GUANGZHOU, China, Aug. 11, 2020 (GLOBE NEWSWIRE) -- Burning Rock Biotech Limited (NASDAQ: BNR, the “Company” or “Burning Rock”), a company focused on the application of next generation sequencing (NGS) technology in the field of precision oncology, today reported financial results for the three months ended June 30, 2020.
Second Quarter 2020 Highlights
Revenues of RMB107.0 million (US$15.1 million) for the three months ended June 30, 2020, representing a 26.1% increase over the corresponding period in 2019.
Key publications:
BENEFIT biomarker study (with AstraZeneca) published in Journal of Thoracic Oncology1
Blood-based MSI validation published in Journal of Molecular Diagnostics2
NSCLC liquid-biopsy real-world validation (COMPASS) published in Translational Lung Cancer Research3
Clinical validation and genetic landscape studies on multiple cancer types including breast cancer,4 lymphoma,5 etc.
Entered into collaboration with Illumina on developing IVD kit solutions on the NextSeq 550Dx system, building on the two companies’ successful collaboration back in 2015 on the MiSeq Dx system that led to the first NMPA (National Medical Products Administration) approved NGS panel for the China market.
Entered into collaboration with CStone Pharmaceuticals (2616.HK) on CDx development for pralsetinib.
Progressing on the training and validation of the Company’s 6-cancer test, which builds on the Company’s 3-cancer test demonstrated in January 2020, with improved assay and bioinformatics.
Launched the PREDICT (Pan-CanceR Early DetectIon ProjeCT) study, a prospective, multi-center study that is expected to enroll 14,000 patients in China, to develop and validate the Company’s pan-cancer early detection test.
Completed initial public offering and concurrent private placement, with an aggregate offering size of US$281.2 million (giving effect to the full exercise of the over-allotment option).
“We appreciate existing and new shareholders’ valuable support towards our IPO in June, the largest IPO by a molecular diagnostics company from China, as we look to leveraging the proceeds raised to catalyze our growth trajectory,” said Yusheng Han, chairman and chief executive officer of Burning Rock. “Amid sporadic COVID incidents in China during the second quarter, we returned to positive year-over-year revenue growth. We continued our efforts to bring NGS testing capability in-house for hospitals through our decentralized, kit based, in-hospital channel; we also advanced our market leadership position in the central-laboratory channel where samples are sent out to third-party laboratories for testing. For early cancer detection, after four years of internal R&D, we launched the 14,000 patient PREDICT study during the second quarter, the first early detection study in multiple cancer types in China, to further develop and validate our blood-based test.”
Second Quarter 2020 Financial Results
Revenues were RMB107.0 million (US$15.1 million) for the three months ended June 30, 2020, representing a 26.1% increase from RMB84.8 million for the same period in 2019.
Revenue generated from central laboratory business was RMB74.6 million (US$10.6 million) for the three months ended June 30, 2020, representing a 17.7% increase from RMB63.4 million for the same period in 2019, primarily attributable to resumed volume growth of the Company’s central laboratory business. This reversed the 37% year-over-year decreasing trend during the first quarter. Number of patients tested in the central laboratory channel increased by 19.9% to 7,252 for the three months ended June 30, 2020 from 6,047 for the same period in 2019.
Revenue generated from in-hospital business was RMB27.6 million (US$3.9 million) for the three months ended June 30, 2020, representing a 69.0% increase from RMB16.3 million for the same period in 2019, driven by resumed kit revenue growth of existing contracted hospitals and ramp-up of newly contracted hospitals. This reversed the 36% year-over-year decreasing trend during the first quarter. Number of contracted partner hospitals in the in-hospital channel increased to 24 as of June 30, 2020 from 21 as of March 31, 2020 and 19 as of December 31, 2019.
Revenue generated from pharma research and development services was RMB4.8 million (US$0.6 million) for the three months ended June 30, 2020, representing a 6.2% decrease from RMB5.1 million for the same period in 2019.
Cost of revenues was RMB28.6 million (US$4.0 million) for the three months ended June 30, 2020, representing a 25.6% increase from RMB22.8 million for the same period in 2019, which was in line with the Company’s continued business growth.
Gross profit was RMB78.4 million (US$11.1 million) for the three months ended June 30, 2020, representing a 26.3% increase from RMB62.0 million for the same period in 2019. Gross margin was 73.3% for the three months ended June 30, 2020, compared to 73.2% for the same period in 2019.
Operating expenses were RMB151.4 million (US$21.4 million) for the three months ended June 30, 2020, representing a 67.3% increase from RMB90.5 million for the same period in 2019.
Research and development expenses were RMB71.2 million (US$10.1 million) for the three months ended June 30, 2020, representing an 103.4% increase from RMB35.0 million for the same period in 2019, primarily due to an increase in share-based compensation expenses for options granted to research and development personnel.
Selling and marketing expenses were RMB38.0 million (US$5.4 million) for the three months ended June 30, 2020, representing an 8.8% increase from RMB34.9 million for the same period in 2019.
