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Biocept Plans Pilot Allowing Customers to Perform CTC Pathology Readout In House

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NEW YORK (GenomeWeb) – Communicating with shareholders in a letter earlier this month, Biocept CEO Michael Nall said that the company expects to launch a pilot program this year that allows select customers to move one aspect of the firm's liquid biopsy test interpretation into their own labs.

In essence, the company plans to split its circulating tumor cell testing into two sections, a technological step and a reporting step, with individual hospital labs taking on the latter. The portion of Biocept's tests that analyze circulating cell-free DNA will still be reported fully by the company.

In an interview this week, Nall explained further how the pilot will work, and also discussed what the company's first steps will be as it moves toward the longer-term process of developing an IVD kit version of its platform and taking it through the US Food and Drug Administration.

Biocept's test menu includes assays that interrogate both circulating tumor cells and cell-free DNA.

Because of the way Biocept's analysis of CTCs works — the company uses a fluidic channel technology to capture these rare cells from a blood sample, then stains and processes them using standard cytology procedures, and interprets molecular status using methods like FISH — it is possible to separate the technical aspects of the test from the reporting of a result.

In tissue analysis, this is already something companies often do, Nall said. For example, Clarient — where Nall has worked in the past, and which was bought by NeoGenomics in 2015 — uses this approach, called a TC/PC (technical component/professional component) split, Nall said.

The technical aspect of a test, the creating of tissue sections and staining of slides, for example, is performed and billed separately from the interpretation of the results by a pathologist.

"We are rolling this out slowly, so we're not going to offer this to every hospital in America right away, but we have some key centers that are very interested in this," Nall said. "We would do that technical aspect of the system here, meaning the capture of circulating tumor cells and then staining. Then we can upload the images … and allow a local pathologist to do the interpretation."

Because analysis of circulating cell-free DNA does not allow this kind of split, that part of the company's tests would still remain completely under its purview even within the new pilot program.

Splitting out interpretation of CTC staining and allowing hospitals to do that themselves also splits out some of the cost of testing, and thus the revenue Biocept collects. Nall said the professional component represents about 15 percent of revenue compared to 85 percent for the technical component.

However, he explained, giving customers this option now plays into the firm's longer-term business strategy. As liquid biopsy testing moves more and more into the mainstream, hospitals and other test providers will want to be able to do more and more in their own laboratories, he argued.

In that vein, Biocept intends over the next few years to develop an IVD kit version of its technology and bring it through FDA approval.

"Right now liquid biopsy is predominantly a send-out test … because we are still early in the evolution," Nall said. "If this was a baseball game, I would say we're probably at the top of the third right now."

Send-out testing, where hospitals send samples for analysis by a central reference lab, is more expensive for them than running tests in house, so as blood-based cancer testing moves further into the standard of care and is reflected in professional guidelines, the needs and desires of hospital labs will change.

"We want to make sure that we are a part of that," Nall said, though "we're just starting this and we estimate that will take a couple of years."

As the liquid biopsy field has developed, two main testing strategies have split off. On one side, labs like Biocept develop and offer a menu of individual assays. In the other, companies like Guardant Health and Personal Genome Diagnostics offer sequencing-based analyses of circulating cell-free tumor DNA using larger gene panels.

Biocept doesn't expect to compete with these technologies necessarily, as comprehensive tests occupy a different clinical niche than the narrower assays Biocept offers, Nall argued. "We're an and with those folks, not an or."

For example, a physician might want to run one or a handful of cheaper, simpler tests first to determine a first-line therapy strategy. Then, if a patient doesn't have some of the more common markers, or has failed standard treatment, they would move to a more comprehensive sequencing test. Or, in the case of therapeutic resistance, testing for a single mutation like EGFR T790M may not require the breadth (or merit the cost) of comprehensive sequencing panels.

Recognizing the same emerging demand as Biocept, several ctDNA sequencing companies, like Resolution Biosciences and PGDx, have also said they plan to develop IVD kits.

In his letter to stockholders earlier this month, Nall said that Biocept hopes to begin a study this year that will help support its own IVD development process.

He clarified this week that it will be focused not on as much on clinical validity, for which the company has already collected a significant amount of data, but more on clinical utility and the health economic value of isolating and analyzing circulating tumor cells.

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