NEW YORK – Biocept reported after the close of the market on Wednesday that its first quarter revenues rose 41 percent year over year, driven by a 27 percent increase in revenue per commercial accession.
For the three months ended March 31, the San Diego-based liquid biopsy firm generated $1.4 million in revenues compared to $1.0 million a year ago. These included about $1.3 million in commercial test revenue, $60,000 from development services testing, and $69,000 in revenue for distributed products including the firm's recently launched Target Selector RUO kits and its existing CEE-Sure blood collection tubes.
Biocept accessioned 1,306 total samples in the quarter, a slight decrease from 1,325 total samples in Q1 2019. Of these, 1,141 were billable samples, down from 1,155 in the prior year's quarter. The firm attributed the drop in total and billable samples to the impact of the COVID-19 pandemic.
In a statement, Biocept President and CEO Michael Nall highlighted that the firm was able to increase revenues even facing these pandemic-associated headwinds. He estimated that the crisis led to a 15 percent to 25 percent decline in commercial volume from Biocept's current customers during the quarter and said it has also impacted opportunities for the firm to gain new customers.Â
Despite this, "we believe we are well positioned to weather the pandemic … and for a return to growth as shelter-in-place restrictions are lifted and physician offices and labs reopen," he added. "We expect that when it is safe for patients diagnosed with cancer to continue to seek treatment, our commercial volume will return to a more normal level."
On a call discussing the firm's financial results, Nall added, however, that the company's outlook for Q2 remains cautions. The company expects "volume to decline by approximately 30 to 40 percent in the second quarter over the prior year, [assuming] a gradual increase in volume as we move through the remainder of this period," Nall said.
Although these products are responsible for a relatively modest percentage of the company's revenue, Nall also said the firm is seeing declines in clinical trial enrollment having an impact on sales of its blood collection tubes and recently launched RUO kits.
Biocept's Q1 net loss jumped to $8.3 million, or $0.11 per share, from $5.9 million, or $.61 per share, in Q1 2019. The company used approximately 79 million weighted-average shares outstanding to calculate per-share loss in the recently completed quarter compared to about 9.8 million for the year-ago period.
Its R&D expenses in Q1 rose about 8 percent to $1.3 million from $1.2 million due primarily to development and validation costs related to its launch of new offerings, such as testing of cerebral spinal fluid and its provision of Thermo Fisher's COVID-19 assay. The firm's SG&A expenses rose almost 10 percent to $3.4 million from $3.1 million.
The firm said it also had $2.1 million in expenses in the quarter related to a January 2020 Warrant Exercise Inducement offering for net proceeds of approximately $2.3 million.
Biocept announced that it was validating Thermo Fisher's kit to provide COVID-19 testing in early April, saying at the time that it would begin providing tests April 15. But announcing its Q1 earnings this week, the firm said that it has not yet performed any COVID-19 testing due to national shortages of specimen collection kits.
To address this the company intends to manufacture its own collection kits for distribution to clients and expects those kits to be available in June.
"We already routinely manufacture our own materials for our oncology testing, so we have a team in-house to do this," Nall said during the firm's earnings call. Biocept's current capability would allow it run approximately 400 COVID-19 tests per day, he added, with the potential to ramp that to about 3,000 per day.Â
Whatever actual volume of COVID-19 testing the company may end up handing would depend on overall demand for tests and on demand for tests specifically from Biocept as opposed to other local and national providers.
During the call, Nall said that in speaking with other labs and hospital systems in the Southern California area it appears that there is "a good amount" of capacity for testing," at least some of which is not being used due to the aforementioned issues with sample collection materials. In that environment, Biocept views itself as "gearing up to make sure we are prepared should test volume increase."
"As far as the demand in California and elsewhere, we still have to see. We hear the same public statements … from our governor and others about the need for wide scale population-based testing. To date, we haven't necessarily seen that, but we're starting to get indications that could be where things are going," Nall said.
"I think there's a need to solve this problem on collection kit capacity first, and then after that we'll start to see things start to become more clear in those arenas," he added.
Biocept finished the quarter with cash and cash equivalents totaling $21.5 million.
In April the company added approximately $9.6 million to this via net proceeds of a registered direct offering.
"We are particularly pleased with our strengthened balance sheet, having raised approximately $36.3 million in net proceeds since the beginning of December 2019," Nall said in a statement.
"We believe that based on historical and planned cash usage, our current funding is expected to support operations through most of 2021; however, with the uncertainty introduced by the impact of COVID-19 on revenue and collections, our cash runway may be shorter," he added.