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BI

BIOCEPT INC (BIOCQ)·Q2 2023 Earnings Summary

Executive Summary

  • Q2 revenue fell sharply to $0.59M due to the cessation of COVID-19 PCR testing in February; sequential revenue declined 12% and year-over-year declined ~90% .
  • Net loss improved year-over-year to $3.63M (EPS $(3.50)), aided by a $2.44M non-cash gain from warrant liability revaluation; sequential EPS worsened vs Q1 $(0.41) .
  • Management emphasized the strategic pivot to CNSide, with NCCN submission efforts, FORESEE trial enrollment past midpoint, and manuscripts submitted to peer-reviewed journals; cost actions have reduced opex across functions .
  • Liquidity stood at $6.63M cash at quarter-end, supplemented by ~$3.6M net proceeds from a May 2023 offering; management continues to right-size operations to extend the cash runway .
  • No Q2 earnings call transcript was available; the company planned a business update call later in August focused on FORESEE and CNSide adoption—potential near-term narrative catalyst .

What Went Well and What Went Wrong

What Went Well

  • “Our primary focus is establishing our proprietary cerebrospinal fluid assay CNSide as standard of care… diligently work towards submission to NCCN for consideration to include CNSide” (CEO Antonino Morales). FORESEE trial enrollment passed midpoint; additional sites expected .
  • Manuscript submitted describing CNSide validation and case studies; four additional manuscripts in preparation with leading neuro-oncologists, targeting peer-reviewed publication to bolster clinical utility and reimbursement .
  • Operating discipline: significant reductions in cost of revenues, R&D, G&A, and S&M versus prior year reflecting headcount and vendor spend reductions; sales agreements and cost controls highlighted across Q1–Q2 updates .

What Went Wrong

  • Core revenue reset: Net revenues dropped to $0.59M versus $5.82M a year ago as COVID testing ended; commercial accessions fell from 77,779 to 322 (Q2 YoY), underscoring post-COVID volume headwinds .
  • Sequential softness: Revenue decreased from $0.67M in Q1 to $0.59M in Q2, with EPS deteriorating to $(3.50) from $(0.41); volumes are still normalizing post exit from COVID testing .
  • Listing/financial pressure: The company disclosed noncompliance with Nasdaq stockholders’ equity requirement in May and is pursuing a compliance plan; strategic alternatives and workforce reductions announced in January to preserve cash .

Financial Results

Income Statement Comparison (Oldest → Newest)

MetricQ2 2022Q1 2023Q2 2023
Revenue ($USD Millions)$5.819 $0.673 $0.589
Loss from Operations ($USD Millions)$(9.889) $(7.098) $(6.114)
Net Loss ($USD Millions)$(10.044) $(7.144) $(3.631)
Diluted EPS ($USD)$(17.82) $(0.41) $(3.50)
Change in Fair Value of Warrant Liability ($USD Millions)N/AN/A$2.442

Operating Expenses Detail (Oldest → Newest)

Metric ($USD Millions)Q2 2022Q1 2023Q2 2023
Cost of Revenues$8.023 $3.028 $2.550
R&D Expenses$1.729 $1.040 $0.409
G&A Expenses$4.300 $2.988 $3.494
Sales & Marketing Expenses$1.656 $0.715 $0.250

Balance Sheet Snapshot (Oldest → Newest)

MetricDec 31, 2022Mar 31, 2023Jun 30, 2023
Cash and Equivalents ($USD Millions)$12.897 $6.774 $6.633
Total Assets ($USD Millions)$30.873 $22.993 $22.103
Total Liabilities ($USD Millions)$22.013 $20.565 $21.813
Stockholders’ Equity ($USD Millions)$8.860 $2.428 $0.290

