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Biocept, Inc. (NASDAQ: BIOC) Q3 2022 earnings name dated Nov. 28, 2022
Company Contributors:
Jody Cain — Investor Relations
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Antonino Morales — Director and Interim Chief Monetary Officer
Analysts:
Kemp Dolliver — Brookline Capital Markets — Analyst
Presentation:
Operator
Good day, and welcome to the Biocept Third Quarter Monetary Outcomes Convention Name. [Operator Instructions] And please notice that this occasion is being recorded. I might now like to show the convention over to Jody Cain. Please go forward.
Jody Cain — Investor Relations
That is Jody Cain with LHA. Thanks for taking part in right this moment’s name. Becoming a member of me from Biocept are Sam Riccitelli, Chairman and Interim President and Chief Government Officer; and Antonino Morales, Interim Chief Monetary Officer. Throughout this name, administration shall be making numerous forward-looking statements throughout the that means of the Personal Securities Litigation Reform Act of 1995. Ahead-looking statements embrace all statements that aren’t historic information and customarily could be recognized by phrases resembling anticipates, estimates, believes, might, expects, intends, could, plans, potential, predicts, initiatives, ought to, will, would or the destructive of these phrases.
Ahead-looking statements contain identified and unknown dangers and uncertainties and different elements that will trigger precise outcomes, efficiency or achievements to be materially totally different from these statements in addition to efficiency or achievements which can be implied by the forward-looking statements. Specifically, there may be important uncertainty in regards to the length, severity and affect of the COVID-19 pandemic. This implies outcomes might change at any time.
And the contemplated affect of COVID-19 on Biocept’s operations, monetary outcomes and outlook is the most effective estimate primarily based on the knowledge out there for right this moment’s dialogue. For particulars about these dangers, primarily based to the corporate’s SEC filings, together with the corporate’s quarterly report on Kind 10-Q for the interval ended September 30, 2022, filed with the SEC on November 21, 2022. The content material of this name accommodates time-sensitive info that’s correct solely as of right this moment, November 28, 2022. Besides as required by legislation, Biocept disclaims any obligation to publicly replace or revise any info to replicate occasions or circumstances that happen after this name.
Now I’d like to show the decision over to Sam Riccitelli. Sam?
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Thanks, Jody, and good afternoon, everybody. It has been about 9 months since Antonino and I assumed our present working roles at Biocept, and greater than 5 months since our final funding neighborhood convention name. We’re delighted to be talking with you right this moment for an replace on our enterprise and our latest monetary efficiency. Antonino will converse to the numbers in a second. However earlier than we start, I’d wish to thank him and his crew, each inside colleagues and exterior professionals for his or her laborious work in getting our Types 10-Q for the second and third quarters of this 12 months finalized and filed.
The listing of firms which have accomplished two 10-Q filings and 11 days can’t be lengthy, and we’re actually not completely satisfied being on this listing. It really took heroic efforts, and lots of, many hours had been dedicated to finishing these paperwork. And as of final Monday, we’re present with our SEC filings. I’d additionally wish to thank everybody becoming a member of us right this moment for his or her endurance with the scheduling of this name, however we selected to delay the decision a bit reasonably than compete with the Thanksgiving vacation. When it comes to the enterprise, I’m happy to share progress in our aim to ascertain Biocept as a pacesetter within the rising class of diagnosing cancers which have metastasized to the central nervous system.
We’re well-positioned to attain this aim with our CNSide assay, which is the primary commercially out there product to measure CNS biomarker standing in real-time. As a laboratory-developed check, CNSide is analytically validated and run commercially in our CLIA-certified CAP-accredited laboratory right here in San Diego. As an replace, following a Faculty of American Pathologists or CAP inspection final month, our labs CAP accreditation has been renewed for the subsequent two years. We lately introduced that CNSide is now validated to detect and quantify tumor cells within the cerebrospinal fluid of sufferers with melanoma who’re confirmed or suspected of getting leptomeningeal illness.
