Burning Rock Reports Fourth Quarter and Full Year 2021 Financial Results

Guangzhou, CHINA


GUANGZHOU, China, March 21, 2022 (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 and the year ended December 31, 2021.

2021 Business Overview and Recent Updates

  • Therapy Selection  
    • Achieved 38% overall testing volume growth year-on-year during 2021 full-year, with accelerated transition towards the in-hospital segment, our strategic focus. 2021 fourth quarter testing volume growth accelerated to 33% year-on-year, from 14% year-on-year in the third quarter of 2021.
    • Obtained the National Medical Products Administration (NMPA) approval for our second NGS-based companion diagnostics (CDx) kit and software.
  • Minimal Residual Disease (MRD)
    • Completed product development, based on a personalized approach.
    • Clinical datasets (non-small cell lung cancer and colorectal cancer post-operative prognosis) reading out at American Association for Cancer Research (AACR) Annual Meeting 2022.
    • Commercially launched in March 2022.
  • Pharma Services
    • Fast build-up of project backlog. The total value of new contracts we entered into during 2021 amounted to RMB183 million, approximately 5.7 times of the new contract value signed in 2020.
    • Notable new projects entered during the fourth quarter of 2021 include a CDx development collaboration with Merck for the MET inhibitor tepotinib for the mainland China market, based on our liquid biopsy OncoCompass™ Target panel.  
  • Early Detection  
    • 9-cancer test development on track: first clinical study (the PROMISE study, NCT04972201, with c. 2,000 patients) completed enrollment and is expected to read out in 2022.

Fourth Quarter 2021 Financial Results

Revenues were RMB147.3 million (US$23.1 million) for the three months ended December 31, 2021, representing a 11.9% increase from RMB131.7 million for the same period in 2020, or a 16.4% sequential increase from RMB126.6 million for the three months ended September 30, 2021.

  • Revenue generated from central laboratory business was RMB86.0 million (US$13.5 million) for the three months ended December 31, 2021, representing a 0.8% decrease from RMB86.7 million for the same period in 2020, narrowing from a year-on-year decrease of 12.3% during the third quarter of 2021.
  • Revenue generated from in-hospital business was RMB51.9 million (US$8.1 million) for the three months ended December 31, 2021, representing a 25.2% increase from RMB41.5 million for the same period in 2020, driven by in-hospital testing volume growth. Both volume and revenue metrics reached a new quarterly high.
  • Revenue generated from pharma research and development services was RMB9.5 million (US$1.5 million) for the three months ended December 31, 2021, representing a 165.1% increase from RMB3.6 million for the same period in 2020, primarily attributable to increased testing performed for our pharma customers and growth in companion diagnostics development services.

Cost of revenues was RMB42.0 million (US$6.6 million) for the three months ended December 31, 2021, representing a 28.9% increase from RMB32.6 million for the same period in 2020, which was broadly in line with the Company’s continued business growth.

Gross profit was RMB105.4 million (US$16.5 million) for the three months ended December 31, 2021. Gross margin was 71.5% for the three months ended December 31, 2021, compared to 75.3% for the same period in 2020. By channel, gross margin of central laboratory business was 76.7% during the fourth quarter of 2021, compared to 76.8% during the same period in 2020; gross margin of in-hospital business was 65.9% during the fourth quarter of 2021, compared to 72.9% during the same period in 2020.

Operating expenses were RMB357.5 million (US$56.1 million) for the three months ended December 31, 2021, representing a 40.5% increase from RMB254.5 million for the same period in 2020. The increase was primarily driven by headcount growth to support our business expansion.

  • Research and development expenses were RMB112.7 million (US$17.7 million) for the three months ended December 31, 2021, representing a 35.1% increase from RMB83.4 million for the same period in 2020, primarily due to (i) an increase in expenditure for early cancer detection related research, and (ii) an increase in research and development personnel’s staff cost.
  • Selling and marketing expenses were RMB103.2 million (US$16.2 million) for the three months ended December 31, 2021, representing an 82.3% increase from RMB56.6 million for the same period in 2020, primarily due to an increase in staff cost resulted from an 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 RMB141.6 million (US$22.2 million) for the three months ended December 31, 2021, representing a 23.6% increase from RMB114.5 million for the same period in 2020, primarily due to an increase in general and administrative personnel’s staff cost resulted from an increase in headcount and an increase in share-based compensation expenses.

