Burning
Rock Reports
First Quarter 2024
Financial
Results
GUANGZHOU, China, May 29,
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 March 31, 2024.
Recent Business Updates
·
Early
Detection
o THUNDER study for 6-cancer test was included in the
Diagnosis and Treatment
Guidelines for Primary Liver Cancer (2024 Edition) and the
Expert Consensus on Detection and
Clinical Application of Tumor DNA Methylation Markers (2024
Edition), showing an impressive performance of ELSA-seq
using cfDNA in cancer detection and origin prediction.
·
Pharma
Services
o Total value of new contracts during the first quarter of 2024
amounted to RMB218 million, representing a growth over 100% from
the same period in 2023.
First Quarter 2024 Financial Results
Total Revenues were RMB125.6 million
(US$17.4 million) for the three
months ended March 31, 2024, representing a 11.9% decrease from
RMB142.5 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 RMB57.4
million (US$7.9 million) for the three months ended March 31, 2024,
representing a 11.3% increase from RMB51.6 million for the same
period in 2023, driven by an increase in sales volume.
·
Revenue generated from central laboratory business
was RMB47.6 million (US$6.6 million) for the three months ended
March 31, 2024, representing a 23.0% decrease from RMB61.8 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 RMB20.6 million (US$2.9 million) for the three months
ended March 31, 2024, representing a 29.3% decrease from RMB29.2
million for the same period in 2023, primarily attributable to
decreased testing services performed for our pharma customers due
to timing of lumpy projects.
Cost of revenues was RMB39.9 million (US$5.5 million) for the three months
ended March 31, 2024, representing an 8.7%
decrease from RMB43.7 million for the same period in 2023, primarily due to a
decrease in cost of central laboratory business, which was in line
with the decrease in revenue generated from this business and
partially offset by an increase in sales volume of in-hospital
business and a decrease in depreciation expense for all kinds of
business.
Gross profit was RMB85.7 million
(US$11.9 million) for the three months ended March 31,
2024, representing a 13.2% decrease from
RMB98.8 million
for the same period in 2023. Gross margin
was 68.2% for the three months ended March 31, 2024, compared to
69.3% for the same period in 2023. By channel, gross margin of
central laboratory business was 77.7% for the three months ended
March 31, 2024, compared to 77.8% during the same period in 2023;
gross margin of in-hospital business was 68.3% for the three months
ended March 31, 2024, compared to 66.7% during the same period in
2023, primarily due to a decrease in amortization; gross margin of
pharma research and development services was 46.1% for the three
months ended March 31, 2024, compared to 55.8% during the same
period of 2023.
Non-GAAP gross profit, which
excludes depreciation and amortization expenses,
was RMB93.0 million (US$12.9 million) for the
three months ended March 31, 2024,
representing a 13.8% decrease from RMB107.9
million for the same period in 2023. Non-GAAP gross margin was 74.0% for the three months ended March 31,
2024, compared to 75.7% for the same period in 2023.
Operating expenses
were RMB211.5 million (US$29.3 million)
for the three months ended March 31, 2024,
representing a 26.4% decrease from RMB287.2 million for the same
period in 2023. The decrease was primarily
driven by improved operating
efficiency.
·
Research and development expenses were
RMB66.0 million (US$9.1 million) for the
three months ended March 31, 2024, representing a 30.1% decrease from
RMB94.4 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, and (ii) a decrease in the expenditure for
research projects.
·
Selling and marketing expenses were
RMB46.9 million (US$6.5 million) for the
three months ended March 31, 2024, representing a 27.7% decrease
from RMB64.8 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 RMB98.7
million (US$13.7 million) for the three months ended March 31,
2024, representing a 22.9% decrease from RMB128.0 million for the
same period in 2023, primarily due to (i) a decrease in general and
administrative personnel's staff cost, and (ii) a decrease in
amortized expenses for office building; (iii) a decrease in the
provision for allowance for doubtful accounts.
Net loss was RMB121.5 million (US$16.8 million) for the three months ended
March 31, 2024, compared to RMB185.3 million for the same period in
2023.
Cash, cash equivalents, restricted
cash and short-term investments were RMB572.7 million (US$79.3 million) as of
March 31, 2024.
2024 Financial Guidance
We currently expect to achieve
breakeven (measured by non-GAAP gross profit minus non-GAAP
SG&A) for the full year 2024.
Non-GAAP gross profit refers to
gross profit excluding depreciation and amortization. Non-GAAP
SG&A refers to selling and marketing expenses and general and
administrative expenses, both excluding their respective
share-based compensation and depreciation and
amortization.
Corporate structure reorganization
The Company moved its PRC onshore
headquarter from Beijing to Guangzhou in May 2024. Burning Rock
Biotech Limited, our ultimate Cayman Islands holding company, does
not have any substantive operations other than directly controlling
Guangzhou Burning Rock Biotech Limited, our new wholly foreign
owned entity, or WFOE, and indirectly controlling Burning Rock
(Beijing) Biotechnology Co., Ltd., the variable interest entity, or
VIE, through certain contractual arrangements. The equity change of
Beijing Burning Rock Biotech Limited had been completed, and
certain contractual agreements had been amended. The chart below
sets forth our corporate structure and identifies our principal
subsidiaries as of the date of this release:
Conference Call Information
Burning Rock will host a conference
call to discuss the first quarter 2024 financial results at 8:00
a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on May 29,
2024.