This can be a devastating complication during which metastatic most cancers spreads to the membrane surrounding the mind and spinal wire. This validation expands the industrial use of CNSide past breast most cancers, non-small cell lung most cancers and different carcinomas to now embrace melanoma, which is the third commonest tumor sort in CNS metastasis. The significance of detecting CNS metastases can’t be overstated, as focused therapies can oftentimes cut back or resolve the debilitating signs and prolong life expectancy.
That mentioned the present requirements of care, that are CSF cytology and scientific analysis through MRI, have restricted sensitivity and specificity, which creates challenges for physicians in managing the illness and figuring out the most effective course of therapy. In pilot research, CNSide continues to display excessive ranges of sensitivity and specificity. Moreover, CNSide is each qualitative and quantitative, that are key benefits in monitoring the response of leptomeningeal tumors to therapy and bettering the flexibility to make or change therapy selections.
Our first utility for CNSide represents a serious industrial alternative for Biocept. We estimate the annual market alternative of $1.2 billion within the U.S. and $2 billion globally. We plan to discover the usage of CNSide for added indications that might additional develop this market alternative, together with for different ailments past most cancers that have an effect on the CNS. Since CNSide’s early entry launch about 2.5 years in the past, we’ve got constantly reported consecutive quarterly will increase in ordering quantity. I’m happy to report this development continued into the third quarter, with CNSide quantity growing 8% sequentially and up 176% over the prior 12 months.
Our buyer base has additionally expanded with 28 of the ELITE 64 Nationwide Most cancers Institute designated most cancers facilities having ordered CNSide. We count on some slowdown in ordering throughout this 12 months’s fourth quarter as traditionally, most cancers testing is impacted by the vacation season. Throughout our final name in June, we launched three initiatives to attain our aim of turning into a pacesetter in neurological tumor diagnostics. Right this moment, I’m happy to share our progress in opposition to every of them. Our first initiative is to drive the era of considerably extra proof demonstrating the scientific utility of CNSide.
We plan to make use of this proof to help reimbursement and the incorporation of CNSide into scientific care pointers, which we imagine will broaden doctor adoption. Beginning with our company-sponsored FORESEE scientific trial, the affected person enrollment is now open on the first scientific website, with the second website anticipated to be cleared earlier than year-end or in early 2023. The FORESEE examine is a two-part potential scientific trial. Now we’ll enroll sufferers with breast or non-small cell lung most cancers who’ve suspected or confirmed leptomeningeal metastases.
The trial is designed to check CNSide with typical care strategies resembling CSF, cytology and radiology. The aim of the FORESEE trial is to additional consider the efficiency of CNSide in monitoring the response to therapy in a potential scientific trial setting and to evaluate the affect of CNSide on therapy selections made by physicians. This trial is targeted on demonstrating scientific utility, which is predicated on how and to what extent physicians discover worth within the detection of illness and the way CNSide influences them of their decision-making. We imagine proof of scientific utility will help increased reimbursement selections in addition to attaining customary of care standing.
Earlier this month, we introduced participation in an investigator-initiated examine to raised perceive their improvement and development of metastatic breast most cancers and mind metastases and/or leptomeningeal illness. This 20-patient pilot examine is being carried out by main breast oncologists, Docs Michelle Melisko and Laura Hupert, from the College of California, San Francisco, below a grants from the California Breast Most cancers Analysis Program and the College of California, San Francisco [Indecipherable].
The examine is designed to establish biomarkers related to CNS metastases, enabling a greater understanding of therapy response, prognosis and therapy resistance that will enhance the administration of CNS illness in sufferers with metastatic breast most cancers. Outcomes from cerebrospinal fluid utilizing Biocept’s CNSide assay and match affected person blood samples shall be analyzed and in comparison with detect and characterize most cancers in CSF, with the aim of figuring out new targets and to information therapeutic selections. This examine is notable for a number of causes.
