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spk01: Welcome to the BIOSEP second quarter 2021 financial results conference call. All participants will be in lesson only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference call over to Bruce Voss. Please go ahead.
spk03: This is Bruce Voss with LHA. Thank you all for participating in today's conference call. Joining me from BIOSEP are Michael Nall, President and Chief Executive Officer, and Tim Kennedy, Chief Operating Officer and Chief Financial Officer. 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 from those statements as well as performance or achievements that are implied by the forward-looking statements. In particular, there is significant uncertainty about the duration, severity, and impact of the COVID-19 pandemic. This means results could change at any time, and the contemplated impact of COVID-19 on BIOSEP's operations, financial results, and outlook is the best estimate based on the information for today's discussion. For details about these risks, please see the company's SEC filings, including the company's quarterly report on Form 10Q being filed today. The content of this call contains time-sensitive information that is accurate only as of today, August 16th, 2021. Except as required by law, BIOSEP disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Now I'd like to turn the call over to Michael Null. Mike?
spk04: Thank you, Bruce, and good afternoon, everyone. Today we're reporting profitability for the first half of 2021 on revenues of nearly $30 million, driven primarily by our high-quality RT-PCR COVID-19 testing. We are pleased to continue providing this valuable service with the resulting financial performance and cash flow supporting investment in our core oncology business. Revenues for the second quarter of $12 million are significantly higher versus the prior year, again, due to the COVID-19 testing. That said, 2Q revenues were down from Q1 this year due to a decline in COVID-19 test volumes with more Americans becoming vaccinated. However, with the emergence of the Delta variant, our run rate COVID-19 testing in the current quarter to date is above last quarter's levels. Since last reporting total samples received for COVID-19 testing of 450,000 on July 21st, we are now approaching the milestone of nearly 500,000 samples, an increase of about 50,000 samples in less than one month. We are prepared for higher COVID-19 testing volume as we begin receiving samples through our partnership with the California Community College System as students return to on-campus classes. We are already providing testing services to more than 20 colleges in Southern California, mostly for athletic teams. The full impact of testing for the California Community College System is largely unknown at this point, as each college in the system determines its own policy. Some have already indicated interest in using BioCept for COVID-19 testing of their unvaccinated students, faculty, and staff. Importantly, we have taken steps to ensure our lab capacity can handle an expected influx in samples. At some campuses, we have established on-campus sample collection points and implemented an online service in collaboration with Cleared4 that enables both the college and students to track COVID-19 testing. As a final update on COVID-19 testing, we continue to co-develop and validate the AGEA Biotechnologies Assay. As we've discussed, the importance of this assay is in quantifying viral load regardless of the COVID-19 strain or variant. Quantifying viral load can be key in determining when patients who tested positive can safely return to work, school, or other activities. We see a valuable role for this testing, particularly with the quickly spreading Delta variant. Turning now to our core oncology business, we are highly encouraged by the ongoing adoption of CN-Sci, our paradigm-changing neuro-oncology assay. CN-Sci provides physicians with a valuable tool to diagnose and manage patients with cancer that has metastasized to the central nervous system and brain. Our assay answers three critical questions. First, is cancer present? Second, is there a target for treatment? And third, what is the trend over time? Since our beta launch of this assay in early 2020, we have seen continuous growth in quarterly test volume. with gains of nearly 40% from Q4 2020 to Q2 2021. It's particularly meaningful that more than 30 of the most prestigious U.S. academic institutions have now ordered our See Inside assay. Even more exciting is that the majority of these institutions have become repeat customers. We view this as a strong indication that neuro-oncologists who are using our assay see its value in improving patient outcomes. We intend to continue reaching out to the neuro-oncology community this year and to expand our outreach activities to include the broader oncology community next year. Our focus is firmly directed on making C-INSIDE the standard of care based on its ability to offer physicians a more timely and accurate method to diagnose the presence of metastases to the central nervous system. Our pilot