REG - Burning Rock Biotech - 1st Quarter Results
29/05/2024 07:00
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RNS Number : 2352Q Burning Rock Biotech Limited 29 May 2024
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
(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 (http://ir.brbiotech.com) or through link
https://edge.media-server.com/mmc/p/ovj2q2n6
(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
As of
March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024
In-hospital Channel:
Pipeline partner hospitals((1)) 29 30 29 28 28
Contracted partner hospitals((2)) 49 50 55 59 59
Total number of partner hospitals 78 80 84 87 87
((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.
((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, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024
(RMB in thousands)
Central laboratory channel 61,804 66,239 53,481 51,288 47,614
In-hospital channel 51,561 53,835 54,496 28,809 57,387
Pharma research and development channel 29,151 26,194 19,589 40,988 20,622
Total revenues 142,516 146,268 127,566 121,085 125,623
For the three months ended
Gross profit March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024
(RMB in thousands)
Central laboratory channel 48,090 51,876 41,487 41,886 37,002
In-hospital channel 34,409 33,353 35,459 12,910 39,192
Pharma research and development channel 16,273 15,193 8,974 23,317 9,500
Total gross profit 98,772 100,422 85,920 78,113 85,694
For the three months ended
Share-based compensation expenses March 31, June 30, September 30, December 31, March 31, 2024
2023 2023 2023 2023
(RMB in thousands)
Cost of revenues 353 627 680 654 596
Research and development expenses 13,612 15,301 12,161 12,401 12,287
Selling and marketing expenses 1,606 3,389 2,848 1,816 508
General and administrative expenses 62,595 18,502 57,704 56,472 55,990
Total share-based compensation expenses 78,166 37,819 73,393 71,343 69,381
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, June 30, September 30, 2023 December 31,2023 March 31, 2024 March 31, 2024
2023 2023
RMB RMB RMB RMB RMB US$
Revenues 142,516 146,268 127,566 121,085 125,623 17,399
Cost of revenues (43,744) (45,846) (41,646) (42,972) (39,929) (5,531)
Gross profit 98,772 100,422 85,920 78,113 85,694 11,868
Operating expenses:
Research and development expenses (94,417) (95,779) (83,701) (73,119) (65,985) (9,139)
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 (287,230) (236,146) (264,735) (244,437) (211,522) (29,295)
Loss from operations (188,458) (135,724) (178,815) (166,324) (125,828) (17,427)
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)
Loss before income tax (184,831) (130,797) (174,531) (161,142) (121,369) (16,810)
Income tax expenses (422) (445) (450) (1,071) (180) (25)
Net loss (185,253) (131,242) (174,981) (162,213) (121,549) (16,835)
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:
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:
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 (190,912) (116,413) (176,936) (165,239) (120,959) (16,753)
shareholders
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
As of
December 31, 2023 March 31, March 31,
2024 2024
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 615,096 572,616 79,306
Restricted cash 120 58 8
Accounts receivable, net 126,858 135,360 18,747
Contract assets, net 22,748 23,063 3,194
Inventories, net 69,020 63,121 8,742
Prepayments and other current assets, net 50,254 46,630 6,458
Total current assets 884,096 840,848 116,455
Non-current assets:
Equity method investment 337 249 34
Convertible note receivable 5,320 5,320 737
Property and equipment, net 131,912 114,498 15,858
Operating right-of-use assets 12,284 19,655 2,722
Intangible assets, net 964 747 103
Other non-current assets 5,088 3,609 500
Total non-current assets 155,905 144,078 19,954
TOTAL ASSETS 1,040,001 984,926 136,409
Burning Rock Biotech Limited
Unaudited Condensed Consolidated Balance Sheets (Continued)
(in thousands)
As of
December 31, 2023 March 31, March 31,
2024 2024
RMB RMB US$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 18,061 24,630 3,411
Deferred revenue 130,537 127,516 17,661
Accrued liabilities and other current liabilities 104,935 91,037 12,608
Customer deposits 1,197 1,197 166
Current portion of operating lease liabilities 8,634 11,026 1,527
Total current liabilities 263,364 255,406 35,373
Non-current liabilities:
Non-current portion of operating lease liabilities 3,690 7,971 1,104
Other non-current liabilities 4,537 4,717 651
Total non-current liabilities 8,227 12,688 1,755
TOTAL LIABILITIES 271,591 268,094 37,128
Shareholders' equity:
Class A ordinary shares 116 116 16
Class B ordinary shares 21 21 3
Additional paid-in capital 4,849,337 4,918,718 681,235
Treasury stock (65,896) (65,896) (9,126)
Accumulated deficits (3,853,635) (3,975,184) (550,557)
Accumulated other comprehensive loss (161,533) (160,943) (22,290)
Total shareholders' equity 768,410 716,832 99,281
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,040,001 984,926 136,409
Burning Rock Biotech Limited
Unaudited Condensed Statements of Cash Flows
(in thousands)
For the three months ended
March 31, 2023 March 31, 2024 March 31, 2024
RMB RMB US$
Net cash used in operating activities (113,143) (40,209) (5,569)
Net cash used in investing activities (4,059) (2,386) (330)
Net cash used in financing activities (32) - -
Effect of exchange rate on cash, cash equivalents and restricted cash (4,892) 53 7
Net decrease in cash, cash equivalents and restricted cash (122,126) (42,542) (5,892)
Cash, cash equivalents and restricted cash at the beginning of period 925,268 615,216 85,206
Cash, cash equivalents and restricted cash at the end of period 803,142 572,674 79,314
Burning Rock Biotech Limited
Reconciliations of GAAP and Non-GAAP Results
For the three months ended
March 31, June 30, September 30, 2023 December 31, March 31, 2024
2023 2023 2023
(RMB in thousands)
Gross profit:
Central laboratory channel 48,090 51,876 41,487 41,886 37,002
In-hospital channel 34,409 33,353 35,459 12,910 39,192
Pharma research and development channel 16,273 15,193 8,974 23,317 9,500
Total gross profit 98,772 100,422 85,920 78,113 85,694
Add: depreciation and amortization:
Central laboratory channel 2,567 2,645 2,550 2,414 1,919
In-hospital channel 2,582 2,637 2,751 2,728 1,524
Pharma research and development channel 3,974 3,665 3,863 3,808 3,856
Total depreciation and amortization included in cost of revenues 9,123 8,947 9,164 8,950 7,299
Non-GAAP gross profit：
Central laboratory channel 50,657 54,521 44,037 44,300 38,921
In-hospital channel 36,991 35,990 38,210 15,638 40,716
Pharma research and development channel 20,247 18,858 12,837 27,125 13,356
Total non-GAAP gross profit 107,895 109,369 95,084 87,063 92,993
Non-GAAP gross margin：
Central laboratory channel 82.0% 82.3% 82.3% 86.4% 81.7%
In-hospital channel 71.7% 66.9% 70.1% 54.3% 70.9%
Pharma research and development channel 69.5% 72.0% 65.5% 66.2% 64.8%
Total non-GAAP gross margin 75.7% 74.8% 74.5% 71.9% 74.0%
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