Biocept, Inc. (BIOC) CEO Michael Nall on Q1 2019 Results - Earnings Call Transcript

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About: Biocept, Inc. (BIOC)
by: SA Transcripts
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Earning Call Audio

Biocept, Inc. (NASDAQ:BIOC) Q1 2019 Earnings Conference Call May 8, 2019 4:30 PM ET

Company Participants

Kevin McCabe - LHA, Investor Relations

Michael Nall - President and Chief Executive Officer

Tim Kennedy - Senior Vice President of Operations and Chief Financial Officer

Edwin Hendrick - Senior Vice President and Chief Commercial Officer

Conference Call Participants

Jason McCarthy - Maxim Group

Operator

Good day and welcome to the Biocept First Quarter Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded today, May 8, 2019.

I would like to now turn the conference over to Ms. Kevin McCabe. Please go ahead.

Kevin McCabe

This is Kevin McCabe with LHA. Good afternoon and thank you for participating in today's conference call. Joining me from Biocept are Michael Nall, President and Chief Executive Officer; Tim Kennedy, Senior Vice President of Operations and Chief Financial Officer; and Edwin Hendrick, Senior Vice President and Chief Commercial 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 anticipate, expect, believes, could, expects, intends, may, plans, potential, predict, project, should, will, would, or the negative of those terms. Forward-looking statements involve known and unknown risk, 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 expressed or implied by the forward-looking statements. For details about these risks, please see the company's SEC Filings.

The content of this call contains time sensitive information that is accurate only as of today, May 8, 2019, except as required by law, Biocept disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occurred after this call.

Now, I'd like to turn the call over to Michael Nall. Mike?

Michael Nall

Thank you, Kevin and good afternoon to everyone on the call today. I'm pleased to report the steps we took in the second half of last year to reinvigorate our sample growth are paying off as we received 1011 commercial samples in the first quarter of 2019, up 27% sequentially from the fourth quarter of 2018.

On a year-over-year basis, our commercial samples grew 11% as compared to the first quarter of last year. We are now close to our historical peak of test volumes per quarter. And we anticipate that we will continue to grow test volume by focusing on various segments of the liquid biopsy market where our technologies can best be utilized.

As we mentioned on our last call in March, a key driver our renewed growth is our pathology partnership service also called EmpowerTC, which leverages our unique Target Selector circulating tumor cell or CTC platform. This offering enables pathologists to interpret the results of our proprietary CTC testing, thereby ensuring that the local hospital laboratories and pathologists remain in the critical path of the patient care continuum.

In the first quarter, we announced the expansion of this service with the capability to analyze additional prognostic and predictive markers for solid tumors. A key contributor to our growth this year has been seen with our expansion into the uro-oncology market. And in the first quarter, we launched several new biomarkers, including AR variant-7, PTEN and MET.

Studies have shown the clinical utility of these markers in prostate cancer and we are pleased that we have been able to add new practices to our customer base including several large urology group practices or LUGPAs. These customers are enthusiastic about being able to participate in the Target Selector testing through EmpowerTC in order to better manage patient treatment.

Additionally, we've seen an increase in orders for our breast cancer offerings, which has been driven by the need for clinicians to utilize our blood based essays to monitor key changes in biomarkers such as ER, PR and HER2 as patients are undergoing treatment. Our partnership with Prognos to capture and monetize data generated from our liquid biopsy testing is expected to launch this quarter and the pipeline of companies and projects that Prognos is targeting with this information as robust.

As you may recall, Prognos continues to build its repository of over 20 billion laboratory records to apply artificial intelligence to clinical laboratory diagnostics in order to help Life Sciences and pharmaceutical companies develop and market targeted therapies. We are very pleased to be working with Prognos as their first liquid biopsy partner and then to be in a position to commercialize our de-identified test data with revenue from this program expected as the year progresses.

We've been working hard with our collaborator Thermo Fisher and today I'm pleased to announce that we have launched our first tumor specific panel Target Selector NGS Lung for the treatment and monitoring of patients diagnosed with lung cancer. We have started marketing this lung cancer targeted panel to physicians in the hospital setting and to researchers in the pharmaceutical and biotechnology industries.

Our collaboration with Thermo Fisher Scientific gives us access to Thermo's next generation sequencing technologies and supports our plan to commercialize multi-gene tumor specific panels. Importantly, we believe that this and other panels that we may launch under our collaboration with Thermo Fisher can help us build additional content to support our liquid biopsy data initiative with Prognos Health.

We believe that Biocept remains the only commercial liquid biopsy company that has both CTC and circulating tumor DNA or ctDNA analysis with both single gene and multi-gene offerings, all tested from the same blood sample. We believe that this differentiation is helping us gain market adoption and new market share. Also, in the first quarter, we announced the availability of our research-use-only kits intended to enable molecular laboratories around the world to utilize our target select ctDNA technology to perform liquid biopsy testing.

We announced our first customer for these kits Agiomix, a provider of genomics and bioinformatics services in the Middle East, Africa and Asia for both research and clinical applications. This initiative begins to position Biocept as an international diagnostic kit manufacturer with a global brand. Our Target Selector platform is patent protected in the United States and in 10 major international territories. And our first available kit is for the high sensitivity detection of EGFR oncogene mutations, which are among most frequently evaluated biomarkers for lung cancer.

We are in the process of applying for a CE mark in Europe. And if granted this will enable us to market our kit technology in the EU and elsewhere in the world where a CE mark is recognized. We anticipate obtaining the CE Mark sometime in the second half of this year for EGFR kit, and additional RUO test kits for other oncogene mutations are planned for launch in the future.

Among other first quarter highlights, we published a peer reviewed case series featuring our Target Selector EGFR testing in the medical journal Clinics in Oncology. The article highlighted the care of three patients in which Biocept's liquid biopsy testing detected activating EGFR mutations when tissue biopsy was inadequate. Our assays were used to support the decision to administer EGFR directed therapy for all three patients.

The first patients EGFR mutation was detected at diagnosis and after beginning therapy, the patient had a complete response for approximately two years. The other two patient's blood was tested after their disease had progressed. And our assay identified the resistance mutation EGFR T790M. Upon detection of this mutation, the patient's then both became eligible to receive treatment with the next generation therapy, AstraZeneca's Tagrisso.

We also presented a poster at the 2019 AACR Annual Meeting for our novel liquid biopsy assay for detection ESR1 mutations. This biomarker has the potential to predict treatment response and resistance for patients with hormone receptor positive metastatic breast cancer, the subtype present in the majority of metastatic breast cancer patients. We are happy to announce this assay will be included in a study sponsored by a large pharmaceutical company and conducted by Principal Investigator Dr. Kevin Kalinsky at Columbia University in New York.

We have collaborated with Dr. Kalinsky previously with published work on CTCs and our ability to detect ER in breast cancer. We also announced the initiation of a clinical study with Providence Saint John's Health Center and the John Wayne Cancer Center to validate the use of cerebral spinal fluid or CSF as a specimen type with our Target Selector platform. In patients diagnosed with certain cancers leptomeningeal metastases or LM can occur when tumor cells enter in the CSF and re-grow within the spinal cord and brain.

In this trial, our platform will be used to test the CSF for patients diagnosed with breast and lung cancer, as well as other malignancies determine if leptomeningeal metastases has occurred. Results from our liquid biopsy testing will be compared to standard methods for confirming the diagnosis of LM. Studies such as these are designed to continue to add to the body of evidence supporting the clinical utility of our liquid biopsy products and services and provide data to present and future medical meetings and in peer reviewed publications.

Turning to our quality improvement initiative collaboration with Highmark Blue Cross and its subsidiary Allegheny Health, you may recall that Allegheny is one of the largest integrated healthcare delivery systems in Pennsylvania. A key goal of this initiative is to increase the rate of testing for molecular biomarkers in advanced lung cancer patients to 100%, as many patients diagnosed with lung cancer today are still not tested to qualify for targeted therapies. The quality improvement initiative with Allegheny Health is designed to evaluate the clinical utility and economic value of our Target Selector testing for profiling and monitoring actionable biomarkers in lung cancer patients.

We present an interim data in late April from the program at the Blue National Summit 2019, which is the annual convention of the national Blue Cross Blue Shield Association. These interim results show that 27% of the patients enrolled avoided a second biopsy by utilizing our test. Notably, in the cohort of patients tested so far, we identified a treatable biomarker 37% of the time. While these data are preliminary, we're advancing towards completion of the programs 100 patient enrollment goal. Clinical results from this initiative could be reported in a larger form later this year or in early 2020.

Finally, I'm pleased to report that in the first quarter of 2019, we were granted an additional patent covering our CTC platform in Japan. At present, we have 32 patents issued globally, with several more patent applications pending. Our idea state includes patents for our proprietary micro channel antibody cocktail platform for rare cell capture, as well as patents for our highly sensitive molecular enrichment platform.

To summarize, our corporate priorities in 2019 include the following. Increasing Target Selector's market penetration in the emerging liquid biopsy field, including launching and gaining traction with our new tumor specific panels, backed by Thermo Fisher's next generation sequencing technologies; signing additional EmpowerTC partnership agreements with hospital systems, pathologist and other physicians; advancing our kit strategy by entering into additional global distribution agreements and gaining access to additional markets by obtaining the CE mark in Europe; monetizing data from our testing results through our collaboration with Prognos; further automating our laboratory processes to improve reproducibility, quality and productivity to improve margins; continuing to pursue our quality improvement initiative with Highmark Blue Cross and the Allegheny Health System; signing new third party health plan contracts and agreements with integrated healthcare delivery networks and publishing additional clinical case studies that validate the use of our Target Selector assays.

Now, I'll turn the call over to Tim Kennedy to review our financial results for the first quarter. Tim?

Tim Kennedy

Thanks, Mike and good afternoon everyone. For Q1 2019, we reported revenues in excess of 1 million compared to 807,000 in Q1 2018, a substantial increase of 27% year-over-year. Revenues were also up 19% sequentially from the 860,000 reported in Q4 2018.

Commercial reimbursement based on historical mix and test for accession received is expected to continue to be in the $1100 range on average, as we continue to launch new assays throughout the year. In Q1 2019, we had 1155 billable accessions versus 1084 billable accessions in Q1 2018 and 938 billable accessions in Q4 2018.

The number of billable samples per sales day averaged approximately 19 in the first quarter of 2019, up from 17.5 and 15.4 in the first and fourth quarters of 2018 respectively. Our new commercial strategy is focused on physician specialties and market segments that we believe are driving the turnaround in our volume trends.

Turning to our cash usage, since announcing the initiative to reduce our use of cash on an annualized basis in Q1 of 2018, we're happy to report that we have achieved approximately 3.2 million in annualized cash usage reductions, compared to the cash usage baseline in Q1 of 2018 when this initiative began.

Cost of revenue for Q1 2019 was 2.6 million, which was up approximately 7% compared to the same period last year. The increase in cost of revenue in Q1 2019 was primarily related to an increase in our materials costs due to higher test volumes.

With the increased volume we've begun to once again leverage the fixed components of costs with year-over-year revenue increasing 27% and cost of revenue increasing just 7%. In addition, we continue to provide laboratory capacity to accommodate higher volumes as our growth trends are expected to continue to improve.

Research and development expenses for Q1 2019 were 1.2 million, compared with 1.1 million in Q1 2018. The year-over-year increase was due primarily to costs associated with development of new individual assays and automation as well as validation of the Thermo Fisher molecular oncology assay panel.