General and administrative expenses were RMB42.2 million (US$5.9 million) for the three months ended June 30, 2020, representing an 105.1% increase from RMB20.6 million for the same period in 2019, primarily due to (i) an increase in staff cost, which was in line with the continued growth of the Company’s business, and (ii) expenses related to the Company’s initial public offering.
Net loss was RMB71.1 million (US$10.1 million), compared to RMB26.0 million for the same period in 2019.
Cash, cash equivalents and restricted cash were RMB2.6 billion (US$363.2 million) as of June 30, 2020.
2020 Financial Guidance
Assuming no significant resurgence of the COVID pandemic in China, Burning Rock expects its full year 2020 revenues to be approximately RMB420 million (US$59.4 million), implying a 28% year-over-year growth in the second half of 2020 compared with the same period in 2019.
Conference Call Information
Burning Rock will host a conference call to discuss the second quarter 2020 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on August 11, 2020.
Details of the conference call are as follows:
International:
+65 67135090
U.S.:
18665194004
U.K.:
08082346646
Hong Kong:
+852 30186771
China Mobile:
4006208038
China Landline:
8008190121
Conference ID:
4765946
A replay of the conference call will be available for two weeks (dial-in number: +61 2 8199 0299; same conference ID as shown above).
About Burning Rock
Burning Rock Biotech Limited (NASDAQ: BNR), whose mission is to Guard Life via Science, focuses on the application of next generation sequencing (NGS) technology in the field of precision oncology. Its business consists of i) NGS-based therapy selection testing for late-stage cancer patients, with the leading market share in China and over 185,000 tissue and liquid-based tests completed cumulatively, and ii) NGS-based cancer early detection, which has moved beyond proof-of-concept R&D into the clinical validation stage.
For more information about Burning Rock, please visit: www.brbiotech.com.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Burning Rock may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Burning Rock’s beliefs and expectations, are forward-looking statements. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock’s control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this press release is as of the date of this press release, and Burning Rock does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
_____________________________
1 Refined Stratification Based on Baseline Concomitant Mutations and Longitudinal circulating tumor DNA Monitoring in Advanced EGFR-mutant Lung Adenocarcinoma under Gefitinib Treatment. Accepted, Journal of Thoracic Oncology.
2 Detection of Microsatellite Instability from Circulating Tumor DNA by Targeted Deep Sequencing. Journal of Molecular Diagnostic.
3 Circulating tumor DNA clearance predicts prognosis across treatment regimen in a large real-world longitudinally monitored advanced non-small cell lung cancer cohort. Translational Lung Cancer Research.
4 Characterizations of Cancer Gene Mutations in Chinese Metastatic Breast Cancer Patients. Frontiers in Oncology.
5 Molecular profiling of Chinese R-CHOP treated DLBCL patients: identifying a high-risk subgroup. International Journal of Cancer. Available at: https://pubmed.ncbi.nlm.nih.gov/32399964/.
Selected Operating Data
Three months ended
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
Central Laboratory Channel:
Number of patients tested
5,336
6,047
6,769
7,576
4,680
7,252
Number of ordering physicians(1)
984
1,059
1,155
1,222
810
1,175
Number of ordering hospitals(2)
249
265
281
304
232
284
______________
(1)
Represents physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.
(2)
Represents hospitals whose residing physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.
As of
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
In-hospital Channel:
Pipeline partner hospitals(1)
17
20
21
21
23
23
Contracted partner hospitals(2)
14
15
19
19
21
24
Total number of partner hospitals
31
35
40
40
44
47
_______________
(1)
Refers to hospitals that are in the process of establishing in-hospital laboratories, laboratory equipment procurement or installation, staff training or pilot testing using the Company’s products.
(2)
Refers to hospitals that have entered into contracts to purchase the Company’s products for use on a recurring basis in their respective in-hospital laboratories the Company helped them establish. Kit revenue is generated from contracted hospitals.
