Company Announcements

BNR Reports Second Quarter 2024 Financial Results

Source: RNS
RNS Number : 5686B
Burning Rock Biotech Limited
23 August 2024
 

Burning Rock Reports Second Quarter 2024 Financial Results

GUANGZHOU, China, August 23, 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 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

June 30, 2024

 


(RMB in thousands)

Central laboratory channel

66,239 66,239

53,481

  51,288 

47,614

48,773

 

In-hospital channel

53,835 53,835

54,496 

28,809

 

57,387

59,872

 

Pharma research and development channel

26,194 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

June 30, 2024

 


(RMB in thousands)

Central laboratory channel

51,876

41,487

41,886

 

37,002

38,424

 

In-hospital channel

33,353     33,353

35,459     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

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    110,386

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%

 

 

 

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