Net loss was RMB251.1 million (US$39.4 million) for the three months ended December 31, 2021, compared to RMB156.5 million for the same period in 2020.

Cash, cash equivalents, restricted cash and short-term investments were RMB1,502.9 million (US$235.8 million) as of December 31, 2021.

Full Year 2021 Financial Results

Revenues were RMB507.9 million (US$79.7 million) for 2021, representing an 18.1% increase from RMB429.9 million for 2020.

  • Revenue generated from central laboratory business was RMB319.4 million (US$50.1 million) for 2021, representing a 7.4% increase from RMB297.3 million for 2020.
  • Revenue generated from in-hospital business was RMB165.1 million (US$25.9 million) for 2021, representing a 40.1% increase from RMB117.9 million for 2020. Number of contracted partner hospitals in the in-hospital channel increased to 41 as of December 31, 2021 from 29 as of December 31, 2020.
  • Revenue generated from pharma research and development services was RMB23.4 million (US$3.7 million) for 2021, representing a 59.3% increase from RMB14.7 million for 2020, primarily attributable to increased testing performed for our pharma customers and growth in companion diagnostics development services.

Cost of revenues was RMB143.7 million (US$22.6 million) for 2021, representing a 23.9% increase from RMB116.0 million for 2020, which was in line with the Company’s continued business growth.

Gross profit was RMB364.1 million (US$57.1 million) for 2021, representing a 16.0% increase from RMB313.9 million for 2020. Gross margin was 71.7% for 2021, compared to 73.0% for 2020.

Operating expenses were RMB1,161.2 million (US$182.2 million) for 2021, representing a 59.9% increase from RMB726.3 million for 2020.

  • Research and development expenses were RMB367.9 million (US$57.7 million) for 2021, representing a 39.4% increase from RMB263.9 million for 2020, primarily due to (i) an increase in expenditure for early cancer detection related research, and (ii) an increase in staff cost of research and development personnel.
  • Selling and marketing expenses were RMB303.1 million (US$47.6 million) for 2021, representing a 79.8% increase from RMB168.6 million for 2020, primarily due to an increase in staff cost of selling and marketing personnel.
  • General and administrative expenses were RMB490.3 million (US$76.9 million) for 2021, representing a 66.9% increase from RMB293.8 million for 2020, primarily due to (i) an increase in share-based compensation expenses for options granted to general and administrative personnel, and (ii) an increase in staff cost of general and administrative personnel.

Net loss was RMB796.7 million (US$125.0 million) for 2021, compared to RMB 407.2 million for 2020.

2022 Financial Guidance

We currently expect our full year 2022 revenues to be approximately RMB620 million (US$97.3 million), implying a 22% growth over full year 2021.

Conference Call Information

Burning Rock will host a conference call to discuss the fourth quarter 2021 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on March 22, 2022.

Details of the conference call are as follows:

International:+65 67135590
U.S.:+1 3322089468
U.K.:+44 2036928125
Hong Kong:+852 30186771
China Mobile:4008205286
China Landline:8008208659
Conference ID:8596728

A replay of the conference call will be available for one week (dial-in number: +61 2 9003 4211); 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.

Selected Operating Data
 
 For the three months ended 
 March 31,
2020
 June 30,
2020
 September 30,
2020
 December 31,
2020
 March 31,
2021
 June 30,
2021
 September 30,
2021
 December 31,
2021
Central Laboratory Channel:               
Number of patients tested4,680 7,252 8,644 7,989 7,716 8,155
 7,808 8,235
Number of ordering physicians(1)810 1,175 1,194 1,114 1,082 1,013 920 917
Number of ordering hospitals(2)232 284 289 294 303 300 287 306

(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.

