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 March 31, 2022.
Recent Business Updates
-
Therapy Selection and
Minimal Residual Disease (MRD)
-
Continued growth through (i) market share gain through continued
focus on the in-hospital segment and (ii) new product launch.
Achieved 42% overall testing volume growth year-on-year during the
first quarter of 2022, driven by the 83% testing volume growth of
in-hospital segment year-on-year during the same period, while the
testing volume of central laboratory segment grew 0.3%
year-on-year. New products’ sales contributed 7% of the central
laboratory segmental revenues for March 2022;
-
Burning Rock Liquid Biopsy Conference was successfully held in
April 2022. The 2-day online session was chaired by Professor Jia
Fan, Jinming Yu and Xu Zhang, with participation from over 140
oncologists, during which the Consensus on NGS Clinical Report
Interpretation was released;
-
MRD data was released at American Association for Cancer Research
(AACR) Annual Meeting 2022 for non-small cell lung cancer (NSCLC)
and colorectal cancer (CRC);
-
MRD product was commercially launched in March 2022.
-
Early Detection
-
Data release at AACR on analytical validation;
-
Commercialization in progress, with a few hospitals having
completed product on-boarding and generating revenues.
-
Pharma Services
-
Continued revenue growth, with 302.7% revenue growth year-on-year
during the first quarter of 2022. Pharma service contract backlog
continues to build rapidly. The total value of new contracts we
entered into during the first quarter of 2022 amounted to RMB59
million, representing approximately 125% increase from the first
quarter of 2021.
First Quarter 2022 Financial
Results
Revenues were RMB135.5 million (US$21.4 million)
for the three months ended March 31, 2022, representing a 27.1%
increase from RMB106.6 million for the same period in 2021.
-
Revenue generated from central laboratory business was RMB74.2
million (US$11.7 million) for the three months ended March 31,
2022, representing a 0.5% decrease from RMB74.6 million for the
same period in 2021.
-
Revenue generated from in-hospital business was RMB49.0 million
(US$7.7 million) for the three months ended March 31, 2022,
representing a 68.9% increase from RMB29.0 million for the same
period in 2021, driven by in-hospital testing volume growth.
-
Revenue generated from pharma research and development services was
RMB12.4 million (US$1.9 million) for the three months ended March
31, 2022, representing a 302.7% increase from RMB3.1 million for
the same period in 2021, primarily attributable to increased
testing performed for our pharma customers.
Cost of revenues was RMB47.9 million (US$7.6
million) for the three months ended March 31, 2022, representing a
61.5% increase from RMB29.7 million for the same period in 2021,
primarily due to the Company’s continued business growth, increased
depreciation in relation to our new laboratory and inventory write
downs.
Gross profit was RMB87.6 million (US$13.8
million) for the three months ended March 31, 2022, representing a
13.8% increase from RMB76.9 million for the same period in 2021.
Gross margin was 64.6% for the three months ended March 31, 2022,
which decreased from 72.2% for the same period in 2021 primarily
due to the increased depreciation in relation to our new laboratory
and inventory write downs.
Non-GAAP gross profit, which excludes
depreciation and amortization, was RMB92.7 million (US$14.6
million) for the three months ended March 31, 2022, representing a
20.2% increase from RMB77.1 million for the same period in 2021.
Non-GAAP gross margin was 68.4% for the three months ended March
31, 2022, compared to 72.4% for the same period in 2021 primarily
due to an increase of RMB4.8 million in inventory write downs
(which resulted in a 3.5 percentage-point decrease of gross
margin).
Operating expenses were RMB350.4 million
(US$55.3 million) for the three months ended March 31, 2022,
representing a 40.9% increase from RMB248.8 million for the same
period in 2021. The increase was primarily driven by headcount
growth to support our business expansion.
