Sunvozertinib

GUANGZHOU, China, Dec. 03, 2024 (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, 2024. Recent Business Updates Therapy Selection Presented study results at the 2024 World Conference on Lung Cancer in September 2024. “Neoadjuvant sintilimab plus chemotherapy could be an optional treatment modality in selected EGFR-mutant NSCLC” and “Distinct Genomic and Immune Microenvironment Features of Solid or Micropapillary Predominant Subtype in Stage I Lung Adenocarcinomas”.Signed a strategic cooperation agreement with MGI Tech Co., Ltd in October 2024, aiming to fully complement each other's platform and technological advantages to further promote the clinical application progress and global business of precision oncology. Pharma Services The companion diagnostic (CDx) for EGFR exon 20 insertion mutation (exon20ins) for sunvozertinib, developed through the collaboration of Burning Rock and Dizal, has been approved by the National Medical Products Administration (NMPA) of China, which marks the first co-developed NGS-based CDx for lung cancer approved by NMPA since the release of the CDx guideline in China. Third Quarter 2024 Financial Results Total revenues were RMB128.6 million (US$18.3 million) for the three months ended September 30, 2024, representing a 0.8% increase from RMB127.6 million for the same period in 2023, the increased revenue of in-hospital business was offset by the decrease of central-lab business, as we transition from central-lab to more in-hospital based testing. Revenue generated from in-hospital business was RMB63.8 million (US$9.1 million) for the three months ended September 30, 2024, representing a 17.0% increase from RMB54.5 million for the same period in 2023, driven by an increase in sales volume.Revenue generated from central laboratory business was RMB40.0 million (US$5.7 million) for the three months ended September 30, 2024, representing a 25.2% decrease from RMB53.5 million for the same period in 2023, primarily attributable to a decrease in the number of tests, as we continued our transition towards in-hospital testing.Revenue generated from pharma research and development services was RMB24.9 million (US$3.5 million) for the three months ended September 30, 2024, representing a 27.1% increase from RMB19.6 million for the same period in 2023, primarily attributable to an increased development and testing services performed for our pharma customers. Cost of revenues was RMB36.8 million (US$5.2 million) for the three months ended September 30, 2024, representing an 11.6% decrease from RMB41.6 million for the same period in 2023, primarily due to (i) a decrease in cost of central laboratory business, which was in line with the decrease in revenue generated from this business; (ii) a decrease in amortization expense for all kinds of business; and (iii) the receipt of a government grant for Guangzhou headquarters building. Gross profit was RMB91.8 million (US$13.1 million) for the three months ended September 30, 2024, representing a 6.9% increase from RMB85.9 million for the same period in 2023. Gross margin was 71.4% for the three months ended September 30, 2024, compared to 67.4% for the same period in 2023. By channel, gross margin of central laboratory business was 83.2% for the three months ended September 30, 2024, compared to 77.6% during the same period in 2023, primarily due to the decreased depreciation and rental cost in relation to our laboratory of Guangzhou headquarters; gross margin of in-hospital business was 73.0% for the three months ended September 30, 2024, compared to 65.1% during the same period in 2023, primarily due to the same reason; gross margin of pharma research and development services was 48.2% for the three months ended September 30, 2024, compared to 45.8% during the same period of 2023. Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB97.8 million (US$13.9million) for the three months ended September 30, 2024, representing a 2.8% increase from RMB95.1 million for the same period in 2023. Non-GAAP gross margin was 76.0% for the three months ended September 30, 2024, compared to 74.5% for the same period in 2023. Operating expenses were RMB130.4 million (US$18.6 million) for the three months ended September 30, 2024, representing a 50.7% decrease from RMB264.7 million for the same period in 2023. The decrease was primarily driven by decreases in amortized expense on share-based compensation, budget control measures and headcount reduction to improve the Company’s operating efficiency. Research and development expenses were RMB49.2 million (US$7.0 million) for the three months ended September 30, 2024, representing a 41.3% decrease from RMB83.7 million for the same period in 2023, primarily due to (i) a decrease in