study showed that in patients with suspected central nervous system involvement, CNSci detected tumor cells in approximately 80% of cases, while the current standard of care, CSF cytology, detected tumor cells in only about 50% of cases. Our goal is to secure standard of care status under NCCN guidelines. Importantly, we have a pathway that we expect will allow us to publish the clinical data that we anticipate will influence these national oncology care guidelines. We expect to begin the first part of our 4C study by mid-2022 with a goal to establish clinical validations. We will then conduct the second part of the study to evaluate the clinical utility of CNSI to identify key decision points that can be made based on testing results. We expect to initiate the second part in 2023. Earlier this year, we submitted an initial application to the FDA for breakthrough device designation. Although this submission was recently denied, We are gathering data based on the FDA's feedback to support a resubmission. Our CNSide assay is currently validated to identify metastatic cancers originating in the lung and breast, which frequently involve the central nervous system. We estimate the U.S. market for the assay at more than $1 billion annually, with approximately 200,000 patients diagnosed with metastatic cancer involving the central nervous system per year. We plan to expand our see inside testing in you beyond breast cancer and lung cancer for additional tumor types and biomarkers, including melanoma. We are encouraged by Medicare's recent decision to cover and reimburse our breast cancer assay for the HER2 biomarker at $2,435. Importantly, this coverage decision demonstrated that Medicare recognized the value of liquid biopsy as a necessary part of patient care. Guidelines call for every patient diagnosed with breast cancer to be profiled for key biomarkers, including HER2, which is critical for physicians in qualifying patients for anti-HER2 therapies, such as Herceptin. Additionally, monitoring for the HER2 biomarker is important as the patient's cancer can convert from HER2 negative to HER2 positive as the tumor becomes more aggressive. In fact, retesting to assess current HER2 status at progression or recurrence is currently in the American Society of Clinical Oncology, or ASCO, and the College of American Pathologists, or CAP, guidelines. Common sites for metastatic progression in breast cancer are bone and brain, making a less invasive liquid biopsy solution a viable alternative to tissue biopsy. Our target selector assay has the added advantage of profiling the HER2 biomarker from either blood or cerebral spinal fluids. This decision by the Centers for Medicare and Medicaid Services is very important for the role of liquid biopsy in less invasively and more cost-effectively identifying and monitoring HER2 biomarkers. In May, we announced an agreement with Quest Diagnostics to distribute our target selector NGS lung cancer assay. Quest is currently onboarding our target selector NGS panel, which provides genomic profiling of patients with advanced non-small cell lung cancers. We expect the beginning in the fourth quarter, Quest Oncology Division will be marketing this panel to their customers. It is, of course, exciting to partner with the world's largest clinical testing laboratory who shares our passion for improving patient outcomes. Lung cancer is the third most common cancer in the United States and the leading cause of cancer deaths. The CDC estimates that more than 235,000 new cases of lung cancer will be diagnosed this year. with non-small cell lung cancer accounting for 84% of these cases. Our target selector NGS panel for lung serves an important need as tissue can be difficult to retrieve from patients with advanced cancer. And even when it is collected, the amount of tissue can be insufficient to provide results that guide treatment. Our blood-based panel is able to detect multiple biomarkers to qualify patients for therapy, including newer therapies like targeted treatments that are allowing patients to live longer with a better quality of life. Before Tim reviews our financial results, I want to welcome some new BioSup team members. Earlier this month, we announced the appointment of David Carlander as Senior Vice President of Commercial Operations. Dave brings more than 25 years of industry experience that will be highly valuable at this critical time of commercializing C&Side. Last month, we welcomed Linda Rubenstein and Antonino Morales as directors, increasing the size of our board to nine. Both Linda and Antonino have significant financial and leadership experience to help us achieve our strategic goals and guide our long-term success. Also in July, Sam Riccitelli was appointed chairman. Sam joined our board last October and brings to Biocet substantial experience in diagnostics operations, sales, and senior leadership. He succeeds our long-term chair, David Hale, and interim chair, Fay Wilson. I'm pleased to report that both David and Fay remain as directors. And with that, I'll turn the call over to Tim Kennedy to review our Q2 financial results.