Selected Financial Data
For three months ended
Revenues
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
(RMB in thousands)
Central laboratory channel
72,807
63,394
69,304
70,749
46,141
74,607
In-hospital channel
26,557
16,329
30,704
14,088
17,123
27,588
Pharma research and development channel
5,101
5,090
3,716
3,838
4,065
4,776
Total revenues
104,465
84,813
103,724
88,675
67,329
106,971
For three months ended
Gross profit
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
(RMB in thousands)
Central laboratory channel
54,910
46,122
50,113
51,420
32,434
56,556
In-hospital channel
19,870
12,571
25,412
319
10,126
19,269
Pharma research and development channel
3,332
3,366
2,662
3,237
2,224
2,573
Total gross profit
78,112
62,059
78,187
54,976
44,784
78,398
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for share and per share data)
For the three months ended
March 31, 2019
June 30, 2019
September 30, 2019
December 31, 2019
March 31, 2020
June 30, 2020
June 30, 2020
RMB
RMB
RMB
RMB
RMB
RMB
US$
Revenues
104,465
84,813
103,724
88,675
67,329
106,971
15,141
Cost of revenues
(26,353
)
(22,754
)
(25,537
)
(33,699
)
(22,545
)
(28,573
)
(4,044
)
Gross profit
78,112
62,059
78,187
54,976
44,784
78,398
11,097
Operating expenses:
Research and development expenses
(31,427
)
(34,992
)
(38,278
)
(52,238
)
(40,016
)
(71,176
)
(10,074
)
Selling and marketing expenses
(26,690
)
(34,929
)
(42,606
)
(49,109
)
(29,815
)
(37,992
)
(5,377
)
General and administrative expenses
(31,565
)
(20,614
)
(30,866
)
(49,112
)
(34,295
)
(42,272
)
(5,983
)
Total operating expenses
(89,682
)
(90,535
)
(111,750
)
(150,459
)
(104,126
)
(151,440
)
(21,434
)
Loss from operations
(11,570
)
(28,476
)
(33,563
)
(95,483
)
(59,342
)
(73,042
)
(10,337
)
Interest income
128
3,806
3,686
3,541
3,985
44
6
Interest expense
(4,210
)
(1,826
)
(1,650
)
(1,303
)
(1,178
)
1,939
274
Other (expense) income, net
(176
)
(329
)
(37
)
(341
)
(151
)
122
17
Foreign exchange (loss) gain, net
(101
)
1,142
800
(355
)
611
(118
)
(17
)
Change in fair value of warrant liability
64
(347
)
(1,403
)
(1,153
)
3,503
-
-
Loss before income tax
(15,865
)
(26,030
)
(32,167
)
(95,094
)
(52,572
)
(71,055
)
(10,057
)
Income tax expenses
-
-
-
-
-
-
Net loss
(15,865
)
(26,030
)
(32,167
)
(95,094
)
(52,572
)
(71,055
)
(10,057
)
Net loss attributable to Burning Rock Biotech Limited’s shareholders
(15,865
)
(26,030
)
(32,167
)
(95,094
)
(52,572
)
(71,055
)
(10,057
)
Accretion of convertible preferred shares
(50,296
)
(41,770
)
(33,772
)
(39,173
)
(26,288
)
(38,400
)
(5,435
)
Net loss attributable to ordinary shareholders
(66,161
)
(67,800
)
(65,939
)
(134,267
)
(78,860
)
(109,455
)
(15,492
)
Loss per share:
Basic and diluted
(2.86
)
(2.93
)
(2.85
)
(5.49
)
(3.15
)
(2.68
)
(0.38
)
Weighted average shares outstanding used in loss per share computation:
Basic and diluted
23,167,232
23,167,232
23,167,232
24,437,444
25,031,575
40,786,167
40,786,167
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments
(278
)
(14,288
)
45,317
(6,647
)
11,422
(2,336
)
(331
)
Total comprehensive loss
(16,143
)
(40,318
)
13,150
(101,741
)
(41,150
)
(73,391
)
(10,388
)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders
(16,143
)
(40,318
)
13,150
(101,741
)
(41,150
)
(73,391
)
(10,388
)
For the six months ended
June 30, 2019
June 30, 2020
June 30, 2020
RMB
RMB
US$
Revenues
189,278
174,300
24,670
Cost of revenues
(49,107
)
(51,118
)
(7,235
)
Gross profit
140,171
123,182
17,435
Operating expenses:
Research and development expenses
(66,419
)
(111,192
)
(15,738
)
Selling and marketing expenses
(61,619
)
(67,807
)
(9,597
)
General and administrative expenses
(52,179
)
(76,567
)
(10,837
)
Total operating expenses
(180,217
)
(255,566
)
(36,172
)
Loss from operations
(40,046
)
(132,384
)
(18,737
)
Interest income
3,934
4,029
570
Interest expense
(6,036
)
761
108
Other expense, net
(505
)
(29
)
(4
)
Foreign exchange gain, net
1,041
493
70
Change in fair value of warrant liability
(283
)
3,503
496
Loss before income tax
(41,895
)
(123,627
)
(17,497
)
Income tax expenses
-
-
-
Net loss
(41,895
)
(123,627
)
(17,497
)
Net loss attributable to Burning Rock Biotech Limited’s shareholders
(41,895
)
(123,627
)
(17,497
)
Accretion of convertible preferred shares
(92,066
)
(64,688
)
(9,156
)
Net loss attributable to ordinary shareholders
(133,961
)
(188,315
)
(26,653
)
Loss per share:
Basic and diluted
(5.78
)
(5.73
)
(0.81
)
Weighted average shares outstanding used in loss per share computation:
Basic and diluted
23,167,232
32,865,350
32,865,350
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments
(14,566
)
9,086
1,286
Total comprehensive loss
(56,461
)
(114,541
)
(16,211
)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders
