GUANGZHOU, China, Nov. 15, 2021 (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 September 30, 2021.
Business Updates
Early Detection
6-cancer product: we have successfully signed contracts with a small number of pilot hospitals in China for the commercialization of our 6-cancer early detection product, and will focus on customer education and contracting more hospitals.
9-cancer product: we expect our 9-cancer early detection product development read-out in the first half of 2022, with potential performance improvement over that of our 6-cancer early detection product.
Pharma Services
Pharma service contract backlog continues to build rapidly. The total value of new contracts we entered into during the nine months ended September 30, 2021 amounted to RMB144 million, which is approximately 4.5 times of the new contract value signed in full-year 2020.
Pharma projects involving our Clinical Laboratory Improvement Amendments (CLIA)-certified and College of American Pathologists (CAP)-accredited laboratory in California continue to grow. For instance, in early November, we announced further collaboration with IMPACT Therapeutics where our Guangzhou and California laboratories would provide testing services in connection with IMPACT Therapeutics’ development of its ATR inhibitor IMP9064, which has received the Investigational New Drug (IND) clearance from the U.S. Food and Drug Administration (FDA) for the Phase I/II clinical study.
Therapy Selection
Continued execution of our strategic shift towards more in-hospital testing, with industry-leading scale and growth rate. The volume of in-hospital NGS-based test kits grew 37% year-over-year to over 11,000 tests during the third quarter of 2021, despite the negative COVID-19 impact in August.
Third Quarter 2021 Financial Results
Revenues were RMB126.6 million (US$19.7 million) for the three months ended September 30, 2021, representing a 2.2% increase from RMB123.9 million for the same period in 2020, or a 0.5% sequential decrease from RMB127.3 million for the three months ended June 30, 2021.
Revenue generated from central laboratory business was RMB78.8 million (US$12.2 million) for the three months ended September 30, 2021, representing a 12.3% decrease from RMB89.9 million for the same period in 2020, primarily attributable to a decrease in the number of patients tested in the central laboratory channel to 7,808 for the three months ended September 30, 2021, representing a 9.7% decrease from 8,644 for the same period in 2020.
Revenue generated from in-hospital business was RMB43.7 million (US$6.8 million) for the three months ended September 30, 2021, representing a 37.9% increase from RMB31.7 million for the same period in 2020, driven by in-hospital testing volume growth.
Revenue generated from pharma research and development services was RMB4.1 million (US$0.6 million) for the three months ended September 30, 2021, representing a 79.3% increase from RMB2.3 million for the same period in 2020, primarily attributable to increased testing performed for our pharma customers and growth in companion diagnostics development services.
Cost of revenues was RMB35.0 million (US$5.4 million) for the three months ended September 30, 2021, representing an 8.4% increase from RMB32.3 million for the same period in 2020, which was generally in line with the Company’s continued business growth.
Gross profit was RMB91.6 million (US$14.2 million) for the three months ended September 30, 2021, which was remained relatively stable compared to the same period in 2020. Gross margin was 72.3% for the three months ended September 30, 2021, compared to 73.9% for the same period in 2020.
Operating expenses were RMB262.6 million (US$40.8 million) for the three months ended September 30, 2021, representing a 21.5% increase from RMB216.2 million for the same period in 2020. The increase was primarily driven by headcount growth to support our business expansion.
Research and development expenses were RMB69.6 million (US$10.8 million) for the three months ended September 30, 2021, representing a 0.5% increase from RMB69.3 million for the same period in 2020, primarily due to an increase in research and development personnel’s staff cost resulted from an increase in headcount, partially offset by a decrease in share-based compensation for research and development personnel.
Selling and marketing expenses were RMB76.7 million (US$11.9 million) for the three months ended September 30, 2021, representing a 73.6% increase from RMB44.2 million for the same period in 2020, primarily due to an increase in staff cost resulted from increase in headcount to strengthen our commercial presence in the therapy selection business and build up our early detection commercialization team.
General and administrative expenses were RMB116.3 million (US$18.1 million) for the three months ended September 30, 2021, representing a 13.2% increase from RMB102.7 million for the same period in 2020, primarily due to an increase in general and administrative personnel’s staff cost resulted from an increase in headcount and share-based compensation expenses.
Net loss was RMB170.5 million (US$26.5 million) for the three months ended September 30, 2021, compared to RMB127.1 million for the same period in 2020.
Cash, cash equivalents, restricted cash and short-term investments were RMB1,685.4 million (US$261.6 million) as of September 30, 2021.