-
Research and development expenses were RMB119.5 million (US$18.9
million) for the three months ended March 31, 2022, representing a
54.4% increase from RMB77.4 million for the same period in 2021,
primarily due to (i) an increase in research and development staff
cost which resulted from an increase in headcount and (ii) and
increase in costs for certain research and development for early
detection.
-
Selling and marketing expenses were RMB89.2 million (US$14.1
million) for the three months ended March 31, 2022, representing a
61.8% increase from RMB55.1 million for the same period in 2021,
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 RMB141.7 million (US$22.4
million) for the three months ended March 31, 2022, representing a
21.9% increase from RMB116.3 million for the same period in 2021,
primarily due to an increase in general and administrative
personnel’s staff cost resulted from an increase in headcount.
Net loss was RMB261.4 million (US$41.2 million)
for the three months ended March 31, 2022, compared to RMB171.4
million for the same period in 2021.
Cash, cash equivalents, restricted cash and
short-term investments were RMB1,502.9 million and RMB1,338.4
million (US$211.1 million) as of December 31, 2021 and March 31,
2022, respectively.
2022 Financial Guidance
Given the strong first quarter business performance and assuming
that the impact of COVID-19 dissipates over time in China, Burning
Rock reiterates its full year 2022 revenue guidance of
approximately RMB620 million (US$97.8 million), implying a 22%
growth over full year 2021.
Conference Call Information
Burning Rock will host a conference call to
discuss the first quarter 2022 financial results at 8:30 a.m. U.S.
Eastern Time (8:30 p.m. Hong Kong time) on May 31, 2022.
Details of the conference call are as
follows:
International: |
+65 67135640 |
U.S.: |
+1 3322089718 |
U.K.: |
+44 2036928124 |
Hong Kong: |
+852 30186768 |
China Mobile: |
4008209615 |
China Landline: |
8008207535 |
Conference ID: |
8942518 |
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, 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 |
|
|
For the three months ended |
|
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
Central Laboratory
Channel: |
|
Number of patients tested |
7,716 |
|
8,1551,013300 |
|
7,808 |
|
8,235 |
|
7,743 |
Number of ordering
physicians(1) |
1,082 |
|
1,013 |
|
920 |
|
917 |
|
994 |
Number of ordering
hospitals(2) |
303 |
|
300 |
|
287 |
|
306 |
|
318 |
(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 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
In-hospital
Channel: |
|
Pipeline partner
hospitals(1) |
22 |
|
22 |
|
24 |
|
23 |
|
24 |
Contracted partner
hospitals(2) |
32 |
|
34 |
|
34 |
|
41 |
|
41 |
Total number of
partnerhospitals |
54 |
|
56 |
|
58 |
|
64 |
|
65 |
(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 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
|
(RMB in thousands) |
Central laboratory
channel |
74,561 |
|
79,999 |