staff cost resulted from the reorganization of our research and development department to improve operating efficiency; (ii) a decrease in the expenditure for research projects; (iii) a decrease in amortized expense on share-based compensation; and (iv) a decrease in amortized expenses for office building decoration.Selling and marketing expenses were RMB48.4 million (US$6.9 million) for the three months ended September 30, 2024, representing a 22.3% decrease from RMB62.3 million for the same period in 2023, primarily due to (i) a decrease in staff cost resulted from the reorganization of the sales department and improvement in operating efficiency; (ii) a decrease in conference fee; and (iii) a decrease in entertainment expense.General and administrative expenses were RMB32.9 million (US$4.7 million) for the three months ended September 30, 2024, representing a 72.3% decrease from RMB118.7 million for the same period in 2023, primarily due to (i) a decrease in amortized expense on share-based compensation; (ii) a decrease in amortized expenses for office building decoration; (iii) a decrease in operating lease; and (iv) a decrease in general and administrative personnel’s staff cost. Net loss was RMB35.7 million (US$5.10 million) for the three months ended September 30, 2024, compared to RMB175.0 million for the same period in 2023. Cash, cash equivalents, restricted cash and short-term investments were RMB498.2 million (US$71.0 million) as of September 30, 2024. 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, 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. Non-GAAP Measures In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP gross profit and non-GAAP gross margin, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The company defines non-GAAP gross profit as gross profit excluding depreciation and amortization. The company defines non-GAAP gross margin as gross margin excluding depreciation and amortization. The company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The company believe non-GAAP gross profit and non-GAAP gross margin excluding non-cash impact of depreciation and amortization reflect the company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons. Contact: IR@brbiotech.com Selected Operating Data As of September 30, 2023December 31, 2023March 31, 2024June 30, 2024September 30, 2024In-hospital Channel: Pipeline partner hospitals(1)2928282930Contracted partner hospitals(2)5559595961Total number of partner hospitals 84 87 87 8891(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 RevenuesSeptember 30, 2023December 31, 2023March 31, 2024June 30, 2024September 30, 2024 (RMB in thousands)Central laboratory channel53,48151,28847,61448,77339,984 In-hospital channel54,49628,809 57,38759,87263,769 Pharma research and development channel19,58940,98820,62226,88824,891 Total revenues127,566 121,085 125,623 135,533 128,644 For the three months ended Gross profit September 30, 2023December 31, 2023March 31, 2024June 30, 2024September 30, 2024 (RMB in thousands)Central laboratory channel41,48741,88637,00238,42433,262 In-hospital channel35,45912,91039,19244,05846,580 Pharma research and development channel8,97423,3179,50012,95612,004 Total gross profit85,920 78,113 85,694 95,438 91,846 For the three months ended Share-based compensation expensesSeptember 30, 2023December 31, 2023March 31, 2024June 30, 2024September 30, 2024 (RMB in thousands)Cost of revenues680654596464289 Research and development expenses12,16112,40112,28712,0083,180 Selling and marketing expenses2,8481,8165081,2321,917 General and administrative expenses57,70456,47255,99054,4074,732 Total share-based compensation expenses 73,393 71,343 69,381 68,111 10,118 Burning Rock Biotech LimitedUnaudited Condensed Statements of Comprehensive Loss(in thousands, except for number of shares and per share data) For the three months ended September 30, 2023 December 31,2023 March 31, 2024 June 30,2024 September 30, 2024 September 30, 2024 RMB RMB RMB RMB RMB US$ Revenues127,566 121,085 125,623 135,533 128,644 18,331 Cost of revenues(41,646)(42,972)(39,929 )(40,095 )(36,798)(5,243) Gross profit 85,920 78,113 85,694 95,438 91,846 13,088 Operating expenses: Research and development expenses(83,701)(73,119)(65,985)(64,952)(49,150)(7,004) Selling and marketing expenses(62,310)(49,785)(46,856)(48,907)(48,411)(6,899) General and administrative expenses(118,724)(121,533)(98,681)(92,794)(32,874)(4,685) Total operating expenses (264,735) (244,437)(211,522 )(206,653 )(130,435)(18,588) Loss from operations (178,815)(166,324)(125,828 )(111,215)(38,589)(5,500) Interest income4,018 5,539 4,038 3,187 3,173 452 Other income (expense), net(157)160 434 (82)1 - Foreign exchange (loss) gain, net423 (517)(13)262 (129)(18) Loss before