spk07: Tim? Thanks, Mike, and good afternoon, everyone. For Q2 2021, we're reporting net revenues of $12 million, which is up significantly from $917,000 in Q2 of 2020, with the increase due primarily to COVID-19 testing. Commercial revenue for the second quarter of 2021 included a $1.1 million increase in reserves for potentially uncollectible aged accounts receivables. This reserve relates to testing performed primarily in 2019 which was to be reimbursed in 2020. That reimbursement process was hindered by the pandemic. We continue to be working to collect for this testing, but in the meantime, we determined it was prudent to increase the reserve amount. Prior to the increase in reserves, revenues for the second quarter were $13.1 million and included commercial test revenue of $12.1 million in RT-PCR COVID-19 testing, along with $926,000 in oncology testing, $33,000 in development services test revenue, and $34,000 in revenue for distributed products, target selector, RUO kits, seashore blood collection tubes, and payments from AGEA for services associated with the development of a COVID-19 asset. As a comparison, revenues for the second quarter of 2020 were 841,000 in commercial test revenue, including 37,000 RT-PCR COVID-19 testing, 804,000 in oncology testing, 38,000 in development services test revenue, and $38,000 in revenue for distributed products, target selector RUO kits, and seashore blood collection tubes. In Q2 2021, we received 102,172 total accessions. This is an increase from 1,306 total accessions in Q2 of 2020. but down from Q1 of 2021 total accession of 145,110. As Mike stated, we anticipated a sequential quarter decline in COVID-19 testing volume. However, COVID-19 testing has ramped up in Q3, due mainly to the Delta variant. We also expect to begin receiving samples from our agreement with the California Community College System later in the current quarter. Total cost of revenues was $7.5 million compared with $2.5 million for the prior year period, with the increase primarily due to COVID-19-related collection kits and consumable expenses. As we continue to leverage the fixed components of our costs, our cost of revenues as a percentage of net revenues decreased by approximately 213 percent from the prior year period. Contributors to this expansion in gross margins included better pricing on COVID-19 consumables and COVID-19 collection kits and lower facility costs related to the relocation we completed in late 2020. R&D expenses for the second quarter of 2021 were $1.1 million compared with $1.6 million a year ago, with the decrease primarily attributable to lower facilities costs and cost of revenue allocation to R&D. We expect R&D expenses to increase in the coming quarters as we begin the first 4C clinical study. G&A expenses for Q2 2021 were $3.3 million versus $1.9 million in Q2 2020, with the increase primarily due to headcount additions and other expenses related to COVID-19 testing. Sales and marketing expenses were $1.9 million compared with $1.3 million in the prior year period, resulting primarily from higher commission payments associated with COVID-19 sales. Net loss for the second quarter of 2021 was 1.8 million or 14 cents per share on 13.5 million weighted average shares outstanding. This represents a 5.5 million improvement in net income, even with the impact of the 1.1 million increase in reserves. This compares with a net loss for the second quarter of 2020 of 6.4 million, or 51 cents per share on 12.7 million weighted average shares outstanding. Now turning to our year-to-date results. Net revenues for the first six months of 2021 were 29.8 million, which compares with 2.4 million, for the first six months of 2020. Revenue for the 2021 period before the impact of the increase in reserves included $30.7 million in commercial test revenue, $73,000 in development services test revenue, and $96,000 in revenue for target selector RUO kits and seashore blood collection tubes and payments from AGEA. Operating expenses for the first six months of 2021 were $28.9 million and included cost of revenues of $16.5 million, R&D expenses of $2.2 million, G&A expenses of $6.4 million, and sales and marketing expenses of $3.9 million. Operating income for the first six months of 2021 was $916,000, a $13.5 million improvement from an operating loss of $12.6 million for the first six months of 2020. Net income for the first six months of 2021 was $771,000 or six cents per diluted share on 13.4 million shares outstanding. This is a significant improvement from the net loss for the first six months of 2020 of $14.8 million, or $1.44 per share on 10.3 million weighted average shares outstanding. We reported cash and cash equivalents as of June 30th, 2021, of $19.5 million, which is up from $14.4 million as of December 31st, 2020. During the three months ended June 30, 2021, our cash balance increased due to the addition of $1.2 million from increased collections and an additional $3.9 million through an ATM facility. With that, I'll turn the call back to Mike.
