our assay answers three critical questions.
First is cancer present.
Second is there a target for treatment and third what is the trend over time.
Since our beta launch of this assay in early 2020, we have seen continuous growth in quarterly test volume with gains of nearly 40% from Q4.2020 to Q2.2021.
It's particularly meaningful that more than 30 of the most prestigious U S. Academic institutions have now ordered I see inside assay, even more exciting is that the majority of these institutions have become repeat customers. We view this as a strong indication that neuro oncologists, who are using our assay <unk> value in improving patient outcomes.
We intend to continue reaching out to the neuro oncology community this year and to expand our outreach activities to include the broader oncology community next year.
Our focus is firmly directed on making see inside the standard of care based on its ability to offer physicians, a more timely and accurate method to diagnose the presence of metastases to the central nervous system or.
Our pilot study showed that in patients with suspected central nervous system involvement see inside detected tumor cells and approximately 80% of cases, while the current standard of care G. CSF cytology detected tumor cells and only about 50% of cases, our goal is to secure standard of care status in there in <unk>.
C N guidelines importantly, we have a pathway that we expect will allow us to publish the clinical data that we anticipate will influence these national oncology care guidelines.
We expect to begin in the first part of our forces study by mid 2022 with a goal to establish clinical validation.
We will then conduct the second part of the study to evaluate the clinical utility of see inside to identify key decision points that can be made based on testing results. We expect to initiate the second part in 2023.
Earlier this year, we submitted an initial application to the FDA for breakthrough device designation.
Although this submission was recently denied we are gathering data based on the Fda's feedback to support a resubmission.
Our C. Inside assay is currently validated to identify metastatic cancers originating in the lung and breast, which frequently involve the central nervous system, we estimate the U S market for the assay at more than $1 billion annually with approximately 200000 patients diagnosed with metastatic cancer involving the central nervous system per year, we play.
And to expand our see inside testing of new beyond breast cancer and lung cancer for additional tumor types in biomarkers, including melanoma.
We are encouraged by Medicare as recent decision to cover and reimburse our breast cancer assay for the her two biomarker at $2435. Importantly, this coverage decision demonstrated that Medicare recognized the value of liquid biopsy as a necessary part of patient care guides.
Guidelines call for every patient diagnosed with breast cancer to be profiled for key biomarkers, including her too which is critical for physicians and qualifying patients who are anti her gene therapy, such as herceptin.
Additionally, monitoring for the her two biomarker is important as the patient's cancer can convert from her two negative to her two positive as the tumor becomes more aggressive.
In fact re testing to assess current virtue status of progression or recurrence is currently in the American society of clinical oncology or <unk> and the college of American pathologist or C. A P guidelines.
Common sites for metastatic progression in breast cancer, our bone and brain.
Making the lesson Bessie invasive liquid biopsy solution, a viable alternative to tissue biopsy.
Our target selector assay has the added advantage of profiling the her two biomarker from either blood or cerebral spinal fluid.
This decision by the centers for Medicare and Medicaid services is very important for the role of liquid biopsy and less invasive and more cost effectively identifying and monitoring her two biomarkers.
In May we announced an agreement with quest diagnostics to distribute our targets electric N G S lung cancer assay.
Quest is currently Onboarding, our targets electric Engie S panel, which provides genomic profiling of patients with advanced non small cell lung cancer.
We expect the beginning in the fourth quarter Quest oncology Division will be kept marketing this panel to their customers. It is of course excited to partner with the world's largest clinical testing laboratory, who shares our passion for improving patient outcomes.
Lung cancer is the third most common cancer in the United States and the leading cause of cancer deaths. The CTC estimates that more than 235000, new cases of lung cancer will be diagnosed this year with non small cell lung cancer accounting for 84% of these cases.
Our target select your NGF panel for lung serves an important need as tissue can be difficult to retrieve from patients with advanced cancer and even when it is collect the amount of tissue can be insufficient to provide results to guide treatment are blood based panel is able to detect multiple biomarkers to qualify patients for therapy.
Cuda newer therapies like targeted treatments that are allowing patients to live longer with a better quality of life.
