Burning Rock Reports Third Quarter 2023 Financial Results

Original from: Global 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 September 30, 2023.​

Recent Business Updates 

-    Therapy Selection and Minimal Residual Disease (MRD)

    · Personalized Minimal Residual Disease (MRD) product, brPROPHETTMsupports advancement in early-stage non-small cell lung cancer treatment, with results published in the Cancer Cell in September 2023. The study, MEDAL, is a 5-year study that aimed to investigate the clinical utility of MRD in patients with non-small cell lung cancer (NSCLC) with various approaches to ctDNA detection, including MEDAL-Methylation and MEDAL-PROPHET. In MEDAL-PROPHET study, brPROPHETTM demonstrated superior performance in head-to-head comparisons with tumor-agnostic fixed-panel and tumor-informed fixed-panel MRD assays.

-    Early Detection

    · Following the Breakthrough Device Designation granted by the US Food and Drug Administration (FDA) for our OverC™ Multi-Cancer Detection Blood Test (MCDBT) in January 2023, our OverC™ MCDBT also received the Breakthrough Device Designation by China’s National Medical Products Administration (NMPA) in October 2023, making it the only test globally that has received Breakthrough Device Designation from both the FDA and the NMPA.

-    Pharma Services

    · Entered into a Master Service Agreement in Oncology Companion Diagnostics (CDx) with Boehringer Ingelheim, aiming to focus on advancing the clinical trials related to Boehringer Ingelheim's MDM2-p53 antagonist, brigimadlin (BI 907828), and the development of CDx products in China.

    · Total value of new contracts for the provision of pharma services entered into during the third quarter of 2023 amounted to RMB90 million, representing an 8% year-over-year increase.

Third Quarter 2023 Financial Results

Revenues were RMB127.6 million (US$17.5 million) for the three months ended September 30, 2023, representing a 17.5% decrease from RMB154.6 million for the same period in 2022.

-    Revenue generated from central laboratory business was RMB53.5 million (US$7.3 million) for the three months ended September 30, 2023, representing a 40.6% decrease from RMB90.0 million for the same period in 2022, primarily due to a decrease in the number of tests, as the Company continued to focus on its in-hospital business.

-    Revenue generated from in-hospital business was RMB54.5 million (US$7.5 million) for the three months ended September 30, 2023, representing a 9.8% increase from RMB49.6 million for the same period in 2022, driven by an increase in sales volume from existing hospitals and new contracted partner hospitals.

-    Revenue generated from pharma research and development services was RMB19.6 million (US$2.7 million) for the three months ended September 30, 2023, representing a 30.6% increase from RMB15.0 million for the same period in 2022, primarily attributable to increased development and testing services performed for our pharma customers.

Cost of revenues was RMB41.6 million (US$5.7 million) for the three months ended September 30, 2023, representing a 9.5% decrease from RMB46.0 million for the same period in 2022, primarily due to a decrease in cost of central laboratory business, which was in line with the decrease in revenue generated from this business.

Gross profit was RMB85.9 million (US$11.8 million) for the three months ended September 30, 2023, representing a 20.9% decrease from RMB108.6 million for the same period in 2022. Gross margin was 67.4% for the three months ended September 30, 2023, compared to 70.2% for the same period in 2022. By channel, gross margin of central laboratory business was 77.6% for the three months ended September 30, 2023, compared to 77.8% during the same period in 2022; gross margin of in-hospital business was 65.1% for the three months ended September 30, 2023, compared to 63.6% during the same period in 2022, and such increase was primarily due to an increase in sales volume to high margin hospitals; gross margin of pharma research and development services was 45.8% for the three months ended September 30, 2023, compared to 46.7% during the same period of 2022.

Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB95.1 million (US$13.0 million) for the three months ended September 30, 2023, representing a 18.7% decrease from RMB117.0 million for the same period in 2022. Non-GAAP gross margin was 74.5% for the three months ended September 30, 2023, compared to 75.7% for the same period in 2022.

Operating expenses were RMB264.7 million (US$36.3 million) for the three months ended September 30, 2023, representing a 22.9% decrease from RMB343.2 million for the same period in 2022. The decrease was primarily driven by budget control measures and headcount reduction aimed at improving the Company’s operating efficiency.

-    Research and development expenses were RMB83.7 million (US$11.5 million) for the three months ended September 30, 2023, representing a 23.5% decrease from RMB109.4 million for the same period in 2022, primarily due to a decrease in staff cost resulted from the reorganization of our research and development department to improve operating efficiency.

-    Selling and marketing expenses were RMB62.3 million (US$8.5 million) for the three months ended September 30, 2023, representing a 31.0% decrease from RMB90.3 million for the same period in 2022, primarily due to (i) a decrease in staff cost resulted from the reorganization of our sales department to improve operating efficiency, and (ii) a decrease in marketing and conference fee.

-    General and administrative expenses were RMB118.7 million (US$16.3 million) for the three months ended September 30, 2023, representing a 17.3% decrease from RMB143.5 million for the same period in 2022, primarily due to (i) a decrease in amortized expense on share-based compensation; (ii) a decrease in professional service fee; (iii) a decrease in allowance for doubtful accounts resulting from accelerated settlement with customers with long accounts receivable; and (iv) a decrease in staff cost resulted from the reorganization of our general and administrative department to improve operating efficiency.

Net loss was RMB175.0 million (US$24.0 million) for the three months ended September 30, 2023, compared to RMB231.5 million for the same period in 2022.

Cash, cash equivalents, restricted cash and short-term investments were RMB636.7 million (US$87.3 million) as of September 30, 2023.

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Source: Burning Rock Reports Third Quarter 2023 Financial Results