Burning Rock Biotech Limited (NASDAQ: BNR and LSE: 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, 2024.

Recent Business Updates

  • Therapy Selection
    • Presented study results on small-cell lung cancer and colorectal cancer at the ASCO in June 2024. “The efficacy and safety of high dose Almonertinib in untreated EGFR-mutated NSCLC with brain metastases, including biomarker analysis” and “Individualized tumor-informed circulating tumor DNA analysis for molecular residual disease detection in predicting recurrence and efficacy of adjuvant chemotherapy in colorectal cancer”.
  • Pharma Services
    • New companion diagnostics (CDx) collaboration announced with Bayer in China.

Second Quarter 2024 Financial Results

Total Revenues were RMB135.5 million (US$18.7 million) for the three months ended June 30, 2024, representing a 7.3% decrease from RMB146.3 million for the same period in 2023, as we transition from central-lab to more in-hospital based testing. Importantly, in-hospital segment continued its double-digit growth.

  • Revenue generated from in-hospital business was RMB59.9 million (US$8.2 million) for the three months ended June 30, 2024, representing a 11.2% increase from RMB53.8 million for the same period in 2023, driven by an increase in sales volume.
  • Revenue generated from central laboratory business was RMB48.8 million (US$6.7 million) for the three months ended June 30, 2024, representing a 26.4% decrease from RMB66.2 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 RMB26.9 million (US$3.7 million) for the three months ended June 30, 2024, representing a 2.6% increase from RMB26.2 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 RMB40.1 million (US$5.5 million) for the three months ended June 30, 2024, representing an 12.5% decrease from RMB45.8 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; and (ii) a decrease in amortization expense for all kinds of business.

Gross profit was RMB95.4 million (US$13.1 million) for the three months ended June 30, 2024, representing a 5.0% decrease from RMB100.4 million for the same period in 2023. Gross margin was 70.4% for the three months ended June 30, 2024, compared to 68.7% for the same period in 2023. By channel, gross margin of central laboratory business was 78.8% for the three months ended June 30, 2024, compared to 78.3% during the same period in 2023; gross margin of in-hospital business was 73.6% for the three months ended June 30, 2024, compared to 62.0% during the same period in 2023, primarily due to a decrease in amortization; gross margin of pharma research and development services was 48.2% for the three months ended June 30, 2024, compared to 58.0% during the same period of 2023, primarily due to a decrease in test volume of higher margin projects.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB101.9 million (US$14.0 million) for the three months ended June 30, 2024, representing a 6.8% decrease from RMB109.4 million for the same period in 2023. Non-GAAP gross margin was 75.2% for the three months ended June 30, 2024, compared to 74.8% for the same period in 2023.

Operating expenses were RMB206.7 million (US$28.4 million) for the three months ended June 30, 2024, representing a 12.5% decrease from RMB236.1 million for the same period in 2023. The decrease was primarily driven by budget control measures and headcount reduction to improve the Company’s operating efficiency.

  • Research and development expenses were RMB65.0 million (US$8.9 million) for the three months ended June 30, 2024, representing a 32.2% decrease from RMB95.8 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; and (iii) a decrease in amortized expenses for office building decoration.
  • Selling and marketing expenses were RMB48.9 million (US$6.7 million) for the three months ended June 30, 2024, representing a 31.0% decrease from RMB70.8 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 travel expense.
  • General and administrative expenses were RMB92.8 million (US$12.8 million) for the three months ended June 30, 2024, representing a 33.5% increase from RMB69.5 million for the same period in 2023, primarily due to an increase in amortized expense on share-based compensation.

Net loss was RMB108.0 million (US$14.9 million) for the three months ended June 30, 2024, compared to RMB131.2 million for the same period in 2023.

Cash, cash equivalents, restricted cash and short-term investments were RMB533.0 million (US$73.3 million) as of June 30, 2024.