Before Jim reviews, our financial results I want to welcome some new buyers up team members earlier. This month, we announced the appointment of David car lender as senior Vice President of commercial operations, Dave brings more than 25 years of Indias spring industry experience that will be highly valuable at this critical time commercializing <unk>.
Okay.
Last month, we welcomed Linda Rubenstein and Anthony no morality as directors, increasing the size of our board Tonight.
It's Linda and Anthony you don't have significant financial and leadership experience to help us achieve our strategic goals and guide our long term success.
Also in July <unk> was appointed Chairman Sam joined our Board last October and brings to <unk> substantial experience in diagnostics operations sales and senior leadership.
This exceeds our long term chair, David Hale and interim chair if a wilson.
I'm pleased to report that both David and Fe remain as directors.
With that I'll turn the call over to Tim Kennedy to review, our Q2 financial results Tim.
Thanks, Mike and good afternoon, everyone for Q2.2021, we're reporting net revenues of $12 million, which is up significantly from 917000 in Q2 of 2020.
With the increase due primarily to COVID-19 testing.
Commercial revenue for the second quarter of 2021.
<unk>, a $1.1 million, increasing reserves for potentially uncollectible, aged accounts receivables.
This reserve relates to testing performed primarily in 2019, which was to be reimbursed in 2020.
That reimbursement process was hindered by the pandemic, we continue to be working to collect her this testing, but in the meantime, we determined it was prudent to increase the reserve amount.
Prior to the increase in reserves revenues for the second quarter were $13.1 million and included commercial tests revenue of $12.1 million in RT PCR COVID-19 testing along with 926000 in oncology.
<unk> testing 33000 and development services test revenue.
And 34000 in revenue for distributed products target select or are you owe kits.
Sure blood collection tubes, and payments from a G for services associated with the development of a COVID-19 assay.
As a comparison revenues for the second quarter of 2020.
Were 841000, and commercial tests revenue, including 37000, RT PCR COVID-19 testing 804000 and oncology testing.
38000, and development services pest revenue and 38000 in revenue for distributed products target select or are you a kids and seashore blood collection tubes.
In Q2.2021, we received 102172 total exception.
This is an increase from 1306 total obsessed humans in Q2 of 2020.
But down from Q1 of 2021 total access of 145110.
As Mike stated, we anticipated a sequential quarter decline in COVID-19 testing boss. However, COVID-19 testing has ramped up in Q3.
Due mainly to the Delta Varian.
We also expect to begin receiving samples from our agreement with the California Community College system later in the current quarter.
Total cost of revenue was $7.5 million compared with $2.5 million for the prior year period with the increase primarily due to COVID-19 related collection kits and consumable expenses.
Yeah.
As we continue to leverage the fixed components of our cost.
Our cost of revenues as a percentage of net revenues decreased by approximately 213% from the prior year period.
Contributors to this expansion in gross margins included better pricing on COVID-19, consumables and COVID-19 collection kits.
And lower facility costs related to the relocation we completed in late 2020.
R&D expenses for the second quarter of 2021 were $1.1 million.
Paired with $1.6 million a year ago.
With the decrease primarily attributable to lower facilities costs and cost of revenue allocation for R&D.
We expect R&D expenses to increase in the coming quarters as we begin the first force the clinical study.
G&A expenses for Q2, 2021 were $3.3 million versus $1.9 million in Q2.2020 with the increase primarily due to headcount additions and other expenses related to COVID-19 testing.
Sales and marketing expenses were $1.9 million compared with $1.3 million in the prior year period, resulting primarily from higher commission payments associated with COVID-19 sale.
Net loss for the second quarter of 2021 was $1.8 million or <unk> 14 per share on $13.5 million weighted average shares outstanding.
This represents a $5.5 million improvement in net income even with the impact of the $1.1 million increase in reserves.
This compares with a net loss for the second quarter of 2020 of $6.4 million or 51 cents.
Per share on $12.7 million weighted average shares outstanding.
Now turning to our year to date results.
Net revenues for the first six months of 2021 or $29.8 million, which compares with $2.4 million for the first six months of 2020.
Revenue for the 2021 period before the impact of the increase in reserves included $30.7 million in commercial pest revenue.
