San Diego-based Biocept Inc. has been on a roll this year to carve out a spot for itself in the emerging field of liquid biopsy and personalized medicine. A $10 million offering of common stock and warrants is the company's latest move to support its expanding menu of available companion tests for immuno-oncology therapeutics.

The company said Friday it would sell stock (9.1 million shares) and warrants (for 9.1 million shares) at a combined price of $1.10. The warrants will be good for up to five years. The offering, which is expected to close Wednesday, includes a 30-day over-allotment option for additional shares (up to 1.365 million) priced at $1.03 each, and/or warrants (up to 1.365 million) priced at $0.01 per warrant.

Biocept has been focused on its blood-based liquid biopsy platform, which is intended to guide physicians' cancer diagnosis and treatment decisions based on molecular markers in both circulating tumor cells and in plasma. According to Chris Lewis, of Roth Capital Partners LLC, Biocept holds a leadership position in liquid biopsy and personalized medicine. The analyst noted the company's product expansion, IP portfolio and recent collaborations with major cancer centers as indicators of strong momentum in Biocept.

In May the company reported a partnership with Rosetta Genomics for a proof-of-concept study to determine the usefulness of microRNA profiling of circulating tumor cells as part of lung cancer diagnostics, and another with the Houston-based Baylor College of Medicine to develop a liquid biopsy test for mutations in the estrogen receptor gene, which play a role in identifying the roughly one-third of breast cancer patients who may easily become resistant to certain endocrine therapies.

In August, the company delivered double-digit sequential volume growth for the fifth consecutive quarter, with total revenue of $663 million, beating consensus expectations and representing growth of nearly 800 percent. Significant billable sample volumes growth exceeding 194 percent drove most of the success in the quarter.

The company signed an agreement at the end of August with Teneovita Medical Innovations to distribute Biocept's full range of liquid biopsy products in Canada. That followed earlier expansions of the company's Target Selector products in Israel, Mexico, and the Philippines.

VCS TAKE A SHINE TO COMPANY

The venture capital community has also taken interest in the molecular diagnostic company, with Aspire Capital agreeing to buy $15 million of Biocept stock last December.

Biocept launched its PD-L1 protein expression test in mid-June, making it the first CLIA-validated blood test for detecting PD-L1 expression on the market. Determining PD-L1 status is required for patient's to qualify for treatment with certain immuno-oncology therapeutics because patients expressing the protein are more likely to respond to anti-PD-L1 therapeutics, such as Keytruda (pembrolizumab) for metastatic non-small cell lung cancer (NSCLC).

According to Raghuram Selvaraju, of H.C. Wainwright & Co. LLC's Rodman & Renshaw unit, physician adoption of Biocept's PD-L1 test has been robust, as it is designed to track and monitor protein expression without the need for invasive tissue sampling and can potentially catch PD-L1 expression in heterogeneous tumors that may be missed by simply testing tissue samples.

"Immunotherapy is among the most promising strategies being developed in oncology," Selvaraju said, adding that he expects Biocept's PD-L1 test to continue to drive test demand among patients that may benefit from anti-PD-L1 drugs, along with the company's other lung cancer biomarkers for targeted therapies such as Tagrisso (osimertinib) for EGFR T790M mutation-positive NSCLC.

Despite analyst enthusiasm for the company's potential, the stock (NASDAQ; BIOC) dropped 21.64 percent (26 cents) Friday to close at 93 cents.

With a market opportunity in the billions (as much as $20 billion by some estimates), diagnostic companies are rushing to open the liquid biopsy floodgates with new tests designed to make finding and monitoring cancer as easy as a blood draw or urine sample. The true clinical impact of the technology remains to be seen and there are some early limitations of these tests that will need to be addressed, but some doctors say liquid biopsies could really transform cancer treatment. Several key players in the space have invested significant resources into validating the power of both blood- and urine-based cancer tests, and the outcomes of some of that research has been presented at recent clinical conferences, including the annual meeting of the Philadelphia-based American Association of Cancer Research.

Interest in liquid biopsy is driven by the potential advantages the technology offers over invasive tissue biopsy, along with the potential for actionable information for treatment decision and patient monitoring.