BIOC - Biocept Inc. (BIOC) Business Update Conference Call (Transcript)
2023-08-30 20:38:10 ET
Biocept, Inc. (BIOC)
Business Update Conference Call
August 30, 2023 4:00 PM ET
Company Participants
Jody Cain - LHA
Antonino Morales - President, CEO
Dr. Barbara Blouw - VP, Clinical Development
Dr. Seema Nagpal - Clinical Professor of Neurology-Stanford University
Dr. Philippe Marchand - Chief Operating Officer
Robert Walsh - Vice President, Controller
Darrell Taylor - Chief Legal and Compliance Officer
Conference Call Participants
Kemp Dolliver - Brookline Capital Markets
Michael Okunewitch - Maxim Group
Presentation
Operator
Welcome to the Biocept Business Update Conference Call. [Operator Instructions]. Please note, this event is being recorded.
I would now like to turn the conference call over to Jody Cain. Please go ahead.
Jody Cain
This is Jody Cain with LHA. Thank you for participating in today's call. Joining me are Antonino Morales, President and CEO of Biocept and Dr. Seema Nagpal, Clinical Professor of Neurology at Stanford University; Dr. Barbara Blouw, Vice President of Clinical Development; Dr. Philippe Marchand, Chief Operating Officer; Robert Walsh, Vice President, Controller; and Darrell Taylor, Chief Legal and Compliance Officer from Biocept will be available during today's Q&A session.
During this call, management will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and generally can be identified by terms such as anticipates, estimates, believes, could, expects, intends, may, plans, potential, predicts, projects, should, will, would or the negative of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different those statements as well as performance or achievements that are implied by forward-looking statements. This means that results could change at any time and the contemplated impact of circumstances that impact the battery economy and Biocept's operations, its financial results and its outlook is the best estimate based on the information available for today's discussion.
For details about these risks, please see the company's SEC filings, including the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The content of this call contains time-sensitive information that is accurate only as of today, August 30, 2023. Except as required by law, Biocept disclaims any obligation to publicly update or revise any information to reflect events or circumstances that may occur after this call.
And now I'd like to turn the call over to Antonino Morales. Antonino?
Antonino Morales
Thank you, Jody. Good afternoon, everyone, and thank you for joining us. I'd like to extend a particular welcome to Dr. Seema Nagpal, who is joining us on today's call. Dr. Nagpal is a Board-certified Neuro-oncologist at Stanford University and is also a supporter and early adopter of our proprietary cerebral spinal fluid assay inside. In a few minutes, she will discuss how she uses CNSide in her practice. We are convinced more than ever before that CNSide is a highly valuable asset and that pursuing its further development is critical to the management of patients with cancer involvement in the central nervous system. Additionally, we believe this is the optimal path forward for building a sustainable business and generating value for our shareholders.
In fact, independent research indicates that the initial annual U.S. addressable market for CNSide is about $1.2 billion. Our goal is to establish CNSide as a standard of care under the National Comprehensive Cancer Network or NCCN guidelines, which we believe will support further physician adoption and will set reimbursement at a rate that reflects the value of our test in clinical decision-making. We have a strategy in place to reach this goal, providing us with a clear path forward. You may recall that CNSide was developed based on Biocept's long-standing and proprietary liquid biopsy technology. Our assay is the first commercially available method that has the potential to objectively measure tumor status and therapy response in patients with brain tumors by quantifying the tumor cells in the cerebral spinal fluid of patients with cancer that has metastasized to the central nervous system. It's a laboratory developed test that can help physicians be better informed about the actionable molecular information associated with a patient's metastatic cancer and allows development of personalized cancer treatment plans.
CNSide is unique in its ability to answer 3 key questions. Number one, is there a tumor? The CNSide assay detects and quantifies tumor cells in cerebral spinal fluid in patients with carcinomas or melanomas with suspected central nervous system metastasis. Number two, is there a target? The CNSide assay can identify actionable biomarkers for which targeted therapies are available. And number three, is there a trend? The CNSide assay can monitor tumor cell count, which may be indicative of response to therapy or disease progression. Given that CNSide is not yet recognized as standard of care, we can only build for components of our testing using existing CPT codes, and this level of billing does not cover our test cost.