About Burning Rock

Burning Rock Biotech Limited (NASDAQ: BNR and LSE: 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
  June 30,2023   September 30, 2023   December 31, 2023   March 31, 2024   June 30, 2024  
In-hospital Channel:                    
Pipeline partner hospitals(1) 30   29   28   28   29  
Contracted partner hospitals(2) 50   55   59   59   59  
Total number of partner hospitals 80   84   87   87   88  
(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 June 30, 2023   September 30, 2023   December 31, 2023   March 31, 2024   June 30, 2024  
                        (RMB in thousands)
Central laboratory channel 66,239   53,481   51,288   47,614   48,773  
In-hospital channel 53,835   54,496   28,809   57,387   59,872  
Pharma research and development channel 26,194   19,589   40,988   20,622   26,888  
Total revenues 146,268   127,566   121,085   125,623   135,533  
                 
                                For the three months ended 
Gross profit June 30, 2023   September 30, 2023   December31, 2023   March 31, 2024   June 30, 2024  
                          (RMB in thousands)
Central laboratory channel 51,876   41,487   41,886   37,002   38,424  
In-hospital channel 33,353   35,459   12,910   39,192   44,058  
Pharma research and development channel 15,193   8,974   23,317   9,500   12,956  
Total gross profit 100,422   85,920      78,113   85,694   95,438  
                 
                              For the three months ended
Share-based compensation expenses June 30,2023   September 30, 2023   December31, 2023   March 31, 2024   June 30, 2024    
                              (RMB in thousands)  
Cost of revenues 627   680   654   596   464    
Research and development expenses 15,301   12,161   12,401   12,287   12,008    
Selling and marketing expenses 3,389   2,848   1,816   508   1,232    
General and administrative expenses 18,502   57,704   56,472   55,990   54,407    
Total share-based compensation expenses 37,819   73,393   71,343   69,381   68,111    
                       

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
  June 30, 2023   September 30, 2023   December 31,2023   March 31, 2024   June 30, 2024   June 30, 2024  
  RMB RMB   RMB   RMB   RMB   US$  
Revenues 146,268   127,566   121,085   125,623   135,533   18,650  
Cost of revenues (45,846)   (41,646)   (42,972)   (39,929)   (40,095)   (5,517)  
Gross profit 100,422   85,920   78,113   85,694   95,438   13,133  
Operating expenses:              
Research and development expenses (95,779)   (83,701)   (73,119)   (65,985)   (64,952)   (8,938)  
Selling and marketing expenses (70,842)   (62,310)   (49,785)   (46,856)   (48,907)   (6,730)  
General and administrative expenses (69,525)   (118,724)   (121,533)   (98,681)   (92,794)   (12,769)  
Total operating expenses (236,146)   (264,735)   (244,437)   (211,522)   (206,653)   (28,437)  
Loss from operations  (135,724)   (178,815)   (166,324)   (125,828)   (111,215)   (15,304)  
Interest income 5,255   4,018   5,539   4,038   3,187   439  
Other income (expense), net (118)   (157)   160   434   (82)   (11)  
Foreign exchange (loss) gain, net (210)   423   (517)   (13)   262   36  
Loss before income tax (130,797)   (174,531)   (161,142)   (121,369)   (107,848)   (14,840)  
Income tax expenses (445)   (450)   (1,071)   (180)   (190)   (26)  
Net loss (131,242)   (174,981)   (162,213)   (121,549)   (108,038)   (14,866)  
Net loss attributable to Burning Rock Biotech Limited’s shareholders (131,242)   (174,981)   (162,213)   (121,549)   (108,038)   (14,866)  
Net loss attributable to ordinary shareholders (131,242)   (174,981)   (162,213)   (121,549)   (108,038)   (14,866)  
Loss per share for class A and class B ordinary shares:              
Class A ordinary shares - basic and diluted (1.28)   (1.71)   (1.58)   (1.19)   (1.05)   (0.14)  
Class B ordinary shares - basic and diluted (1.28)   (1.71)   (1.58)   (1.19)   (1.05)   (0.14)  
Weighted average shares outstanding used in loss per share computation:              
Class A ordinary shares - basic and diluted 85,151,052   85,000,869   85,071,360   85,219,188   85,271,858   85,271,858  
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 14,829   (1,955)   (3,026)   590   940   129  
Total comprehensive loss (116,413)   (176,936 )   (165,239)   (120,959 )   (107,098)   (14,737)  
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders (116,413)   (176,936)   (165,239)   (120,959 )   (107,098)   (14,737)  
                         