General and administrative expenses for Q1 2019 were 1.7 million versus 1.9 million for the same period last year and sales and marketing expenses for Q1 2019 were 1.4 million, compared to the 1.6 million reported in Q1 2018, as the company continues to work to contain operating expenses.

The net loss for the first quarter of 2019 was 5.9 million or $0.61 per share on 9.8 million weighted average shares outstanding. This compares with a net loss for the first quarter of 2018 of 6.4 million or $3.33 per share on 1.9 million weighted average shares outstanding. As a reminder we conducted a one-for-thirty reverse stock split of our outstanding common stock which was effective in July 2018.

In addition to the 3.2 million of cash usage reductions previously mentioned, we anticipate realizing additional reductions in use of cash in the coming quarters from the implementation of automation, as well as the outsourcing of our microfluidic channel manufacturing to a contract manufacturer.

Cash and cash equivalents totaled approximately 14.8 million on March 31, 2019, compared to 3.4 million on December 31, 2018, as we raised approximately 17 million in aggregate net proceeds from three financings to date in 2019.

I'll now turn the call over to Edwin Hendrick for an overview of our commercial progress. Edwin?

Edwin Hendrick

Thanks, Tim and hello everyone. I'm pleased to share that we continue to make good progress in the first several months of 2019. Our efforts have gained momentum as we pursue our strategy to focus on certain market segments where our technology platforms offer unique competitive advantages and provide clinical value to physicians who are treating patients with cancer.

We remain active in the broader market for biomarker testing for solid tumors, particularly lung cancer, where clinical treatment guidelines call for the use of liquid biopsy as an adjunct to tissue biopsy or when tissue biopsy is not feasible. In addition, our commercial team is focused on three other market segments and which are patented and differentiated circulating tumor cell or CTC based offerings have gained traction. These markets are urology, breast and integrated oncology.

Within these target markets, we've been very busy over the last several months with different initiatives and product launches, some of which we've started to see impact in the first quarter. These include the launch of our urology product line, which includes the predictive prostate marker ARV-7, the re-launch of an EmpowerTC initiative and expanded presence in the breast cancer arena, the development of our integrated oncology product line and lastly, the recent launch of our Target Selector NGS Lung panel.

As Mike mentioned, in the first quarter, we announced the launch of our expanded EmpowerTC test offering, which now includes CTC enumeration and testing for prognostic and predictive biomarkers in prostate cancer. Many men are diagnosed with low grade prostate cancer and simply undergo watchful waiting or active surveillance to see if their cancer is advancing at an increased rate. Our vision which is driven by input from some of our physician customers is that our EmpowerTC platform can be used to monitor patients in the watchful waiting phase with biomarker testing every six months when patients are typically scheduled to go back for their active surveillance exams.

Our targets select your CTC and our EmpowerTC offerings not only enabled to capture an enumeration of CTCs, but they also enable analysis of biomarkers in CTCs, which distinguishes Biocept in the marketplace. We believe that our focus on these services is significantly contributing to the growth in our test volume and revenues.

The breast cancer testing market is another area of renewed commercial focus of Biocept. Several types of breast cancers have good treatment options and surgery may resolve the disease for many women. However, there are several indications in breast cancer where major unmet medical needs remain. Here we believe that our liquid biopsy testing can play an important role in providing new information that can aid in treatment selection. Since we began testing with our liquid biopsy technology, we processed over 3000 tests for patients diagnosed with breast cancer. And there is growing interest in the detection and monitoring of CTCs as it relates to breast cancer treatment.

In our ongoing outreach to the medical community, we found that doctors are highly arrested using circulating tumor cells to assess the potential for metastatic disease and breast cancer patients. Additionally, triple negative breast cancer or breast cancer that is negative for the three major markers of HER2, PR and ER overexpression remain a major unmet medical need with limited treatment options. These three biomarkers when positive indicates potential to benefit from targeted drug therapies instead of radiation and chemotherapy. Our non-invasive testing allows physicians to monitor for these biomarkers over time to determine if there's any changes, which can now lead to more and potentially better treatment options for these patients.