KPIs and Volume Indicators

KPIQ1 2022Q1 2023Q2 2022Q2 2023
Commercial Accessions Delivered (units)153,056 3,085 77,779 322
COVID-19 PCR Testing StatusProvided Ceased Feb 2023 Provided Ceased
Business Update Call/Conference ActivityN/APlanned resumption with Q2 reporting mid-August N/APlanned later in August (FORESEE update, CNSide)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY / Q2 2023None providedNone providedMaintained (no quantitative guidance)
Margins / OpExFY / Q2 2023None providedContinued cost reductions; right-sizing narrative onlyMaintained (qualitative focus)
OI&E / Tax RateFY / Q2 2023None providedNone providedMaintained (no quantitative guidance)
CNSide Adoption / Trial2023Clinical utility evidence and NCCN submission plannedFORESEE past midpoint; manuscripts submitted; NCCN submission pursuitRaised qualitatively (strategic emphasis)
Capital / Liquidity2023None provided~$3.6M net proceeds raised in May; cash $6.63M at 6/30Incremental liquidity update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2022 / FY 2022; Q-1: Q1 2023)Current Period (Q2 2023)Trend
CNSide standard-of-care pursuitStrategic alternatives pivot to CNSide; lab service agreements; payor in-network adds NCCN submission focus; manuscripts; conference presentations; FORESEE midpointStrengthening clinical utility push
FORESEE trial progressEnrollment opened; CRO support Enrollment past midpoint; more sites joining; planned update callAccelerating enrollment and visibility
Reimbursement strategyLab service agreements required; half of clients engaged (few signed) Seeking reimbursement that reflects test value; NCCN inclusion to support reimbursementContinued emphasis on structured reimbursement
Cost reduction / right-sizing>40% headcount reduction vs pre-COVID; vendor spend down Reduced cost of revenues, R&D, S&M vs PY; G&A down YoY; restructuring ongoingOpex discipline sustained
COVID testing exitAnnounced to cease end of Jan 2023 COVID testing ceased; revenue normalized at oncology baseCompleted pivot away from COVID
Liquidity/capital actionsProjected YE22 cash ~$13M; strategic alternatives initiated ~$3.6M net offering proceeds; cash $6.63M at Q2-endPreserving runway amid lower revenues
Listing/complianceNasdaq equity noncompliance disclosed; remediation plan window No update in Q2 press release on complianceOngoing risk to listing status

Management Commentary

  • “Biocept’s primary focus is establishing our proprietary cerebrospinal fluid assay CNSide as standard of care… We continue to diligently work towards submission to the NCCN for consideration to include CNSide in their standard-of-care guidelines.” — Antonino Morales, President & CEO .
  • “Our ongoing FORESEE clinical trial is powered to generate data… I’m exceptionally pleased that patient enrollment in FORESEE has passed the midpoint, with four clinical sites open… and several additional medical centers expected to join.” — Antonino Morales .
  • “We plan to provide further evidence of CNSide’s clinical utility through publication… We have submitted a manuscript… Four additional manuscripts are being prepared… documenting their clinical experiences with CNSide.” — Antonino Morales .
  • “We right sized our business to align with our primary focus, which is helping to extend our cash runway… reducing expenses are key to Biocept becoming a self-sustaining business.” — Antonino Morales .
  • Q1 context: “We have begun requiring all new customers to sign lab service agreements… nearly half of our existing clients have engaged… although the program has yielded only two signed agreements to date.” — Samuel D. Riccitelli, Chairman & interim CEO .

Q&A Highlights

  • No Q2 2023 earnings call transcript was available in the document set. Management intended to host a business update call later in August to provide a progress report on FORESEE and other developments .

Estimates Context

  • S&P Global/Capital IQ consensus for Q2 2023 EPS and revenue was unavailable due to missing CIQ mapping for BIOCQ; as a result, estimate comparisons cannot be provided at this time [SpgiEstimatesError].
  • Values retrieved from S&P Global are unavailable; consensus comparisons should be treated as not available for this quarter.

Key Takeaways for Investors

  • Post-COVID revenue base is very small ($0.59M), with accessions collapsing; the investment case hinges on CNSide adoption, NCCN inclusion, reimbursement wins, and clinical utility publications .
  • Year-over-year net loss improved materially in Q2, helped by a $2.44M non-cash warrant liability fair value change; sequential EPS deteriorated as the company transitions away from COVID testing volumes .
  • Cost actions are visible across the P&L; sustaining opex discipline remains critical given equity of $0.29M and constrained cash ($6.63M) even after the ~$3.6M May raise .
  • Strategic alternatives and Nasdaq equity compliance remain overhangs; monitor disclosures for remediation plans and any strategic transactions .
  • Near-term catalysts: the planned business update call, new CNSide manuscripts/publications, additional FORESEE sites/enrollment milestones, and any NCCN submission progress .
  • Longer-term thesis: successful clinical guideline inclusion and reimbursement alignment for CNSide could unlock sustainable oncology testing economics; until then, liquidity and execution risk are elevated .
  • Trading implication: stock likely reacts to tangible CNSide clinical/reimbursement milestones and corporate actions; absent those, volume normalization and listing risk may dominate narrative .