spk04: Mike? Thank you, Tim. Before opening the call to your questions, I want to remind you of our corporate priorities, which include the following. supporting the full commercial launch of our C-Inside assay, initiating clinical studies with C-Inside to support adoption as standard of care under NCCN guidelines, expanding our C-Inside testing menu for additional tumor types and biomarkers, increasing sales of our full range of target selector assays, growing sales of our target selector liquid biopsy kits and C-Sure blood collection tubes, entering into additional strategic commercial and technology partnerships like the agreement with Quest Diagnostics, expanding our COVID-19 testing services to the California Community College System, and validating and commercializing our next generation quantitative COVID-19 assay that was co-developed with AGEA Biotechnologies. Our portfolio of target selector-based assays provides critical information to assist physicians in determining treatment decisions for their patients diagnosed with cancer. Our assays are based on our differentiated platforms that leverage information from tumor cells, cell-free DNA and RNA in both blood and cerebral spinal fluid. To date, we have tested nearly 30,000 patient samples with our proprietary oncology biomarker assays and have received nearly 500,000 samples for COVID-19 testing. We expect revenues related to COVID-19 testing to remain meaningful throughout 2021. noting that circumstances could change in the remainder of the year. We also anticipate increasing adoption of our C-inside assay as we develop collaboration and clinical studies to obtain standard of care designation. And to support our commitment to improving patient treatment choices and clinical outcomes, we have a strong balance sheet. With that overview, we're now ready to take questions. Operator?
spk01: Ladies and gentlemen, if you wish to ask a question during today's question and answer session, you will need to press star then the number one on your telephone. If your question has been answered and you wish to withdraw your request, you may do so by pressing the pound key. If you're using a speakerphone, please pick up your handset before entering your request. One moment, please, for the first question.
spk04: Operator, while we're waiting for the first question, I want to remind listeners to view our neuro-oncology webinar discussing the inside for the diagnosis and management of cancer involving the central nervous system. The webinar featured a technology overview and leading neuro-oncologist, Dr. Priya Kumtaker at Northwestern University, Dr. Nicholas Blondin at Yale University, and Dr. Amir Azadi at the Barrows Neurological Institute, reviewing case studies using the C-inside assay with subsequent patient outcomes. The link to view the webinar is on the homepage of our website at biosep.com. I'd also like to mention that we will be presenting at three upcoming virtual investment conferences. These include the H.C. Wainwright 23rd Annual Global Investment Conference being held September 13th through the 15th, the Oppenheimer Virtual Fall Healthcare Life Sciences and MedTech Summit being held September 20th to 23rd, and the Cantor Fitzgerald Virtual Global Healthcare Conference being held September 27th through 30th. We are also scheduled to present in person at the LD Micro Main Event Conference on October 13th in Los Angeles. Presentations and webcasts will be posted to our website at biosep.com. Okay, operator, we're ready for the first questions.
spk01: Our first question comes from Jason McCarthy with Maxim Group. Please go ahead.
spk05: Hey, Mike. Thanks for taking the questions. A couple of questions. First, on the oncology side, do you expect, now that you have the reimbursement for the breast cancer assay, the news with Quest, with the NGS Long, and all the work that you're doing on the CNS side to potentially accelerate your data collection? And maybe you can give us a little bit more color on how that data is being collected and kind of feeding into that relationship with prognos, where we see, you know, potential lot of value in monetization of that data long-term.
spk04: Yeah, no, that's a great question. Thank you, Jason, and good to catch up. First of all, interestingly, I'll pivot in a second to the oncology you asked about, but we actually have deepened our relationship with prognos even on COVID-19 data. which is valuable to them as well. So that is also getting uploaded to Prognos, and it's actually increased the way we work together. And then, as you point out, the more adoption we have of our assays, the more valuable that relationship becomes because we're enriching their database at a faster clip with higher volume. And notably, the NextGen sequencing assay we developed with Thermo Fisher that's now going to be marketed through a partnership with Quest We anticipate we'll really ramp that up once it goes live in Q4 and takes off next year in 2022.