   
 For the three months ended 
 March 31,
2020
 June 30,
2020
 September 30,
2020
 December 31,
2020
 March 31,
2021
 June 30,
2021
 September 30,
2021
 December 31,
2021
In-hospital Channel:               
Pipeline partner hospitals(1)23 23 22 23 22 22 24 23
Contracted partner hospitals(2)21 24 25 29 32 34 34 41
Total number of partner hospitals44 47 47 52 54 56
 58 64

(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,
2020
 June 30,
2020
 September 30,
2020
 December 31,
2020
 March 31,
2021
 June 30,
2021
 September 30,
2021
 December 31,
2021
                
 (RMB in thousands)
Central laboratory channel46,141 74,607 89,899 86,695 74,561 79,999 78,817 85,976
In-hospital channel17,123 27,588 31,704 41,457 28,994 40,502 43,714 51,906
Pharma research and development channel4,065 4,776 2,278 3,570 3,068 6,778 4,084 9,463
Total revenues67,329 106,971 123,881 131,722 106,623 127,279 126,615 147,345


 For the three months ended 
Gross profit
March 31,
2020
 June 30,
2020
 September 30,
2020
 December 31,
2020
 March 31,
2021
 June 30,
2021
 September 30,
2021
 December 31,
2021
                
 (RMB in thousands)
Central laboratory channel32,434 56,556 67,804 66,588 55,212 58,681 58,387 65,985
In-hospital channel10,126 19,269 22,410 30,218 20,070 29,426 31,111 34,194
Pharma research and development channel2,224 2,573 1,373 2,347 1,658 2,124 2,098 5,200
Total gross profit

44,784 78,398 91,587 99,153 76,940 90,231 91,596 105,379


 For the three months ended 
Share-based compensation

March 31,
2020
 June 30,
2020
 September 30,
2020
 December 31,
2020
 March 31,
2021
 June 30,
2021
 September 30,
2021
December 31,
2021
                 
 (RMB in thousands)
Cost of revenues176 183 160 277 339 406 267  492 
Research and development expenses2,072 25,314 10,572 11,843 22,404 20,825 (9,559) (4,033)
Selling and marketing expenses253 491 341 2,372 2,633 2,809 2,044  2,126 
General and administrative expenses1,665 1,639 57,805 58,057 59,382 59,369 60,803  62,126 
Total share-based compensation expenses
4,166 27,627 68,878 72,549 84,758 83,409 53,555  60,711 


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,
2020 
 June 30,
2020 
 September
30, 2020
 
 December
31, 2020
 
 March 31,
2021 
 June 30,
2021 
 September
30, 2021
 
 December
31, 2021
 
 December
31, 2021
 RMB  RMB  RMB  RMB  RMB  RMB  RMB  RMB  US$
Revenues67,329  106,971  123,881  131,722  106,623  127,279  126,615  147,345  23,122 
Cost of revenues(22,545) (28,573) (32,294) (32,569) (29,683) (37,048) (35,019) (41,966) (6,585)
Gross profit44,784  78,398  91,587  99,153  76,940  90,231  91,596  105,379  16,537 
Operating expenses:                         
Research and development expenses(40,016) (71,176) (69,330) (83,418) (77,414) (108,071) (69,649) (112,724) (17,689)
Selling and marketing expenses(29,815) (37,992) (44,174) (56,606) (55,130) (68,058) (76,687) (103,221) (16,198)
General and administrative expenses(34,295) (42,272) (102,731) (114,502) (116,259) (116,130) (116,304) (141,563) (22,214)
Total operating expenses(104,126) (151,440) (216,235) (254,526) (248,803) (292,259) (262,640) (357,508) (56,101)
Loss from operations(59,342) (73,042) (124,648) (155,373) (171,863) (202,028) (171,044) (252,129) (39,564)
Interest income3,985  44  698  1,341  787  681  958  1,031  162 
Interest expense(1,178) 1,939  (776) (652) (510) (565) (367) (94) (15)
Other (expense) income, net(151) 122  (176) (682) 118  433  20  (372) (58)
Foreign exchange gain (loss), net611  (118) (2,228) (1,112) 57  (560) 380  (731) (115)
Change in fair value of warrant liability3,503  -  -  -  -  -  -  -  - 
Loss before income tax(52,572) (71,055) (127,130) (156,478) (171,411) (202,039) (170,053) (252,295) (39,590)
Income tax (expenses) benefit-  -  -  -  -  (1,626) (424) 1,151  181 
Net loss(52,572) (71,055) (127,130) (156,478) (171,411) (203,665) (170,477) (251,144) (39,409)
Net loss attributable to Burning Rock Biotech Limited’s shareholders(52,572) (71,055) (127,130) (156,478) (171,411) (203,665) (170,477) (251,144) (39,409)
Accretion of convertible preferred shares(26,288) (38,400) -  -  -  -  -  -  - 
Net loss attributable to ordinary shareholders(78,860) (109,455) (127,130) (156,478) (171,411) (203,665) (170,477) (251,144) (39,409)
Loss per share:                         
Ordinary shares - basic and diluted(3.15) -  -  -  -  -  -      
Class A ordinary shares - basic and diluted

