BIOC - Earnings call transcript Q2 2019

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Operator

Ladies and gentleman, thank you for standing-by and welcome to the Biocept Second Quarter 2019 Financial Results Conference Call. At this time all participants are in a listen only mode. [Operator Instructions] As a reminder this conference call is being recorded today, August 12, 2019.

At this time, I would like to turn the conference call over to Kevin McCabe. Sir, please go ahead.

Kevin McCabe

at McCabe Kevin is LHA. This thank Good conference participating today's for afternoon and call. in you

from Nall, Operations Joining Executive are Officer. Senior Biocept me Michael Chief and Kennedy, Officer; Edwin Commercial Vice Vice Financial President Officer; President Senior President Chief of and and Hendrick, Tim Chief and

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

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

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

see these about risks, details For company's please SEC Filings. the

sensitive of events as is law, update The that contains that obligation to reflect any accurate content or except this after occurred XXXX, circumstances information XX, publicly revise as time information only required disclaims August any to call this or Biocept of call. by today,

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

Michael Nall

first cancer. the of that over the today. and lung in of to help year the second driven on patients, quarter continuing X.X% this and quarter, a quarter. the year. The $X.X prostate, breast I'm Kevin from the revenues the was segments delivered market continue total target XXXX, we our biopsy on prior over grow most for from growth we Thank strategy, XXXX volume you, to growth million will XX% where XX% by XX% and anticipate an and ago delivered pleased test second in by commercial commercial reaching that up everyone we we in liquid as can the We year to selector on report good increase the afternoon to up through call period quarter are up follow first QX focusing including the samples, with of

initiative late expanded made We market platform or service a with We participate a customer practices, to several the the this prostate target to our leverages growth the patient our which test cancer CTC they results enables technology our This critical tumor new proprietary biomarkers to supports remain year. in EmpowerTC, circulating be we've partnership interpret of testing, added including so specifically CTC called in prostate our year this platform. our included for key those cancer care. pathologists, cell including of path last the of can the is backbone the strategic contributor focus uro-oncology continues which large uro clients to decision pathology that menu and base urology practices to affiliated unique management and group our on in selector urology

Our urology customers treatment. about patient selector manage EmpowerTC better to target testing enthusiastic through are our

with have breast Our utilizing our orders blood and in breast women to cancer in seen for this we an Clinicians cancer platform such based also missed offering not changes biopsy. CTC leverages testing biomarkers treat critical area. increase the initial are in that the and HERX of treatment key tissue as to biomarkers ensure initial monitor to essays for in are ER, workup and our PR

monetize and a testing. liquid recently launched to regard partnership Prognos biopsy data our generated our from with In to capture

initiative We this to announce are live. that has pleased very gone

therapies. life information pharmaceutical diagnostics repository to XX the marketing supply laboratory de-identified of to science for already and in We to patient records. clinical customers Prognos in use and billion exceeds repository, targeted intelligence assist laboratory development which are the to data, technology supplies there of beginning their data important Prognos supply artificial to building this

and of this lung with panel breast. industries. and Fisher addition, In started tumor-specific the quarter. with pharmaceutical selector late marketing hospital in panels we NGS in to researchers the and the We biotechnology continue selector targeted and first NGS collaboration physicians launches Target to Thermo advance to Target study the our in

Thermo Thermo's next-generation gives to Scientific sequencing to our us Tumor-Specific supports Our collaboration Panel. technologies Multi-Gene with access Fisher strategy and commercialize

on time a liquid gene of that circulating Biocept tested we determination and from gain analysis to remains does we all expect DNA us both offerings, a or Multi-Gene but As CT cover this not by have believe CTC Multi-Gene both working and tumor result, market the adoption. company this blood year. the are We with believe QX differentiation same offers single next DNA sample. that commercial panel only would these Medicare is coverage contractors helping At biopsy and with Medicare

