BIOC - Earnings call transcript Q3 2017

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Biocept 2017 Third Quarter Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will hold a question-and-answer session [Operator Instructions].

As a reminder, this conference call is being recorded today November 9, 2017. turn Strategy over and to Vice David like of President Corporate now the to call Moskowitz, I’d Communications. Please go ahead, sir.

David Moskowitz

to Thanks, today’s Thanks, all for you operator. participating conference call. of in

Michael our at Officer, from Kennedy, President Officer. Chief Vice Operations Senior and me Joining Tim Biocept are Chief Nall, team Executive and Financial of President

Act within of the Private this will making be meaning During a number Litigation the Reform of call, management of XXXX. forward-looking statements Securities

can not statements intends, by be terms. all projects, generally that or facts Forward-looking those estimates, may, expects, negative will, the predicts, identified are such could, historical anticipates, include potential, as should, terms would, of and statements believes, plans,

Forward-looking well or implied that different achievements be statements and expressed materially uncertainties actual as that and any are forward-looking the achievements other risk, future results to performance may from involve or as factors results, statements. known unknown by cause performance or

SEC of accurate time For the circumstances required risks, please update or these disclaims see by Company’s of law, as after information only information occur call. content Filings. XXXX. this sensitive to any reflect November Biocept to today, details Except The or publicly obligation that X, events as contains call that about any this revise is

over Now Mike? I’d to the like to turn call Nall. Michael

Michael Nall

we on steps to the technologies. an joining Thanks distribution new channels, By This for and and our clinical our productive agreement distribution David, thanks VWR strategy call of all our we launching to executing test move signing biopsy study Target key supporting program, began developing further launching initiating a partnership us of today. adoption quarter, Selector distribution our and the on important everyone to patented platform. aimed physician has bio-marker where been at liquid towards pathology with a key are

prior over to samples quarter hurricanes the the X% our up on in City metrics Texas impact and and Tim year. Mexico detail a and X% in the on impact more sales Florida, XX% more his services also received year. for than reflect results are In results, days sales the of liquid While, financial period. fewer results, biopsy financial were this during in by These and and year the the the leader third period total sales the space. year-to-date sales prepared Even from third up our in be the quarter with from our doubled quarter continuing reviewing our earthquake in volume have remarks. will our third samples such cover nearly increased prior

potential so throughout without launched the splits we we professionals. we with to and include of pathologists assay, customers months, our we in distribute August, U.S. the we Miraca the at sign sales a ability remain this has announced NCCN critical technical of for certain NRAS agreement and in around global entered in product laboratories liquid to many laboratory marketing August, processing path blood market hospitals for with our community and share services the worldwide economics initiatives requested Sciences executing marketing to test. partnership oncologist our the agreement, based program, leading In world. physician edge may several our we the we pathology our our test. testing to the States. VWR certain with a liquid technologies footprint strategy we this in component Through in, the are we here Also hematologist patients. This biomarkers in United our to a by XX colon cancer U.S. and our This while announced and be just are of cancer own own pathologist and CLIA-certified, practice. have on Biocept and to with territories. expand bearing launch proprietary exclusive Miraca have is platform pilot the melanoma. to and and for expanding validated our last professional is liquid testing Life unique cost both is to access few promotion in distribute allow past is our VWR expanded and our pancreatic biopsy. process lung actionable from for and our to broader tumor and CAP-accredited market this patient's initiative an agreement clinically full into can biomarker supplier tubes as one for agreement model component continue cancers. patient full of October ovarian collection proprietary samples and that we October, the billing In platform San biopsy in to now growing territories useful our also mutations, it is Diego. in share the coverage guidelines biomarker for we and business staffing In NRAS cancer serve a And enabling of the our for of cutting right the sales included circulating biopsy aimed Also and tests and local technology program biopsy, Over liquid launched a NRAS treatment increasing their to to market. our laboratory doing, week of cells

expected Our expand Americans indications business. of to prior gastric melanoma, on our and platform and professionals platform these ovarian validated bring colon to cancers our addressed diagnosed cancer to with XX,XXX year the enable our number Over indications prostate pancreatic lung, each eight. are new sales total cancers are breast, and

