Q3 2022 Biocept Inc Earnings Call
Pardon me. This is the operator speaking to biotech third quarter financial results Conference call will begin momentarily. We just trying to ask please remain on the line once again, the biotech third quarter conference call will begin momentarily. Thank you for your patience.
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Good day and welcome to the biotech third quarter financial results Conference call. All participants are in a listen only mode.
Please signal a conference specialist by Christmas Darcie, followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on your telephone keypad Bitch. All your question. Please press Star then two please note. This event is being recorded.
I'd now like to turn the conference Jody Cain. Please go ahead.
This is Jody Cain with L. A J. Thank you for participating in today's call joining me from bio sector, Richard Kelly, Chairman and interim President and Chief Executive Officer, and Anthony you know morale as interim Chief Financial Officer. During this call management will be making a number of forward looking stay.
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 what or the negative of those terms.
These statements involve known and unknown risks and uncertainties and other factors that may cause the 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 that.
Duration severity 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 available for today's discussion for details.
These risks please see the company's SEC filings, including the company's quarterly report on Form 10-Q for the period ended September 30th 2022 filed with the SEC on November 21st 2022.
Content of this call contains time sensitive information that is accurate only as of today November 28, 2022, except as required by law.
Claims 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 to Sandra to totally Sam.
Thank you Jody and good afternoon, everyone.
It has been about nine months since Anthony, though and I assumed our current operating roles at Viasat.
And more than five months since our last investment community conference call.
We're delighted to be speaking with you today for an update on our business and our recent financial performance.
Anthony you know will speak to the numbers in a moment.
But before we begin I'd like to thank him and his team both internal colleagues and external professionals for their hard work in getting our Form 10-Q for the second and third quarters of this year are finalized and filed.
The list of companies that have completed two 10-Q filings and 11 day cannot be log.
We are certainly not happy being on this list.
It is truly took heroic efforts and many many hours were devoted to completing those documents.
And as of last Monday, we are current with our SEC filings.
I'd also like to thank everyone joining us today for their patients with the scheduling of this call but.
But we chose to delay the call a bit rather than compete with the Thanksgiving holiday.
In terms of the business I'm pleased to share our progress in our goal to establish <unk>.
As a leader in the emerging category of diagnosing cancers that have metastasized and central nervous system.
We are well positioned to achieve this goal with our C. Inside assay, which is the first commercially available product to measure CNS biomarker status in real time.
As a laboratory developed test the inside is analytically validated and run commercially in our CLIA certified cap accredited laboratory here in San Diego.
As an update.
Following a college of American pathologists or cap inspection last month.
Our labs capped accreditation has been renewed for the next two years.
We recently announced with tea inside is now validated to detect and quantify tumor cells and this will ribeiro spinal fluid of patients with melanoma, who are confirmed or suspected of having leptomeningeal disease.
This is a devastating complication and which metastatic cancer spreads to the membrane surrounding the brain and spinal cord.
This validation expands the commercial use of <unk> beyond breast cancer.
Non small cell lung cancer and other carcinoma. So now include melanoma, which is the third most common tumor type.
In CNS metastasis.
The importance of detecting CNS metastasis cannot be overstated as targeted therapies can oftentimes reduce our resolve.
Debilitating symptoms and extend life expectancy.
That said the current standards of care, which are CSF cytology and clinical evaluation via MRI have limited sensitivity and specificity.
Which creates challenges for physicians in managing the disease.
And determining the best course of treatment.
And pilot studies <unk> continues to demonstrate high levels of sensitivity and specificity. Additionally, you see inside as both qualitative and quantitative.
Our key advantages and monitoring the response of Leptomeningeal tumors to treatment and improving the ability to make or change treatment decisions.
Our first application for CN side represents a major major commercial opportunity for biotech.
We estimate the annual market opportunity of $1 $2 billion in the U S and $2 billion globally.
We plan to explore the use of <unk> for additional indications that could further expand this market opportunity including.
Including for other diseases beyond cancer does that affect the CNS.
P&C Cynthia sides early access launch about two and a half years ago.
We have continuously reported consecutive quarterly increases in ordering volume.
I am pleased to report this trend continued into the third quarter with fee inside volume, increasing 8% sequentially and up 176% over the prior year.