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second tubes our year. we $XXXX will time, quarter, of believe first that bioinformatics of $XX,XXX in ordered during grow. up of You customer in applications. adoption These approximately collection continue Middle kits the We about Asia kits this quarter services the which over for XXXX is our and during first that in to we genomics quarter Africa the East, both and may see first clinical customers announced blood from and provider Agiomix, research recall the and of a

validation offering quarter our an international Launching take an order kits for could in and position to test before to as manufacturer Biocept FYI brand. this a kit is sale, our longer most quest customers with kits continues process laboratories. or when As the RUO our diagnostic a global clinical normal analytic perform studies

in international target major States United the Our platform protected in and selector patent territories. is XX

kit, of which this where granted to patented and a of is CE selector the cancer, target is in in enable Mark will blood CE Mark our detection the EU are collection the biomarkers for lung first the us elsewhere and a applying in our market and high-sensitivity world for kit technology We recognized. if for available in Europe tubes process EGFR our

first We other anticipate are future. XXXX mutations for for oncogene RUO CE in obtaining additional with planned of before Mark the end the launch test the kits

Blue testing cancer its this with improvement Our Health The to subsidiary collaboration quality XXX%. biomarkers increase of molecular Cross continues patients is Allegheny Highmark goal of initiative and initiative advanced to in the advance. rate key to lung for

test not of a tested still As XX% to cancer biopsy. avoided at Notably second helped are data therapies. National of our qualify the lung a treatable patients recently XX% the many patients in biomarker conference and targeted for identified time Cross Blue presented tested

lung to have significant rate cost and $XX,XXX as both is important while risk reducing We're a more. repeat This the ability $XX,XXX cost of between biopsy demonstrating of biopsy biomarkers find even can and higher complications testing. and or

Clinical towards be we enrollment a of advancing early year XXX XXXX. or goal. later initiative While these could preliminary, programs data the from reported in in completion are patient results this are larger form this

of choice plans in liquid systems to agreement, this a and health with access plan ordering within On testing coming the our we a members. subsidiary enabling additional We services front a the for biopsy the plan laboratory improve recently efficiency quarters. deemed more BeaconLBS management to been and laboratory service. contracting Under into patients' we entered lab of programs for BeaconLBS test agreement benefit administers plans their reimbursement network anticipate health have LabCorp. with health BeaconLBS,

patent I'm CTC more XX the additional globally, present also quarter, several pleased our applications with issued second to we we At an announced report are in patent that patents in granted China. covering platform have pending.

capture, Our IPS for proprietary, patents antibody for well molecular rare highly platform. patents enrichment state cell or and microchannel platform includes our as for our CT sensitive DNA as cocktail

demonstrate the to Finally, Lung of utility regard our presentation In the and the the symposium back December. of continue September, the will for busy clinical meeting developing the of abstracts testing. this data industry-leading Antonio at we focus in San Breast in molecular World year be Congress pathology Association clinical November in Cancer accepted on with to half

use launching selectors our physicians XXXX from partnership agreements productivity and to Highmark Advancing panels testing gaining tumor entering and the markets practices. Increasing additional publishing and Europe. and in by priorities and systems, urology additional and our Signing emerging technologies. plan Signing agreements To third-party case reproducibility, Thermo hospital the other results Blue Monetizing new summarize, Health Allegheny kit the of the our Further liquid corporate including presenting additional with through assays. obtaining networks traction into include with improvement our gaining our health penetration distribution in backed and in to party additional following. margins. laboratory with by Cross to and sequencing quality data Prognos. new EmpowerTC quality clinical and global that contracts generation studies data next our pursue to biopsy the Continuing collaboration target selector in integrated processes automating target Fisher's agreements validate field initiative healthcare improve delivery by with market strategy access improve pathologists our with the our system. specific including Mark CE

review the turn to financial second I Tim Now, results call over our the quarter. to Kennedy for

Tim Kennedy

and Mike Thanks, afternoon, good everyone.