spk05: Can you talk a little bit about that? You had mentioned prognosis and the COVID data. Anything about the type of data that they're collecting? Is there information on, you know, vaccinated people, levels of virus that they may have if they're positive, all the things that people are hearing about? And the media, is that the type of information they're trying to collect?
spk04: Yeah, you know, that's actually an important point. I think for folks to get more clarity on what we would be providing, first of all, we always want to remind folks this is absolutely anonymous, non-identifiable information to a person and very much compliant with HIPAA and the privacy laws. So, but it does provide incidents, you know, we're getting information on age, you know, region, et cetera, things like that. That's basically the information. When you look at our requisition, other than, you know, social security and name and things like that, which are not delivered, you know, things that would be there would be, you know, whether the patient has other comorbidities and other things that would be delivered to Bioscept and entered into our laboratory information system.
spk05: Will there be an opportunity to or any interest in getting contracts for testing with large academic institutions? We've seen them with other testing providers, kind of sporadically, different regions of the U.S. Is that something that Southern California or California schools may look to do? And what could be the value of something like that for your company?
spk04: Well, are you meaning for COVID testing?
spk05: For COVID testing, right? Sorry, I should have.
spk04: Yeah, that's okay. For COVID testing, you know, we have the agreement with the community college system, which is 2.1 million students, faculty, staff, and that's being onboarded as we speak. So this is the first week of that testing for the general population. Since last spring, we've been providing testing for many of the athletes and sports teams. So we already work with them. When it comes to the UC system elsewhere, they generally take care of their own testing. There could be some chance for some overflow, but most of them have medical centers that already do the testing or relationships in place.
spk05: And just a question for Tim. Can you give us a little bit more granularity on how much of the testing revenue is flowing back into the core spend on the oncology testing business and maybe split that between being COVID testing and oncology for us?
spk07: How much of the spend is flowing into it? You know, most of the revenue that we derive from COVID-19 is fueling the consumable purchases associated with actually doing the COVID-19 testing. So it's not, you know, it's probably, gosh, you know, I don't want to give you a percentage off the top of my head, Jason, but the lion's share of the spend in core associated specifically with COVID testing.
spk05: Okay. Is there any interest in expanding further, or is it all in terms of personnel and overhead, or is that dependent on how COVID goes over the next couple of quarters or months or whatever?
spk07: Yeah, we are prepared certainly to take on, without significant expense, everything that Mike was talking about with regards to community colleges. So we have capacity. We have built capacity over the last year in COVID and capabilities for testing. We are becoming more efficient at processing our COVID samples. We've negotiated lucrative deals with our COVID collection tubes and have reduced the overall costs associated with that, as well as in the CLIA laboratory, the costs associated with processing those COVID tests as well. So much more advanced from today. than where we were when we first started doing COVID testing.
spk04: And, Jason, what I was going to add to that, exactly what Tim said, and first of all, hats off to Tim and the operations team for helping us scale the business so rapidly. As we've talked about in the past, while Tim and I and the entire leadership team has been in the laboratory industry for the bulk of our career, none of us had to scale a business as rapidly as what we've had to with COVID. And the experience that they brought to the table paid off. But much of the investment we've made in that is actually quite helpful for oncology business going forward. So the instruments that we use for COVID can also be used for oncology. So we've got the capacity now to grow much faster than we would have been able to a year ago. Another example is accessioning. For folks that don't know what an accession means, it means to input the sample that's coming in into the computer system so it can be tracked. That's now all done via the web at the client's site. comes in with a barcode into our site and is fully automated all the way through reporting. We're now going to be moving that over to oncology so we can scale that part of our business as well. So a lot of this money that's been invested to build this COVID business is actually quite appropriate for the oncology business going forward as we grow that and we'll require less resources to scale that part of our business because of these investments we've made over the past year and continue to make.
spk05: Great. Thank you, fellas.
spk04: Thank you, Jason.
spk07: Thanks, Jason.