73000, and development services pest revenue and 96000 in revenue for target select or are you, a kit and seashore blood collection tubes and payments from a G.
Operating expenses for the first six months of 2021 were $28.9 million and included.
Cost of revenues of $16.5 million R&D expenses of $2.2 million G&A expenses of $6.4 million and sales and marketing expenses of $3 nine one.
Operating income for the first six months of 2021 was 916000.
A $13.5 million improvement.
From an operating loss of $12.6 million for the first six months of 2020.
Net income for the first six months of 2021 was 771000 or six cents.
Per diluted share on $13.4 million shares outstanding.
This is a significant improvement in the net loss for the first six months of 2020, a $14.8 million or $1.44 per share on $10.3 million weighted average shares outstanding.
We reported cash and cash equivalents as of June 32021 of $19.5 million, which is up from $14.4 million as of December 31 points in 'twenty.
During the three months ended June 32021.
Our cash balance increase.
Due to the addition of $1.2 million from increased collection and then the additional $3.9 million through an ATM facility.
With that I'll turn the call back to Mike Mike.
Thank you Jim before opening the call to your questions I want to remind you of our corporate priorities which include the following.
Supporting the full commercial launch of our C inside assay.
Initiating clinical studies with the inside to support adoption of standard of care under <unk> guidelines span.
Expanding our see inside testing menu for additional tumor types and biomarkers.
Increasing sales of our full range of target select your assay.
Growing sales of our targets electric liquid biopsy kit and <unk> blood collection tubes.
Entering into additional strategic commercial and technology partnerships like the agreement with Quest diagnostics.
Spanning our COVID-19 testing services to the California Community College system.
In validating and commercializing our next generation Quantitate, a COVID-19 assay that was co developed with <unk> biotechnologies.
Our portfolio of targets selected based assays provides critical information to assist physicians in determining treatment decisions for their patients diagnosed with cancer.
Our assays are based on our differentiated platforms to leverage information from tumor cells cell free DNA and RNA in both blood and cerebral spinal fluid.
To date, we have tested nearly 30000 patient samples with our proprietary oncology biomarker assays and have received nearly 500000 samples for COVID-19 testing.
We expect revenues related to the COVID-19 testing to remain meaningful throughout 2021, noting that circumstances could change and the remainder of the year.
We also anticipate increasing adoption of our C. Inside assay as we develop collaborations in clinical studies to obtain standard of care designation.
And to support our commitment to improving patient treatment choices and clinical outcomes, we have a strong balance sheet.
With that overview, we're now ready to take questions operator.
Ladies and gentlemen, if you wish to ask a question. During today's question and answer session. You will need to press Star then the number one on your telephone. If your question has been answered and you wish to withdraw your request you may do so by pressing the pound key.
You're using a speakerphone please pick up your handset before entering here at quest one moment. Please for the first question.
Operator, we're all waiting for the first question I want to remind listeners to view, our neuro oncology webinar discussing see inside for the diagnosis and management of cancer involving the central nervous system. The.
The webinar featured a technology overview, and leading neuro oncologist, Dr. Pre okun taker at Northwestern University, Dr. Nicholas Blunden at Yale University and Dr. Amir Azotic Barrow Neurological Institute viewing case studies using the C inside assay with subsequent patient outcome.
The link to view the webinar is on the homepage of our website at <unk> Dot com.
I'd also like to mention that we will be presenting at three upcoming virtual investor conferences. These include the H C. Wainwright 20, <unk> annual Global investment conference being held September 13th through the 15th.
The Oppenheimer virtual fall healthcare life Sciences at Med Tech Summit being held September 20th 223, and the Cantor Fitzgerald Virtual Global Healthcare conference being held September 27 through 30.
We are also scheduled to be present to present in person at the LD Micro main event conference on October 13th in Los Angeles presentations and webcast, we posted to our website at <unk> com.
Okay, operator, we're ready for the first question.
Yes.
Our first question comes from Jason Mccarthy with Maxim Group. Please go ahead, Hey, Mike Thanks for taking the questions a couple of questions first.
First on the oncology side.
Do you expect now that you have the reimbursement for the breast cancer assay.
