Biocept Inc (BIOC) Q3 2020 Earnings Call Transcript

Biocept Inc  (NASDAQ: BIOC) Q3 2020 earnings call dated Nov. 12, 2020

Corporate Participants:

Bruce Voss — Investor Relations

Michael W. Nall — President and Chief Executive Officer

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

Michael C. Dugan — Senior Vice President, Chief Medical Officer and Medical Director

Analysts:

Jason McCarthy — Maxim Group — Analyst

Sally Yanchus — Brookline Capital Markets — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Biocept Third Quarter 2020 Financial Results Conference Call. [Operator Instructions]

I’d now like to turn the call over to Bruce Voss. Please go ahead.

Bruce Voss — Investor Relations

Thank you. This is Bruce Voss with LHA. Thank you all 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 Dr. Michael Dugan, Senior Vice President, Chief Medical Officer and Medical Director.

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 and contemplated impact of the COVID-19 pandemic. This means results could change at any time and the contemplated impact of COVID-19 on Biocept’s operations, financial results and outlook is a best estimate based on the information for today’s discussion. 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, November 12, 2020, except as required by law, Biocept 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 Nall. Mike?

Michael W. Nall — President and Chief Executive Officer

Thank you, Bruce and good afternoon, everyone. Before we discuss our results in more detail. I’m pleased to welcome Dr. Michael Dugan to his first Biocept quarterly conference call. Dr. Dugan joined us in mid-August as our Chief Medical Officer and Medical Director. He is highly respected in the molecular diagnostics industry and has served in leading medical positions at Exact Sciences, Quest Diagnostics and Roche Medical [Phonetic] Systems. We are thrilled to have him on our team.

During today’s call, Dr. Dugan will discuss our increased focus on neuro-oncology. We see our Target Selector Cerebral Spinal Fluid assays which were launched earlier this year as having clear advantages versus the standard of care. We are proud of our decision to support the fight against the pandemic by offering COVID-19 testing, which is benefiting our customers and patients as well as our Company. Revenues during the quarter reached a record $6.6 million, up more than fourfold over the prior year of $1.5 million. We experienced some of the recovery, we anticipated in our commercial oncology and development testing volume compared with the second quarter. That said, like many other molecular diagnostic labs, our commercial testing volume has not returned to pre-COVID levels owing to lower patient visits to physician offices.

With resurgence in COVID cases currently occurring, we may see an extended impact on the oncology volume. Development and other revenue which is primarily received from pharma and biotech companies increased from the second quarter as many clinical trials that were halted at the beginning of the pandemic has started to come back online. The revenue increase include sales of our seizure, blood collection tubes and research use only or RUO kits, as well as revenue from biotech development projects. Importantly, we have continued to gain momentum with COVID-19 testing. We began offering testing in June and as of yesterday, we received a total of more than 100,000 samples. This includes approximately 20,000 samples received in the past two weeks alone. For Q3 we accrued COVID-19 testing at approximately $120 per sample, which is significantly lower on a per sample basis than oncology assays.

However, this higher testing volume is driving our revenues at a time when oncology volume continues to be impacted by the pandemic. We expect COVID-19 testing will have a significant impact on Q4 revenue and we’ll continue to be an important component of our business until the pandemic subsides. We currently have capacity to run approximately 15,000 COVID-19 samples per week.

Over the past several months, we’ve added staff and equipment to increase daily throughput in our CLIA lab with additional actions underway to increase testing volume even further. We are providing with COVID-19 testing to a growing list of clients, including skilled nursing centers, hospitals, clinics and surgery centers, as well as other businesses, primarily located in California, but are receiving samples from across the country.

Interestingly, some testing has extended beyond healthcare-related businesses. For example, we partnered with Holy Tame [Phonetic] Bob Baffert to provide COVID-19 testing for his team including prior to this year’s Kentucky Derby. As you may know, Mr. Baffert is the trainer of Authentic, the horse that won the Derby. Jill Baffert, wife of Mr. Baffert and a member of his team personally thanked Biocept for our help in providing COVID-19 testing in the weeks leading up to the Derby stating and “It takes a village [Phonetic] and we couldn’t have done any of it, without you and your team.”