spk01: Our next question comes from Kumar Raja with Brookline Capital Markets. Please go ahead.
spk02: Thanks for taking my questions. So first with regard to COVID-19 testing, how much pooling are you doing in terms of the testing? And in terms of capacity, where do you stand?
spk04: I'll let Tim answer that. He's our expert in everything going on in the lab. So Tim.
spk07: Yeah, no, it's a great, great question. We have tremendous capacity if we were to go with pooling. Right now, we have capacity to do somewhere in the vicinity of approximately 30,000 COVID tests a week. Obviously, that significantly increases with something like pooling, which would probably take it to about 150,000 a week there. So it is a pretty significant increase if we were to go with that piece of it.
spk04: And just, you know, we haven't made any public statements about how we process the samples, but we're very aware of that and it makes a lot of sense for most laboratories to look at that as well. So it's a good question, Kumar.
spk02: Yeah. And next with regard to the health plan access, looks like you already have more than 200 million lives under coverage. How are you guys thinking? Do you think this is kind of, are you guys planning to do more work to get like more life under coverage or how do you guys think about where you stand right now?
spk04: Yeah, no, that's another great question. You know, one thing we've done pretty well here for being a relatively small laboratory historically until COVID was get a lot of coverage policies. And that was because I think folks were excited about the idea of liquid bias and the cost savings for the system. But as you know, we just hired a new commercial leader, Dave Carlander, and one of his goals is to hire a new senior leader for managed care. So that's someone we're looking to recruit. In the meantime, we have folks that focus on the health plan contracting today, as well as a hardworking billing and collections team that work for Tim that work on that every day. Now, keep in mind on the COVID-19, for those that don't know, it's under the CARES Act by law, payers are forced to pay for the COVID-19 testing. So where we see sometimes the challenges is on the oncology side, sadly, especially when you look at the value that's delivered for our whole industry with laboratory and oncology testing. But at the same time, with the focus on CSF and these patients that are late-stage cancer that don't have other options, we're having really good luck getting paid there, too, and we want to put a lot more ammunition behind it. Another example of how we're reinvesting the business to grow faster, collect more money in the future with the revenues from COVID.
spk02: Okay. Maybe finally a question on the commercial strategy for CN side. There are a lot of states where you don't have centers that are ordering. How are you thinking in terms of penetrating those states, and what kind of sites do we have there?
spk04: Sure. Well, we have, you know, 10 hardworking salespeople around the country, and we're looking to expand that. But right now, you know, we're mainly focused for CNSite on neuro-oncologists. And for folks that aren't familiar, neuro-oncologists are especially generally fine in either very large oncology practices or more typically in a teaching hospital, such as Northwestern or Yale or UCSD Morris Cancer Center or MD Anderson Mayo, places like that. And we're in almost all of those. So, in fact, we're in over 30 of the leading academic institutions now across the country. So there's very few regions where we don't have a foothold at this point. So now over the coming year, our salespeople will continue to nurture those relationships and move that on into medical oncology as we go into 2022. With that, we'll be investing more, once again, taking the revenues from COVID and investing in our sales and marketing organization to better penetrate the entire U.S. But right now, we're achieving our goals by focusing on the neuro-oncologists and growing the business there. These are the folks that are experts in metastatic cancer to the brain and central nervous system. And so it's important that we get them on our side. And if folks watch that webinar, they'll see how passionate they are about what we're doing.
spk02: Okay, great. Thanks for taking my questions. Well, thank you.
spk01: Our next question comes from Michael Akunowicz with Maxim Group. Please go ahead.
spk06: Hey guys, thanks for taking the question. So I'd like to ask just a bit about the COVID testing numbers going into the second half. In particular, you know, over the last month, you received around 50,000 and you're expecting that to increase due to the California community college system. So given that you have, you know, it seems like you have some increased penetration within the testing market here. So could you actually surpass the runway you achieved at the peak of the pandemic earlier this year as we move into the third quarter?
