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Biocept Q2 Revenues Down 23 Percent on Pandemic Impact

NEW YORK (GenomeWeb) – Biocept reported after the close of the market on Wednesday that its second quarter revenues dropped 23 percent year over year.

For the three months ended June 30, the San Diego-based liquid biopsy firm had $917,471 in revenues compared to the $1.2 million it saw during the same quarter last year. These included $841,000 in commercial test revenue, $38,000 in development services test revenue, and $38,000 in revenue for distributed products, split between Biocept's Target Selector RUO kits and CEE-Sure blood collection tubes.

On a call discussing the firm's earnings, Biocept President and CEO Michael Nall said that the decline in development services revenue in particular is not surprising as these assays are used mainly by the company's pharma and biotech customers in drug development and clinical trials.

"During the pandemic, many clinical trials came to a halt and some remain on hold today," he explained.

Biocept accessioned 1,399 commercial samples during the second quarter of 2020, a 4 percent increase from the 1,340 commercial samples it accessioned during Q2 2019. The firm also reported that it recorded 1,184 billable samples, a 2 percent decrease from the 1,211 it saw in the same period last year. The company said this decline in billable samples was due to the impact of the COVID-19 pandemic.

Nall said that the fact that the firm's overall Q2 commercial testing volume increased slightly year over year was due to the decision to initiate COVID-19 testing, a significant break from the company's focus on developing cancer liquid biopsy assays.

Although commercial volume in Biocept's core oncology business was down 16 percent year over year, Nall said in a statement that this was "significantly better than the decline of up to 40 percent" the company had anticipated earlier in the year.

"We reached a low point in oncology testing early in the second quarter, with subsequent improvement as the quarter progressed.  However, with the resurgence of the pandemic, physicians report that patient office visits have not returned to pre-COVID levels, which is continuing to affect our oncology testing volume," he added.

Due to these ongoing challenges, Nall said that although Biocept's long-term strategy remains oncology-focused, and the firm expects its oncology test volume to return to growth when the pandemic subsides, COVID-19 testing will remain an important part of its business "for the immediate future."

The company has received more than 11,000 specimens for COVID-19 testing so far, and Nall said on the call that tests are being reimbursed at an average of $100 per sample. The firm also announced after the call that it has signed an agreement with an unnamed healthcare group to provide COVID-19 testing to skilled nursing facilities.

"With testing volume ramping up, we expect COVID-19 testing to have a significant impact on third quarter revenue," Nall said on the call.

By later this year, Biocept also expects to begin shipping its own COVID-19 specimen collection kits to lab services customers. It also will work under a development agreement with Aegea Biotechnologies, announced last week, to utilize the Switch-Blocker technology co-owned by the two firms to develop a novel SARS-CoV-2 assay.

The company's Q2 net loss was $6.5 million, or $.05 per share, compared to $7.8 million, or $0.38 per share, in Q2 2019. The calculation of per-share loss in the recently completed quarter was based on 127.2 million weighted-average shares outstanding versus about 20.5 million in Q2 2019.

Biocept's quarterly R&D expenses rose 45 percent to $1.6 million from $1.1 million, mainly due to the recent launch of its COVID-19 PCR testing, ongoing laboratory automation projects, and continued development and validation of liquid biopsy panels. Its SG&A expenses shrank about 3 percent to $3.2 million from $3.3 million.

The company finished the quarter with $24.1 million in cash and cash equivalents.

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