Biocept (BIOC) Stock Is Mixed After Earnings

Biocept BIOC Stock News

Biocept Inc (NASDAQ: BIOC) is having a rough start to the trading session, down about 2.75% at the open. The declines come after the company issued its financial results, leaving investors with mixed feelings. Nonetheless, a second press release announcing new patents seems to be providing some cushion for the fall. Here’s what’s happening:

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BIOC Stock Heads Red On Financial Reults

In a press release issued this morning, Biocept provided its financial results for the second quarter and first six months of the fiscal 2019 year. The results were relatively mixed. At the end of the day, revenues are growing quite rapidly, but are still pretty small, not nearly covering expenses.

In a statement, Michael Nall, President and CEO at BIOC, had the following to offer:

I’m pleased to report another quarter of strong performance with revenues increasing 45% over the prior-year quarter, as we continue to execute on our new commercial strategy. Growth was driven by a 26% year-over-year increase in commercial samples, as we focused our commercial efforts on segments of the liquid biopsy oncology market where Target Selector™ can help the most patients, namely in prostate, breast, and lung cancers. Most importantly, we are helping more patients as our billable samples accessioned per sales day entering the third quarter increased approximately 50% from the beginning of the year.

We have now launched two tumor-specific panels developed in collaboration with Thermo Fisher Scientific. These products, Target Selector™ NGS Lung Panel and Target Selector™ NGS Breast Panel, combine Thermo Fishers’ state-of-the-art Ion Torrent™ next-generation sequencing (NGS) platform with our CLIA laboratory and commercial infrastructure, as well as our expertise in blood sample preservation and DNA/RNA isolation. Biocept is the only commercial liquid biopsy company offering both circulating tumor cell (CTC) and circulating tumor DNA (ctDNA) analysis with both single-gene and multi-gene offerings.

I’m also pleased to report that our initiative with Prognos has advanced to the next phase as we are beginning to supply them with de-identified information in real time. We believe this partnership will allow us to commercialize data generated from our liquid biopsy testing, with Prognos applying its artificial intelligence technology to its repository of more than 20 billion laboratory records to help life science and pharmaceutical companies develop and market targeted therapies. We are pleased to be the first liquid biopsy company to strike a partnership with Prognos.

The Highlights From The Report

There was definitely plenty of positive news to pull from the financial results. First and foremost, for the second quarter, revenue climbed by a whopping 45% on a year over year basis. During the period BIOC saw a 26% increase in commercial samples year over year.

For the first six months of the year, revenue climbed by 36%, with commercial samples increasing 18% year over year. So, there’s no denying the fact that Biocept is generating revenue growth that turns heads.

There’s also the matter of product launches. During the first six months of 2019, the company has launched multiple screening panels, helping it to achieve the strong revenue growth that it reported. With continued work to expand its product offering, investors are looking forward to continuing, and possibly compounding annual revenue growth.

The Rub

While there are plenty of reasons to be excited, there’s also a big, dark cloud hanging over the company, and investors are clearly reacting to it, as can be seen by the declines.

At the moment, Biocept only has about $6 million in current assets. Based on the fact that the company generated a loss of more than $5 million in the second quarter, there’s a need for funding, and that need is relatively immediate.

Considering this, there’s a fear that BIOC will access the funding that it needs through dilution. Should this take place, new shares would be issued, reducing the value of shares currently held by investors.

In Other News…

In other news, BIOC issued a press release this morning announcing that it has been awarded three patents. In the United States, the company was issued Patent No. 10,369,568, entitled Cell Separation Using Microchannel Having Patterned Posts. In Canada, the company was issued Patent No. 2,756,493, entitled Devices And Methods of Cell Capture And Analysis. Finally, in Europe, the company received Patent No. 2,619,588, entitled Methods And Reagents For Signal Amplification.

Of course, these patents add to the IP protection behind the company’s proprietary liquid biopsy technology. In a statement, Michael Nall had the following to offer:

Increasing shareholder value by broadening U.S. and international patent protection used in our Target Selector™ liquid biopsy platform is a key strategic initiative, as we seek to develop our business globally, with the potential to license our technologies for uses outside the scope of our core business. We now have been granted 36 issued patents covering our tests and technologies, and plan to continue to strengthen our intellectual property position with additional patent issuances to come.

The Bottom Line

The bottom line here is that all in all, things are going well. BIOC continues to innovate and protect the proprietary technologies that it is creating. Moreover, the company’s liquid biopsies are seeing a strong uptake among the medical community due to an improved commercial strategy. While there’s obvious need for funding ahead, this is often the case at this stage of the game. As such, the stock could be a strong pick for an investor with long-term goals and an appetite for risk.

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