compared to be As Mike $XXXX in an expected shared $X earlier XX% from Commercial also were to QX range average to revenues increase received on XX% the reported the reimbursement based we XXXX, is million approximately historical throughout continue we mix $XXX,XXX on test year. new of reported launch up assays $X.X Revenues the in QX and of as XXXX. year-over-year. sequentially XXXX million, for per to accession continue in QX

the accessions XXXX in QX billable we In had XX% from versus accessions QX X% in accessions billable up XXXX billable XXXX XXXX. XXX XXXX up and QX

our X.X driving in trends. physician, is strategy million, as for resulting was segments believe period the same lower In growth to XXXX our that commercial we the in QX XX% the same Our which to revenue of total to the are laboratory period and despite increase year. is ability Cost begun last volume specialties volume. focused on automation compared in compared some headcount XXXX, clear market to last flat year-over-year year implement the we've in

volume begun fixed leverage to cost again once With our we've the of the increased structure. components

in automate continue moving to to laboratory clear the incremental accommodate improve. expense provide our to continue volumes we higher we to capacity our trends forward, anticipate laboratory As ability growth minimal we to expect additional at as functions

was primarily QX panels. development target launched period Research selector million, were This $X breast lung NGS due compared development of to liquid slight and year. target for XXXX biopsy increase $X.X the recently million and our for the same NGS to selector validation last expenses and

were year General $X.X XXXX expenses versus QX and prior the administrative million for flat period.

As and marketing of versus down expenses XXXX, higher to XXXX expenses QX G&A to work for revenue, The for company commissions and and XX% driven contain Sales compared increase and continues as operating million to volume a as QX XXXX. XXXX marketing sales expenses were expenses. in percentage $X.X associated volume QX the million, $X.X that were and by well. other with excess QX

As despite a marketing prior launches percentage to of the period were marketing costs XXXX versus in increase the revenue, expenses XX% related sales new QX of test. and down year

Our commercial sales changes has the we've productivity increased due to strategy. made with our force

on $X.X outstanding. weighted million for share shares million $X.X $XX.X $X.XX share was the compares of in million in non-cash outstanding. $X.X second on inducements. period quarter The quarter with This quarter second of per warrant loss second per the inclusive a $X.XX XXXX the loss of for with net average XXXX share million a shares net $X.X loss of average of or XXXX expense weighted for million per Net the of

our XX to XXXX. outstanding As in a one reminder a reverse common of stock effective stock July which we split was conducted

six revenue and and revenue $X.X Now of to year. Cost year-to-date million, general first $X.X million administrative million, $X.X the marketing June approximately was last research XX% sales $XXX,XXX was increased $X numbers; ended months expense period XXXX our of turning development in the XXXX during XX, $X.X the and or months million for million, was and million. $X.X to compared to our six same was

to to net $XX Cash from and $X.X aggregate XXXX proceeds exercise million cash in June $X.X XXXX approximately million equivalents warrant and as on on raised million financings from three totaled million XX, date $XX.X XX, approximately XXXX. in we compared December

turn now overview Hendrick an call will of commercial our to Edwin? I for the over Edwin progress.

Edwin Hendrick

half and the of traction prostate, of that breast our Tim cancer. everyone. getting second in and to areas has growth treatment our quarter Thanks, our commercial made last I'm good commercial year's team demonstrates hello, sample lung focus progress were the first strong pleased XXXX, over share throughout

growing the the see While And we strategy commercial this our sequential strong growth to still implementing acceptance are of pleased new year I quarterly our that our market. the growth. first sample a quarter to year-over-year in were is volume in testament believe from

are accessioning we XXXX, approximately XX In billable January day. samples per

roughly As beginning the approximately XX day, year. the to entered the a increase number we second of we and exited per that the since quarter, quarter XX% third grew

of productivity In second per All this Our significant to industry. accessions years with half than we behind XX sales rep more the in monthly experience capable have with is the quarter, bring train national first of relationships a the these brought or in the force physician sales for numbers year several company. doubling year-over-year. regional managed the of to physician practice an average professional sales and diagnostic past and in the level highly

numbers the every delivering day. is team their our work suggest As experience sales hard to

these Each In that data markets provide help monitor large define selecting the also aid for further treat help lung market their information into physicians cancer, best treatment testing. pathways add patients. urology, we our gathering data to of treatment oncology each to use we in day, of results our the can technology of of We're and Analysis liquid target drive breast to biopsy further database. us our physicians and penetration patients. more continue our