Our customer base has also expanded with 28 of the elite 64 National Cancer Institute designated cancer centers, having ordered <unk> Si.
We expect some slowdown in ordering during this year's fourth quarter as historically cancer testing is impacted by the holiday season.
During our last call in June we introduced three initiatives to achieve our goal of becoming a leader in neurological tumor diagnostics today I'm pleased to share our progress against each of them.
Our first initiative is to drive the generation of significantly more evidence demonstrating the clinical utility of <unk>.
We plan to use this evidence to support reimbursement and the incorporation of see inside into clinical care guidelines, which we believe will broaden physician adoption.
Starting with our company sponsored for the clinical trial.
Patient enrollment has now opened up the first clinical sites with a second site expected to be cleared before year end or in early 2023.
The <unk> study is a two part prospective clinical trial.
So we will enroll patients with breast or non small cell lung cancer, who have suspected or confirmed leptomeningeal metastases.
Trial is designed to compare <unk> inside with conventional care techniques, such as CSL cytology and radiologists.
The goal of the <unk> trial is to further evaluate the performance of C inside and monitoring response to treatment.
Prospective clinical trials set it.
[noise] excuse me and to assess the impact of C. Inside on treatment decisions made by physicians.
This trial is focused on demonstrating clinical utility, which is based on the call.
And to what extent physicians find value in the detection of disease.
And now I'll see inside influences them in their decision, making we believe evidence of clinical utility will support higher reimbursement decisions as well as achieving standard of care status.
Earlier this month, we announced participation in an investigator initiated studies to better understand the development and progression of metastatic breast cancer and brain metastases Android Leptomeningeal disease. This.
This 20 patient pilot study is being conducted by leading breast oncologist, Dr. Michelle Mollusca, and Laura <unk> from the University of California, San Francisco under a grant from the California breast cancer Research program.
And the University of California, San Francisco brains for.
Yeah.
The study is designed to identify biomarkers associated with CNS metastasis, enabling a better understanding of the treatment response prognosis and treatment resistance that may improve the management of CNS disease in patients with metastatic breast cancer.
Results from cerebrospinal fluid using <unk> inside assay and batch patient blood samples will be analyzed and compared to detect and characterize cancer N C. A F.
With the goal of identifying new targets and to guide therapeutic decisions.
This study is notable for several reasons first it is being conducted by the oncologist rather than by neuro oncologist signaling that our test is gaining awareness beyond the neuro oncology community.
Second the California breast cancer Research program and the breast cancer program at UCSF are part of the Baidu administration cancer Moonshot.
Which is aimed to accelerate progress against cancer.
Third and perhaps most importantly, we expect that results will demonstrate the vastly superior ability athene side compared with blood to detect and quantify tumor cells in the CNS.
We intend to solicit and fund.
Additional investigator initiated trials, including some that may lead to expanded the inside market opportunities.
I'm also pleased to announce the three posters featuring <unk> side were selected for presentation.
At the society of Neuro oncology annual meeting, which took place earlier this month.
This is the Premier Neuro oncology conference and these presentations are important and generating further awareness and interest in seeing inside amongst our core customer groups.
As well as Biopharma companies that are conducting studies with neuro oncology therapeutics.
One of our posters covered her to heterogeneity of the observation in metastatic tumor.
With this data currently being prepared for publication in a peer review journal.
The other two posters provided compelling data demonstrating <unk> capability.
In CNS primary to an area, we intend to further evaluate for expansion.
Of note. These studies were presented by lead leading neuro oncology key opinion leaders, Dr. Pre acoustic car of northwestern University and Dr. Santos to sorry at Providence, Southern California.
Our second initiative is to focus on leveraging the insights to drive collaboration with Biopharma companies that are seeking to develop new treatments or expanded use for existing treatments for CNS tumors.
The ability of <unk> to capture and characterize circulating tumor cells in cerebrospinal fluid enables the identification of biomarker targets that are susceptible to approved and investigational therapies. Additionally, the ability to quantitatively monitor the level of cancer cells in the CSF drone treat.
That can indicate therapeutic response.
See inside May provide an observational endpoint for these trials.
And subject to inclusion in standard of care guidelines.
Has the potential to become an efficacy endpoint indicator for therapies undergoing clinical investigation.