As the number of COVID-19 samples our lab receives increases, I mean, we remain proud of our team’s ability to process these tests quickly with the vast majority of results to-date sent to our help providers within 48 hours of receiving a sample. We’ve also received many compliments from our COVID-19 testing customers and public health officials about our service throughout the process. We are making good progress in developing our own COVID-19 specimen collection tubes and remain on track for validation in our lab later this year. The launch of these tubes has been delayed due to back orders on equipment needed to produce the high number that we require as well as a delay by the third party CRO that confirm the effectiveness of the viral killing properties of our proprietary media inside the tubes.

Importantly, we are happy to report that we are filing a patent for this important advance this week. We are also reporting progress under our agreement with a geo biotechnologies COVID-19 development project. The GSA will utilize the patented Switch-Blocker technology, which is both powerful and versatile and we currently apply it to molecular diagnostics and clinical oncology. We’re just particularly well suited for liquid biopsies of either blood or cerebral spinal fluid in order to detect targeted gene mutations used to guide therapy decisions. For COVID-19, the Switch-Blocker technology could provide much higher sensitivity that we believe will detect viral load at much lower levels than conventional PCR based COVID-19 assays. If successful, Biocept has an option of first negotiation to expand our COVID-19 testing capabilities with this next generation offering.

Even during these challenging times, We continue to strengthen our core oncology business with significant developments that support growth both near term and post-pandemic. While we discussed our provider argument [Phonetic] the Highmark Health on our last call, it is a significant accomplishment that is worth revisiting. Highmark Health is the nation’s second largest integrated health delivery system and a Blue Cross Blue Shield affiliated organization. The agreement was earned after a positive review by Highmark’s VITAL’s program, which evaluates new technologies for clinical utility and health economic benefit.

The study included two [Technical Issues] valuation of our Target Selector assays with the goal of helping physicians rapidly assess the molecular status of patients with advanced non-small cell lung cancer in order to select the most appropriate therapy while also reducing the overall cost of care. I want to mention this because integrated health systems are the future of healthcare. These groups are seeking opportunities to —opportunities for innovations that allow for quality healthcare delivered cost effectively. Purchases of the healthcare services are contracting with these groups to deliver high quality outcomes, while assuming cost risks. Using a simple blood sample is a cost efficient — is cost efficient for physicians to profile for biomarkers in selecting therapy and for monitoring disease progression over time.

We recently expanded our portfolio of assays with the introduction of a new FISH assay for the NTRK3 gene alterations that are associated with many solid tumors including cancers of lung, colon and breast, as well as melanoma. There are — there are currently available therapies that target oncogenic fusion genes involving NTRK3 as well as NTRK3 and NTRK3 genes. NTRK1 and 3 are the most commonly involved.

We have strengthened our patent portfolio as well. Last month, we were awarded a broad patent in Japan covering devices for the detection of any target of interest including circulating tumor cells or CTCs that are shed into the bloodstream by solid tumors for a binding entity or any solid surface are used for target capture, detection and analysis. This patent covers any biological sample type and includes the use of single entities or cocktails of binding entities. It also covers combinations of antibodies for capturing a wide variety of tumor types. This pattern fits well with our patent and micro-channel and the cell staining platforms. We believe that broad coverage afforded by this patent also provides the opportunity to out-license the technology to other companies with a focus on any target of interest including single cell analysis and other methodologies.

Earlier this week we announced the award of a patent in Hong Kong covering the enhanced detection of rare cells including cancer cells using fluorescent complexes including CTCs. The method covered by this patent geographically expands our protection for the sensitive detection of cancer cells. It also combined seamlessly with our core technologies using antibodies for CTC enrichment as well as our micro channel, intellectual property for the capture, enrichment and imaging of CTCs collected using our patented blood transport tube. These new patents demonstrate our success in expanding our international intellectual property portfolio, which is a strategic priority, as we work to grow our business globally. We now have 44 US international patents covering our molecular diagnostic technologies.

And with that, I’ll now turn the call over to Tim Kennedy to review our third quarter financial results. Tim?

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

Thanks, Mike and good afternoon, everyone. As Mike mentioned, for Q3 2020, we reported revenues of $6.6 million. This increase from $1.5 million in Q3 2019 is primarily due to $5.7 million in commercial test revenue from COVID-19 testing. In Q3 2020 we received 52,993 total accessions. This is a significant increase from 1,429 total accessions in Q3 2019. Commercial volume in Q3 2020 was 52,773. Total cost of revenues was $5.9 million compared with $2.8 million for the prior year period.