First, it’s being carried out by oncologists reasonably than by neuro-oncologists, signaling that our check is gaining consciousness past the neuro-oncology neighborhood. Second, the California Breast Most cancers Analysis Program and the Breast Most cancers Program at UCSF are a part of the Biden Administration Most cancers Moonshots, which is aimed to speed up progress in opposition to most cancers. Third, and maybe most significantly, we count on that outcomes will display the vastly superior means of CNSide in contrast with blood to detect and quantify tumor cells within the CNS.
We intend to solicit and fund further investigator-initiated trials, together with some that will result in expanded CNSide market alternatives. I’m additionally happy to announce that three posters that includes CNSide had been chosen for presentation on the Society of Neuro-Oncology Annual Assembly, which occurred earlier this month. That is the premier Neuro-Oncology convention, and these displays are essential in producing additional consciousness and curiosity in CNSide amongst our core buyer group in addition to biopharma firms which can be conducting research with neuro-oncology therapeutics.
Certainly one of our posters lined HER2 heterogeneity remark in metastatic tumor, with this information at present being ready for publication in a peer-review journal. The opposite two posters supplied compelling information demonstrating CNSide’s functionality in CNS major tumors, an space we intend to additional consider for growth. Of notice, these research had been offered by main neuro-oncology key opinion leaders, Dr. Priya Kumthekar of Northwestern College and Dr. Santosh Kesari at Windfall Southern California.
Our second initiative is to deal with leveraging CNSide to drive collaboration with biopharma firms which can be in search of to develop new remedies or develop the use for current remedies for CNS tumors. The flexibility of CNSide to seize and characterize circulating tumor cells in cerebrospinal fluid allows the identification of biomarker targets which can be prone to authorised and investigational therapies. Moreover, the flexibility to quantitatively monitor the extent of most cancers cells within the CSF throughout therapy can point out therapeutic response.
CNSide could present an observational endpoint for these trials and topic to inclusion in customary of care pointers has the potential to turn out to be an efficacy endpoint indicator for therapies present process scientific investigations. As you will have seen, we introduced our first biopharma collaboration in June with Plus Therapeutics to make use of CNSide within the RESPECT LN Part I/IIa trial to judge response to therapy and therapy efficacy of rhenium-186 nanoliposome in sufferers with leptomeningeal illness. We additionally introduced our first CNSide biopharma collaboration revenues within the second quarter.
We proceed to pursue further collaborations via a sturdy funnel of potential leads having recognized greater than 50 related alternatives. And our third initiative is to establish further applied sciences, services and products we are able to in-license or purchase that may increase our choices to neuro-oncologists. We’re very early on this course of, but stay excited in regards to the prospects. As an replace on our COVID-19 enterprise, we don’t anticipate offering this testing service a lot past the top of 2022.
It’s notable that we’ve got acquired greater than 1 million samples for COVID-19 testing since we started providing this service in June 2020, with the ensuing gross revenue serving to to fund our CNSide actions. As beforehand introduced, we’ve got judiciously exited most of our blood-based oncology diagnostic companies to focus our sources on CNSide. Nonetheless, we proceed to help current diagnostic and biopharma firm collaborations that also require some points of our prior blood-based packages.
With these feedback, I’d like to show the decision over to Antonino Morales to evaluate our monetary outcomes. Antonino?
Antonino Morales — Director and Interim Chief Monetary Officer
Thanks, Sam, and thanks, everybody, for becoming a member of us right this moment. As talked about, we lately grew to become present with our quarterly SEC filings. Though we filed our 10-Q for the second quarter on November 10, and we filed our 10-Q for the third quarter on November 21, right this moment, I’ll focus my remarks on our Q3 and 9-month monetary outcomes. Beginning with our third quarter outcomes; web revenues for the three months ended September 30, 2022, had been $5.6 million, which included $4.7 million in COVID-19 check income. This compares with web revenues for third quarter of 2021 of $17.5 million, which included $16.5 million in COVID-19 check income.