|
78,817 |
|
85,976 |
|
74,211 |
In-hospital channel |
28,994 |
|
40,502 |
|
43,714 |
|
51,906 |
|
48,957 |
Pharma research and
development channel |
3,068 |
|
6,778 |
|
4,084 |
|
9,463 |
|
12,356 |
Total
revenues |
106,623 |
|
127,279 |
|
126,615 |
|
147,345 |
|
135,524 |
|
For the three months ended |
Gross profit |
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
|
(RMB in thousands) |
Central laboratory
channel |
55,212 |
|
58,681 |
|
58,387 |
|
65,985 |
|
50,574 |
In-hospital channel |
20,070 |
|
29,426 |
|
31,111 |
|
34,194 |
|
33,396 |
Pharma research and
development channel |
1,658 |
|
2,124 |
|
2,098 |
|
5,200 |
|
3,610 |
Total gross
profit |
76,940 |
|
90,231 |
|
91,596 |
|
105,379 |
|
87,580 |
|
For the three months ended |
Share-based
compensation expenses |
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
|
(RMB in thousands) |
Cost of revenues |
339 |
|
406 |
|
267 |
|
|
492 |
|
|
365 |
Research and development
expenses |
22,404 |
|
20,825 |
|
(9,559 |
) |
|
(4,033 |
) |
|
12,299 |
Selling and marketing
expenses |
2,633 |
|
2,809 |
|
2,044 |
|
|
2,126 |
|
|
1,774 |
General and administrative
expenses |
59,382 |
|
59,369 |
|
60,803 |
|
|
62,126 |
|
|
65,715 |
Total share-based
compensation expenses |
84,758 |
|
83,409 |
|
53,555 |
|
|
60,711 |
|
|
80,153 |
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 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
|
March 31,2022 |
|
|
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
Revenues |
106,623 |
|
|
127,279 |
|
|
126,615 |
|
|
147,345 |
|
|
135,524 |
|
|
21,379 |
|
Cost of
revenues |
(29,683 |
) |
|
(37,048 |
) |
|
(35,019 |
) |
|
(41,966 |
) |
|
(47,944 |
) |
|
(7,563 |
) |
Gross
profit |
76,940 |
|
|
90,231 |
|
|
91,596 |
|
|
105,379 |
|
|
87,580 |
|
|
13,816 |
|
Operating
expenses: |
|
|
|
|
|
|
Research and development
expenses |
(77,414 |
) |
|
(108,071 |
) |
|
(69,649 |
) |
|
(112,724 |
) |
|
(119,496 |
) |
|
(18,850 |
) |
Selling and marketing
expenses |
(55,130 |
) |
|
(68,058 |
) |
|
(76,687 |
) |
|
(103,221 |
) |
|
(89,211 |
) |
|
(14,073 |
) |
General and administrative
expenses |
(116,259 |
) |
|
(116,130 |
) |
|
(116,304 |
) |
|
(141,563 |
) |
|
(141,733 |
) |
|
(22,358 |
) |
Total operating
expenses |
(248,803 |
) |
|
(292,259 |
) |
|
(262,640 |
) |
|
(357,508 |
) |
|
(350,440 |
) |
|
(55,281 |
) |
Loss from
operations |
(171,863 |
) |
|
(202,028 |
) |
|
(171,044 |
) |
|
(252,129 |
) |
|
(262,860 |
) |
|
(41,465 |
) |
Interest income |
787 |
|
|
681 |
|
|
958 |
|
|
1,031 |
|
|
1,832 |
|
|
289 |
|
Interest expenses |
(510 |
) |
|
(565 |
) |
|
(367 |
) |
|
(94 |
) |
|
119 |
|
|
19 |
|
Other income (expense),
net |
118 |
|
|
433 |
|
|
20 |
|
|
(372 |
) |
|
298 |
|
|
47 |
|
Foreign exchange gain (loss),
net |
57 |
|
|
(560 |
) |
|
380 |
|
|
(731 |
) |
|
(777 |
) |
|
(123 |
) |
Loss before income
tax |
(171,411 |
) |
|
(202,039 |
) |
|
(170,053 |
) |
|
(252,295 |
) |
|
(261,388 |
) |
|
(41,233 |
) |
Income tax (benefits)
expenses |
- |
|
|
(1,626 |
