Burning
Rock Reports
Second Quarter 2024
Financial
Results
GUANGZHOU, China, August 23,
2024-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
o 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
o 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
|
|
|
|
|
|
|
|
|
In-hospital Channel:
|
|
|
|
|
|
|
Pipeline partner
hospitals(1)
|
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|
|
|
|
|
Contracted partner
hospitals(2)
|
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|
|
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|
Total number of partner hospitals
|
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(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
|
|
|
|
|
|
|
|
|
(RMB in
thousands)
|
|
Central laboratory channel
|
|
|
|
|
|
|
|
In-hospital channel
|
|
|
28,809
|
|
|
|
|
Pharma research and development
channel
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
125,623
|
135,533
|
|
|
|
For the three months
ended
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
(RMB in
thousands)
|
|
Central laboratory channel
|
|
|
41,886
|
37,002
|
38,424
|
|
|
In-hospital channel
|
|
|
12,910
|
39,192
|
44,058
|
|
|
Pharma research and development
channel
|
|
|
23,317
|
9,500
|
12,956
|
|
|
Total gross profit
|
|
|
|
85,694
|
95,438
|
|
|
|
For the three months
ended
|
|
|
Share-based compensation expenses
|
|
|
|
|
|
|
|
|
(RMB in
thousands)
|
|
Cost of revenues
|
|
|
654
|
|
|
|
|
Research and development
expenses
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
|
|
|
|
|
General and administrative
expenses
|
|
|
|
|
|
|
|
Total share-based compensation expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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
|
|
|
|
|
|
|
|
|
|
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|
Revenues
|
146,268
|
127,566
|
121,085
|
125,623
|
135,533
|
18,650
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
Income tax expenses
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
RMB
|
RMB
|
US$
|
|
Revenues
|
288,784
|
261,156
|
35,937
|
|
Cost of revenues
|
|
|
|
|
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
|
|
|
|
|
Loss from operations
|
|
|
|
|
Interest income
|
8,399
|
7,225
|
994
|
|
Other income, net
|
481
|
352
|
48
|
|
Foreign exchange loss,
net
|
(326)
|
249
|
34
|
|
Loss before income tax
|
|
|
|
|
Income tax expenses
|
|
|
|
|
Net
loss
|
|
|
|
|
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)
|