income tax (174,531)(161,142)(121,369 )(107,848 )(35,544)(5,066) Income tax expenses (450) (1,071)(180) (190)(201)(29) Net loss (174,981) (162,213)(121,549 )(108,038 )(35,745)(5,095) Net loss attributable to Burning Rock Biotech Limited’s shareholders(174,981)(162,213)(121,549 )(108,038)(35,745)(5,095) Net loss attributable to ordinary shareholders(174,981)(162,213)(121,549 )(108,038)(35,745)(5,095) Loss per share for class A and class B ordinary shares: Class A ordinary shares - basic and diluted(1.71)(1.58)(1.19 )(1.05 )(0.35) (0.05) Class B ordinary shares - basic and diluted (1.71)(1.58)(1.19 )(1.05 ) (0.35) (0.05) Weighted average shares outstanding used in loss per share computation: Class A ordinary shares - basic and diluted85,000,869 85,071,360 85,219,188 85,271,858 85,902,670 85,902,670 Class B ordinary shares - basic and diluted17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments(1,955)(3,026)590 940 (4,054)(578) Total comprehensive loss (176,936 )(165,239)(120,959 )(107,098)(39,799)(5,673) Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders (176,936)(165,239)(120,959 )(107,098 )(39,799)(5,673) Burning Rock Biotech LimitedUnaudited Condensed Statements of Comprehensive Loss(in thousands, except for number of shares and per share data) For the nine months ended September 30, 2023 September 30, 2024 September 30, 2024 RMBRMBUS$Revenues416,350 389,800 55,546 Cost of revenues(131,236)(116,822)(16,648)Gross profit285,114 272,978 38,898 Operating expenses: Research and development expenses(273,897)(180,087)(25,662)Selling and marketing expenses(197,926)(144,174)(20,545)General and administrative expenses(316,288)(224,349)(31,969)Total operating expenses(788,111)(548,610)(78,176)Loss from operations (502,997)(275,632)(39,278)Interest income12,417 10,398 1,482 Other income, net324 353 50 Foreign exchange gain, net97 120 17 Loss before income tax(490,159)(264,761)(37,729)Income tax expenses(1,317)(571)(81)Net loss(491,476)(265,332)(37,810)Net loss attributable to Burning Rock Biotech Limited’s shareholders(491,476)(265,332)(37,810)Net loss attributable to ordinary shareholders(491,476)(265,332)(37,810)Loss per share for class A and class B ordinary shares: Class A ordinary shares - basic and diluted(4.80)(2.58)(0.37)Class B ordinary shares - basic and diluted(4.80)(2.58)(0.37)Weighted average shares outstanding used in loss per share computation: Class A ordinary shares - basic and diluted85,070,921 85,467,131 85,467,131 Class B ordinary shares - basic and diluted17,324,848 17,324,848 17,324,848 Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments7,215 (2,524)(360)Total comprehensive loss(484,261)(267,856)(38,170)Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(484,261)(267,856)(38,170) Burning Rock Biotech LimitedUnaudited Condensed Consolidated Balance Sheets(In thousands) As of December 31, 2023September 30, 2024September 30, 2024 RMB RMBUS$ASSETS Current assets: Cash and cash equivalents615,096497,96970,960Restricted cash12027840Accounts receivable, net126,858166,49123,725Contract assets, net22,74817,7502,529Inventories, net69,02066,4449,468Prepayments and other current assets, net50,25430,6234,364Convertible note receivable-5,320758Total current assets 884,096 784,875 111,844 Non-current assets: Equity method investment33724335Convertible note receivable5,320--Property and equipment, net131,91290,13912,845Operating right-of-use assets12,28499,30114,150Intangible assets, net96452575Other non-current assets5,0889,7221,385Total non-current assets 155,905 199,930 28,490 TOTAL ASSETS 1,040,001 984,805 140,334 Burning Rock Biotech LimitedUnaudited Condensed Consolidated Balance Sheets (Continued)(in thousands) As of December 31, 2023 September 30, 2024 September 30, 2024 RMB RMBUS$LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable18,061 25,213 3,593 Deferred revenue130,537 110,748 15,781 Accrued liabilities and other current liabilities104,935 94,110 13,411 Customer deposits1,197 567 81 Current portion of operating lease liabilities8,634 27,842 3,967 Total current liabilities 263,364 258,480 36,833 Non-current liabilities: Non-current portion of operating lease liabilities3,690 73,055 10,410 Other non-current liabilities4,537 5,104 728 Total non-current liabilities 8,227 78,159 11,138 TOTAL LIABILITIES 271,591 336,639 47,971 Shareholders’ equity: Class A ordinary shares116 118 17 Class B ordinary shares21 21 3 Additional paid-in capital4,849,337 4,996,947 712,059 Treasury stock(65,896)(65,896)(9,390)Accumulated deficits(3,853,635)(4,118,967)(586,948)Accumulated other comprehensive loss(161,533)(164,057)(23,378)Total shareholders’ equity768,410 648,166 92,363 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY1,040,001 984,805 140,334 Burning Rock Biotech