I want to reiterate our focus on the naturopathic medicine segment, better known in most of the academic institutions as part of their integrated oncology offering. They're over 5000 naturopathic physicians practicing in the United States, many affiliated with major Medical Center's. Naturopathic doctors or NDs, or oncology specific trained, Fellows of American Board of Naturopathic Oncology, better known as FABNOs are trained in integrative cancer care and can play a key role in the support of cancer patients with diagnosis through survivorship.

At the beginning of the year, we placed the sales resource to help market and sell to this growing segment. Importantly, NDs are early adopters when it comes to monitoring a patient's disease using CTCs or ctDNA and we and many experts believe that patient monitoring is where the real promise lies for liquid biopsy. The launch of our Target Selector NGS Lung panel, supported by Thermo Fisher's Oncomine sequencing and informatics technology is also very exciting as it allows us to be the only company that could offer three different platforms in liquid biopsy. Uniquely, we now offer our target select your CTC and ctDNA test as well as tumor specific panels backed next-gen sequencing. This flexibility offers important choices for the physician for evaluating tumor biomarkers and selecting the right treatment at the right time.

When I joined Biocept, we recruited several seasoned sales professionals. And I'm pleased to report that our productivity per sale rep has improved. As Tim mentioned previously, the number of samples per day that we're receiving has increased from just over 15 in the fourth quarter of 2018 to nearly 19 per day in the first quarter of 2019. We believe that we have a solid and experienced team in place and that this metric should continue to trend higher. We currently have 10 field sales territories with further sales force expansion to be determined later in the year based on the opportunities that we see for growth.

Thank you for your time and attention and I'll turn the call back over to Mike.

Michael Nall

Thanks, Edwin. We continue to innovate in an important in emerging field with a broad offering of less invasive and cost effective solutions to help physicians select the best treatment pathways for their patients diagnosed with cancer. Our proprietary biomarker assays have been performed on over 22,000 patient samples and are based on our differentiated platforms leverage information from both CTCs as well as ctDNA. We continue to generate clinical evidence that supports the high sensitivity and specificity of our biomarker assays. And in addition to efforts to drive organic growth, we are focused on expanding opportunities through strategic partnerships and other initiatives by leveraging our investment in our intellectual property.

And with that overview, we're now ready to take questions. Operator?

Question-and-Answer Session

Operator

We will now begin the question-and-answer session. [Operator Instructions]

Michael Nall

While we're waiting for that first question, I'd like to mention I'll be making a corporate presentation at the LD Micro Ninth Invitational Conference being held in Bel Air, California. Our presentation is scheduled to take place on June 4, at 10 AM Pacific and that's at the LD Micro once again. Sorry about that operator, and I'm ready for the first question.

Operator

That's no problem. The first question comes from Jason McCarthy with Maxim group. Please go ahead.

Edwin Hendrick

Hello, Jason.

Jason McCarthy

Hi, guys. Thanks for taking the questions. Can you talk a little bit more about Empower and I know you had talked previously about the urology segment, where there's large clinical practices for urology and prostate cancer, but what about the breast cancer segment, it's part of a marketing strategy targeting large OBGYN clinics perhaps and how does that fit into growing this particular segment of the business?

Michael Nall

That's a great question. And actually, it's - I'll answer it first and then I'll pass it over to Edwin so he can add a little bit more color, Jason. When you look at our other market segments, namely breast or lung are the biggest, but as you know, Jason, we validated numerous tumor types. The type of testing that would be involved with pathology would be more a surgical pathologist and generally they're going to be located in a hospital or in a regional lab. And you mentioned OBGYN, generally, they may find a patient with breast cancer, but then they're going to quickly refer them over generally to a medical oncologist who would be the call point that would actually use the information. Kind of where liquid biopsy is today, it's still in the early phases and generally it's the ultimate user whether it's a medical oncologist or now more and more we're working with urologist and they use the information the liquid biopsy provides.