base intellectual the focused largest partnerships and expand Two, increasing into value China with opportunities test shareholder, to volumes test domestically our intent into forward with abroad. proprietary U.S. collaborating strategy are accounts. of of on increase our technologies entering and commercial from and sample liquid additional physicians through the our our platform. these clinically expanding serve third-party our Three, hospital and actionable evaluating Bridge. healthcare to that top-tier as signing to on institutional property and patented to our of the current number Five, continue in networks adoption of reporting initiatives partnership progress review per our scale number Biocept biopsy liquid our institutions These introduction outside This new initiatives our Four, are plan oncology U.S. Ally our multiple to initiatives the and agreements infrastructure of with from to And and economies capture strategic ordering one; achieve expanding the look biomarker our has delivering. test. strategic milestones. partnership cost like biopsy menu on integrated we six delivery clients. operational help reimbursement seven our our tests. strategic on the pathology of patient and oncology and efficiencies, key to health leverage support for I'd and certain to focus test driving to We our down executing includes We seven

XX drive objective field is management in the the We the our as consistent executives commercial year. unique of Selector previously the with awareness the continue stated to XX to benefits and now executives addition platform Target our we in organization. to marketing. sales sales have field sales in of This between to market XX We have by end our invest in of

physicians focus biopsy delivering on market access health driven by for growth high-value and U.S. the to plan the our to our solutions increasing and and to in be continues broadening abroad. information patient visibility our services actionable Our reimbursement liquid in

with need effects, cancer more life As targeted the patients side drug and proven minimize our identify with prolong companies to biomarkers. continue for ability cancer actionable therapies to technology increases develop our to

the the become in in stages potential still While the biopsy liquid markets early has largest one diagnostics. medical to of

from good used to information for biomarker Biocept cancer surgical These providing qualify are the patients can to we profiling traditional months success methods. review monitoring, strong of of noninvasive, that, to call And physicians believe over as Kennedy them or number cost-effective position. outcomes technology things from always I'll their the our to with The to we Tim? testing the do continues be significantly most cancer nine with As help year made molecular the as see with and a this as financial diagnosed success for well to patients highlights stories the the XXXX quarter. patient patient to field targeted in in first that we therapy. of of having is Tim access important not We turn progress benefiting are one ability closed therapy. we cancer optimal with improve as who grow can help and third the those the

Tim Kennedy

in the revenue, everyone. other impact with as areas earlier good and first Thanks quarter. want natural sales volume, impact have multiple per The afternoon days the I income calculations, impacts and overarching fewer then Mike financial disasters accession that of net our well results out as point DSO which on to that mentioned Mike the an metrics. starts third and

Now walk X.X% through let XXXX third quarter million for the you results. our the up quarter from Revenue $X.X XXXX. was of of me third

from XXXX period Third million of and $XX,XXX services. comprised development the $X.X million last in of quarter reported revenue from up year. $X.XX was commercial testing is XXXX same million revenue Year-to-date from $X.X XXX% the

historical on the $X,XXX reimbursement to in and commercial on be accession Our range mix per test average. based continues

includes in of which the new approximately third purposes. end we billable billable We do samples which samples samples not converted our year-over-year quarter for support liquid Research biopsy and the quarter validation are reminder, tests, represented XXXX. of but the accessioned a volume the and the QX pipeline validation services recognition XXXX, use development and at in accrual X,XXX, biomarker of revenue growth based Total our As third of also assays. research of to submitted accession of were X.X%. our of samples X,XXX awareness

disasters the natural volume approximately As I quarter and believe XX% XX% third days we sales our to by in mentioned, impacted fewer of the negatively XXXX.

plus come our a billable cases ordered international testing partner, that company, claim for by submit reminder, number samples for physician to or per the under Commercial of day cases either we other payment. are quarter approximately a third for which, parties those pharmaceutical as are billable commercial are agreement. Development a services. averaged of XX samples services The hospital responsible XXXX. a a performed sale or development insurance tests company samples in As research cases an third defined an distribution from

than of quarter quarter The had fewer did third days of XXXX. third the sales XXXX two

growth fewer third increasing new the so and recent XXXX quarter have the force with we the sales executive we prior in to period expand volume year. far sales account hired eight third our averages, startups despite account days by XXXX, X% same-store were base over this of period. XX of In or sales New in quarter referral continue the

we from the to fully first that average reminder, As on months company. up six take joined sales ramp about they anticipate a executives will when

excess cost XXXX third total of Now to moving quarter our million $X.X In expected with to pathology partnership direct assay in of to recent revenue volume operations capacity lab our million in our on in launch XXXX. was quarter volumes the and and attributable result expenses. The higher the $X.X as our of to expansion of cost third the higher of a service coming the of compared was force months the sales initiative. addition increase associated