Burning Rock Biotech Limited Unaudited Condensed Statements of Comprehensive Loss (in thousands, except for number of shares and per share data)

  For the six months ended
  June 30, 2023   June 30, 2024   June 30, 2024  
  RMB   RMB   US$  
Revenues 288,784   261,156   35,937  
Cost of revenues (89,590)   (80,024)   (11,012)  
Gross profit 199,194   181,132   24,925  
Operating expenses:      
Research and development expenses (190,196)   (130,937)   (18,018)  
Selling and marketing expenses (135,616)   (95,763)   (13,177)  
General and administrative expenses (197,564)   (191,475)   (26,349)  
Total operating expenses (523,376)   (418,175)   (57,544)  
Loss from operations  (324,182)   (237,043)   (32,619)  
Interest income 8,399   7,225   994  
Other income, net 481   352   48  
Foreign exchange loss, net (326)   249   34  
Loss before income tax (315,628)   (229,217)   (31,543)  
Income tax expenses (867)   (370)   (51)  
Net loss (316,495)   (229,587)   (31,594)  
Net loss attributable to Burning Rock Biotech Limited’s shareholders (316,495)   (229,587)   (31,594)  
Net loss attributable to ordinary shareholders (316,495)   (229,587)   (31,594)  
Loss per share for class A and class B ordinary shares:      
Class A ordinary shares - basic and diluted (3.09)   (2.24)   (0.31)  
Class B ordinary shares - basic and diluted (3.09)   (2.24)   (0.31)  
Weighted average shares outstanding used in loss per share computation:      
Class A ordinary shares - basic and diluted 85,108,555   85,246,969   85,246,969  
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 9,170   1,530   211  
Total comprehensive loss (307,325)   (228,057)   (31,383)  
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders (307,325)   (228,057)   (31,383)  
             

Burning Rock Biotech LimitedUnaudited Condensed Consolidated Balance Sheets(In thousands)

  As of   
  December 31, 2023   June 30,2024   June 30,2024  
  RMB   RMB   US$  
ASSETS            
Current assets:            
Cash and cash equivalents 615,096   532,542   73,280  
Restricted cash 120   505   69  
Accounts receivable, net 126,858   153,641   21,142  
Contract assets, net 22,748   20,018   2,755  
Inventories, net 69,020   65,805   9,056  
Prepayments and other current assets, net 50,254   28,460   3,916  
Convertible note receivable -   5,320   732  
Total current assets 884,096   806,291   110,950  
Non-current assets:            
Equity method investment 337   247   34  
Convertible note receivable 5,320   -   -  
Property and equipment, net 131,912   100,716   13,860  
Operating right-of-use assets 12,284   105,429   14,508  
Intangible assets, net 964   724   100  
Other non-current assets 5,088   9,976   1,372  
Total non-current assets 155,905   217,092   29,874  
TOTAL ASSETS   1,040,001   1,023,383   140,824  
             

Burning Rock Biotech LimitedUnaudited Condensed Consolidated Balance Sheets (Continued)(in thousands)