Therefore, we are focused on pursuing standard of care status for CNSide through the NCCN guidelines to support further adoption and reimbursement that aligns with our test value. To accomplish this, we need to provide evidence of CNSide's clinical utility for physicians in their treatment decision-making. We are in the process of generating evidence in the form of data from our 4C prospective clinical trial and peer-reviewed publications, both of which I will speak about momentarily. While we anticipate increased physician adoption and launching full commercialization upon securing standard of care status, I want to mention that early adoption from the physician community is highly promising. We launched CNSide in the first quarter of 2020. By the end of Q2 of this year CNSide had been used by more than 200 physicians for over 1,400 patients at more than different institutions.
The cumulative number of CNSide tests we have run to date exceeds 2,800. We believe the strong early adoption along with the fact that many physicians are reordering the test show CNSide is a useful tool in supporting physicians in managing their patients with central nervous system metastases. In our quest to produce additional clinical utility, we have a dual approach strategy.
First, is our ongoing prospective FORESEE trial, which measures the impact of CNSide on physicians' clinical decision-making to manage Leptomeningeal Metastasis for LM, this is a devastating cancer in the membranes that surround the brain and spinal cord with few treatment options. The trial is also designed to compare CNSide inside cell detection in the cerebral spinal fluid to that of conventional cytology. CNSide has notable advantages over current standards of care, such as cytology, clinical evaluation and MRI, which have limited sensitivity and specificity.
In fact, it's notable that 40% of patients who test positive for LM at autopsy tested negative for LM through cytology prior to death. These limitations create challenges for physicians in managing disease and determining the best course of treatment for very sick patients. In pilot studies, our test has shown 92% sensitivity in 95 specificity, 95% specificity in detecting LM. Additionally, CNSide is both qualitative and quantitative which are key to monitoring the treatment response and improving the ability of physicians to make or change treatment decisions. This is becoming increasingly important as more targeted therapies are approved by regulators.
FORESEE is a 2-part prospective clinical trial that's enrolling subjects with breast or small cell lung cancer as the primary tumor and who have suspected or confirmed LM involvement. We began enrolling subjects in the feasibility phase of the study in March, which will include up to 40 subjects. I'm pleased to report that we are well ahead of our projections with 33 subjects enrolled as of August 28 at clinical sites that include Sanford University, the University of Texas Southwestern Medical Center, Northwestern University Feinberg School of Medicine and Fred Hutchinson Cancer Center University of Washington.
The trial is designed to follow subjects and collect data from each enrollee at 4 key time points in their treatment. As of last week, we collected data points from 55 visits. We anticipate completing the feasibility phase of this study in the first half of 2024 and moving into the second part of the study, which is the validation phase at that time, between 40 and 100 subjects will be enrolled in that phase. We expect 2 additional medical centers to join the FORESEE trial in the near term to help with future enrollment.
The second strategy to generate additional clinical utility evidence is through the publication of study data in peer-reviewed journals. We are pleased that 5 manuscripts are in process for publication. One article authored by Dr. Sonam Puri from Huntsman Cancer Institute in Salt Lake City has been submitted recently to the Journal Neuro-Oncology advances, it describes how CNSide was used for diagnosing and monitoring response to therapy on 15 unique patients treated at that facility having non-small cell lung cancer with suspected or confirmed LM.
A second paper reviewing the fundamentals of the CNSide technology has been submitted by our team at Biocept to the archives of pathology and laboratory medicine. Complementing this publication strategy, CNSide was featured in 2 oral presentations at the Snow ASCO CNS Cancer Center Conference held earlier this month. It's highly gratifying to have leaders in the field such as Dr. Priya U. Kumthekar from Northwestern and Dr. David Paccione at the University of California San Diego discussing CNSide at one of the most prestigious annual gatherings of neuro-oncologists and other physicians as they are -- as they share breakthroughs in detecting and treating cancers of central nervous system.
At this time, I am exceptionally pleased to turn the call over to Dr. Nagpal, who will discuss how she is using CNSide with her patients. Dr. Nagpal?
Dr. Seema Nagpal
Thank you for your introduction, Antonino. I'm very excited and pleased to share my experience using the CNSide test and that of Stanford University to help our patients. I have been using CNSide since it first became available in April 2020. Before I add access to this test, it was challenging to diagnose my patients with leptomeningeal disease and identify actionable biomarkers for response to therapy. Prior to availability of this test, I was relying solely on pathology. Results, which have poor sensitivity and specificity in combination with looking at my patients seeing what they look like an MRI, which is also limited in sensitivity and specificity. These limitations can be really significant obstacles to the treatment of my patients and can really affect their survival and quality of life when I can't get the right answer for them.
