bioAffinity Technologies, Inc. (Nasdaq: BIAF;
BIAFW), a biotechnology company addressing the need for
noninvasive detection of early-stage lung cancer and other diseases
of the lung, today reported financial results for the three and
nine months ended Sept. 30, 2023, and provided a business
update.
Highlights from the third quarter of 2023 and subsequent weeks
included:
Corporate and Commercial Highlights
- The Company’s wholly owned Precision Pathology Laboratory
Services (PPLS) subsidiary acquired the non-medical assets of
Village Oaks Pathology Services on Sept. 18, 2023. The clinical
laboratory, certified under the Clinical Laboratory Improvement
Amendments (CLIA) of 1988 and accredited by the College of American
Pathologists (CAP), is now owned and operated by PPLS.
- The Centers for Medicare and Medicaid Services (CMS) released a
preliminary payment decision in September 2023 for the Current
Procedural Terminology (CPT) code for CyPath® Lung, our noninvasive
test for lung cancer, issued by the American Medical Association
(AMA) in June 2023. CMS is expected to finalize the 2024 payment
for CyPath® Lung in November 2023 with an effective date of Jan. 1,
2024. CMS’ final payment determination is expected to favorably
impact PPLS’ established fee schedule for CyPath® Lung, determining
reimbursement by private insurance carriers.
- The U.S. Department of Defense (DOD) purchased CyPath® Lung
tests for use in an observational study on active military
personnel at high risk for developing lung cancer (NCT05870592) and
for research on the use of bronchoalveolar lavage fluid to assess
cardiopulmonary function and exercise performance in military
personnel post-COVID-19 infection.
- Dallas J. Coleman joined the Company as National Director of
Sales responsible for leading the CyPath® Lung sales team, sourcing
new business opportunities and expanding the pilot market launch
across Texas in preparation for the national rollout. Previously,
Mr. Coleman was an Executive Account Manager for the respiratory
portfolio of Olympus America’s therapeutic solutions division.
Management Commentary
"The transformative strategic acquisition of PPLS in September
gives us a strong revenue base as we move forward with the rollout
of our game-changing CyPath® Lung test. PPLS is forecast to
contribute $8.7 million in net revenue over the next 12 months,
with additional upside as we work to expand sales of CyPath® Lung
regionally and nationally," bioAffinity President and Chief
Executive Officer Maria Zannes said.
"We achieved another significant milestone in September when we
received a preliminary payment decision from CMS for CyPath® Lung
that is in line with the July 2023 payment recommendation from the
Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests.
The CMS payment determination is a crucial step forward in our
commercial rollout of our noninvasive test to improve detection of
early-stage lung cancer," Ms. Zannes said. " As we begin our pilot
marketing program for CyPath® Lung in Texas, we look forward to
applying what we learned in our beta market testing and informing
and accelerating our regional and national rollout plans. As we
plan to expand the geographic reach, add prescribing physicians,
and partner with larger medical systems, we anticipate substantial
revenue growth for CyPath® Lung.”
Third Quarter Financial Results
Revenue for the third quarter of 2023 increased to $298,484, up
from $1,150 in the prior-year period. Prior to the Sept. 18, 2023,
acquisition of PPLS, bioAffinity Technologies’ revenue was
generated from royalties from sales of CyPath® Lung as a laboratory
developed test (LDT), clinical flow cytometry services related to
CyPath® Lung, and CyPath® Lung tests purchased by the DOD.
Post-acquisition of PPLS, beginning Sept. 19, 2023, the income from
royalties and clinical flow cytometry services was classified as
related party income and eliminated from consolidated net revenues,
while additional revenue streams from PPLS were consolidated. PPLS
generates three sources of revenue: patient service fees, histology
service fees and medical director fees. Sales to the DOD were
$4,500 for the third quarter of 2023.
Research and development expenses were $330,376 for the third
quarter of 2023, compared with $319,744 for the comparable period
in 2022. The increase was primarily due to higher compensation
costs from adding research personnel and higher costs for lab
supplies and reagents.
Clinical development expenses were $106,422 for the third
quarter of 2023, compared with $60,941 for the third quarter of
2022. The increase was primarily due to higher professional fees
related to clinical strategy evaluation for the pivotal clinical
trial of CyPath® Lung.
Selling, general and administrative expenses were $2.0 million
for the third quarter of 2023, compared with $595,702 for the
comparable period in 2022. The increase was primarily attributed to
higher accounting, legal and professional fees related to the
acquisition of PPLS and being a publicly traded company, higher
board compensation, employee and stock-based compensation, and
sales and marketing costs for commercialization of CyPath®
Lung.