As you May have seen we announced our first biopharma collaboration in June with plus Therapeutics do you see inside my respect <unk> phase <unk> trial to evaluate response to treatment and treatment efficacy of rhenium 186, nano liposome in patients with Leptomeningeal disease, We also announce.
Our first day inside Biopharma collaboration revenues in the second quarter.
We continue to pursue additional collaborations through a robust funnel of potential leads having identified more than 50 relevant opportunities.
Yes.
And our third initiative is to identify additional technologies products and services, we can in license or acquire that can augment our offerings to neuro oncologists we.
We are very early in this process yet remain excited about the prospects.
As an update on our COVID-19 business.
We do not anticipate providing this testing service much beyond the end of 2022.
It's notable that we have received more than 1 million samples for COVID-19 testing since we began offering this service in June 2020.
With the resulting gross profit helping to fund our see inside activities.
As previously announced we have judiciously exited most of our blood based oncology diagnostic businesses to focus our resources on see inside.
However.
We continue to support existing diagnostic and Biopharma company collaborations that still requires some aspects of our prior blood based programs.
With those comments I'd like to turn the call over to Anthony No morality to review our financial results. That's Anita Thanks, Dan and thanks, everyone for joining US today as mentioned, we recently became current with our quarterly SEC filings, Although we filed our 10-Q for the second quarter on November 10, we filed our 10-Q.
Third quarter on November 21st today, I will focus my room.
<unk> on our Q3 and nine months financial results.
Starting with our third quarter results net revenues for the three months ended September 32022 were $5 6 million, which included $4 $7 million in COVID-19 test revenue.
This compares with net revenues for third quarter of 2021 of $17 5 million, which included $16 5 million in COVID-19 test revenue.
We accession to 49874 commercial samples during Q3 of 2022 compared with 152796 commercial samples during the prior year period with the decline due primarily to lower COVID-19 testing volume cost.
The revenues for the third quarter of 2022 was $5 $8 million compared with $11 $3 million a year ago with the decrease primarily related to lower COVID-19 testing volume.
R&D expenses for the third quarter of 2022 were $1 $4 million, which compared with $1 $3 million for the third quarter of 2021.
G&A expenses for the third quarter of 2022 were $3 million.
Compared with $3 5 million for the third quarter of 2021 with the decrease primarily due to lower stock based compensation and lower head count.
Sales and marketing expenses for this years third quarter were $1 million compared with $1 $9 million a year ago with the decrease due primarily to reduction in sales commissions expense.
Net loss attributable to common stockholders for third quarter of 2022 was $5 $1 million or 33 cents per share. This compares with a net loss attributable to common stockholders for the third quarter of $2021.
$6 million or four cents per share.
Turning to our nine months results net revenues for the nine months of 2022 were $36 $1 million, which.
Peers with $47 3 million for the first nine months of 2021.
Operating expenses for the first nine months of 2022 were $49 $5 million and included cost of revenues of $24 1 million R&D expenses of $4 $9 million G&A expenses of $4 $2 million and sales and marketing expenses.
$6 3 million within G&A $3 $5 million of expenses were nonrecurring.
Net loss attributable to common stockholders for the first nine months of this year was $13 6 million or <unk> 80 per share. This compares with net income attributable to common stockholders for the first nine months of $2021 $1 million or one cent per share.
We reported cash of $18 million as of September 30th 2022, with those comments I'll turn the call back to Sam.
Thanks Antonio.
I want to mention that last month, we hosted our second K O L. Webinar. This one featuring neuro oncologists.
Dr. Preapproved, the car from northwestern University and Dr. Sima lag Paul from Stanford University.
Both discussed the real world use of <unk> inside in their practices and their institution. We invite you to watch this compelling webinar, which is available on the <unk> side page on <unk> Dot com.
Now before opening the call to your questions. Let me summarize by stating that our goal is to establish leadership in the emerging category of neurological tumor diagnostics.
We intend to generate the requisite clinical utility evidence that will support the inside reimbursement.
And adoption into patient care guidelines.
We're also focused on forming collaborations with Biopharma companies.
That are developing treatments for CNS tumors.
We faced several near term milestones, including the follow up.
We expect to announce our second revenue generating Biopharma collaboration either later this year or early next year.
We plan to open an additional center in the <unk> clinical trial again, either later this year.
Or early next year.
We have one investigator initiated trial with see inside already underway and are seeking opportunities for additional independent trials.
