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 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 | 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 | 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% | |||||