2021 Financial Guidance
Starting late October, another wave of COVID resurgence has been reported in multiples cities in China, and the relevant governmental authorities have imposed travel restrictions and other measures. As of the date of this earnings release, the current wave has not been cleared out and the corresponding travel restrictions and other measures have not been lifted. We expect our central-laboratory testing volumes and, to a lesser extent, the growth of our in-hospital testing volumes, to be significantly impacted. We thus expect our 2021 full-year revenue to be at or around RMB500 million, subject to future development of the current wave of COVID resurgence.
Conference Call Information
Burning Rock will host a conference call to discuss the third quarter 2021 financial results at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Hong Kong time) on November 16, 2021.
Details of the conference call are as follows:
International:
+65 67135590
U.S.:
+1 3322089468
U.K.:
+44 2036928125
Hong Kong:
+852 30186771
China Mobile:
4008205286
China Landline:
8008208659
Conference ID:
2277434
A replay of the conference call will be available for one week (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 273,000 tissue and liquid-based tests completed cumulatively, and ii) 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: ir.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.
Contact: IR@brbiotech.com
Selected Operating Data
For the three months ended
March 31,
2020
June 30,
2020
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
Central Laboratory Channel:
Number of patients tested
4,680
7,252
8,644
7,989
7,716
8,155
7,808
Number of ordering physicians(1)
810
1,175
1,194
1,114
1,082
1,013
920
Number of ordering hospitals(2)
232
284
289
294
303
300
287
(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,
2020
June 30,
2020
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
In-hospital Channel:
Pipeline partner hospitals(1)
23
23
22
23
22
22
24
Contracted partner hospitals(2)
21
24
25
29
32
34
34
Total number of partner hospitals
44
47
47
52
54
56
58
(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 the three months ended
Revenues
March 31,
2020
June 30,
2020
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
(RMB in thousands)
Central laboratory channel
46,141
74,607
89,899
86,695
74,561
79,999
78,817
In-hospital channel
17,123
27,588
31,704
41,457
28,994
40,502
43,714
Pharma research and development channel
4,065
4,776
2,278
3,570
3,068
6,778
4,084
Total revenues
67,329
106,971
123,881
131,722
106,623
127,279
126,615
For the three months ended
Gross profit
March 31,
2020
June 30,
2020
September 30,|
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
(RMB in thousands)
Central laboratory channel
32,434
56,556
67,804
66,588
55,212
58,681
58,387
In-hospital channel
10,126
19,269
22,410
30,218
20,070
29,426
31,111
Pharma research and development channel
2,224
2,573
1,373
2,347
1,658
2,124
2,098
Total gross profit
44,784
78,398
91,587
99,153
76,940
90,231
91,596
For the three months ended
Share-based compensation expenses
March 31,
2020
June 30,
2020
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
(RMB in thousands)
Cost of revenues
176
183
160
277
339
406
267
Research and development expenses
2,072
25,314
10,572
11,843
22,404
20,825
(9,559
)
Selling and marketing expenses
253
491
341
2,372
2,633
2,809
2,044
General and administrative expenses
1,665
1,639
57,805
58,057
59,382
59,369
60,803
Total share-based compensation expenses
4,166
27,627
68,878
72,549
84,758
83,409
53,555
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for number of shares and per share data)
For the three months ended
March 31,
2020
June 30,
2020
September 30,
2020
December 31,
2020
March 31,
2021
June 30,
2021
September 30,
2021
September 30,
2021
RMB
RMB
RMB
RMB
RMB
RMB
RMB
US$
Revenues
67,329
106,971
123,881
131,722
106,623
127,279
126,615
19,650
Cost of revenues
(22,545
)
(28,573
)
(32,294
)
(32,569
)
(29,683
)
(37,048
)
(35,019
)
(5,435
)
Gross profit
44,784
78,398
91,587
99,153
76,940
90,231
91,596
14,215
Operating expenses:
Research and development expenses
(40,016
)
(71,176
)
(69,330
)
(83,418
)
(77,414
)
(108,071
)
(69,649
)
(10,809
)
Selling and marketing expenses
(29,815
)
(37,992
)
(44,174
)
(56,606
)
(55,130
)
(68,058
)
(76,687
)
(11,902
)
General and administrative expenses
(34,295
)
(42,272
)
(102,731
)
(114,502
)
(116,259
)
(116,130
)
(116,304
)
(18,050
)
Total operating expenses
(104,126
)
(151,440
)
(216,235
)
(254,526
)
(248,803
)
(292,259
)
(262,640
)
(40,761
)
Loss from operations
(59,342
)
(73,042
)
(124,648
)
(155,373
)
(171,863
)
(202,028
)
(171,044
)
(26,546
)
Interest income
3,985
44
698
1,341
787
681
958
149
Interest expense
(1,178
)
1,939
(776
)
(652
)
(510
)
(565
)
(367
)
(57
)
Other (expense) income, net
(151
)
122
(176
)
(682
)
118
433
20
3
Foreign exchange loss, net
611
(118
)
(2,228
)
(1,112
)
57
(560
)
380
59
Change in fair value of warrant liability
3,503
-
-
-
-
-
-
-
Loss before income tax
(52,572
)
(71,055
)
(127,130
)
(156,478
)
(171,411
)
(202,039
)
(170,053
)
(26,392
)
Income tax expenses
-
-
-
-
-
(1,626
)
(424
)
(66
)
Net loss
(52,572
)
(71,055
)
(127,130
)
(156,478
)
(171,411
)
(203,665
)
(170,477
)
(26,458
)
Net loss attributable to Burning Rock Biotech Limited’s shareholders
(52,572
)
(71,055
)
(127,130
)
(156,478
)
(171,411
)
(203,665
)
(170,477
)
(26,458
)
Accretion of convertible preferred shares
(26,288
)
(38,400
)
-
-
-
-
-
-
Net loss attributable to ordinary shareholders
(78,860
)
(109,455
)
(127,130
)
(156,478
)
(171,411
)
(203,665
)
(170,477
)
(26,458
)
Loss per share:
Ordinary shares - basic and diluted
(3.15
)
-
-
-
-
-
-
Class A ordinary shares - basic and diluted
-
(2.68
)
(1.22
)
(1.51
)
(1.65
)
(1.96
)
(1.64
)
(0.25
)
Class B ordinary shares - basic and diluted
-
(2.68
)
(1.22
)
(1.51
)
(1.65
)
(1.96
)
(1.64
)
(0.25
)
Weighted average shares outstanding used in loss per share computation:
Ordinary shares - basic and diluted
25,031,575
-
-
-
-
-
-
Class A ordinary shares - basic and diluted
-
23,461,319
86,479,686
86,511,799
86,721,263
86,764,260
86,908,975
86,908,975
Class B ordinary shares - basic and diluted
-
17,324,848
17,324,848
17,324,848
17,324,848
17,324,848
17,324,848
17,324,848
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments
11,422
(2,336
)
(91,093
)
(94,881
)
14,080
(34,980
)
6,146
954
Total comprehensive loss
(41,150
)
(73,391
)
(218,223
)
(251,359
)
(157,331
)
(238,645
)
(164,331
)
(25,504
)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders
(41,150
)
(73,391
)
(218,223
)
(251,359
)
(157,331
)
(238,645
)
(164,331
)
(25,504
)
Burning Rock Biotech Limited
Unaudited Condensed Statements of Comprehensive Loss
(in thousands, except for share and per share data)
For the nine months ended
September 30,
2020
September 30,
2021
September 30,
2021
RMB
RMB
USD
Revenues
298,181
360,517
55,952
Cost of revenues
(83,412
)
(101,750
)
(15,791
)
Gross profit
214,769
258,767
40,161
Operating expenses:
Research and development expenses
(180,522
)
(255,134
)
(39,596
)
Selling and marketing expenses
(111,981
)
(199,875
)
(31,020
)
General and administrative expenses
(179,298
)
(348,693
)
(54,116
)
Total operating expenses
(471,801
)
(803,702
)
(124,732
)
Loss from operations
(257,032
)
(544,935
)
(84,571
)
Interest income
4,727
2,426
377
Interest expense
(15
)
(1,442
)
(224
)
Other (expense) income, net
(205
)
571
88
Foreign exchange loss, net
(1,735
)
(123
)
(19
)
Change in fair value of warrant liability
3,503.00
-
-
Loss before income tax
(250,757
)
(543,503
)
(84,349
)
Income tax expenses
-
(2,050
)
(318
)
Net loss
(250,757
)
(545,553
)
(84,667
)
Net loss attributable to Burning Rock Biotech Limited’s shareholders
(250,757
)
(545,553
)
(84,667
)
Accretion of convertible preferred shares
(64,688
)
-
-
Net loss attributable to ordinary shareholders
(315,445
)
(545,553
)
(84,667
)
Loss per share:
Class A ordinary shares - basic and diluted
(5.56
)
(5.24
)
(0.81
)
Class B ordinary shares - basic and diluted
(5.56
)
(5.24
)
(0.81
)
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted
39,446,747
86,798,854
86,798,854
Class B ordinary shares - basic and diluted
17,324,848
17,324,848
17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments
Foreign currency translation adjustments
(82,007
)
(14,754
)
(2,290
)
Total comprehensive loss
(332,764
)
(560,307
)
(86,957
)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders
(332,764
)
(560,307
)
(86,957
)
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
As of
December 31,
2020
September 30,
2021
September 30,
2021
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
1,895,308
1,621,641
251,675
Restricted cash
29,898
28,069
4,356
Short-term investment
362,132
35,670
5,536
Accounts receivable, net
88,218
92,868
14,413
Contract assets
22,534
37,268
5,783
Amounts due from related parties
212
966
150
Inventories
68,021
115,785
17,970
Prepayments and other current assets
57,329
60,912
9,453
Total current assets
2,523,652
1,993,179
309,336
Non-current assets:
Equity method investment
1,417
982
152
Property and equipment, net
111,481
296,383
45,999
Operating Right-of-use assets
-
86,813
13,473
Intangible assets, net
3,457
4,236
657
Other non-current assets
23,021
44,692
6,936
Total non-current assets
139,376
433,106
67,217
TOTAL ASSETS
2,663,028
2,426,285
376,553
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets (Continued)
(in thousands)
As of
December 31,
2020
September 30,
2021
September 30,
2021
RMB
RMB
US$
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable
35,482
49,122
7,624
Deferred revenue
74,402
122,715
19,045
Capital lease obligations, current
4,816
-
-
Accrued liabilities and other current liabilities
83,648
90,966
14,116
Customer deposits
1,120
1,042
162
Short-term borrowing
7,370
7,370
1,144
Current portion of long-term borrowings
34,695
-
-
Current portion of operating lease liabilities
-
35,357
5,487
Current portion of financing lease liabilities
-
787
122
Total current liabilities
241,533
307,359
47,700
Non-current liabilities:
Deferred government grants
263
-
-
Operating lease liabilities
-
57,530
8,929
Other non-current liabilities
228
227
35
Total non-current liabilities
491
57,757
8,964
TOTAL LIABILITIES
242,024
365,116
56,664
Shareholders’ equity:
Class A ordinary shares
116
116
18
Class B ordinary shares
21
21
3
Additional paid-in capital
4,006,616
4,220,944
655,080
Accumulated deficits
(1,418,160
)
(1,977,569
)
(306,913
)
Accumulated other comprehensive loss
(167,589
)
(182,343
)
(28,299
)
Total shareholders’ equity
2,421,004
2,061,169
319,889
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
2,663,028
2,426,285
376,553
Burning Rock Biotech Limited
Unaudited Condensed Statements of Cash Flows
(in thousands)
For the three months ended
September 30,
2020
September 30,
2021
September 30,
2021
RMB
RMB
US$
Net cash generated from (used in) operating activities
(37,052
)
(133,394
)
(20,705
)
Net cash generated from (used in) investing activities
(365,373
)
(72,085
)
(11,183
)
Net cash generated from (used in) financing activities
(20,939
)
(32,995
)
(5,122
)
Effect of exchange rate on cash, cash equivalents and restricted cash
(81,043
)
4,919
763
Net increase cash, cash equivalents and restricted cash
(504,407
)
(233,555
)
(36,247
)
Cash, cash equivalents and restricted cash at the beginning of period
2,566,236
1,883,265
292,278
Cash, cash equivalents and restricted cash at the end of period
2,061,829
1,649,710
256,031
For the nine months ended
September 30,
2020
September 30,
2021
September 30,
2021
RMB
RMB
US$
Net cash generated from (used in) operating activities
17,116
(365,537
)
(56,728
)
Net cash generated (used in) investing activities
(72,884
)
148,667
23,071
Net cash generated from (used in) financing activities
2,097,242
(46,118
)
(7,158
)
Effect of exchange rate on cash, cash equivalents and restricted cash
(77,889
)
(12,508
)
(1,941
)
Net increase cash, cash equivalents and restricted cash
1,963,585
(275,496
)
(42,756
)
Cash, cash equivalents and restricted cash at the beginning of period
98,244
1,925,206
298,787
Cash, cash equivalents and restricted cash at the end of period
2,061,829
1,649,710
256,031