EX-99.1 2 d366082dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Burning Rock Reports First Quarter 2022 Financial Results

GUANGZHOU, China, May 31, 2022 —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 ended March 31, 2022.

Recent Business Updates

 

   

Therapy Selection and Minimal Residual Disease (MRD)

 

   

Continued growth through (i) market share gain through continued focus on the in-hospital segment and (ii) new product launch. Achieved 42% overall testing volume growth year-on-year during the first quarter of 2022, driven by the 83% testing volume growth of in-hospital segment year-on-year during the same period, while the testing volume of central laboratory segment grew 0.3% year-on-year. New products’ sales contributed 7% of the central laboratory segmental revenues for March 2022;

 

   

Burning Rock Liquid Biopsy Conference was successfully held in April 2022. The 2-day online session was chaired by Professor Jia Fan, Jinming Yu and Xu Zhang, with participation from over 140 oncologists, during which the Consensus on NGS Clinical Report Interpretation was released;

 

   

MRD data was released at American Association for Cancer Research (AACR) Annual Meeting 2022 for non-small cell lung cancer (NSCLC) and colorectal cancer (CRC);

 

   

MRD product was commercially launched in March 2022.

 

   

Early Detection

 

   

Data release at AACR on analytical validation;

 

   

Commercialization in progress, with a few hospitals having completed product on-boarding and generating revenues.

 

   

Pharma Services

 

   

Continued revenue growth, with 302.7% revenue growth year-on-year during the first quarter of 2022. Pharma service contract backlog continues to build rapidly. The total value of new contracts we entered into during the first quarter of 2022 amounted to RMB59 million, representing approximately 125% increase from the first quarter of 2021.

First Quarter 2022 Financial Results

Revenues were RMB135.5 million (US$21.4 million) for the three months ended March 31, 2022, representing a 27.1% increase from RMB106.6 million for the same period in 2021.

 

   

Revenue generated from central laboratory business was RMB74.2 million (US$11.7 million) for the three months ended March 31, 2022, representing a 0.5% decrease from RMB74.6 million for the same period in 2021.

 

   

Revenue generated from in-hospital business was RMB49.0 million (US$7.7 million) for the three months ended March 31, 2022, representing a 68.9% increase from RMB29.0 million for the same period in 2021, driven by in-hospital testing volume growth.

 

   

Revenue generated from pharma research and development services was RMB12.4 million (US$1.9 million) for the three months ended March 31, 2022, representing a 302.7% increase from RMB3.1 million for the same period in 2021, primarily attributable to increased testing performed for our pharma customers.

Cost of revenues was RMB47.9 million (US$7.6 million) for the three months ended March 31, 2022, representing a 61.5% increase from RMB29.7 million for the same period in 2021, primarily due to the Company’s continued business growth, increased depreciation in relation to our new laboratory and inventory write downs.

Gross profit was RMB87.6 million (US$13.8 million) for the three months ended March 31, 2022, representing a 13.8% increase from RMB76.9 million for the same period in 2021. Gross margin was 64.6% for the three months ended March 31, 2022, which decreased from 72.2% for the same period in 2021 primarily due to the increased depreciation in relation to our new laboratory and inventory write downs.


Non-GAAP gross profit, which excludes depreciation and amortization, was RMB92.7 million (US$14.6 million) for the three months ended March 31, 2022, representing a 20.2% increase from RMB77.1 million for the same period in 2021. Non-GAAP gross margin was 68.4% for the three months ended March 31, 2022, compared to 72.4% for the same period in 2021 primarily due to an increase of RMB4.8 million in inventory write downs (which resulted in a 3.5 percentage-point decrease of gross margin).

Operating expenses were RMB350.4 million (US$55.3 million) for the three months ended March 31, 2022, representing a 40.9% increase from RMB248.8 million for the same period in 2021. The increase was primarily driven by headcount growth to support our business expansion.

 

   

Research and development expenses were RMB119.5 million (US$18.9 million) for the three months ended March 31, 2022, representing a 54.4% increase from RMB77.4 million for the same period in 2021, primarily due to (i) an increase in research and development staff cost which resulted from an increase in headcount and (ii) and increase in costs for certain research and development for early detection.

 

   

Selling and marketing expenses were RMB89.2 million (US$14.1 million) for the three months ended March 31, 2022, representing a 61.8% increase from RMB55.1 million for the same period in 2021, primarily due to an increase in staff cost resulted from 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 RMB141.7 million (US$22.4 million) for the three months ended March 31, 2022, representing a 21.9% increase from RMB116.3 million for the same period in 2021, primarily due to an increase in general and administrative personnel’s staff cost resulted from an increase in headcount.

Net loss was RMB261.4 million (US$41.2 million) for the three months ended March 31, 2022, compared to RMB171.4 million for the same period in 2021.