We accessioned 49,874 industrial samples throughout Q3 of 2022 in contrast with 152,796 industrial samples in the course of the prior 12 months interval, with the decline due primarily to decrease COVID-19 testing quantity. Value of revenues for the third quarter of 2022 was $5.8 million in contrast with $11.3 million a 12 months in the past, with the lower primarily associated to decrease COVID-19 testing quantity. R&D bills for the third quarter of 2022 had been $1.4 million, which in contrast with $1.3 million for the third quarter of 2021.
G&A bills for the third quarter of 2022 had been $3 million in contrast with $3.5 million for the third quarter of 2021, with the lower primarily on account of decrease stock-based compensation and decrease headcount. Gross sales and advertising bills for this 12 months’s third quarter had been $1 million in contrast with $1.9 million a 12 months in the past, with the lower due primarily to discount in gross sales commissions expense. Internet loss attributable to widespread stockholders for the third quarter of 2022 was $5.1 million or $0.33 per share.
This compares with the web loss attributable to widespread stockholders for the third quarter of 2021 of $0.6 million or $0.04 per share. Turning to our nine-month outcomes; web revenues for the 9 months of 2022 had been $36.1 million, which compares with $47.3 million for the primary 9 months of 2021. Working bills for the primary 9 months of 2022 had been $49.5 million and included value of revenues of $24.1 million, R&D bills of $4.9 million, G&A bills of $4.2 million, and gross sales and advertising bills of $6.3 million; inside G&A, $3.5 million of bills had been nonrecurring.
Internet loss attributable to widespread stockholders for the primary 9 months of this 12 months was $13.6 million or $0.80 per share. This compares with web revenue attributable to widespread stockholders for the primary 9 months of 2021 of $0.1 million or $0.01 per share. We reported money of $18 million as of September 30, 2022.
With these feedback, I’ll flip the decision again to Sam.
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Thanks, Antonino. I wish to point out that final month, we hosted our second KOL Webinar, this one that includes neuro-oncologist, Dr. Priya Kumthekar from Northwestern College and Dr. Seema Nagpal from Stanford College. Each talk about the real-world use of CNSide of their practices and at their establishments. We invite you to observe this compelling webinar, which is offered on the CNSide web page on biocept.com. Now earlier than opening the decision to your questions let me summarize by stating that our aim is to ascertain management within the rising class of neurological tumor diagnostics.
We intend to generate the requisite scientific utility proof that may help CNSide reimbursement and adoption into affected person care pointers. We’re additionally centered on forming collaborations with biopharma firms which can be growing remedies for CNS tumors. We confronted a number of near-term milestones, together with the next: We count on to announce our second revenue-generating biopharma collaboration, both later this 12 months or early subsequent 12 months.
We plan to open a further middle within the FORESEE scientific trial, once more, both later this 12 months or early subsequent 12 months. Now we have one investigator-initiated trial with CNSide already underway and are in search of alternatives for added unbiased trials — and we count on CNSide scientific examine outcomes to be revealed in a peer-reviewed journal someday within the first half of 2023.
Lastly, I wish to welcome Biocept’s latest Director, Quyen Dao-Haddock as a CPA with greater than 20 years of economic and accounting expertise. Quyen shall be a invaluable addition to our Board and likewise as a member of our Audit Committee. In closing, we imagine Biocept is on an optimum path for development and constructing shareholder worth. We stay up for sharing our progress on the targets on upcoming quarterly calls. And as all the time, we’re dedicated to bettering affected person therapy selections and scientific outcomes.
And with that overview, we’ll now — we’re now able to take your questions. Operator?
Questions and Solutions:
Operator
Thanks. [Operator Instructions]
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Whereas we’re ready for the primary query, with the accounting evaluate now accomplished and our SEC filings updated, we stay up for protecting you abreast of our progress by resuming our observe of holding quarterly convention calls. Additionally, Antonino and I shall be in San Francisco in the course of the Annual JPMorgan Healthcare Convention and can be found for one-on-one conferences, January 9 via the 11. Please contact LHA if you want to schedule a while with us. Okay, operator, we’re prepared for the primary query.
Operator
And that query will come from Kemp Dolliver with Brookline Capital Markets. Please go forward.
