This story has been updated to include comments from Biocept's earnings call with analysts.
NEW YORK (GenomeWeb) – Biocept reported after the close of the market Tuesday that its third quarter 2018 revenues plunged 31 percent year over year as total test volumes shrank 28 percent.
The liquid biopsy assay developer reported total revenues of $761,591 for the three months ended Sept. 30, compared to $1.1 million in the same period last year, and missing the Wall Street analysts' estimate of $950,000. Comparing only accrual-based revenue, which the firm switched to in January 2017, Biocept's earnings dropped about 15 percent from the prior year's quarter.
Overall revenue for Q3 2018 included $63,000 from development services and $698,000 in commercial test revenues from the accession of 964 total samples — 28 percent fewer than the 1,343 samples the company analyzed in Q3 2017. Among these, 878 samples were billable samples, a 27 percent drop from the 1,203 billable samples accessioned during the same quarter last year.
"Progress continues on multiple fronts to support our future growth," Biocept President and CEO Michael Nall said in a statement, in which he focused on the firm's efforts to restructure its commercial organization and hire executives with expertise in the diagnostics industry. Nall also noted that the firm is launching new programs to further engage current customers and broaden adoption of its Target Selector platforms.
"As an update on our collaboration with Thermo Fisher Scientific, we expect to complete validation of the molecular oncology assay panel before the end of 2018, and we anticipate being in position for commercial launch in 2019," Nall added. "At that time, Biocept will be the only liquid biopsy company offering both individual cancer biomarker tests along with the option of a larger oncology assay panel."
During a call with analysts following the release of the earnings, Nall said that company leaders are disappointed in the results — which mark a fourth consecutive quarter of year-over-year sample and revenue reductions — and are dedicated to turning things around.
Edwin Hendrick, Biocept's newly appointed chief commercial officer, said that he and his team are now working on "repackaging" the company's liquid biopsy platform to certain physician segments in oncology — treatment areas where Biocept believes its technology has "unique advantages in helping physicians improve outcomes for their patients," Hendrick said. He also suggested that greater emphasis on Biocept's capability for CTC analysis in addition to circulating DNA tests, will be a focus of marketing efforts moving forward.
Nall also highlighted Biocept's deal with Highmark Health, announced this August, to study the clinical and economic impact of its testing in patients with non-small cell lung cancer.
He further added that oncologists in the Allegheny Network have been enthusiastic so far and the study has now accrued more than 10 percent of the planned subjects. The company has also recruited about 10 percent of the planned cohort for its study with the UCSD Moores Cancer Center, using both circulating tumor cells and circulating tumor DNA to monitor for early signs of disease recurrence, he added.
Finally, Nall said Biocept is also making progress in its planned transition from offering laboratory testing to selling diagnostic kits, expecting to have research-use-only offerings based on its Target Selector assays ready for sale in 2019.
When asked about the possibility of future merger or acquisition activity, Nall said that Biocept's board is "absolutely focused on trying to increase shareholder value," and "certainly wouldn't stand in the way of something that would benefit shareholders."
Biocept's Q3 net loss widened to $6.7 million from $5.8 million in Q3 2017. However, its net loss per share narrowed to $2.42 per share in Q3 2018 calculated on 2.8 million weighted average shares outstanding from a net loss per share of $5.90 calculated on 986,865 weighted average shares outstanding in the year-ago period. Analysts had expected a loss per share of $2.02.
The company's R&D expenses for Q3 2018 rose 29 percent to $1.1 million from $856,698 a year ago, due primarily to a higher proportion of allocated laboratory costs associated with increased research and development activities and the cost of research studies conducted in collaboration with academic and healthcare institutions.
Biocept's Q3 SG&A costs dropped 9 percent to $3.2 million from $3.5 million in the year-ago period. This was driven by a reduction in headcount-related expenses, the company said, as well as lower sales commissions reflected in its reduced sales volume.
Biocept finished the quarter with $9.0 million, after raising approximately $12.5 million in aggregate net proceeds from a shareholder rights offering and a financing with certain institutional investors.
The firm's shares sank nearly 8 percent to $1.66 in Wednesday afternoon trading on the Nasdaq.