spk04: Well, I'll let Tim weigh in on that. But, you know, I think if we had a crystal ball, life would be so easy. But what the colleges, as we talked about in the script, they all have their own process and policy. So it's been kind of hard to predict what to expect from these groups. But we do anticipate, yes, that there will be a sizable amount of volume coming from them. You know, at our peak, we were doing about 15,000 in a week. And, you know, could we get that big? I guess it depends on Delta. You know, on one hand, of course, we all hope that this doesn't get to that level, but we're starting to see it, you know, with a vengeance. And so we're prepared. You know, we can handle it, and we'll be ready when the volume comes if it does get that high. Tim, do you want to add anything to that?
spk07: Yeah, the one thing I'd say is that we remain very nimble. in the COVID-19 area especially because of the unknown volumes that could come from the community colleges. We've certainly seen an increase in testing from our skilled nursing facilities as well. You know, so we've seen some skilled nursing facilities come back with COVID positive results on unvaccinated as well as vaccinated. And as a result of that, they have to increase the amount of testing that they're doing on a weekly basis. But it'll be interesting to see how the colleges impact that based on the age group of the college students that are attending the community colleges. We don't think that a majority necessarily of those folks that are attending community colleges are already vaccinated. So it's difficult to tell because it's not only the students, but it's also the faculty. So we'll see here as the third quarter progresses, but, you know, with regard to that volume, but it certainly could be equally as big as what we've had in the past at our peak. and could potentially exceed that, but we just don't know just yet.
spk04: And we'll continue to give updates for folks on the COVID volume once a month or so, just like we have been, so people can see real-time kind of how that's looking.
spk06: All right, thanks. I'd also like to ask just how vaccination plays into the next-gen AGEA test. Because it seems like among vaccinated individuals, a simple yes-no test may be more less useful than a more quantitative test. So I'd like to ask if this plays a role in the rationale and potential longer term durability. And also, as Jason mentioned, is there more of a significant COVID data play with prognosis if you're able to determine things like viral loads between vaccinated and unvaccinated individuals?
spk04: I think that's very thoughtful. That's not something we've talked about with them, but you've given me some ideas at this point that we could. Interesting, you asked about the importance of quantitation, and I've not seen it yet, but evidently I heard today from one of our scientists that there was an article or an editorial in the journal from AMP, the Association of Molecular Pathology, that talks about the importance of quantitation with COVID. And so, yeah, we do think that's meaningful, and we continue to work with them on getting that assay commercialized.
spk06: All right, thank you. And then just one more. So, What sort of data do you guys think that you're going to need to demonstrate to the FDA to get CNSide considered as a breakthrough device?
spk04: Well, you know, this was very important for us to get that initial round of feedback from them. And with that, you know, going into great detail, we need to have more patients in actually the normal cases. And normal is relatively easy. And it's a difficult thing when it comes to cerebral spinal fluid, but not impossible. We did it when we did the validation to offer it in our laboratory. And we just need to enrich that population. And these are people that don't have diagnosis of cancer. So we need to get a greater number of those in the samples. And we think we'll be able to make that progress. So we're working on that now. We'll have further information as things move forward. In addition, we got some really good feedback on, you know, there are really two questions. When we talk about our one, two, three approach, we've got number one, is cancer present, which is kind of the diagnostic claim. Then number, I'm sorry, number one and three questions. Then the number three, is there a trend? And so there really is two applications for the assay that each could have their own breakthrough. One is the diagnosis claim. The other one is what it means to monitor. So that's the, I think, more valuable and exciting one for us long term, but we need to nail that first part down to have our clinical validation done. So we're focused on that today.
spk06: All right. Thank you very much for taking my questions.
spk04: Sure. Sure. Thank you, Michael.
spk01: This concludes our question and answer session. I would like to turn the conference back over to Mike Null for any closing remarks.
spk04: Thank you, Operator. Well, on behalf of our Board of Directors and the hardworking team at BioCEP, I want to thank everyone for participating on today's call. and for your interest in our company. We look forward to providing an update on our progress during our next conference call in November, which is hard to believe. That's the next one. In November, when we report 2021 third quarter financial results. Thanks again, and have a great day, everybody.
spk01: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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