Gross margin was 11%, which we attribute to our COVID-19 testing business. R&D expenses for Q3 of 2020 were $1.1 million compared with $1.2 million during Q3 of 2019, with the decrease primarily due to a reduction in laboratory allocated costs. G&A expenses for Q3 2020 were $3 million versus $1.7 million in Q3 2019, with the increase primarily due to legal and investor relations expenses as well as headcount additions to handle COVID-19 related activities. Sales and marketing expenses were $1.40 — excuse me, sales and marketing expenses were $1.43 million, which was relatively flat compared to $1.46 million a year ago as a result of curtailed sales and marketing activities due to the pandemic.

Net loss for the third quarter of 2020 was $4.9 million or $0.43 per share on $11.3 million weighted average shares outstanding. Our weighted average share count reflects the 1 for 10 reverse split implemented in September 2020. This compares with a net loss for the third quarter of 2019 of $5.7 million or $2.47 per share on 2.3 million weighted average shares outstanding.

Now turning to the year-to-date financial results. Revenues for the first nine months of 2020 were $9 million compared with $3.7 million for the first nine months of 2019. Again with the increase due to COVID-19 testing. Cost of revenues in the nine months of 2020 were $11.3 million. R&D expenses were $4 million. G&A expenses were $6.8 million and sales and marketing expenses were $4.2 million. The net loss for the first nine months of 2020 was $19.7 million or $1.48 per share. Cash and cash equivalents as of September 30 were $16.9 million compared with $9.3 million as of December 31, 2019.

In the third quarter of 2020 as a result of robust sales and anticipated demand for COVID-19 testing, the company increased consumable inventory by $2.3 million and grew accounts receivable by $4.8 million. Based on historical and planned cash usage, we believe our current cash position will support operations through most of 2021, however, with the uncertainty introduced by COVID-19 on revenues and collections, our cash runway may be shorter.

As a final note, we expect to complete our move to our new headquarters and lab facility by the 1st of September, excuse me, 1st of December. While located only about a mile away from our current facilities, the new building is designed to meet our commercial development and administrative needs while reducing rent expense and other facility costs. We expect a smooth transition without workflow disruption.

And now I will turn the call over to Dr. Michael Dugan to provide an overview of our neuro oncology strategy. Michael?

Michael C. Dugan — Senior Vice President, Chief Medical Officer and Medical Director

Thanks, Tim. I’m delighted to be speaking with all of you today. It is a pleasure to lead our efforts to further develop and commercialize Biocept’s portfolio of advanced molecular diagnostic assays. These assays are primarily used to help properly diagnose and characterize cancers in patients with advanced or metastatic disease including metastatic tumors that can involve the brain and spinal cord. But they are also used to monitor response to therapy in patients with cancer, an area where we are continuing to focus efforts with our liquid biopsies.

We also currently perform and are developing a new assay to aid in the public health fight against COVID-19. Since joining Biocept, I’ve been evaluating various areas of unmet clinical needs in oncology and public health that we can better serve with our offerings and working with my colleagues to develop strategic projects that address these needs. These efforts include the development of important clinical studies, advisory teams, publications and additional new or more versatile assays. We are also further developing the clinical market with first hand clinical, technical and client service support for the commercial and research use of these products.

We are particularly excited to develop the use of our proprietary target selector CSF assays for detecting lung and breast cancer that has metastasized to the brain or central nervous system. Metastatic cancers frequently involve the central nervous system and advanced disease sometimes as the only manifestation of the disease when it has been successfully treated in the rest of the body. 10% to 30% of adult patients with cancer depending on type will develop brain metastases. Although involvement of the central nervous system is usually associated with a worsening prognosis, patients with metastatic cancer are now living significantly longer due to many advances and treatment strategies and various new targeted therapies. There are many patients for whom timely confirmation of brain or spinal cord involvement and appropriate early treatment can lead to significantly better projected survival and marked reduction in neurologic symptoms such as headaches, impaired mobility or loss of vision.