-
  

(2.68


)
 (1.22) (1.51) 

(1.65


)
 

(1.96


)
 

(1.64


)
 

(2.40


)
 

(0.38


)
Class B ordinary shares - basic and diluted-  (2.68) (1.22) (1.51) (1.65) (1.96) (1.64) (2.40) (0.38)
Weighted average shares outstanding used in loss per share computation:                         
Ordinary shares - basic and diluted25,031,575  -  -  -  -  -  -  -  - 
Class A ordinary shares - basic and diluted

-
  

23,461,319
  86,479,686  86,511,799  

86,721,263
  

86,764,260
  

86,908,975
  

87,128,297
  

87,128,297
 
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
  

17,324,848
  

17,324,848
 
Other comprehensive (loss) income, net of tax of nil:                         
Foreign currency translation adjustments11,422  (2,336) (91,093) (94,881) 14,080  (34,980) 6,146  (24,726) (3,880)
Total comprehensive loss(41,150) (73,391) (218,223) (251,359) (157,331) (238,645) (164,331) (275,870) (43,289)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(41,150) (73,391) (218,223) (251,359) (157,331) (238,645) (164,331) (275,870) (43,289)
                           


Burning Rock Biotech Limited
 
Unaudited Condensed Statements of Comprehensive Loss
 
(in thousands, except for share and per share data)
 
 For the year ended
 December 31,
2020
 December 31,
2021
 December 31,
2021
 RMB
 RMB
 USD
Revenues429,903  507,862  79,694 
Cost of revenues(115,981) (143,716) (22,553)
Gross profit313,922  364,146  57,141 
Operating expenses:        
Research and development expenses(263,940) (367,858) (57,725)
Selling and marketing expenses(168,587) (303,096) (47,562)
General and administrative expenses(293,800) (490,256) (76,932)
Total operating expenses(726,327) (1,161,210) (182,219)
Loss from operations(412,405) (797,064) (125,078)
Interest income6,068  3,457  542 
Interest expense(667) (1,536) (241)
Other (expense) income, net(887) 199  31 
Foreign exchange loss, net(2,847) (854) (134)
Change in fair value of warrant liability3,503  -  - 
Loss before income tax(407,235) (795,798) (124,880)
Income tax expenses-  (899) (141)
Net loss(407,235) (796,697) (125,021)
Net loss attributable to Burning Rock Biotech Limited’s shareholders(407,235) (796,697) (125,021)
Accretion of convertible preferred shares(64,688) -  - 
Net loss attributable to ordinary shareholders(471,923) (796,697) (125,021)
         
Loss per share:        
Class A ordinary shares - basic and diluted(6.88) (7.65) (1.20)
Class B ordinary shares - basic and diluted(6.88) (7.65) (1.20)
         
Weighted average shares outstanding used in loss per share computation:        
Class A ordinary shares - basic and diluted51,309,631  86,883,011  86,883,011 
Class B ordinary shares - basic and diluted17,324,848  17,324,848  17,324,848 
         
Other comprehensive loss, net of tax of nil:        
Foreign currency translation adjustments
Foreign currency translation adjustments
(176,888) (39,480) (6,195)
Total comprehensive loss(584,123) (836,177) (131,216)
         
Total comprehensivelossattributable to Burning Rock Biotech Limited’s shareholders(584,123) (836,177) (131,216)
         