bringing consumption last to in were hire we greater mentioned of of of personnel for employees resources to $XXX,XXX year, in personnel allocation with in-house third $X.X advance volume this mainly quarter the order number period. process development, of same third associated with the primarily was relations R&D the billing, our our human associated decrease we've new period quarter increase reduced higher an of and from year. development million General properly with been train effectively $XXX,XXX administrative investor decrease in in need and of to the bringing by addition were $X.X million, expenses to partially was reported due April accelerate for receivables. of proportion As costs to the of functions. This materials in activities. Research prior of XXXX and in offset biomarker outsourcing costs lab fees associated expected new Since billing year higher of other collections reported to increase XXXX expenses tests. development and due previously, compared increases the the this a assays, The a for in in-house with able costs

in million XXXX. net million $X.X the was of due this first decreased year year Days Outstanding range our prior the loss DSOs or year-over-year expansion of or million sales were a versus driven quarter $X.XX additional of increase expense XX% million $X.XX expansion operations the period to $X.X need. generated marketing XXXX per third of $X.X support share. team force and operations through in loss capacity The cash cash the sales of to compares $X.X third our the Sales professionals. or largely the XXXX the for third Year-to-date over for to quarter in of of our net quarter a of XX, creation per of XXX of quarter XX-day in in excess to expected XXXX Our The have averaged September share. days company’s from loss the growth. third This and in quarter our Sales approximately net the by was from total

million our of overall equivalents grew leverage to that to higher XXXX. $X.X XX, operations future fixed our associated overall company's incremental and from capacity While with generated million XX, percentage totaled as will $X.X higher of to cost expect to December on the continue expense as support is cash fund cash volumes, created. volume the compared XXXX base current cash excess we we and Cash period a September expected need

approximately upgrade that, needs. And costs quarter third back with our and for to partnership turn in Mike. Mike? now the the During initiatives, well lab I'll facility company system as preparation our over next generation $XXX,XXX of call the pathology equipment information sequencing and spent as one-time to launching

Michael Nall

you, Thank Tim.

to move a believe competitive I in our key of I'd Biocept we that provide to on liquid with like Before the Q&A sustainable the biopsy reiterate four business market. the areas advantage

clinical of platform or or circulating biomarkers First comprehensive tumor cancer our and Target CTCs assays leverages DNA resulting with focused clear circulating dual utility. in Selector a on both menu ctDNA tumor cells

can providing by both differentiated marketing by biopsy simple ctDNA biopsy all CTCs a and and complete a tissue answer from analysis surgical with physicians that biomarker drop. therefore liquid a to in physicians same a offer are more We the blood information obtained

concordance technologies Second in high our industry-leading tissue very biopsy. test proprietary assay biomarker leverage, performance our including resulting enrichment with

our and biopsy lastly, or cost the And are to efficiency strategy in vitro of amenable increases Selector continues technologies our development kits. effectiveness diagnostic preferred our solution claims liquid and provider the our with reimbursement of plans Third, status of drive health the to collection. Target IVD

future to be development test liquid potential our laboratories by kits diagnostic our significantly the in our the With business biopsy have performed enabling of to scale around we world.

patients information more outcomes treatment we've made to want our our for meaningfully our audience. at now the hard please establishing access be rapidly are summary, your need answer targeted and the progress will to and today's the thank to their in in Selector constant for happy Biocept employees Tim their I, So, significant helping for we I Most and to Target dedication actionable and dialing for pull investors marketplace. importantly brand work, more they physicians identifying patients customers of improve you for therapies. their questions. thanks to Operator, trust, in support each call. by their

Operator

Thank you. [Operator Instructions]

Michael Nall

Angeles presenting Conference in look meetings forward at be Please during December Los scheduling on X first JPMorgan question, seeing Event to the held if San we’re a we’ll we be Main Micro Francisco We on XXth January Annual contact While Investor to that Healthcare interested waiting for that through the I’d being announce those like Conference you LD you're will attending time. XX. that. in LHA in holding this of Also meeting X. during

operator, for question. the Okay, first we’re ready

Operator

first ahead. with comes go Nakae Chardan. Our Please question Keay from

Keay Nakae

Yes, thanks.

natural how the of you Mike quantify you're disaster terms insight to able how Tim are in For and give you just still more to that? can impacts, assessing