Kemp Dolliver — Brookline Capital Markets — Analyst
Hello, good afternoon. I’ve a few questions. First is what does the expense base seem like after you exit COVID testing, assuming that, that may happen on the finish of the 12 months?
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Kemp, thanks for the query. I’m going to let Antonino reply this one. Go forward.
Antonino Morales — Director and Interim Chief Monetary Officer
Yeah. That — in anticipation of the exit of the COVID, we had began lowering our expense base not solely from the working facet and headcounts. And we had incurred some expense to make that occur this 12 months, and also you’ll see some enhancements within the bills going ahead after the fourth quarter, however there shall be positively reductions within the expense base.
Kemp Dolliver — Brookline Capital Markets — Analyst
You’re not able to present specifics at this level?
Antonino Morales — Director and Interim Chief Monetary Officer
No, I actually can’t — I imply I can’t challenge at this level.
Kemp Dolliver — Brookline Capital Markets — Analyst
Okay. Truthful sufficient. The following couple of questions are interrelated, they usually relate to CNSide and your means to develop use of it on the designated nationwide most cancers facilities. So how are you attempting to the touch the most cancers facilities which have but to order? What are the gating elements for you in doing so past the plain that you’ve in all probability a minimal variety of individuals out making calls? And at last, what expertise have you ever had with repeat orders of late?
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
So many good questions in there, Kemp. As you could or is probably not conscious, we’ve got a comparatively small industrial group within the area proper now. We’re not absolutely overlaying the geography of the U.S. We’re centered largely within the Midwest, the Southeast and within the Northeast. Now we have three FTEs there, and we’ve got a pacesetter in that group and who’s additionally serving to us on the industrial facet itself, he’s carrying a bag himself a bit.
And primarily, conferences like we simply had at SNOW [Phonetic] are huge boards for us, the place we attempt to contact base with all the KOLs that we’ve got been interacting with, together with those that haven’t but ordered. I might describe the NCI facilities very like I might describe many of the shopping for universe for well being care merchandise. There are early adopters. There are late adopters. There are center to late adopters. So I feel we’ve finished an excellent job at figuring out these people that had been keen to attempt one thing model new due to maybe compassionate use points or simply the desperation they’ve in serving to to handle these sufferers.
And so we proceed to name on these facilities with our small group. It’s a collaboration between inside and out of doors people. Our medical crew spends a whole lot of time interacting with KOLs, explaining how the check works and what it may possibly present to those caregivers. So hopefully, a few of that provides you somewhat colour on how we go about getting these NCI facilities. We’re seeing a pleasant tempo of adoption, simply had — a number of simply begin right here within the final time period. So we’re now off to twenty-eight. So hopefully, that provides you some colour, Kemp. Did I reply all of your questions?
Kemp Dolliver — Brookline Capital Markets — Analyst
The final query associated to expertise with repeat orders up to now.
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
So we’re seeing comparatively good efficiency there. I don’t have any off-hand statistics for that. Apart from observe — you may observe the variety of physicians who order each quarter. You may entice — you can too observe the developments — the optimistic developments we’ve seen in instances per shopper that’s been steadily growing. So these sorts of metrics are all contained in our investor deck. So these sorts of issues give us nice assurance that the check is sticky as soon as the clinicians have some expertise with it.
Kemp Dolliver — Brookline Capital Markets — Analyst
Nice. Thanks, Sam.
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
Thanks Kemp. Thanks for the questions.
Operator
And it will conclude our question-and-answer session. I’d like to show the convention again over to Sam Riccitelli for any closing remarks.
Samuel D. Riccitelli — Chairman and interim President and Chief Government Officer
As soon as once more, I’d wish to thank everybody for taking part on right this moment’s name and on your curiosity in Biocept. We stay up for offering an replace throughout our subsequent convention name in March 2023 once we report our 2022 fourth quarter and full 12 months monetary outcomes. Thanks once more, and have an amazing day.
Operator
[Operator Closing Remarks]
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