Burning Rock Biotech Limited
 
Unaudited Condensed Consolidated Balance Sheets
 
(In thousands)
  
 As of
 December 31,
2020
 December 31,
2021
 December 31,
2021
 RMB RMB US$
ASSETS     
Current assets:     
Cash and cash equivalents1,895,308 1,431,317 224,605
Restricted cash29,898 7,795 1,223
Short-term investments362,132 63,757 10,005
Accounts receivable, net88,218 92,197 14,468
Contract assets, net22,534 42,391 6,652
Amounts due from related parties212 - -
Inventories68,021 123,210 19,335
Prepayments and other current assets, net57,329 60,279 9,460
Total current assets2,523,652 1,820,946 285,748
Non-current assets:     
Equity method investment1,417 910 143
Property and equipment, net111,481 325,438 51,068
Operating right-of-use assets- 81,007 12,712
Intangible assets, net3,457 5,150 808
Other non-current assets23,021 45,136 7,083
Total non-current assets139,376 457,641 71,814
TOTAL ASSETS2,663,028 2,278,587 357,562
      


Burning Rock Biotech Limited
 
Unaudited Condensed Consolidated Balance Sheets (Continued)
 
(in thousands)
  
 As of
 December 31,
2020

 December 31,
2021
 December 31,
2021
 RMB
 RMB
 US$
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable35,482  63,080  9,899 
Deferred revenue74,402  142,871  22,420 
Capital lease obligations, current4,816  -  - 
Accrued liabilities and other current liabilities83,648  127,892  20,070 
Customer deposits1,120  972  153 
Short-term borrowings7,370  2,370  372 
Current portion of long-term borrowings34,695  -  - 
Current portion of operating lease liabilities-  34,999  5,492 
Total current liabilities241,533  372,184  58,406 
Non-current liabilities:        
Deferred government grants263  -  - 
Non-current portion of operating lease liabilities-  49,316  7,739 
Other non-current liabilities228  11,776  1,848 
Total non-current liabilities491  61,092  9,587 
TOTAL LIABILITIES242,024  433,276  67,993 
         
Shareholders’ equity:        
Class A ordinary shares116  116  18 
Class B ordinary shares21  21  3 
Additional paid-in capital4,006,616  4,280,956  671,775 
Accumulated deficits(1,418,160) (2,228,713) (349,733)
Accumulated other comprehensive loss(167,589) (207,069) (32,494)
Total shareholders’ equity2,421,004  1,845,311  289,569 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY2,663,028  2,278,587  357,562 
         


Burning Rock Biotech Limited
 
Unaudited Condensed Statements of Cash Flows
 
(in thousands)
  
 For the three months ended
 December 31,
2020

 December 31,
2021

 December 31,
2021
 RMB
 RMB
 US$
Net cash used in operating activities(90,659) (112,349) (17,628)
Net cash used in investing activities(36,428) (66,970) (10,508)
Net cash generated from (used in) financing activities68,477  (6,781) (1,065)
Effect of exchange rate on cash, cash equivalents and restricted cash(78,013) (24,498) (3,844)
Net decrease cash, cash equivalents and restricted cash(136,623) (210,598) (33,045)
Cash, cash equivalents and restricted cash at the beginning of period2,061,829  1,649,710  258,873 
Cash, cash equivalents and restricted cash at the end of period1,925,206  1,439,112  225,828 
         


 For the year ended
 December 31,
2020

 December 31,
2021

 December 31,
2021
 RMB
 RMB
 US$
Net cash used in operating activities(73,543) (477,886) (74,993)
Net cash generated from (used in) investing activities(109,312) 81,697  12,823 
Net cash generated from (used in) financing activities2,165,719  (52,899) (8,301)
Effect of exchange rate on cash, cash equivalents and restricted cash(155,902) (37,006) (5,808)
Net increase (decrease) cash, cash equivalents and restricted cash1,826,962  (486,094) (76,279)
Cash, cash equivalents and restricted cash at the beginning of period98,244  1,925,206  302,107 
Cash, cash equivalents and restricted cash at the end of period1,925,206  1,439,112  225,828 
         


Coordonnées