Cash, cash equivalents, restricted cash and short-term investments were RMB1,502.9 million and RMB1,338.4 million (US$211.1 million) as of December 31, 2021 and March 31, 2022, respectively.

2022 Financial Guidance

Given the strong first quarter business performance and assuming that the impact of COVID-19 dissipates over time in China, Burning Rock reiterates its full year 2022 revenue guidance of approximately RMB620 million (US$97.8 million), implying a 22% growth over full year 2021.

Conference Call Information

Burning Rock will host a conference call to discuss the first quarter 2022 financial results at 8:30 a.m. U.S. Eastern Time (8:30 p.m. Hong Kong time) on May 31, 2022.

Details of the conference call are as follows:

 

International:    +65 67135640
U.S.:    +1 3322089718
U.K.:    +44 2036928124
Hong Kong:    +852 30186768
China Mobile:    4008209615
China Landline:    8008207535
Conference ID:    8942518

A replay of the conference call will be available for one week (dial-in number: +61 2 8199 0299; 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.

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

 

     For the three months ended  
     March 31,
2021
     June 30,
2021
     September 30,
2021
     December 31,
2021
     March 31,
2022
 
                                    

Central Laboratory Channel:

  

Number of patients tested

     7,716        8,155        7,808        8,235        7,743  

Number of ordering physicians(1)

     1,082        1,013        920        917        994  

Number of ordering hospitals(2)

     303        300        287        306        318  

 

(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.

     As of  
     March 31,
2021
     June 30,
2021
     September 30,
2021
     December 31,
2021
     March 31,
2022
 
                                    

In-hospital Channel:

  

Pipeline partner hospitals(1)

     22        22        24        23        24  

Contracted partner hospitals(2)

     32        34        34        41        41  

Total number of partner hospitals

     54        56        58        64        65  

 

(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,
2021
     June 30,
2021
     September 30,
2021
     December 31,
2021
     March 31,
2022
 
                                    
     (RMB in thousands)  

Central laboratory channel

     74,561        79,999        78,817        85,976        74,211  

In-hospital channel

     28,994        40,502        43,714        51,906        48,957  

Pharma research and development channel

     3,068        6,778        4,084        9,463        12,356  

Total revenues

     106,623        127,279        126,615        147,345        135,524  

 

     For the three months ended  
Gross profit    March 31,
2021
     June 30,
2021
     September 30,
2021
     December 31,
2021
     March 31,
2022
 
                                    
     (RMB in thousands)  

Central laboratory channel

     55,212        58,681        58,387        65,985        50,574  

In-hospital channel

     20,070        29,426        31,111        34,194        33,396  

Pharma research and development channel

     1,658        2,124        2,098        5,200        3,610  

Total gross profit

     76,940        90,231        91,596        105,379        87,580  

 

     For the three months ended  
Share-based compensation expenses    March 31,
2021
     June 30,
2021
     September 30,
2021
    December 31,
2021
    March 31,
2022
 
                                  
     (RMB in thousands)  

Cost of revenues

     339        406        267       492       365  

Research and development expenses

     22,404        20,825        (9,559     (4,033     12,299  

Selling and marketing expenses

     2,633        2,809        2,044       2,126       1,774  

General and administrative expenses

     59,382        59,369        60,803       62,126       65,715  

Total share-based compensation expenses

     84,758        83,409        53,555       60,711       80,153  


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,
2021
    June 30,
2021
    September 30,
2021
    December 31,
2021
    March 31,
2022
    March 31,
2022
 
     RMB     RMB     RMB     RMB     RMB     US$  

Revenues

     106,623       127,279       126,615       147,345       135,524       21,379  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

     (29,683     (37,048     (35,019     (41,966     (47,944     (7,563
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     76,940       90,231       91,596       105,379       87,580       13,816  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Research and development expenses

     (77,414     (108,071     (69,649     (112,724     (119,496     (18,850

Selling and marketing expenses

     (55,130     (68,058     (76,687     (103,221     (89,211     (14,073

General and administrative expenses

     (116,259     (116,130     (116,304     (141,563     (141,733     (22,358

Total operating expenses

     (248,803     (292,259     (262,640     (357,508     (350,440     (55,281
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (171,863     (202,028     (171,044     (252,129     (262,860     (41,465
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest income

     787       681       958       1,031       1,832       289  

Interest expenses

     (510     (565     (367     (94     119       19  

Other income (expense), net

     118       433       20       (372     298       47  

Foreign exchange gain (loss), net

     57       (560     380       (731     (777     (123
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax

     (171,411     (202,039     (170,053     (252,295     (261,388     (41,233
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income tax (benefits) expenses

     —         (1,626     (424     1,151       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (171,411     (203,665     (170,477     (251,144     (261,388     (41,233
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Burning Rock Biotech Limited’s shareholders