Biocept’s Target Selector CSF assays address a significant underserved need in this area. As the current standard of care, microscopic evaluation of the cerebral spinal fluid known as CSF cytology has very limited sensitivity for detecting metastases and provides no additional information about molecular targets for therapy choice. Due to technical limitations of the method, CSF cytology is often negative when tumor involvement of the brain or spinal cord is suspected, often generating repeat attempts to collect a CSF sample from a lumbar puncture procedure.

Results of our earliest clinical studies of CSF in lung and breast cancer patients as well as developmental work with other tumors involving the brain has attracted the interest of many leading neuro oncologists, thoracic oncologists and breast oncologists. Several of these key opinion leaders are working with us as study collaborators to better establish the clinical utility of our Target Selector assays and determine future uses of our diagnostic assays in this underserved areas of oncology initial studies have already been or are being presented in 2020 at major international meetings.

Last month results from a small prospective study of our Target Selector CSF assays compared to CSF cytology was presented at the 2020 International Association for the Study of Lung Cancer Hot Topic meeting devoted to liquid biopsy. In this study 28 cerebral spinal fluid samples from 15 patients with metastasis to the central nervous system obtained sequentially before and during treatment were compared. Target Selector testing improve detection of tumor involvement finding CTCs in 78% of the samples collected versus 55% of samples examined with conventional cytology methods Target Selector testing also provided sensitive, quantitative identification of actionable EGFR mutations in cerebral spinal fluid that could inform more specific and appropriate treatment selection.

Results from another small study using our CSF assays to analyze cerebral spinal fluid samples from patients with primary lung or breast cancer with either brain or leptomeningeal disease will be presented later this month at the Society for Neuro-Oncology SNO 2020 Conference. SNO is SNO 2020. More than 2,600 neuro-oncology professionals are expected to register for this year’s conference. We will be announcing study results following the lifting of the data embargo. In particular, these studies illustrate that while CSF cytology has significant limitations and remains a qualitative tool Target Selector allows for a more sensitive, cell specific and quantitative assessment of tumor in CSF to gauge treatment response matched with information about molecular alterations that can aid physicians in choosing the most appropriate therapy.

This can be a more clinically effective and cost effective approach compared to existing methods to assess response to therapy, which are largely limited to conventional CSF cytology and radiology. While CSF testing currently represents less than 10% of our oncology volume, we are focused on developing clinical studies and awareness of our Target Selector technology for use by neuro oncologists and other oncologist treating patients with metastatic cancer is a various types. We expect to see this business gained volume over the next year. While still in the early stages of developing a commercial strategy, we are excited about the traction we are already gaining. Our work in the coming months will focus on supporting the clinical information needs of our early adopters, highlighting the value of our existing assays and expanding the tumor types, which we can characterize.

We are also developing more robust clinical studies related to various indications for use and developing a — developing a comprehensive study plan that will move these assays toward widespread adoption as a standard of care. I look forward to sharing more about our clinical development strategy and progress in upcoming conference calls.

With that, I’ll turn the call back to Mike Nall.

Michael W. Nall — President and Chief Executive Officer

Thanks, Mike and welcome again to the team. I’d also like to welcome the Sam Riccitelli to Biocept. Sam joined our Board of Directors last month and brings us extensive experience in the molecular diagnostics industry. Having served in executive positions and on the Boards of multiple publicly traded companies. Bruce Huebner who has served as a Director for the past seven years is retiring from our Board at the end of this month. We very much appreciate his many contributions and we wish him well in his retirement.

At Biocept, the safety and well-being of our employees is a priority. We are providing safe working conditions for our staff through routine COVID testing, social distancing and staggered shifts while delivering the same excellent quality, turnaround time and customer service without interruption or delay. Our longer-term corporate priorities remain unchanged. These include increasing market penetration of Target Selector assays with a focus on neuro-oncology in addition to urology, breast and lung cancers; growing sales of our Target Selector molecular assay RUO kits and our CEE-Sure feature blood collection tubes; increasing market penetration of our Target Selector NGS offering under our collaboration with Thermo Fisher and securing Medicare coverage; entering into additional strategic commercial and technology partnerships, global and domestic; signing more agreements with third-party health plans including capitated plans and expanding our relationship with the Blue Cross Blue Shield network; publishing clinical case studies and presenting data at scientific conferences that further validate our Target Selector testing; launching additional assays and strengthening our patent portfolio in the US and internationally.