While in the early days, I used CNSide mainly on patients to sort of rule in or confirm leptomeningeal disease, meaning I was fairly certain about what it was but I wanted the cell count or I really wanted the biomarkers. I have now kind of transitioned a bit more to using it more broadly, and I'm using it to rule out leptomeningeal disease in patients. And that is a little bit different, it might not be as easy to appreciate, but it is just as important to rule out the disease as it is to rule it in, 1 in 10 women in this country will develop breast cancer at some point and it may be treated and cured and then sometime later, they may show up with abnormal enhancement on their brain MRI that may be completely unrelated. And it's particularly important to figure out that, that new enhancement is not related to the breast cancer. It is not leptomeningeal disease because treatments to the brain and central nervous system have really serious side effects.
For instance, probably one of the most common treatment methods we use is brain radiation. And for leptomeningeal disease, it's the whole entire brain and sometimes a spinal cord while it reduces cancer progression in the central nervous system, it is also notorious for damaging healthy brain. And what this translates to for patients and families is early dementia, and that can be seen within 3 to 6 months of the treatment. So if, for example, that breast cancer patient actually just has a little bit of inflammation from something completely different doing whole brain radiation really, really, really causes harm.
So I don't want to format patients, but I also want to make sure I'm tuning the right thing. So without an adequate diagnostic test, you can tell that this is a real challenge. And I gave you that one particular example, but that patient is 1 of at least 2 or 3 in the past year where I've been able to convince their treatment team and the patients that they actually don't have leptomeningeal metastases and therefore, we should not do these really harmful treatments.
And actually that particular piece of using CNSide has expanded the number of deficiencies using CNSide at Sanford. So I use it all the time for patients within the cancer center for our breast, lung, melanoma oncologist, but now general neurology is asking to use this test on patients who are in the hospital hey, they have a little bit of abnormal enhancement on their MRI. They have maybe a remote prior history of cancer is this cancer, and it's a really important question answer and to answer correctly.
So I'm in agreement with you, Antonino. This is an incredibly important test. It's really important information. And I think once it's in the hands of a physician, we figure out how to use it, and we don't want to lose it. Thank you.
Antonino Morales
Thank you for those comments, Dr. Nagpal and sincerely, thank you for taking time from your very busy schedule to join us this afternoon.
Before we open the call to your questions, I want to mention another important action we are taking to help us reach our goal of standard of care status for CNSide. For more than a year, we have focused on rightsizing our business and taking other steps to extend our cash runway. You may have seen in our most recent financial news release that we have significantly reduced operating expenses. Much of our savings have been from trimming our workforce to align with our strategic focus. We now have a purpose-driven and enthusiastic team with the capabilities to advance our strategy. Additional measures to manage our spend have included simplifying test ordering and reducing the number of microfluidic chips used in CNSide testing.
So in summary, I'd like to leave you with 2 key points. First, we are making progress in generating the requisite prospective clinical evidence to support CNSide as standard of care under NCCN guidelines and achievement that we believe will support further physician adoption and set reimbursement. And second, we are carefully managing our expenses to extend our cash runway. As always, we are committed to improving treatment decisions for physicians and enhancing clinical outcomes for patients.
With that overview, we are ready to take your questions. Operator?
Operator
[Operator Instructions] One moment please for the first question.
Antonino Morales
Before we take your first question, I'd like to mention that Biocept will be participating virtually in the H.C. Wainwright Global Investment Conference being held September 11 through 13. A webcast of our presentation will go live on September 11 on the Events and Presentations page of our website at biocept.com.
Okay, operator, we are ready for the first question.
Question-and-Answer Session
Operator
The first question today comes from Michael Okunewitch with Maxim Group.
Michael Okunewitch
I guess to start off, I'd just like to ask a little bit about the process that's gaining inclusion into guidelines. Are you still expecting that the feasibility portion of the FORESEE study will support that inclusion as well as sufficient reimbursement? Or do you think you'll need the validation portion as well?
Antonino Morales
We -- Michael, again, thank you for joining us today. We believe that completing the feasibility study will be sufficient for us to submit our application to the NCCN guidelines so that we can become included in their standard of care -- standard of care.
Michael Okunewitch
All right. And then as for the validation portion, right, if the feasibility is enough for the guidelines and for reimbursement, what's the goal of the larger second portion of the study?