In potentially our of engage six year fact, further to areas of from studies with for from We base. platforms. testing our target were gathered customer abstract new the in Molecular focus four new demonstrate meeting our at in treatment the biopsy of that Association value plan in months derived centers perspective to presentation Pathology been clinical this AMP coming the or the liquid information selector of major accepted

in and laboratory cancer. biomarker of the XXXX Our been breast launches new prostate R&D department for busy test and very with

selector sequencing menu range, new NGS test enhance target liquid panels biopsy our and service. automation and Our NextGen to

We new traction continue half market us enable back the expect to will these tests the to gain year. in of

cancer. in CTC interest offerings of of cancer selector is capture as certain and of breast and target and the segments, high to such market in treatment enumeration EmpowerTC which prostate an novel enable Our CTCs, area

play have ability attended the distinguishes contributor subject the focus on annual they growth key our in Additionally, future, and biomarkers to of volume the in these Congress revenues. the breast-cancer information this getting now to are in very been analyze at to positive recently interact role our the meeting. in monitoring treatment we our disease technology educate using very was believe the and more platform in and CTCs and as marketplace. CTCs services unique prominent guidance decisions. with informed them on that capabilities believe We is We physicians make us We and this test our need can our a XXth treatment of the them and a they international

event make the our demonstrates recently testing that progress healthcare offer we that for Blue part cost-effectiveness biopsy are the of source during to in liquid BeaconLBS to and is our this lastly, target selector testing was there network Blue service. system. the biopsy message contract or the unique of right to plan, And and in as Cross Laboratory payers announced expanding time liquid resonating. the national interest presented with focus at we who approach patient, care target delivery selector our health the Association, of right the part the patients that test, continue our to right access program recently Shield We with strong

and liquid new health by health ensure collecting that biopsy to were assets to payers our patient summarize, seeking we physicians the effective force To options. demonstrate define business liquid our to to were and testing And evolve needs patients additional utility platforms success applications we have analyzing of strategy, our meet execute with customers the care. to focused growing with technology against continue clinical plan our studies our improve driving continue to and and practical the an to data our further help and of conducting to sales system,

back for attention, Mike. turn you time I'll and Thank the and your call over to

Michael Nall

Thank you, Edwin.

offering We are with biopsy treatment of cost in cancer. physicians diagnosed the and the broad effective important invasive liquid field to patients innovating solutions of for emerging pathways in help their less with our select best

over CT on on performed DNA been platforms circulating as tumor differentiated CTCs have are or patient test both and cells DNA. leverage or information samples from tumor to as biomarker proprietary well Our our XX,XXX based circulating

high evidence clinical generate to biomarker supports assays. that and continue of specificity We the sensitivity our

driving In expanding on we we in property. shareholder our other addition value initiatives the and where are strategic investment can growth increase partnerships to to organic intellectual through focused leverage opportunities

Operator? are overview And ready to with that we take questions.

Operator

[Operator Instructions]

Michael Nall

like question, While City. the mention I'd be a in first waiting upcoming we making two to at conferences presentation for that both York will corporate New

as We X Conference September Investor the Investment and and as XXst XXth, follow XX. well will the HC Global Summit September be be held Annual to at held Wainwright XX being

for Okay, operator questions. ready we're

Operator

McCarthy question. go question first your Please with Maxim ahead from today Group. Our comes Jason from

Jason McCarthy

Thanks if cases target offerings? what in the would a based one color practical in panels we the physician give bit the versus And differences see near to expect other there choose the the selector some want Oncomine us future? more newer see of any target could and for on the to panels taking question. then can are and traditional the Like to pipeline that you between selector other

Michael Nall

of Thanks for then But you well. I so first at the tear for up will address and question, Jason. probably and get look take, Well as that he when a Even, panel can I'll it from the Edwin I offered genes selector offerings. have either our individual traditional for offerings there that. has you the you target two two that generally And genes different or is multiple kind markets got broader

sometimes teaching researcher though but Many a larger just because who's as with offering hospital can very that's interesting a interesting care driven it and panels a specific they to lot you're confused position because like your lot get a folks patient in a doing and provides. to information our someone on just panels If want researchers much they're type treat need treating of has more company that generally biopharmaceutical larger not the based information the or a standard the studies a options. regimen don't to guidelines frankly for in looking you the of have oncologist community by