In addition, we are pleased that we could expand our offerings to public health needs for COVID-19 testing and plan to continue to provide as much need to service, as long as the need is, there. Finally, we continue building on our position as an established leader in liquid biopsy and our Target Selector testing 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 both, circulating tumor cells or CTCs as well as circulating tumor DNA or ctDNA, both in blood and cerebral spinal fluid.

To date we have tested approximately 26,500 patient samples with our proprietary oncology biomarker assays. And have received more than thousand COVID-19 samples. We fully expect our oncology test volume will gradually increase in return to more normal levels as the pandemic subsides. We are particularly pleased to have a strong balance sheet. As Tim mentioned, with the uncertainty of COVID-19 brings to revenue and collections, our cash runway may be shorter than we currently anticipate. Like everyone we’re looking forward to the day when the pandemic is under control and returning our business to more normal operations.

In closing, I’d like to thank our entire team of Biocept for their hard work and dedication during this challenging period. As always, we are committed to improving patient treatment choices and clinical outcomes. And with that overview, we’re now ready to take questions. Operator?

Questions and Answers:

Operator

[Operator Instructions]

Bruce Voss — Investor Relations

While waiting for the first question, I’d like to mention that we will be presenting at the Virtual H.C. Wainwright Bioconnect Conference being held January 11 to 14. Webcast of our presentations will be posted to our website at biocept.com. Okay, operator, we’re ready for the first question.

Operator

First question comes from Jason McCarthy of Maxim Group. Please go ahead.

Michael W. Nall — President and Chief Executive Officer

Hello, Jason.

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

Hi, Jason.

Jason McCarthy — Maxim Group — Analyst

Thanks for taking the question and congrats on the quarter.

Michael W. Nall — President and Chief Executive Officer

Well, thank you.

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

Thanks.

Jason McCarthy — Maxim Group — Analyst

So I’d like to ask a bit about the COVID testing, because it seems like you’ve been basically doubling the number of tests of specimen received each month. So could you provide a bit more color on how much it cost you to run an individual COVID test compared to the reimbursement? I’m trying to gauge how we should look at your, the impact to your gross margins as we go into the fourth quarter with, what looks like increased testing.

Michael W. Nall — President and Chief Executive Officer

Yeah, Jason. Well, thanks for the question. I’m going to let Tim answer most of that, but I appreciate your highlight of the gross margin question, because that COVID business helped us achieve gross margin for this quarter as folks may have noticed once we put the earnings release out. And one of the challenges in COVID business right now is keeping ahead of the game with the inventory. So to highlight some of the smart work our team has done is we’ve kind of bulked up on some inventory, so we can continue to handle this growth. And I’m trying to stay ahead of it, some of these shortages that are plaguing the industry. But you know, we’re not immune to that, every lab in this industry is sometimes calling each other, trying to figure out solutions for whether it’s pipette tips or reagents or equipment that all needs to be solved.

Once it is, I think we can all handle even more volume, but we’re haven’t, doing a great job of doing that so far and excited to be able to continue to help more and more folks, get this needed testing. So with that, I’ll let Tim address some of the other questions you got.

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

Thanks, Mike. As Mike said, Jason, doing COVID testing isn’t the least expensive thing that you could do, especially for a company like Biocept that was accustomed to do on oncology testing, which COVID basically has nothing to do with that. So, but we’ve been — we’ve worked really hard to provide capacity since we launched COVID testing, basically the very end of the second quarter. And as time has gone by, volumes have ramped and we’ve gotten better and better. I would say at being able to service that volume as we go forward and expect to get better and better as we continue to go forward.

But right now, I would say for the third quarter, our cost of revenue associated with COVID is about 50% to 55% of the revenue number that we generate associated with COVID. As Mike said, it’s been tough to get various consumable materials and our leverage with that as we started wasn’t all that wonderful, but as time is going by, I think we’re getting better and better at that and being able to command those higher, higher volumes associated with COVID is, giving us the ability to get a little bit better economies of scale.

Jason McCarthy — Maxim Group — Analyst

All right, thank you very much. And then I have one more on the — on the COVID side of things, we’ve seen a few companies with some progress on, so saliva-based PCR is kind of thing as a potential new phase of the overall testing paradigm. I’d like to get your take on that. And if there are any plans to expand Biocept capabilities into saliva-based testing, to the actual lab side or the sample collection side?

