Cancer blood test business Biocept prices $9M financing

Biocept will use the money for working capital and general corporate purposes

Biocept has priced shares and warrants worth an anticipated $9.3 million. The cancer blood test business put together the financing to add to what remains of the $4.6 million in cash it had at the end of last year.

San Diego, CA-based Biocept is seeking to raise the $9.3 million from institutional investors. The agreements with these investors position Biocept top sell 4.3 million shares for $2.15 a pop. And to offload warrants to buy close to 2.2 million shares with a exercise price of $2.50 a piece. Buyers can start exercising the warrants six months after the transaction closes. From that point, they will have five years before the warrants expire.

Biocept expects to wrap up the transaction by the end of the month. Once fees and other costs are taken out, Biocept expects to exit the financing with $8.4 million.

That would represent a timely boost to the cash reserves of Biocept, which incurred net losses of $18.4 million last year. Those losses moved the company’s accumulated deficit past $173 million. And left it sat on $4.6 million at the turn of the year.

With Biocept anticipating it will continue to incur losses to fund its lab operation, supporting sales and marketing and R&D, this week’s financing will go toward keeping the business going. Biocept racked up sales of $3.2 million last year, a more than 400% increase over 2015 but still short of the amount it needs to generate to balance the books.

Biocept’s attempts to grow into a successful business are built upon Target Selector, technologies designed to help oncologists find and monitor cancer biomarkers in the blood of their patients. To do this, Biocept looks for circulating tumor cells and related DNA in blood samples to show whether certain biomarkers are present.

For breast cancer patients, Biocept looks at biomarkers including ER, HER2 and FGFR1. Biocept looks at different biomarkers when assessing lung cancer patients. And, in response to booming interest in immuno-oncology, it added the ability to screen for PD-L1 expression last year.

This focus puts Biocept up against a multitude of competitors, from rival oncology-focused startups, to established tissue tests and deep-pocketed giants such as Roche.