The news with class with the NGL lung and all the work that youre doing on the CNS side to potentially accelerate your data collection.
And maybe you can give us a little bit more color on how that data is being collected and kind of feeding into that relationship with prognosis, where we see the potential a lot of value.
Monetization of that data long term.
Yeah, No. That's a great question, Thank you, Jason and good to catch up.
First of all interestingly.
I'll pivot in a second to the oncology, you're asking about but we actually have deepened our relationship with broad based even on COVID-19 data, which is valuable to them as well. So that is also getting uploaded to prognose in its actually increase the way we work together and then.
As you pointed out the more adoption, we have of our assays the more valuable that relationship becomes because we're enriching their database at a faster clip with higher volume and notably the nexgen.
Sequencing assay, we develop a thermo Fisher thats now going to be marketed through a partnership with quest, we anticipate will really ramp that up once it goes live in Q4 and takes off next year in 2022.
Can you talk a little bit about that you had mentioned prognose in the Covid data anything.
About the type of data that they're collecting as their information on.
The vaccinated people levels of virus that they may have as their positive all the things that people are hearing about.
And the media is that the type of information, they're trying to collect.
Yeah.
That's actually an important point I think for folks to get more clarity on what we would be providing first of all we always wanted to remind folks. This is absolutely anonymous non identifiable information to a person and very much compliant with HIPAA and the privacy laws. So but it does provide incidence you know we're getting the information.
On age.
Region et cetera things like that.
That's basically the information when you look at our requisition other than <unk>.
Social security and name and things like that which are not delivered you know things that would be there would be.
Whether the patient has.
Other comorbidities and other things that would be delivered to <unk> and entered into our laboratory information system.
Will there be an opportunity.
Two or any interest in getting contracts for testing with large academic institutions, we've seen them with other testing providers kind of sporadically different regions of the U S.
That's something that southern California, or California schools May look to do and what what could be the value of something like that.
For your company.
Well are you, meaning for Covid testing for Covid testing right, sorry, I should've been much but that's okay.
Covid testing.
Have the agreement with the community College system, which is $2.1 million students back staff and that's been onboard it as we speak.
So this is the first week of that testing for the general population since last spring, we've been providing testing for many of the athletes and sports teams. So we already worked with them when it comes to the UC system. It elsewhere or are they generally take care of their own testing there could be some chance for some overflow, but most of them have medical centers that already do the tests.
Our relationships in place.
And just a question for Tim can you give us a little bit more granularity on.
How much of the testing revenue is flowing back into the core.
And on the oncology testing business and maybe split that between being Covid testing in oncology for us.
How much of the spend is flowing into the <unk>.
You know most of the revenue that we derive from.
COVID-19.
Is fueling the consumable purchases associated with actually doing the COVID-19 testing so it's not.
It probably gosh.
I don't want to give you a percentage off top my head, Jason, but the lion's share of the spend or the associated specifically with Covid testing.
Okay.
Is there any interest in expanding further or is it all depends in terms of personnel.
And overhead or is that dependent on how COVID-19 goes over the next couple of quarters or months or whatever.
Yeah, we are prepared certainly to take on without significant expense.
Everything that Mike was talking about with regards to community colleges. So we have capacity, we have built capacity over the last year in COVID-19.
Capabilities for testing we are becoming.
More efficient at processing, our COVID-19 samples.
We've negotiated a lucrative deals with our Covid collection tubes.
And have reduced the overall costs associated with that as well as.
In the CLIA laboratory.
Costs associated with processing those those.
Covid test as well so much more advanced from today.
And then where we were when we first started doing COVID-19 testing.
And Jason what I was going to add to that exactly what Tim said it first of all hats off to Tim and the operations team for helping us scale. The business. So rapidly as we've talked about in the past well, Tim and I and the entire leadership team has been in the laboratory industry for the bulk of our career none of US had the scale of business as rapidly as what we've had to with Covid and the experience.
So they brought to the table paid off but much of the investment we've made and that is actually quite helpful for oncology business going forward. So the instruments that we use for Covid can also be used for oncology. So we've got the capacity now to grow much faster than we would've been able to a year ago. Another example is assessing for folks that don't know what it assertion means it means.