) |
|
(424 |
) |
|
1,151 |
|
|
- |
|
|
- |
|
Net loss |
(171,411 |
) |
|
(203,665 |
) |
|
(170,477 |
) |
|
(251,144 |
) |
|
(261,388 |
) |
|
(41,233 |
) |
Net loss attributable
to Burning Rock Biotech Limited’s shareholders |
(171,411 |
) |
|
(203,665 |
) |
|
(170,477 |
) |
|
(251,144 |
) |
|
(261,388 |
) |
|
(41,233 |
) |
Net loss attributable
to ordinary shareholders |
(171,411 |
) |
|
(203,665 |
) |
|
(170,477 |
) |
|
(251,144 |
) |
|
(261,388 |
) |
|
(41,233 |
) |
Loss per share for
class A and class B ordinary shares: |
|
|
|
|
|
|
Class A ordinary shares -
basic and diluted |
(1.65 |
) |
|
(1.96 |
) |
|
(1.64 |
) |
|
(2.40 |
) |
|
(2.50 |
) |
|
(0.39 |
) |
Class B ordinary shares -
basic and diluted |
(1.65 |
) |
|
(1.96 |
) |
|
(1.64 |
) |
|
(2.40 |
) |
|
(2.50 |
) |
|
(0.39 |
) |
Weighted average
shares outstanding used in loss per share
computation: |
|
|
|
|
|
|
Class A ordinary shares -
basic and diluted |
86,721,263 |
|
|
86,764,260 |
|
|
86,908,975 |
|
|
87,128,297 |
|
|
87,179,752 |
|
|
87,179,752 |
|
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 |
|
Other comprehensive
income (loss), net of tax of nil: |
|
|
|
|
|
|
Foreign currency translation
adjustments |
14,080 |
|
|
(34,980 |
) |
|
6,146 |
|
|
(24,726 |
) |
|
(3,065 |
) |
|
(483 |
) |
Total comprehensive
loss |
(157,331 |
) |
|
(238,645 |
) |
|
(164,331 |
) |
|
(275,870 |
) |
|
(264,453 |
) |
|
(41,716 |
) |
Total comprehensive
loss attributable to Burning Rock Biotech Limited’s
shareholders |
(157,331 |
) |
|
(238,645 |
) |
|
(164,331 |
) |
|
(275,870 |
) |
|
(264,453 |
) |
|
(41,716 |
) |
Burning Rock Biotech LimitedUnaudited
Condensed Consolidated Balance Sheets(In thousands) |
|
|
As of |
|
December 31,2021 |
|
March 31,2022 |
|
March 31,2022 |
|
RMB |
|
RMB |
|
US$ |
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
1,431,317 |
|
1,265,792 |
|
199,674 |
Restricted cash |
7,795 |
|
9,083 |
|
1,433 |
Short-term investments |
63,757 |
|
63,482 |
|
10,014 |
Accounts receivable, net |
92,197 |
|
103,616 |
|
16,345 |
Contract assets, net |
42,391 |
|
43,923 |
|
6,928 |
Inventories, net |
123,210 |
|
130,175 |
|
20,535 |
Prepayments and other current
assets, net |
60,279 |
|
69,331 |
|
10,937 |
Total current
assets |
1,820,946 |
|
1,685,402 |
|
265,866 |
Non-current
assets: |
|
|
|
|
|
Equity method investment |
910 |
|
773 |
|
122 |
Property and equipment,
net |
325,438 |
|
322,171 |
|
50,821 |
Operating right-of-use
assets |
81,007 |
|
72,501 |
|
11,437 |
Intangible assets, net |
5,150 |
|
4,246 |
|
669 |
Other non-current assets |
45,136 |
|
22,703 |
|
3,581 |
Total non-current
assets |
457,641 |
|
422,394 |
|
66,630 |
TOTAL
ASSETS |
2,278,587 |
|
2,107,796 |
|
332,496 |
Burning Rock Biotech LimitedUnaudited
Condensed Consolidated Balance Sheets (Continued)(in
thousands) |
|
|
As of |
|
December 31,2021 |
|
March 31,2022 |
|
March
31,2022 |
|
RMB |
RMB |
US$ |
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
63,080 |
|
|
97,892 |
|
|
15,442 |
|
Deferred revenue |