And we expect see inside clinical study results to be published in a peer reviewed journal.
Sometime in the first half of 2023.
Lastly, I want to welcome <unk> newest director Quintile Haddock.
As a CPA with more than 20 years of financial and accounting experience Quinn will be a valuable addition to our board and also as a member of our audit Committee.
In closing, we believe <unk> is on an optimal path for growth and building shareholder value. We look forward to sharing our progress on the goals on upcoming quarterly calls.
And as always we are committed to improving patient treatment choices and clinical outcomes and with that overview, we'll know or we're now ready to take your questions operator.
Thank you and ladies and gentlemen, if you wish to ask a question. During today's question and answer session. You will need to press. The Star then one on your telephone keypad.
You'd like to remove yourself from Q you may do so by pressing Star then two.
Once again that it started in one to ask a question and one moment. Please for the first question.
While we are waiting for the first question with the economy review now completed and our SEC filings up to date.
We look forward to keeping you abreast of our progress by resuming our practice of holding quarterly conference calls also Edson Nino and I will be in San Francisco during the annual J P. Morgan Health care conference and are available for one on one meetings January nine through the 11th please contact L. L. H, a if you would like to schedule some time with us.
Okay, operator, we're ready for the first question.
And that question will come from Ken <unk> with Brookline capital markets. Please go ahead.
Hi, good afternoon.
I have a couple of questions.
First is what Disney expense space look like.
After you exit the Covid testing, assuming that that will occur at the end of the year.
Hi, Ken Thanks for the question I'm going to let Antonio answer. This one go ahead yeah.
In anticipation of the exit of the Covid, we had started a reducing our expense base.
Not only from the operating side in headcounts, and we had it we had incurred some expenses to to make.
Make that happen this year and you'll see some improvements in the expenses going forward after the fourth quarter, but there will be definitely reductions in the expense base.
Youre not in a position to give specifics at this point.
No I really can't I can't project at this point.
Okay fair enough.
The next.
Couple of questions are interrelated and they relate to CN side and.
Your ability to expand use of it.
Yes.
The designated National cancer centers so.
How are you trying to touch the cancer centers that have yet to order what are the gating factors for you in doing so beyond the obvious that you have probably a minimal number of people out making calls.
And finally, what experience have you had with repeat orders of late.
So many many good questions in there camps as you may or may not be aware, we have a relatively small commercial organization in the field right now we're not fully covering the geography of the U S. We're focused mostly in the Midwest the south.
Southeast and in the northeast we have about three ftes, there and we have a leader of that group and who is also helping us on the commercial side itself is carrying a bag himself with it.
And essentially meetings like we just had snow or big forums for us where.
Where we try to touch base with all of the Kols that we have been interacting with including those who have not yet ordered.
I would describe the NCI centers much like I would describe most of the buying universe for health care products. There are early adopters. They are late adopters there are middle to late adopters.
So I think we've done a very good job of identifying those folks.
That we're willing to try something brand new because of.
Haps compassionate use issues or just the desperation they have in helping to manage these patients.
And so we continue to call on these these centers with our small group it.
It is a collaboration between inside and outside folks our medical teams spend a lot of time interacting with kols, explaining how the test works.
But it can provide to these caregivers. So hopefully some of that gives you a little color on how we go about getting getting these NCI centers, where we're seeing a nice pace of adoption.
Just had a several just start here in the last period of time. So we're now up to 28. So hopefully that gives you some color okay.
Did I answer all your questions.
The last question related to experience with repeat orders so far.
So we're seeing relatively good performance here I don't have any any off hand statistics for that.
Other than that you can track the number of physicians, who order every quarter you can attract you can also track.
The trends the positive trends are the same and cases per client that's been steadily increasing.
So those kinds of metrics are all contained in our in our investor deck. So.
Those kinds of things give us great assurance that the test is sticky once once the clinicians have some experience with it.
Great. Thank you Sam.
Capex for the questions.
And this will conclude our question and answer session I'd like to turn the conference back over to Deborah can tell he for any closing remarks.
Once again I'd like to thank everyone for participating on today's calls and for your interest in <unk>, We look forward to providing an update during our next conference call in March 2023, when we report our 2022 fourth quarter and full year financial results. Thanks, again and have a great day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
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Yeah.
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