Michael Nall

throughout a of a Texas let have we good the biggest producing that qualify is detail. hit bit growing And do in give Mexico, area for relationship U.S., Mexico fast I'll a our remind It’s through But therapies. a in but we thanks. to then and of more especially our just states everybody business to used Yes, quite in Quest City, with they as one Tim well AstraZeneca little bit you Florida. question. that coverage as their patients

from as were last a providers. three so quarter all this punch laboratory those you've And two, to heard us amounted for one, other

up tee I'll and can Tim more talk he about that detail. over it with to So the turn

Tim Kennedy

Keay. Sure,

to XX% to rate earthquake run day with range pre what arrive couple order of our and looked post, up to our as so estimate So our as well accessions of look in sales prior come our and of at overall of Mexico, at the per the in we XX%, XX%. estimate rate that run we what was and prior to post XX% was – to hurricanes

Keay Nakae

Okay.

So some trend? prior time you kind there's now up to back of passed, that seeing revert the has are those numbers

Tim Kennedy

I if has completely, down Well, there. kind of Houston I'd Texas like but has a that taken rebounded rebuild will to bit say time you of think to

to to we So hurricane. where improvement, that prior we to were back wouldn't while that we've say completely some seen – I those were

Keay Nakae

Okay, thanks.

Michael Nall

think too. also the I meaningful sales was two days a And less to that

Tim Kennedy

absolutely. Yes,

days you're days the per or less billable. in year-over-year as if averaged accessions So we’re two XX sales less performance, two mentioned, day, at quarter looking we third averaging I having those on sales if quarter And sales been do the the guess days I the expectation for or you for perhaps few XXXX, days. what not have less may two of math, third those could

Keay Nakae

follow as a you and you do then sessions terms seeing they sales to relate question at the one per just of the start productivity. day leverage Okay, force point also two there the think up overcapacity, what things in

hires in are using frame time six get you expectations a months for the or earlier as up to year, there. meeting So to the your speed

Michael Nall

So, me let respond.

the So that incremental with created, of of excess as expectation and leveraging accession component we've component. the far leverage our cost every is the that fixed as capacity

that's great question. So a

scientists and specifically specific laboratory being CLIA out will the to of the created particular. laboratory, if of on we need and So, microscopy in increase expenses, those those clinical expenses board, comes in growth you we the wave excess the of areas bite apple next for if won't go capacity in and of those

said months that that, company I sales take our analyzing with reps the volume performance say say Now in the the reps for for that normal average being have or as I six of if Company the about I months. six longer, XX% contributed time, And in or longer will six reps months in the would over would have you third been third on quarter our with are our quarter. about of to

Keay Nakae

good. of one Miraca, respect sense a if final footprint just question, that's can. well to Okay, With And so us give their I what is. then

to it to need the maybe use but able to, the efforts given sales than that more hire be is size your you're of If person the one least able maybe alleviate at to footprint.

Michael Nall

just feet sales that of them. the had world. go know laboratory rely able Right couple be. a diagnostic on the to. as just street could And is one trying that would is close over experts invest kind point. would in anatomic have for team that need to a and think have territories supplement Miraca, It don't acquired time. idea But for in not stage out we're Japanese at big the now, getting to where We person in we and in in the be to this large we're deal the Very I often, it territories partners to ready that company of the team use more the our reps can’t those XX the training very to of service. a And it. that companies help to launch on we our really have the and sales a pathology and get more They're largest XX-plus

Neogenomics of Tim a in to kind general of here cover offered together what strategy where used and working as you doing somewhere. testing pathology go work, companies kind find two to of oncology would think market the or to that U.S. part to I fact, In in an similar at merged

Keay Nakae

all I Okay, thanks, had. that's

Michael Nall

Very good.

Operator

go Capital. question Lauren Our from with WestPark comes Instructions] next Chung [Operator ahead. Please

Lauren Chung

how I a are talk Hi and have can you question you in thanks, PAMA you billing the Biocept’s some talk reimbursement. receiving, my call. plans for there does what and reimbursements about horizon current Can you are any cut taking been have of reimbursements? on other that about on the the impacts how reimbursement, and

Michael Nall

PAMA that that. us. to And question. into and payers Medicare Yeah the compared same that that or law create now know like private for pricing protecting access Medicare that a for to those that pay is something it's neutral for the was for don’t is impacts went to testing for great competitive And effect what designed

the we were pleased really we didn't So, had very versus were we so see been what that put amounts paid. that meaningful about a forward historically in change

So and strategy that's our great us for that’s news out. playing

will bill remind haven't far as would doctor just from the different we And that are past test bill we course like different and they the to really things. bill But what things expect two a will anybody you are to get their they other I to As that any color of change what what from Tim over we're getting payments we we other and seen the what I’ll collect see, what that. quarters the more any per expect insurance on let add basis allows several and payers, collect.