Input the.
Sample that's coming in into the computer system. So it can be tracked that's now done via the web at the client site comes in with a barcode into our site in fully automated all the way through reporting we're now going to be moving that over to oncology. So we can scale that part of our business as well. So a lot of this money that's been invested to build this COVID-19 business is actually quite.
Right appropriate for the oncology business going forward as we grow that will require less resources to scale that part of our business because of these investments we've made over the past year and continue to Bang.
Great. Thank you fellows.
Thank you Jason Thanks, Jason.
Our next question comes from Kumar <unk> with Brookline capital markets. Please go ahead.
Thanks for taking my questions.
With regard to COVID-19 this thing.
How much pooling all you're doing income bump if this thing.
And in terms of capacity will be strong.
I'll, let Tim answer that he's our expert and everything going on in the lab. So Tim Yeah, No. It's a great great question, we have tremendous capacity.
If we were to go with pooling.
Right now we have capacity to do somewhere in the vicinity of approximately 30000 Covid tests a week.
Obviously that significantly increases with.
Something like pooling, which would probably take us about 150000 a week.
There so it is a pretty.
Significant increase if we were to go with that piece of it and just you know.
We haven't made any public statements about how we process the samples, but we're very aware of that and it makes a lot of sense for both laboratories to look at that as well. So it's a good question Kumar.
Next with regards to the health plan.
So it looks like you already have more than 200 million lives from the holidays.
How are you guys thinking you think this is kind of how you guys are.
Planning to do more work to get like a more life on the Colorado age out or how do you guys think about where he is time based model.
Yeah No. That's another great question, you know one thing we've done pretty well here for being a relatively small laboratory historically until Covid was get a lot of coverage policies and that was because I think folks who are excited about the idea of liquid biopsy and the cost savings for the system, but we as you know we just hired a new commercial leader Dave currently under him.
One of his goals is to hire a new senior leader for managed care. So that's somewhere and we're looking to recruit in the meantime, we have folks that focus on the health plan contracting today as well as the hardworking billing and collections team that worked for Tim that work on that every day now keep in mind on the COVID-19 for those that don't know.
It's under the cares act by law payers are forced to pay for the COVID-19 testing, so where we see sometimes the challenges on the oncology side badly.
Especially when you look at the value that's delivered for our whole industry with laboratory in oncology testing, but at the same time with the focus on CSF. In these patients that are late stage cancer that don't have other options. We're having really good luck getting paid there too we want to put a lot more ammunition behind it. Another example of how we're reinvesting in the business to grow faster.
<unk> collect more money in the future with the revenues from Covid.
Okay. Maybe finally, a question on how much of that plant plus the inside.
There are a lot of the states.
States are ready to go and kind of thing.
Ordering how are you thinking in terms of penetrating both state plan.
What kind of.
Pfizer do we have that.
Sure well, we have 10 hardworking salespeople around the country and we're looking to expand that but right now we're mainly focused foresee inside on neuro oncologists and for those that aren't familiar neuro oncologist store, especially the generally find in either very large oncology practices or more typically in a teaching hospital.
<unk>, such as northwestern or Yale or UCSD Moores Cancer Center, MD Anderson Mayo places like that and we're in almost all of those.
So in fact, we are in over 30 of the leading academic institutions now across the country. So theres very few regions, where we don't have a foothold at this point so now over the coming year, our salespeople will continue to nurture those relationships and move that on into medical oncology as we go into 2022 with that will be.
Investing more once again, taking the revenues from Covid and investing in our sales and marketing organization to better penetrate the entire U S. But right now we're achieving our goals by focusing on the neuro oncologists and growing the business. There. These are the folks that are experts in metastatic cancer to the brain and central nervous system and so it's important that we do.
Get them on our side and it folks watch that webinar they'll see how passionate they are about what we're doing.
Okay, great. Thanks for taking my questions.
Thank you.
Our next question comes from Michael <unk> with Maxim Group. Please go ahead.
Hey, guys. Thanks for taking the question.
Sure.
So I'd like to ask.
Just a bit about the COVID-19 testing numbers going into the second half in particular, you know over the last months.