Antonino Morales
We would eventually -- if the feasibility study provides the kind of data that would support the submission to the NCCN, we would consider actually terminating that second half of the validation phase because it would no longer be necessary.
Michael Okunewitch
All right. And then I actually do have a question for Dr. Nagpal, could you talk a little bit more about what signs you would look for and to figure out whether or not you should consider a rule out test [indiscernible] and then if you didn't have the CNSide, what will you do with these patients where you're not entirely sure whether or not they do have LM and you're considering potentially damaging treatment?
Antonino Morales
I believe Dr. Nagpal has signed off. She is practicing physician, so she wasn't able to stay on the call. I believe Dr. Barbara Blouw can take your question though, Michael.
Dr.Barbara Blouw
Yes, Michael, this is Dr. Barbara Blouw. I will relay that question to Dr. Nagpal, and we will provide you with an answer today or tomorrow.
Michael Okunewitch
All right. I appreciate that. And then just one more for me, and I'll hop back in the queue. I'd just like to see what level of reimbursement you would need in order to justify a greater mass marketing effort for CNSide?
Antonino Morales
Reimburse level of reimbursement. Can you repeat that question, you broke out, Michael?
Michael Okunewitch
I was sorry, I was saying what level of reimbursement would you need for CNSide to make it worth it to justify a greater commercial marketing effort?
Antonino Morales
Our expectation actually is that we've looked and explored that question and we expect that this test could potentially have a pricing of about $5,000, $6,000 or so. However, and that is not what we need to make a profit that is much more than what we need right now. Our cost to process the test is a little bit less than $1,000.
Michael Okunewitch
All right. Thank you very much and looking forward to additional progress.
Antonino Morales
Thanks, Michael.
Operator
The next question comes from Kemp Dolliver with Brookline Capital Markets.
Kemp Dolliver
Right. Looking at the enrollment data you provided generates a couple of questions. First, has the pace of enrollment changed since you started in March?
Antonino Morales
Actually, that's a very -- Kemp by the way, thank you for joining us, and that's a very good question. We are actually ahead of schedule. The pace started very strongly and continues at a very strong pace. We are -- we had originally anticipated completing the first phase enrollment by the end of this year. We expect to complete it by the end of September. So we are well ahead of schedule.
Kemp Dolliver
Okay. That was my second question and just doing the arithmetic around the enrollment so far. So that comment is encouraging. So you complete enrollment in September. How does the time -- how has the cadence move after that because this is not a study where there's, say, certain number of visits over a certain number of time frame. It's a little more general than that. Assuming that you do complete enrollment in September, are we looking at, say, January for having data?
Antonino Morales
No. We expect to have data by -- before the end of the first half of next year. There are some unknowns for us. Obviously, we have patients that expire and so that kind of changes the numbers a little bit. But we are on track to have data available before the mid part of next year, and that data is what we've used to submit to NCCN.
Kemp Dolliver
Okay. Very good. And then you did touch on this in your prepared comments, but what are the steps are you considering near term to extend the cash runway further into next year?
Antonino Morales
Yes, we continue to evaluate and this -- I think you're aware, we just started back in February of 2022 where we started reducing headcount and looking at creating efficiencies in our laboratory in all areas of the business. That's an ongoing process. As we move forward, we continue to identify more efficiencies in the laboratory but also as we have reduced or rightsized our business and not focusing on the commercial side of the business, we also have some other areas of the administrative side that we are able to reduce as well. So the -- we continue to look at that. It's an ongoing task.
Kemp Dolliver
Right. And I think you talked about the office space and that being a substantial opportunity. Is that still in process or?
Antonino Morales
Yes. We have ongoing conversations with our landlord at this point in time, considering various options to reduce the expenses associated with the building that we're in right now. As you know, the most critical part for us is the laboratory. We took previous management took over this larger space when they geared up for the COVID testing, given the fact that we're not doing COVID testing anymore, there's some excess space here that we will -- we are definitely looking at ways to reduce the expenses associated with that space.
Kemp Dolliver
Very good. Thank you for taking my questions.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Antonino Morales for any closing remarks.
Antonino Morales
Thank you. Once again, I'd like to thank everyone for participating on today's call and for your interest in Biocept. We look forward to providing an update during our next conference call in November when we resume holding these events on a quarterly basis when reporting financial results. Thanks again, and have a great day.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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Biocept, Inc. (BIOC) Business Update Conference Call (Transcript)