BIOCEPT INC – 10-Q – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Insurance News Net

Posted: November 21, 2021 at 1:53 am

The following discussion and analysis of our financial condition and results ofoperations should be read in conjunction with our unaudited condensed financialstatements and related notes included in this Quarterly Report on Form 10-Q andthe audited financial statements and notes thereto as of and for the year endedDecember 31, 2020 and the related Management's Discussion and Analysis ofFinancial Condition and Results of Operations, both of which are contained inour Annual Report on Form 10-K for the year ended December 31, 2020, filed withthe Securities and Exchange Commission on March 31, 2021. Past operating resultsare not necessarily indicative of results that may occur in future periods.

Company Overview

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formalin-fixed paraffin-embedded, or FFPE. In March 2020 we also released a RUOBRAF Target SelectorTM validated for both ctDNA and FFPE.

Our revenue generating efforts are focused in three areas:

providing laboratory services to medical oncologists, neuro-oncologists,

and other physicians or healthcare providers treating patients with cancer

providing laboratory services using both our CTC and ctDNA and ctRNA

assays in order to help pharmaceutical and biopharmaceutical companies run

licensing our proprietary technology and selling our distributed products,

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Assays, Products and Services

Our current assays and clinical trial services include:

CTC and ctDNA and ctRNA Testing. Our current assays and our other planned

cancer diagnostic assays are based on our Target-Selector technologies.

After completing testing, we or our partners provide our customers with an

easy to understand report that describes the results of the analyses

performed, which is designed to help medical oncologists, neuro-oncologists,

surgical oncologists, urologists, pulmonologists, pathologists and other

physicians make better decisions about the treatment of their patients.

Clinical Trial Services. We plan to utilize our clinical laboratory and

translational research capabilities to provide clinical trial and research

services to pharmaceutical and biopharmaceutical companies and clinical

research organizations to improve the efficiency and economic viability of

their clinical studies. Our clinical studies and translational research

services could leverage our knowledge of CTCs and ctDNA and ctRNA and our

ability to develop and implement new cytogenetic, immunocytochemical and

molecular diagnostic assays. Our current assays can, and our other planned

cancer diagnostic assays and biomarker assays are anticipated to be able to,

help optimize clinical trial patient selection and/or monitor cancer drivers

during the course of treatment or disease progression. Demonstration of

clinical utility of our assays would more easily enable these tests to be

adopted in standard clinical practice, helping physicians select the most

appropriate therapy for their patients.

RT-PCR COVID-19 Testing. We are currently performing RT-PCR testing for

COVID-19 and have received more than 640,000 samples for processing to

date. We believe that our RT-PCR COVID-19 testing will be an important aspect

of our business until the COVID-19 pandemic subsides.

In May 2020, we announced the availability of a Target-Selector molecular assayRUO kit for the detection of BRAF mutations in ctDNA and FFPE samples.

Pharmaceutical, Research and Health Economic Collaborations

In February 2021, we announced establishing a research collaboration withProtean BioDiagnostics, Inc. to research the ability of our Target Selectormolecular assay to determine EGFR status in non-small lung cancer (NSCLC)patients.

Provider Agreements

In July 2019, we announced that we entered into a Laboratory Services ProviderAgreement with Beacon Laboratory Benefit Solutions, Inc., a nationallyrecognized premier provider of laboratory benefit management technologysolutions to health and managed care companies in the United States.

In June 2020, we announced that we entered into a managed care provideragreement with Medical Cost Containment Professional LLC (MCCP), to processout-of-network claims for Biocept's Target SelectorTM liquid biopsy testing.MCCP is a reference-based pricing insurance network that includes more than150,000 providers nationwide.

Patents and Technology

Our success depends on an intellectual property portfolio that supports ourfuture revenue streams and erects barriers to our competitors. We aremaintaining and building our patent portfolio through filing new patentapplications, prosecuting existing applications, and licensing and acquiring newpatents and patent applications.

Coronavirus (COVID-19) Pandemic

In January 2021, we signed an agreement with the Foundation for CaliforniaCommunity Colleges to make COVID-19 testing available to the 116 Californiacommunity colleges and their more than 2.1 million students. Through theFoundation's CollegeBuys program, our PCR-based COVID-19 test is now availablefor community colleges to purchase for students, faculty and staff.

In June 2021, we announced a collaboration with CLEARED4, a market leader inpandemic health and safety solutions, to develop a system for tracking andmanaging COVID-19 testing requirements and test results for our customers.

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Results of Operations

Three Months Ended September 30, 2020 and 2021

The following table sets forth certain information concerning our results ofoperations for the periods shown (dollars in thousands):

expenses

operations

taxes

delivered

Costs and Expenses

Income Tax Expense

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Results of Operations

Nine Months Ended September 30, 2020 and 2021

The following table sets forth certain information concerning our results ofoperations for the periods shown (dollars in thousands):

Income Tax Expense

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Liquidity and Capital Resources

Cash Flows

Our net cash flow from operating, investing and financing activities for theperiods below were as follows (dollars in thousands):

Liquidity, Capital Resources and Expenditure Requirements

the costs of developing our anticipated internal sales and marketing

capabilities;

the scope, progress and results of our research and development programs,

including clinical utility studies;

the scope, progress, results, costs, timing and outcomes of the clinical

utility studies for our diagnostic assays;

our ability to manage the costs for manufacturing our microfluidic channels;

the costs of maintaining, expanding and protecting our intellectual

property portfolio, including potential litigation costs and liabilities;

our ability to obtain adequate reimbursement from governmental and other

third-party payers for our assays and services;

the costs of additional general and administrative personnel, including

accounting and finance, legal and human resources, as a result of becoming

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Off-Balance Sheet Arrangements

We have not engaged in any off-balance sheet arrangements as defined inItem 303(a)(4) of Regulation S-K.

Critical Accounting Policies and Significant Judgments and Estimates

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