Received around 50000, and youre expecting that to increase due to the California community College system. So.
Given that you have you know it seems like there's some increased penetration within the testing market here. So could you actually surpassed the run rate you achieved at the peak of the pandemic earlier this year as we move into the third quarter.
Well I'll, let Tim weigh in on that but you know I think it.
If we had a crystal ball life would be so easy, but with the colleges as we've talked about it in the script. They all have their own process and policy. So it's been kind of hard to predict what to expect from these groups, but we do anticipate yes, there'll be a sizable amount of volume coming from them.
We were doing about 15000 in a week and could we get that big I guess it depends on Delta you know on one hand of course, we all hope that this doesn't get to that level, but we're starting to see it.
With a vengeance and so we're prepared.
We can handle it and we'll be ready when the volume comes if it does get that hi, Tim do you want to add anything to that yeah. The one thing I'd say is that we remain very nimble in the COVID-19 area, especially.
Because of the unknown volumes that could come from the community colleges.
Certainly seen an increase in testing from our skilled nursing facilities as well.
So we've seen some skilled nursing facilities come back with Covid.
Covid positive results on an unvaccinated as well as vaccinated and as a result of that the increase the amount of testing that they're doing on a on a weekly basis.
But it'll be interesting to see how the colleges impact that.
Based on the age.
Age group of the college students that are attending that community colleges.
We don't we don't think that that.
A majority necessarily of those folks that are attending pending colleges are already.
Vaccinated, so it's difficult to tell because it's not only the students, but it's also the faculty so we'll see here as the third quarter progresses, but.
With regards to that volume, but it certainly could be equal.
Equally as big as what we've had in the past that our peak and could potentially exceed that but we just don't know it just yet and we will continue to give updates for folks on the COVID-19 volume once a month or so just like we have been so people can see real time kind of how that's looking.
Alright. Thanks.
I'd also like to ask just how vaccination plays into the Nextgen <unk> test.
Like among vaccinated individuals a simple yes, no test maybe more less useful than a more quantitative test. So I'd like to ask if this plays a role in the rationale and potential longer term durability and also as Jason mentioned it is there more of a significant COVID-19 data play with prognosis.
If you are able to determine things like viral loads between vaccinated and unvaccinated individuals'.
Well I think that's very thoughtful that's not something we've talked about with them, but you have given me some ideas at this point that we could.
Interesting you asked about the importance of quantitative and I've not seen it yet, but evidently I heard today from one of our scientists that there was an article or an editorial in the journal from Amp. The association of molecular pathology that talks about the importance of quantitative with Covid and so yeah, we do think thats meaningful and we continue to work with them.
On getting that assay commercialized.
Alright, Thank you and then just one more.
So what sort of data do you guys think that you're going to need to demonstrate to the FDA.
To get see inside.
Consider it as a breakthrough device.
Well you know.
This was very important for us to get that initial round of feedback from them.
<unk>.
With that.
Going into great detail, we need to have more patients in actually the normal cases of normal is relatively it's a difficult thing when it comes to cerebral spinal fluid, but not impossible. We did it when we did the validation to operate in our laboratory and we just need to enrich that population and these are people that don't have diagnosis of cancer.
So we need to get a greater number of those in the samples and we think we'll be able to make that progress. We're working on that now and we'll have.
Further information as things move forward. In addition, we got some really good feedback on.
They're really two questions. When we talk about our 123 approach. We've got number one is cancer, president, which is kind of a diagnostic claim the number I'm sorry, the number one and three questions and then number three is there a trend and so there really is two applications for the assay that each could have their own breakthrough one is the diagnosis claim the other one is.
What it means to monitor so that's the I think more valuable and exciting one for us long term, but we need to nail that first part down to have a clinical validation done. So we're focused on that today.
Alright, Thank you very much for taking my questions.
Sure sure. Thank you Michael.
This concludes our question and answer session I would like to turn the conference back over to Mike Doyle for any closing remarks.
Thank you operator.
On behalf of our board of directors and the hard working team at <unk> 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 November which is hard to believe that the next one in November when we report 2021 third quarter financial results.
Thanks, again and have a great day everybody.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.