Investing in CTC Testing with Biocept
In previous articles, we discussed such companies as Apocell and Raindance Technologies that are developing blood tests that can detect cancer by looking for circulating tumor cells (CTCs) in the blood. These tests could be used in the initial prognosis of cancer as well as frequently throughout treatment, for example, to see how well a patient is responding to a particular targeted drug therapy. According to an overview of the CTC industry conducted by Hanson and Wade in 2013, 66% of researchers say that analysis of CTCs will be standard of care in the next 4 years. One CTC testing company that had an IPO this year with little fanfare was Biocept.
San Diego based Biocept (NASDAQ:BIOC) first began trading on February 5, 2014 when they offered shares to the public for net proceeds of $16.7 million. Investors who would have bought shares the first day of trading and held them until today would have paper losses of over -%50 based on today’s closing price. At December 31, 2013, Biocep’s accumulated deficit was approximately 122.4 million, half of which was incurred from December 2007 to the present. The other half was incurred prior to 2007 and was for a business plan that was unrelated to cancer treatment. Revenues were approximately $134,000 for the year ended December 31, 2013, 78% which came from the Dana-Farber Cancer Institute. Biocept’s patent portfolio consists of 3 issued U.S. patents, 6 pending U.S. patent applications and corresponding foreign patents and foreign patent applications. Biocept had 27 full-time employees and one part-time employee as of December 31, 2013.
Biocept’s CTC Tests
Biocept intends to use approximately $5 million of the net proceeds of the IPO to complete all four stages of development for the planned CTC test pipeline seen below:
Referred to as OncoCEE, this platform is claimed by Biocept to offer 10-100X the sensitivity of competing platforms in detecting cancer mutations in the bloodstream. One of OncoCEE’s formidable competitors in the CTC testing space is a product called CELLSEARCH offered by Janssen, a Johnson and Johnson company. CELLSEARCH is the first and only clinically validated, FDA-cleared test for capturing and enumerating CTCs. Biocept makes the below claims as to the advantages of OncoCEE over CELLSEARCH:
For the year ended December 31, 2013, the average price per commercial OncoCEE test was $635 and the average price for a clinical OncoCEE test was $400.
Biocept has a sales and marketing agreement currently with Clarient for their OncoCEE-BR test (breast cancer) test and with Thermo Fisher Scientific (NYSE: TMO) for their OncoCEE-LU (lung cancer) test. They also plan to establish their own sales organization with an initial group of 7 sales representatives placed in strategic locations around the country. From May to December 2013, Biocept performed an average of 1-3 physician-ordered tests per month (in addition to the 20-30 tests per month which they have been performing since January 2013 for a clinical utility study with investigators at the Dana-Farber Cancer Institute). For Biocept (NASDAQ:BIOC) investors, in the absence of revenue growth, attention should focus on the progress Biocept reports on advances of their test pipeline. Of particular interest will be the findings from the Dana-Farber clinical study which is being sponsored by Genentech, the results of which are said to be available in 2014.
Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Find out which ones in the Quantigence report freely available to Nanalyze subscribers.