  As of
  December 31, 2023   June 30,2024   June 30,2024  
  RMB RMB US$
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable 18,061   25,870   3,560  
Deferred revenue 130,537   119,352   16,423  
Accrued liabilities and other current liabilities 104,935   86,300   11,876  
Customer deposits 1,197   1,197   165  
Current portion of operating lease liabilities 8,634   26,922   3,705  
Total current liabilities 263,364   259,641   35,729  
Non-current liabilities:      
Non-current portion of operating lease liabilities 3,690   80,988   11,144  
Other non-current liabilities 4,537   4,908   676  
Total non-current liabilities 8,227   85,896   11,820  
TOTAL LIABILITIES 271,591   345,537   47,549  
Shareholders’ equity:      
Class A ordinary shares 116   116   16  
Class B ordinary shares 21   21   3  
Additional paid-in capital 4,849,337   4,986,830   686,211  
Treasury stock (65,896)   (65,896)   (9,068)  
Accumulated deficits (3,853,635)   (4,083,222)   (561,870)  
Accumulated other comprehensive loss (161,533)   (160,003)   (22,017)  
Total shareholders’ equity 768,410   677,846   93,275  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 1,040,001   1,023,383   140,824  
             

Burning Rock Biotech LimitedUnaudited Condensed Statements of Cash Flows(in thousands)

  For the three months ended
  June 30, 2023   June 30,2024   June 30,2024  
  RMB RMB US$
Net cash used in operating activities (79,204)   (40,836)   (5,619)  
Net cash used in investing activities (2,928)   (227)   (31)  
Net cash used in financing activities (1,003)   -   -  
Effect of exchange rate on cash, cash equivalents and restricted cash 13,271   1,436   196  
Net decrease in cash, cash equivalents and restricted cash (69,864)   (39,627)   (5,454)  
Cash, cash equivalents and restricted cash at the beginning of period 803,142   572,674   78,803  
Cash, cash equivalents and restricted cash at the end of period 733,278   533,047   73,349  
     
  For the six months ended
  June 30,2023   June 30,2024   June 30,2024  
  RMB RMB US$
Net cash used in operating activities (192,347)   (81,045)   (11,152)  
Net cash used in investing activities (6,987)   (2,613)   (360)  
Net cash used in financing activities (1,035)   -   -  
Effect of exchange rate on cash, cash equivalents and restricted cash 8,379   1,489   204  
Net decrease in cash, cash equivalents and restricted cash (191,990)   (82,169)   (11,308)  
Cash, cash equivalents and restricted cash at the beginning of period 925,268   615,216   84,657  
Cash, cash equivalents and restricted cash at the end of period 733,278   533,047   73,349  
     

Burning Rock Biotech LimitedReconciliations of GAAP and Non-GAAP Results

   For the three months ended
  June 30,2023   September 30, 2023   December 31, 2023   March 31,2024   June 30,2024  
   (RMB in thousands)
Gross profit:    
Central laboratory channel 51,876   41,487   41,886   37,002   38,424  
In-hospital channel 33,353   35,459   12,910   39,192   44,058  
Pharma research and development channel 15,193   8,974   23,317   9,500   12,956  
Total gross profit 100,422   85,920   78,113   85,694   95,438  
Add: depreciation and amortization:          
Central laboratory channel 2,645   2,550   2,414   1,919   1,226  
In-hospital channel 2,637   2,751   2,728   1,524   824  
Pharma research and development channel 3,665   3,863   3,808   3,856   4,417  
Total depreciation and amortization included in cost of revenues 8,947   9,164   8,950   7,299   6,467  
Non-GAAP gross profit:          
Central laboratory channel 54,521   44,037   44,300   38,921   39,650  
In-hospital channel 35,990   38,210   15,638   40,716   44,882  
Pharma research and development channel 18,858   12,837   27,125   13,356   17,373  
Total non-GAAP gross profit 109,369   95,084   87,063   92,993   101,905  
Non-GAAP gross margin:          
Central laboratory channel 82.3%   82.3%   86.4%   81.7%   81.3%  
In-hospital channel 66.9%   70.1%   54.3%   70.9%   75.0%  
Pharma research and development channel 72.0%   65.5%   66.2%   64.8%   64.6%  
Total non-GAAP gross margin 74.8%   74.5%   71.9%   74.0%   75.2%  
Burning Rock Biotech (NASDAQ:BNR)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Burning Rock Biotech Charts.
Burning Rock Biotech (NASDAQ:BNR)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Burning Rock Biotech Charts.