Please register in advance of the
conference using the link provided below and dial in 15 minutes
prior to the call, using participant dial-in numbers and unique
registrant ID which would be provided upon registering.
PRE-REGISTER LINK:
https://register.vevent.com/register/BIbdb6210ab73d4bb7b25e3ffbdc206d07.
Additionally, a live and archived
webcast of the conference call will also be available on the
company's investor relations website at http://ir.brbiotech.com
or through link https://edge.media-server.com/mmc/p/ovj2q2n6.
A replay of the webcast will be
available for 12 months via the same link above.
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
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As of
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In-hospital Channel:
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Pipeline partner
hospitals(1)
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Contracted partner
hospitals(2)
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Total number of partner hospitals
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(1)
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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.
|
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(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
|
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For the three months
ended
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Revenues
|
|
|
|
|
|
|
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(RMB in
thousands)
|
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Central laboratory channel
|
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|
|
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In-hospital channel
|
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28,809
|
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Pharma research and development
channel
|
|
|
|
|
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Total revenues
|
|
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|
121,085
|
125,623
|
|
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For the three months
ended
|
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|
Gross profit
|
|
|
|
|
|
|
|
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(RMB in
thousands)
|
|
Central laboratory channel
|
|
|
|
41,886
|
37,002
|
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|
In-hospital channel
|
|
|
|
12,910
|
39,192
|
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Pharma research and development
channel
|
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23,317
|
9,500
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Total gross profit
|
|
|
|
78,113
|
85,694
|
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|
For the three months
ended
|
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|
Share-based compensation expenses
|
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|
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(RMB in
thousands)
|
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Cost of revenues
|
|
|
|
654
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Research and development
expenses
|
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|
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Selling and marketing
expenses
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General and administrative
expenses
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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)
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For the three months
ended
|
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RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|
Revenues
|
142,516
|
146,268
|
127,566
|
121,085
|
125,623
|
17,399
|
|
|
Cost of revenues
|
|
|
|
|
|
|
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|
Gross profit
|
98,772
|
100,422
|
85,920
|
78,113
|
85,694
|
11,868
|
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Operating expenses:
|
|
|
|
|
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Research and development
expenses
|
(94,417)
|
(95,779)
|
(83,701)
|
(73,119)
|
(65,985)
|
(9,139)
|
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Selling and marketing
expenses
|
(64,774)
|
(70,842)
|
(62,310)
|
(49,785)
|
(46,856)
|
(6,489)
|
|
|
General and administrative
expenses
|
(128,039)
|
(69,525)
|
(118,724)
|
(121,533)
|
(98,681)
|
(13,667)
|
|
|
Total operating expenses
|
|
|
|
|
|
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|
|
Loss from operations
|
|
|
|
|
|
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|
|
Interest income
|
3,144
|
5,255
|
4,018
|
5,539
|
4,038
|
559
|
|
|
Other income (expense),
net
|
599
|
(118)
|
(157)
|
160
|
434
|
60
|
|
|
Foreign exchange (loss)
gain, net
|
(116)
|
（210)
|
423
|
(517)
|
(13)
|
(2)
|
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Loss before income tax
|
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Income tax expenses
|
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Net
loss
|
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|
|
|
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Net
loss attributable to Burning Rock Biotech Limited's
shareholders
|
(185,253)
|
(131,242)
|
(174,981)
|
(162,213)
|
(121,549)
|
(16,835)
|
|
|
Net
loss attributable to ordinary shareholders
|
(185,253)
|
(131,242)
|
(174,981)
|
(162,213)
|
(121,549)
|
(16,835)
|
|
|
Loss per share for class A and class B ordinary
shares:
|
|
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|
|
|
|
|
|
Class A ordinary shares - basic and
diluted
|
(1.81)
|
(1.28)
|
(1.71)
|
(1.58)
|
(1.19)
|
(0.16)
|
|
|
Class B ordinary shares - basic and
diluted
|
(1.81)
|
(1.28)
|
(1.71)
|
(1.58)
|
(1.19)
|
(0.16)
|
|
|
Weighted average shares outstanding used in loss per share
computation:
|
|
|
|
|
|
|
|
|
Class A ordinary shares - basic and
diluted
|
85,065,585
|
85,151,052
|
85,000,869
|
85,071,360
|
85,219,188
|
85,219,188
|
|
|
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:
|
|
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|
|
|
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Foreign currency translation
adjustments
|
(5,659)
|
14,829
|
(1,955)
|
(3,026)
|
590
|
82
|
|
|
Total comprehensive loss
|
(190,912)
|
(116,413)
|
(176,936)
|
(165,239)
|
(120,959)
|
(16,753)
|
|
|
Total comprehensive loss attributable to Burning Rock Biotech
Limited's shareholders
|
(190,912)
|
(116,413)
|
(176,936)
|
(165,239)
|
(120,959)
|
(16,753)
|
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