LimitedUnaudited Condensed Statements of Cash Flows(in thousands) For the three months ended September 30, 2023September 30, 2024September 30, 2024 RMBRMBUS$Net cash used in operating activities(47,417)(30,278)(4,315)Net cash used in investing activities(1,985)(987)(141)Net cash (used in)/generated from financing activities(45,888)2 - Effect of exchange rate on cash, cash equivalents and restricted cash(1,239)(3,537)(503)Net decrease in cash, cash equivalents and restricted cash (96,529)(34,800)(4,959)Cash, cash equivalents and restricted cash at the beginning of period733,278 533,047 75,959 Cash, cash equivalents and restricted cash at the end of period636,749 498,247 71,000 For the nine months ended September 30, 2023September 30, 2024September 30, 2024 RMBRMBUS$Net cash used in operating activities(239,764)(111,323)(15,863)Net cash used in investing activities(8,972)(3,600)(513)Net cash (used in)/generated from financing activities(46,923)2 - Effect of exchange rate on cash, cash equivalents and restricted cash7,140 (2,048)(292)Net decrease in cash, cash equivalents and restricted cash (288,519)(116,969)(16,668)Cash, cash equivalents and restricted cash at the beginning of period925,268 615,216 87,668 Cash, cash equivalents and restricted cash at the end of period636,749 498,247 71,000 Burning Rock Biotech LimitedReconciliations of GAAP and Non-GAAP Results For the three months ended September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 (RMB in thousands)Gross profit: Central laboratory channel41,487 41,886 37,002 38,424 33,262 In-hospital channel35,459 12,910 39,192 44,058 46,580 Pharma research and development channel8,974 23,317 9,500 12,956 12,004 Total gross profit85,920 78,113 85,694 95,438 91,846 Add: depreciation and amortization: Central laboratory channel2,550 2,414 1,919 1,226 1,277 In-hospital channel2,751 2,728 1,524 824 798 Pharma research and development channel3,863 3,808 3,856 4,417 3,846 Total depreciation and amortization included in cost of revenues 9,164 8,950 7,299 6,467 5,921 Non-GAAP gross profit： Central laboratory channel44,037 44,300 38,921 39,650 34,539 In-hospital channel38,210 15,638 40,716 44,882 47,378 Pharma research and development channel12,837 27,125 13,356 17,373 15,850 Total non-GAAP gross profit95,084 87,063 92,993 101,905 97,767 Non-GAAP gross margin： Central laboratory channel82.3%86.4%81.7%81.3%86.4%In-hospital channel70.1%54.3%70.9%75.0%74.3%Pharma research and development channel65.5%66.2%64.8%64.6%63.7%Total non-GAAP gross margin74.5%71.9%74.0%75.2%76.0%

The NDA submission is bolstered by data from the WU-KONG1 Part B trial. Credit: Jo Panuwat D via Shutterstock. Dizal has submitted sunvozertinib’s new drug application (NDA) to the US Food and Drug Administration (FDA) aiming to secure approval for treating locally advanced or metastatic non-small cell lung cancer (NSCLC) with epidermal growth factor receptor (EGFR) exon 20 insertion (exon20ins) mutations. These mutations are identified by an FDA-approved test in patients. Sunvozertinib, an irreversible EGFR inhibitor, is designed to target a broad range of mutations while maintaining selectivity for wild-type EGFR. The NDA submission is supported by data from the WU-KONG1 Part B multinational trial that evaluated the safety and efficacy of sunvozertinib in patients with relapsed or refractory EGFR exon20ins NSCLC across Asia, North America, South America, and Europe. Findings showed that sunvozertinib achieved the primary endpoint, demonstrating a statistically significant and clinically meaningful objective response rate. Dizal CEO Xiaolin Zhang said: “We are encouraged by the potential of sunvozertinib as a single oral agent to improve outcomes for patients with EGFR exon20ins NSCLC. “The filing for approval of sunvozertinib marks Dizal’s first NDA submission to the FDA, which represents an important step forward as we continue our efforts to address unmet medical needs globally. We look forward to working closely with the FDA on their review of our application.” The therapy received accelerated approval in China, reportedly becoming the first and only oral medication globally for NSCLC patients harbouring EGFR exon20ins mutations. It has also earned breakthrough therapy designations (BTDs) from the FDA this April and China’s Center for Drug Evaluation in October this year for the given indication. Presently, sunvozertinib is undergoing further evaluation in a Phase III, randomised, multinational WU-KONG28 trial for comparing it with platinum doublet chemotherapies in treatment-naive patients on a global scale. In August last year, China’s National Medical Products Administration approved sunvozertinib for treating advanced NSCLC with EGFR exon20ins following platinum-based chemotherapy.