Net loss for the third quarter of 2023 was $2.3 million, or
$0.26 per share, compared with a net loss of $4.9 million, or $1.17
per share, for the comparable period in 2022.
Cash and cash equivalents were $4.5 million as of Sept. 30,
2023, compared with $11.4 million as of December 31, 2022.
Management will assess opportunities to raise additional capital
when the markets are favorable.
2023 Financial Outlook and Next Twelve Months
The Company expects to generate between $2.1 and $2.3 million in
net revenues for 2023. This is up from $4,800 in 2022. Over the
next 12 months (fourth quarter 2023 to third quarter 2024), the
Company expects to generate between $8.4 and $9.0 million in net
revenues.
CyPath® Lung sales are expected to trend up as the Company
expands its sales force and marketing efforts. Through Sept. 30,
2023, the pilot marketing program for CyPath® Lung had 20
physicians enrolled, 15 physicians who had ordered tests for their
patients and 44 CyPath® Lung diagnostic tests conducted. Over the
next 12 months (fourth quarter 2023 to third quarter 2024), the
Company expects to grow the number of physicians enrolled to 82,
the number of physicians that have ordered to 61, and the number of
CyPath® Lung diagnostic tests conducted to 284, which will
contribute gross revenues of $457,166. To achieve this growth, the
Company plans to expand its sale force from two to five in
strategic metropolitan areas of Texas, promote CyPath® Lung through
branding and marketing assets, and benefit from broader
reimbursement from private payers and public health insurance
programs, including Medicare and Medicaid, based on CMS’ final
payment determination.
About bioAffinity Technologies, Inc.
bioAffinity Technologies, Inc. addresses the need for
noninvasive diagnosis of early-stage cancer and diseases of the
lung, and broad-spectrum cancer treatment. The Company’s first
product, CyPath® Lung, is a noninvasive test that has shown high
sensitivity and specificity for the detection of early-stage lung
cancer. CyPath® Lung is marketed as a laboratory developed test
(LDT) by Precision Pathology Laboratory Services, a subsidiary of
bioAffinity Technologies. Research and optimization of the
Company’s platform technologies are conducted in its laboratories
at PPLS and The University of Texas at San Antonio. For more
information, visit www.bioaffinitytech.com and follow us on
LinkedIn, Facebook and X.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
identified by the use of the words "could," "believe,"
"anticipate," "intend," "estimate," "”expect," "may," "continue,"
"predict," "potential," "project" and similar expressions that are
intended to identify forward-looking statements and include
statements regarding CMS finalizing the 2024 payment for CyPath®
Lung in November 2023 with an effective date of Jan. 1, 2024, CMS’
final payment determination favorably impacting PPLS’ established
fee schedule for CyPath® Lung, determining reimbursement by private
insurance carriers, moving forward with the rollout of the
Company’s CyPath® Lung test, PPLS contributing $8.7 million in net
revenue over the next 12 months, additional upside as the Company
expands sales of CyPath® Lung regionally and nationally, informing
and accelerating the Company’s regional and national rollout plans
by applying what it learned in its beta market testing,
anticipating substantial revenue growth for CyPath® Lung as the
Company expands the geographic reach, adds prescribing physicians,
and partners with larger medical systems, assessing opportunities
to raise additional capital when the markets are favorable,
generating between $2.1 and $2.3 million in net revenues for 2023,
generating between $8.4 and $9.0 million in net revenues over the
next 12 months, CyPath® Lung sales trending up as the Company
expands its sales force and marketing efforts, over the next 12
months growing the number of physicians enrolled in the Company’s
pilot program to 82, the number of physicians that have ordered
tests to 61, and the number of CyPath® Lung diagnostic tests
conducted to 284, contributing gross revenues of $457,166,
expanding the Company’s sale force from two to five in strategic
metropolitan areas of Texas, promoting CyPath® Lung through new
branding and marketing assets, and benefiting from broader
reimbursement from private payers and public health insurance
programs, including Medicare and Medicaid, based on CMS’ final
payment determination. These forward-looking statements are based
on management's expectations and assumptions as of the date of this
press release and are subject to a number of risks and
uncertainties, many of which are difficult to predict, that could
cause actual results to differ materially from current expectations
and assumptions from those set forth or implied by any
forward-looking statements. Important factors that could cause
actual results to differ materially from current expectations
include, among others, the Company’s ability to roll out its
CyPath® Lung test as planned, the Company’s ability to generate
substantial revenue for CyPath® Lung by expanding its geographic
reach, adding prescribing physicians and partnering with larger
medical systems, the Company’s ability to raise additional capital
when the markets are favorable, the Company’s ability to expand its
sales force and marketing efforts, the Company’s ability to grow
the number of physicians enrolled in the Company’s pilot program,
the number of physicians that have ordered tests, and the number of
CyPath® Lung diagnostic tests conducted, the Company’s ability to
promote CyPath® Lung through new branding and marketing assets and
benefit from broader reimbursement from private payers and public
health insurance programs and the risk factors described in the
Company's Annual Report on Form 10-K for the year ended December
31, 2022, the Company's Quarterly Reports on Form 10-Q, the
Company's Current Reports on Form 8-K and subsequent filings filed
with the Securities and Exchange Commission. The information in
this release is provided only as of the date of this release, and
the Company undertakes no obligation to update or revise publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events, except as required by law.