Michael W. Nall — President and Chief Executive Officer

Well, few answers to that Jason, one is we’re staying abreast of some of the advances there. And in fact our development project with the GM the year that might be a good fit for the enhanced sensitivity that — once that assay is validated and released would potentially offer. So there could be a big help there. However, we’re also staying close to our clients. And I think we’ve shared before that the majority of the specimens we’re getting in are from skilled nursing, we’ve just kind of done a good job there and folks really like us. And one of the reasons, they like it is that we don’t require, although we are validated for, we can have them, we don’t require a nasal test.

So most of the listeners are probably aware that for a lot of the testing out there that’s being done, you have to be sampled up inside your nose. Our test is validated also with the oral collection, meaning it’s kind of at the back of your throat, so it’s much easier for these residents have the skilled nursing to be able to gain a sample. And so far the skilled nursing centers are happy with this oral collection and I think it may be less than some of the need to go to saliva. But I mean said we’re also I mean opportunities with schools and as you heard the racetrack and other facilities were alive assay might be quite helpful in those populations. So more to come on that, but interesting times. In the meantime, I think it was smart of us to validate both the nasal and the oral collection, because that’s been a big differentiator for us.

Jason McCarthy — Maxim Group — Analyst

Yeah, it definitely sounds a lot easier than the nasopharyngeal swab.

Michael W. Nall — President and Chief Executive Officer

That’s right. Especially in that group of residents and patients, If you think about the situation and most of those cases.

Jason McCarthy — Maxim Group — Analyst

Yeah. And then I have one more if you guys don’t mind, a bit more broad. So I’d like to see if you could provide a bit more color on just the overall pipeline and strategy for growing your core oncology business, especially now you have COVID-19 test in as a bit of a cash engine to help with capital and offset the burn.

Michael W. Nall — President and Chief Executive Officer

Sure. No, absolutely, Jason. I always want to reiterate, and I think everybody gets this. That we entered into this, because we know, it was a service that needed to be provided, to care for folks. And so we’re very thankful that the reimbursement covers our cost and provides a little bit of extra cushion there for us. And you’re exactly right that we plan to reinvest that in our core business. And one of the challenges with our previous resources was really investing in the clear, redefined, statistically significant, clinical utility studies that are needed to prove the true value that we bring.

The Highmark VITAL thing shows we can do this. And we were very fortunate to be able to be chosen as a participant in that study with relatively low cost for us in the 10s of thousands of dollars. However, as you know to really create big value with these kind of studies to get the tons of attention and get you in the guidelines, you’re talking about a larger expense and thanks to some of the — the cushion that we’re getting from the high volume of testing we’re doing, we’re going to be able to fund those going into it. So we’ll be communicating more on that. Dr. Dugan mentioned, our investments, I think very, very well today in his discussion on neuro-oncology and that’s a real area we’re differentiated.

You have to have the cell to do what we’re doing there. So all the folks that have cell-free DNA assays, what can be helpful as a stage 2 can answer the question, are there cancer cells present or not in the CSF? We can. So it makes a ton of sense for us to invest some money there. Get the clinical utility established that will lead us in the standard of care and guidelines inclusions.

Jason McCarthy — Maxim Group — Analyst

All right. Thank you very much, and again, congratulations on the quarter.

Michael W. Nall — President and Chief Executive Officer

All right, thanks, Jason. I’ll look forward to getting back to New York and seeing you guys live, I missed the travel. Let me tell you the thing, but anyway.

Operator

The next question comes from Sally Yanchus of Brookline Capital Markets. Please go ahead.

Sally Yanchus — Brookline Capital Markets — Analyst

Hi, guys.

Michael W. Nall — President and Chief Executive Officer

Hello, Sally.

Sally Yanchus — Brookline Capital Markets — Analyst

Thanks. Good quarter, and yes, come back to New York to visit us, that will be great.

Michael W. Nall — President and Chief Executive Officer

Yeah, it’s great.