Tim Kennedy

Sure.

range a mentioned, historical reimbursement a reimbursement in will on that that sharing our and offered mind in the initiative schedule. pathology what it of $X,XXX fee partnership launch it's based shares, our on physician to does a basically commercial Keep of I our continues if is you from accession mix average. reimbursement test As the global and perspective be per

component the fee is physician professional about to the of XX% testing about schedule technical is XX% the component. to attributable of So and

up of what as Keay to the excess as form drive that out incremental we that well force which asked really is expect how we've expansion. But initiative, part that as over we really time. obviously, going our initiative, will really of sales the is our incremental that's we did that that of and our had partnership on numerous same why in leverage associated may expectations time, capacity, our of and increase volume our was come that what there ultimately at which it times is economies scale talked thing ramp calls about down volume the Now is drives volumes do pathology the it. see about with to this reimbursement that pathology the But we comes partnership

Lauren Chung

can Thank liquid Biocept the updates overall? any you on competitors, a industry you against on the comment the and you. what comment in And see field biopsy test just in in the

Michael Nall

Sure. Thanks Lauren.

As term Googles and because actually predictive answers questions in are testing challenging biopsy analysis, DNA have range that's as but cell-free of cell a the get like apart of being within we of biomarker a of the than for hits would And of well liquid smaller meaningful circulating and for just we are but in are all that sets find circulating the types answers circulating folks all diseases that competing biopsy that fact other oncology focused for on biopsy It's tumor you liquid even it's anybody that. lot kinds liquid that tumor a oncology. provide there's when questions the folks used the oncology. much amount And broader in DNA. we fact tumor as both generally because than us

lot choosing we our one have reality, seen folks haven't physicians announcements. are key reason and though in for the a But that's test. us So the really differentiators of even of

We haven't the in seen still very out a lot early liquid It's clinic. biopsy. in of competition

but change over going market's So as grow that may the to well. time

the gets decision physician. more their is remain of more to developing where answer adequate. for blood So our correct that profile a going the the are nice when market market treatment the using we and towards they by needed And the to make tissue a tissue the are this see where right patient we and leaders now, we space not part a is alternative biopsy first idea and of really in of sure one patient

difference. so big And a that's

tissue and and value but know biopsy In physician And getting and entire opportunity for else to as addition, that us, get is which time. converted strong very our offering is and stream have one reps partnership, be unique targeting no to this ones part strategy first mentioned not to the pathologists rather with care in for relationships for pathology Tim months getting us practices continuum right biopsy as really liquid the medical patients. a one is integral with of can they're it an of the adequate after oncology sometimes meanings when than They're of, they are that they take at will they're go-to-market start surgery. aware a

So numerous it October the received in leads for company. great in position of well launched coming our into College and Pathology biopsy, very launch a at when we was has the advocate meeting they're already in using liquid this to American resulted strategy

Lauren Chung

you. Thank

Michael Nall

Lauren. Thanks,

Operator

next question Michael with go ahead. Please World Murphy New from comes Investor. Our

Michael Murphy

I you. Thank cash give wanted your to comment a just alternatives are what situation on the there? and

Michael Nall

had we just had… Yes, reported that we

Tim Kennedy

million $X.X

Michael Nall

of million evaluating for are the goal speak. the $X.X the fund continue numerous as quarter and it's company we to to that and at alternatives our we end

Michael Murphy

Okay, thank you.

Operator

This question-and-answer Mike concludes to our Nall like over conference closing the session. back I turn to any would for remarks.

Michael Nall

everybody call the your and a have and East. West all day forward Thanks. great a great you're on year-end Thanks interest for Thank if for results. on We on participating for conference friends and call here our for our Coast to in you today's have next Biocept. look to sharing progress evening the our our on

Operator

for Thank concluded. you now has attending conference The today's presentation.

disconnect. may You now

Biocept (BIOCQ) 10 Nov 172017 Q3 Earnings call transcript