bioAffinity Technologies,
Inc.
Condensed Consolidated Balance
Sheets
September 30, 2023
December 31, 2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
4,509,236
$
11,413,759
Accounts and other receivables, net
1,108,414
10,489
Inventory
9,908
5,540
Prepaid expenses and other current
assets
382,651
531,899
Total current assets
6,010,209
11,961,687
Non-current assets:
Property and equipment, net
512,152
214,438
Operating lease right-of-use asset,
net
392,347
—
Finance lease right-to-use, net
1,262,087
—
Goodwill
1,148,553
—
Intangible assets, net
848,056
—
Other assets
16,060
6,000
Total assets
$
10,189,464
$
12,182,125
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
827,407
$
345,042
Accrued expenses
643,786
541,894
Unearned revenue
38,250
—
Operating lease liability, current
portion
484,211
—
Finance lease liability, current
portion
364,934
—
Loan payable
—
251,746
Total current liabilities
1,958,588
1,138,682
Non-current liabilities:
Finance lease liability, net of current
portion
921,546
—
Operating lease liability, net of current
portion
315,421
—
Total liabilities
3,195,555
1,138,682
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001 per
share; 20,000,000 shares authorized; no shares issued or
outstanding at September 30, 2023, and December 31, 2022
—
—
Common stock, par value $0.007 per share;
25,000,000 shares authorized (increase from 14,285,714 approved by
shareholder vote on June 6, 2023); 9,216,883 issued and outstanding
at September 30, 2023; and 8,381,324 shares issued and outstanding
at December 31, 2022
64,535
58,669
Additional paid-in capital
49,160,689
47,652,242
Accumulated deficit
(42,231,315
)
(36,667,468
)
Total stockholders’ equity
6,993,909
11,043,443
Total liabilities and stockholders’
equity
$
10,189,464
$
12,182,125
bioAffinity Technologies,
Inc.
Unaudited Condensed
Consolidated Statements of Operations
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(unaudited)
(unaudited)
Net Revenue
$
298,484
$
1,150
$
319,143
$
2,457
Cost of sales
74,704
146
76,025
292
Gross profit
223,780
1,004
243,118
2,165
Operating expenses:
Research and development
330,376
319,744
1,035,118
949,388
Clinical development
106,422
60,941
161,310
141,684
General and administrative
2,023,917
595,702
4,576,708
1,295,558
Depreciation and amortization
57,569
773
100,805
2,852
Total operating expenses
2,518,284
977,160
5,873,941
2,389,482
Loss from operations
(2,294,504
)
(976,156
)
(5,630,823
)
(2,387,317
)
Other income (expense):
Interest income
27,193
7,414
109,971
8,261
Interest expense
(8,785
)
(896,502
)
(11,801
)
(2,443,350
)
Other income
4,606
—
4,606
—
Other expense
(17,100
)
—
(17,100
)
—
Gain on extinguishment of debt
—
—
—
212,258
Fair value adjustments on convertible
notes payable
—
(3,053,914
)
—
(1,866,922
)
Net loss before provision for income
taxes
(2,288,590
)
(4,919,158
)
(5,545,147
)
(6,477,070
)
Income tax expense
(2,294
)
(300
)
(18,700
)
(2,460
)
Net loss
$
(2,290,884
)
$
(4,919,458
)
$
(5,563,847
)
$
(6,479,530
)
Net loss per common share, basic and
diluted
$
(0.26
)
$
(1.17
)
$
(0.65
)
$
(2.03
)
Weighted average common shares
outstanding, basic and diluted
8,696,554
4,203,781
8,551,154
3,194,765
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version on businesswire.com: https://www.businesswire.com/news/home/20231114135941/en/
bioAffinity Technologies Julie Anne Overton Director of
Communications jao@bioaffinitytech.com
Investor Relations Dave Gentry RedChip Companies Inc.
1-800-RED-CHIP (733-2447) or 407-491-4498 BIAF@redchip.com
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