Sally Yanchus — Brookline Capital Markets — Analyst

Yeah, I mean really good quarter. I guess one of my questions is what’s your sense of, I mean the COVID volume testing has really been expanded. I mean, do you expect to see this level of testing volume? I mean I would say through next year. But going into 2022, if you have any…

Michael W. Nall — President and Chief Executive Officer

Well, just like you we’re modeling through next year. We don’t know what to expect, but we’re expecting to continue to grow it like say there is, even in just here in California there seems to be tons of demand out there. And we were very fortunate, Tim, under sales his capabilities in operation, sometimes as well as our teams and even though we’re all very thankful of them, because for us, we were fortunate we already had a good laboratory operation. So we’ve been able to grow this, because we already have things in place, some of the other startup COVID labs did not.

We have a fantastic operations team that knew how to scale the business and already had done this before. An example would be that because of our relatively low volume of oncology, we never invested in automated ordering, meaning that the client just types it, our acquisition is manually filling it out. Well, you can’t do that with the volumes we have now. So in a matter of weeks we were able to get online ordering up and now greater than 90% of the specimens coming in here are ordered by our clients via our portal. With a barcode that goes on the sample and we just barcode it when it comes in. Otherwise, I’d have to have an army of people doing nothing but data entry with the kind of volumes we’re doing.

So it’s that so renewable, we have that experience. And what we’re finding is, and Dr. Dugan just prompted me that the clients that we serve, the bulk of the clients we currently serve which is skilled nursing, they love the service levels are getting. They’re not used to getting that detailed service, that an oncology lab is geared up to provide with a local representative that visits them and service their staff, handles their issues with people that answer the phone call 24/7. That kind of white glove service rightfully standard of care in oncology through most of the providers, but it’s not always the case when it comes to the bread and butter lab testing that you get.

So they’ve really appreciate what we’ve done. And I think for us, we were just well positioned to be able to take advantage of this and have the right team in place to do it.

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

Let me just add to that, as what Mike said, that’s really how we got our COVID business and it came from word of mouth. I mean it was, it was servicing one skilled nursing facility and word got out to another skilled nursing facility, and another and another and before you know it, our volume has been increasing pretty much weekly here, so…

Sally Yanchus — Brookline Capital Markets — Analyst

Wow. Interesting. Okay. And as far as the standard liquid biopsy business, you have seen an improvement in the third quarter, correct. I mean, because…

Michael W. Nall — President and Chief Executive Officer

We’ve seen volumes go up. Yeah, we’ve seen volumes go up, but not to the levels of growth and the levels that we had seen pre-pandemic. A couple of reasons, one of the challenges is that we’re still in early phases of adoption of our testing by the clients. And it requires a fair amount of interaction with our sales team to keep that growth happening. They don’t have access to the oncologists right now. So it’s for lunches [Phonetic], like you normally do and things you do to visit them in person. We’re getting a fair number, especially with neuro-oncology, it’s actually taken a lot of time with us on the zoom calls, but the folks that are ordering the blood testing there, difficult still for us to get access to. And I think you’ve heard this from other labs, the people of other labs they seen the results over the past couple of quarters.

But the other thing is our sales team, especially those in the West Coast. It’s been a lot of their time focused on getting new COVID clients. Right. So I think as that starts to shake out going into 2021, we’re going to have a strategy where we’re able to now with the resource to go after both of those things as aggressively as we’ve done in the past.

Sally Yanchus — Brookline Capital Markets — Analyst

Tim, G&A expenses were $3 million in the quarter. Do you expect that kind of level to continue for the fourth quarter, $3 million. Because you said you did bring on more people.

Michael W. Nall — President and Chief Executive Officer

No, like I like I mentioned, we’ve — we’ve learned how to become more efficient in our operations and I do expect that to go down, not to pre-COVID levels specifically, but it will go down. Yes.

Sally Yanchus — Brookline Capital Markets — Analyst

Okay. All right. Okay. Good. Thanks. I don’t have any more questions, but great quarter, congratulations.

Michael W. Nall — President and Chief Executive Officer

Thank you, Sally.

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

Thanks, Sally.

Sally Yanchus — Brookline Capital Markets — Analyst

Yeah.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mike Nall for any closing remarks.

Michael W. Nall — President and Chief Executive Officer

Thank you, operator. And on behalf of our Board of Directors and our very hard working team here at Biocept, 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 March when we report fourth quarter and full year 2020 financial results and the year 2020 will be behind us. Thanks again and have a great day.

Operator

[Operator Closing Remarks]