GUANGZHOU, China, Aug. 22, 2024 (GLOBE NEWSWIRE) -- 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 partnerhospitals
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
December 31, 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
December 31, 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 Limited Unaudited 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 Limited Unaudited 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 Limited Unaudited 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 Limited Reconciliations 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