And since this blood they can order it generally out of their own office, but as liquid biopsy becomes the standard of care that call point and that decision points going to change. And that's because most of the hospital systems have bought up a lot of the practices, especially medical oncology practices or they've all consolidated into mega practices. The largest ones three in America are US Oncology, Florida Cancer Specialists and now OneOncology a very large group that's formed between New York Cancer and Blood as well as a couple of groups in Tennessee. And so they may have their own lab and they could be good partners for us with our pathology initiatives. But the other focus is going to be in the future on the surgical pathologist that's located servicing the group of hospitals and their offices.

And what happens is the hospitals buy the oncology practices and then the first thing they do is say, all the lab testing needs to route to our system. So we're the only liquid biopsy company and this is critical that has a way we can partner with them and allow them to participate in the interpretation and that's the reimbursement for that testing. So that's the critical advantage I think that we have over some of the other folks which are just marketing to the end user and they do all the billing and reimbursement on their own. So we think we have long-term the strategy that win, it's been proven in other parts of our business, namely, NeoGenomics that people follow them, it's the same business model and we fit right in with that. Edwin, maybe you can talk more about breast cancer and kind of how we see that growing through monitoring and also the negatives.

Edwin Hendrick

Sure. So as Mike pointed out, the urology side, the reason why we're focusing on Empower is because they do so much pathology through their biopsies that typically a lot of the large groups have their own pathology laboratory and their own pathologist on site. Breast cancer is slightly different. And as Mike pointed out, most of that work goes through the hospital. And what we're doing is we're truly calling on those pathology offices because we want to get them familiar with CTCs, know that they can use their knowledge base in order to do the professional component and then drive that business from the medical oncology through to the hospital. So it truly is a nice little partnership as everything's working through. The local met on gets the reading from the local pathologist, but yet they do get the national type of coverage and the proprietary testing that Biocept can offer. So the beautiful thing in regards to breast cancer especially as we kind of talked about with the triple negatives is that there are some attic changes with those three markers and they do change over time.

There's many papers out there that state that change anywhere between 20% and 30%. So typically on this those triple negatives, these patients are just nailed with radiation and chemotherapy, and they don't have any other options because they're not positive for any of those biomarkers, so they really do want to monitor these patients and our non-invasive testing allows them to draw blood on a regular basis. So they can find out whether or not any of those markers have changed. And if they do change, then there are drugs out there called Herceptin and Tamoxifen that allow them to get off of the radiation or chemotherapy or at least have reduced doses of that and get them on a true therapeutic. So the breast cancer marketplaces is extremely exciting for us because of the monitoring and because of all of the data it's already out there that's driving this type of testing.

Jason McCarthy

Okay, and perhaps you could talk a little bit about the partnership with Thermo Fisher you got the Target Selector NGS Lung launched. Can you talk a little bit about other potential titles that you're considering developing perhaps you have them already with Thermo Fisher?

Michael Nall

Yeah. No, absolutely. Yeah, there's other options for them and as you recall, we're one of the first centers for liquid biopsy launch. And we're partnering with them both on the development and then on the reimbursement side for the panel and so lung is the first that we're going out with, but there'll be other solid tumor specific panels here in the future. And we haven't made any public statements about which ones, but we'll be giving some more information on those in the coming quarter.

Jason McCarthy

Okay, and as you go forward, it looks like you had - our view is that you've put all the pieces in place, the company was well capitalized to return it back to growth. And I guess Tim this may be a question for you with the 19% increase in revenue quarter-over-quarter. Do you look at this trajectory continuing? I know you haven't given guidance, but maybe you can give us a little bit more color on where you expect the revenue growth should go from here.

Tim Kennedy

Yeah. Well, Jason, I'll just remind you, we're not at the point yet where we give guidance, but I know Tim can probably give you a little bit more detail and help you with some modeling perhaps.

Jason McCarthy

Maybe from an historical session perspective and maybe we can make our own assumptions.