     (171,411     (203,665     (170,477     (251,144     (261,388     (41,233

Net loss attributable to ordinary shareholders

     (171,411     (203,665     (170,477     (251,144     (261,388     (41,233

Loss per share for class A and class B ordinary shares:

            

Class A ordinary shares - basic and diluted

     (1.65     (1.96     (1.64     (2.40     (2.50     (0.39

Class B ordinary shares - basic and diluted

     (1.65     (1.96     (1.64     (2.40     (2.50     (0.39

Weighted average shares outstanding used in loss per share computation:

            

Class A ordinary shares - basic and diluted

     86,721,263       86,764,260       86,908,975       87,128,297       87,179,752       87,179,752  

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

     14,080       (34,980     6,146       (24,726     (3,065     (483

Total comprehensive loss

     (157,331     (238,645     (164,331     (275,870     (264,453     (41,716

Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders

     (157,331     (238,645     (164,331     (275,870     (264,453     (41,716


Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

     As of  
     December 31,
2021
     March 31,
2022
     March 31,
2022
 
     RMB      RMB      US$  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     1,431,317        1,265,792        199,674  

Restricted cash

     7,795        9,083        1,433  

Short-term investments

     63,757        63,482        10,014  

Accounts receivable, net

     92,197        103,616        16,345  

Contract assets, net

     42,391        43,923        6,928  

Inventories, net

     123,210        130,175        20,535  

Prepayments and other current assets, net

     60,279        69,331        10,937  

Total current assets

     1,820,946        1,685,402        265,866  
  

 

 

    

 

 

    

 

 

 

Non-current assets:

        

Equity method investment

     910        773        122  

Property and equipment, net

     325,438        322,171        50,821  

Operating right-of-use assets

     81,007        72,501        11,437  

Intangible assets, net

     5,150        4,246        669  

Other non-current assets

     45,136        22,703        3,581  

Total non-current assets

     457,641        422,394        66,630  
  

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

     2,278,587        2,107,796        332,496  
  

 

 

    

 

 

    

 

 

 


Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)

 

 

     As of  
     December 31,
2021
    March 31,
2022
    March 31,
2022
 
     RMB     RMB     US$  

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

     63,080       97,892       15,442  

Deferred revenue

     142,871       159,148       25,105  

Accrued liabilities and other current liabilities

     127,892       104,092       16,420  

Customer deposits

     972       972       153  

Short-term borrowing

     2,370       2,370       374  

Current portion of operating lease liabilities

     34,999       35,298       5,568  

Total current liabilities

     372,184       399,772       63,062  
  

 

 

   

 

 

   

 

 

 

Non-current liabilities:

      

Non-current portion of operating lease liabilities

     49,316       39,811       6,280  

Other non-current liabilities

     11,776       13,636       2,151  

Total non-current liabilities

     61,092       53,447       8,431  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

     433,276       453,219       71,493  
  

 

 

   

 

 

   

 

 

 

Shareholders’ equity:

      

Class A ordinary shares

     116       116       19  

Class B ordinary shares

     21       21       3  

Treasury stock

     —         (3,258     (514

Additional paid-in capital

     4,280,956       4,357,933       687,447  

Accumulated deficits

     (2,228,713     (2,490,101     (392,804

Accumulated other comprehensive loss

     (207,069     (210,134     (33,148

Total shareholders’ equity

     1,845,311       1,654,577       261,003  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

     2,278,587       2,107,796       332,496  
  

 

 

   

 

 

   

 

 

 


Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

     For the three months ended  
     March 31,
2021
    March 31,
2022
    March 31,
2022
 
     RMB     RMB     US$  

Net cash used in operating activities

     (113,145     (144,361     (22,772

Net cash generated from (used in) investing activities

     288,329       (13,011     (2,050

Net cash used in financing activities

     (4,162     (3,934     (621

Effect of exchange rate on cash, cash equivalents and restricted cash

     16,658       (2,931     (464

Net increase (decrease) in cash, cash equivalents and restricted cash

     187,680       (164,237     (25,907

Cash, cash equivalents and restricted cash at the beginning of period

     1,925,206       1,439,112       227,014  

Cash, cash equivalents and restricted cash at the end of period

     2,112,886       1,274,875       201,107  

Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

 

     For the three months ended  
     March 31,
2021
    June 30,
2021
    September 30,
2021
    December 31,
2021
    March 31,
2022
 
                                
     (RMB in thousands)  

Gross profit

     76,940       90,231       91,596       105,379       87,580  

Add: depreciation and amortization

     206       437       1,382       1,981       5,139  

Non-GAAP gross profit

     77,146       90,668       92,978       107,360       92,719  

Total revenues

     106,623       127,279       126,615       147,345       135,524  

Gross margin

     72.2     70.9     72.3     71.5     64.6

Non-GAAP gross margin

     72.4     71.2     73.4     72.9     68.4