142,871 |
|
|
159,148 |
|
|
25,105 |
|
Accrued liabilities and other
current liabilities |
127,892 |
|
|
104,092 |
|
|
16,420 |
|
Customer deposits |
972 |
|
|
972 |
|
|
153 |
|
Short-term borrowing |
2,370 |
|
|
2,370 |
|
|
374 |
|
Current portion of operating
lease liabilities |
34,999 |
|
|
35,298 |
|
|
5,568 |
|
Total current
liabilities |
372,184 |
|
|
399,772 |
|
|
63,062 |
|
Non-current
liabilities: |
|
|
|
Non-current portion of
operating lease liabilities |
49,316 |
|
|
39,811 |
|
|
6,280 |
|
Other non-current
liabilities |
11,776 |
|
|
13,636 |
|
|
2,151 |
|
Total non-current
liabilities |
61,092 |
|
|
53,447 |
|
|
8,431 |
|
TOTAL
LIABILITIES |
433,276 |
|
|
453,219 |
|
|
71,493 |
|
Shareholders’
equity: |
|
|
|
Class A ordinary shares |
116 |
|
|
116 |
|
|
19 |
|
Class B ordinary shares |
21 |
|
|
21 |
|
|
3 |
|
Treasury stock |
- |
|
|
(3,258 |
) |
|
(514 |
) |
Additional paid-in
capital |
4,280,956 |
|
|
4,357,933 |
|
|
687,447 |
|
Accumulated deficits |
(2,228,713 |
) |
|
(2,490,101 |
) |
|
(392,804 |
) |
Accumulated other
comprehensive loss |
(207,069 |
) |
|
(210,134 |
) |
|
(33,148 |
) |
Total shareholders’
equity |
1,845,311 |
|
|
1,654,577 |
|
|
261,003 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
2,278,587 |
|
|
2,107,796 |
|
|
332,496 |
|
Burning Rock Biotech LimitedUnaudited
Condensed Statements of Cash Flows(in thousands) |
|
|
For the three months ended |
|
March 31,2021 |
|
March 31,2022 |
|
March 31,2022 |
|
RMB |
|
RMB |
|
US$ |
Net cash used in operating activities |
(113,145 |
) |
|
(144,361 |
) |
|
(22,772 |
) |
Net cash generated from (used
in) investing activities |
288,329 |
|
|
(13,011 |
) |
|
(2,050 |
) |
Net cash used in financing
activities |
(4,162 |
) |
|
(3,934 |
) |
|
(621 |
) |
Effect of exchange rate on
cash, cash equivalents and restricted cash |
16,658 |
|
|
(2,931 |
) |
|
(464 |
) |
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
187,680 |
|
|
(164,237 |
) |
|
(25,907 |
) |
Cash, cash equivalents and
restricted cash at the beginning of period |
1,925,206 |
|
|
1,439,112 |
|
|
227,014 |
|
Cash, cash equivalents
and restricted cash at the end of period |
2,112,886 |
|
|
1,274,875 |
|
|
201,107 |
|
|
|
|
Burning Rock Biotech
LimitedReconciliations of GAAP and Non-GAAP
Results |
|
|
For the three months ended |
|
March 31,2021 |
|
June 30,2021 |
|
September 30,2021 |
|
December 31,2021 |
|
March 31,2022 |
|
(RMB in thousands) |
Gross profit |
76,940 |
|
|
90,231 |
|
|
91,596 |
|
|
105,379 |
|
|
87,580 |
|
Add: depreciation and
amortization |
206 |
|
|
437 |
|
|
1,382 |
|
|
1,981 |
|
|
5,139 |
|
Non-GAAP gross
profit |
77,146 |
|
|
90,668 |
|
|
92,978 |
|
|
107,360 |
|
|
92,719 |
|
Total
revenues |
106,623 |
|
|
127,279 |
|
|
126,615 |
|
|
147,345 |
|
|
135,524 |
|
Gross margin |
72.2 |
% |
|
70.9 |
% |
|
72.3 |
% |
|
71.5 |
% |
|
64.6 |
% |
Non-GAAP gross margin |
72.4 |
% |
|
71.2 |
% |
|
73.4 |
% |
|
72.9 |
% |
|
68.4 |
% |
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