Edwin, do to want add So you that. to anything

Edwin Hendrick

I Again biopsy sequencing next and that different versus in No. platforms. the you well. very and the Mike, different CT many handle liquid situations, on two especially think DNA the the

type, that academic at want or it like approach, community-based biomarker they looking looking a really of certain really a original or and for of institutions for panels that on more just sites weather from entity the are as the certain healthcare whether off expensive K you a to next to doctors for have monitoring sequencing treat the larger see our larger You going platforms not response. are to type looking Also, system. for therapeutic EGFR more rest are a looking the typically aspect,

So be to from task therefore it with expanded the to ultimately, better from they're to looking system. at patient to long healthcare a back be right that's way at and effective way more a monitor more be a cost-effective do program the at wanted to it They going able and over right to right a look able the time. time it

Michael Nall

difference types critical amplification. we one too, on individual with analysis of what target CTCs, feel we more call we our more selector protein DNA could based efficient offer analysis is And on test and that specifically on

as panels can you find that's for they here. by DNA of unique using So will, physicians looking menu and individual a NGS both it CTC, right thing PCR Biocept. broader CT the if by really well the Whatever as genes

Jason McCarthy

just details additional revenue very fee, a the a you the how helpful. the I I diagnostic to That's these them you sales, a is are I getting that there of you. see selling of know thank companies on an directly generate are you then any deal. days. lot know from to part share Prognos that could right, information. of monetizing provide you deal, want And like data important All if is

Michael Nall

the will quarter. haven't this we of it While the terms say I agreement. that disclosed live went

gathering biotechnology at customers, you is revenue so but and will have not more bit meantime, more but about research we on find data in world they use then report it little that what their overall the here on and a you should we're a pharmaceutical and they in that lab they And that in liberty locales hopefully either primarily developing share agents information the to they specific we we the there of that anything as from for target future. be types use they're identified market when the more we to existing every use color from and QX, to or the treatments the know of are that discuss in provide to for they all the patients generating that research day

Jason McCarthy

just on side. and one thanks finance one Alright the last more quick

quarters seeing kind So, your drivers you of the the that. gross stead-ish I few for of is looking know increase back in for part automation margins you past mentioned and

there are So primarily that? automation or like is that that volume other including factors, growth driving

Michael Nall

I'm fast to and then turn because Let Tim him me over want I start real going complimenting. to

So of in at increasing lot things Tim joined just job a making out coming that not always his on, one as when in quest. were successful ultimate done. a Tim hard lab. of the And everybody us and progress We're that's XXXX these never of fall being of quality tell truly our that's the but will operations efficiencies with

and more So answer that identified specifics you kind Tim question. I'm I'll your thrilled about let that

Tim Kennedy

as Yes, Mike, you thank thanks, Jason, well.

two and increases growth being Jason, able in is in to So our automation as fold. actually margin, you said is expense. incremental without It significant our gross grow

through associated to expenses process. of that growth the be going able always is components your also. to well and goal You're fixed volume that cost the with automation just limit leverage consumables, have begin that here but of Clearly, and consumables to as expense, you to expenses revenue as increase to

both. of combination the with So

growth volume/revenue expenses net So and margin controlling down combination and of EBITDA also those and volume more it's in growth ultimately of income. reducing having potentially gross them through fall leveraging a and that the

Jason McCarthy

very the for taking Alright. Thank you much questions.

Michael Nall

Okay, thanks Jason.

Operator

showing time, any to over no additional for the like questions. to at conference gentleman management this and turn ladies And I remarks. I'm closing back

Michael Nall

want today's call Biocept look all as a we Thank of our as sharing Directors, you, in and our day next on great for and progress forward operator. when of to I participating Thanks quarter call third And you employees to Board financial on hard-working well We conference of all the interest behalf our thank have our our your on results. report company. for everybody. of

Operator

and joining. presentation. that do We does gentlemen, Ladies for conclude thank today's you

disconnect lines. now may your You

Biocept (BIOCQ) 12 Aug 192019 Q2 Earnings call transcript