Tim Kennedy

Yeah, as the year progressed along, we expect that are our accessions per sales day will continue to increase. As we mentioned in our prepared remarks, we went from 15.4 in the fourth quarter to 19 in the first quarter of this year. And as we progress through the second quarter and hit the third quarter, in the third quarter you hit a little bit of seasonality in July and August due to vacations et cetera. But our expectation is continued to grow on a billable samples per sales day perspective.

Jason McCarthy

And we don't anticipate the value of being impacted now that we have the FISH Probes.

Tim Kennedy

No, right, so we had launched our urology platform without our FISH Probes back in the beginning of the year, so most of the first quarter from a reimbursement perspective for that increase in urology volume that volume came in at a lower reimbursement rate. And now that we've launched our urology FISH Probes at the end of the first quarter, we expect that our net revenue per accession will continue to be, as I mentioned in that $1100 range as we progress here throughout the rest of this year.

Jason McCarthy

And last question, Mike, can you talk a little bit about the partnership with Prognos, so a little bit more color. You'd mentioned potentially generating revenues from commercializing bioinformatics already this year in 2019. Can you give us a sense of what that revenue stream could look like? Not from - I'm not asking you to quantitate it and give guidance, but in terms of how Prognos will market that bioinformatics package to pharmacists or other groups that would be interested?

Michael Nall

Sure. No, absolutely. Well, part of it - there's really two ways that we will be able to gain revenues from this marketing initiative with them and in collaboration. The first one is our data is now being uploaded into their database of biomarkers and market it today. So what we're doing is further enriching their database. Now, with liquid biopsy results previous to that it's all been on tissue and they have they have relationships with some of the biggest players on that side in the space. And so we're the first liquid biopsy company. So we're excited about that. The way that it works is they then market this data in total. And they already have contracts in place example for EGFR testing to certain pharma companies that have EGFR targeted therapies. So we now help to enrich that and we'll get a proportional share based on the amount of input that we have going into that database. So our share compared to tissue results today is much smaller, but we still will get a small share of that existing revenue stream.

The area that I think I'm more excited about that a little bit longer term that we're now working on, now that we've got the interface in place is customized projects, where we'll go market together to pharma and see if there's a way to target specific things that we identify and deliver that in a customized protocol that would just be between the pharma company, Biocept and Prognos and this could also be in managed care. So that would potentially be the more valuable of the two different collaborations, but we're very happy to have the first part just - it gets us in the ball game, it was a way that we could get value out of this in a way that was cost effective for us and within our ability to fund, so it makes us very excited to be part of that informatics initiative, as well as now really in the same kind of ball game as some of the big players in the space.

Jason McCarthy

So that last point was that with the pharma, Prognos and Biocept you could essentially have like a customized bioinformatics package?

Michael Nall

That's right.

Jason McCarthy

Then the end customer would require on both the -

Michael Nall

Yeah. And we'll be leveraging the Thermo Fisher relationship. I wouldn't view them as necessarily part of the collaboration with the pharma, but the data that we're generating using that platform and their database that we pull from to get the way that next-gen sequencing is reported. It's kind of a nice fit. So you can start to see the vision of what we're trying to achieve there between our technology providers, the technologies we develop ourselves and the information that's provided, as well as with this relation with Prognos, the ability to go back to pharma and managed care and monetize that is really exciting. And we've been able to do that without having to hire an army of bioinformatics', which are very expensive and probably not in the realm of our budget here at Biocept.

Jason McCarthy

Then the second the thermo data can be used to be uploaded into the Prognos AI platform, is that correct?

Michael Nall

Yeah, that's right.

Jason McCarthy

Okay, great. Thank you for taking all the questions, guys.

Michael Nall

Sure, excellent.

Operator

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Michael Nall for any closing remarks.

Michael Nall

Great, well, I want to thank all of you for participating on today's call and for your interest in Biocept. We look forward to sharing our progress on our next conference call when we report our second quarter financial results. Thanks and have a great day.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.