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Burning Rock Q4 Revenues Rise 50 Percent

NEW YORK – Burning Rock Biotech reported on Thursday morning that its fourth quarter revenues were up nearly 50 percent year over year.

The Chinese precision oncology firm reported total revenues of RMB131.7 million ($20.2 million) for the three months ended Dec. 31, 2020, compared to RMB88.7 million in the same period of 2019, despite noted impacts from the coronavirus pandemic.

Revenue generated from the company's central laboratory business was RMB86.7 million in Q4, a 22 percent increase from RMB70.7 million for the same period last year. This was primarily due to an increase in the average sales price per patient, as well as to test volume growth for the firm's central lab channel.

Despite pandemic impacts, the company said it tested 7,989 patients through its central lab during the quarter compared to 7,576 for the same period in 2019.

Burning Rock's Q4 in-hospital test revenue was RMB41.5 million, almost triple the RMB14.1 million it saw during the same period in 2019, as the firm grew its customer base to 29 hospitals from 19 in the year-ago quarter. Pharma research and development services revenues totaled RMB3.6 million, a 7 percent decrease from RMB3.8 million for the same period in 2019.

Among recent business highlights, the company noted that it has completed product development of its methylation-based six-cancer screening test and is now ramping up capacity for volume production.

The firm has also initiated new access programs to gather real-world feedback on the assay, with expected commercialization in 2022. Following behind this is a nine-cancer detection test undergoing performance improvement efforts.

On a call discussing the company's financial results, Burning Rock COO Shaokun Chuai highlighted results presented at ESMO Asia showing 98.3 percent specificity and 80.6 percent sensitivity for the six-cancer test in a cohort that included many early-stage tumors.

According to Chuai, the original plan was for the six-cancer assay to serve as a prototype, with the nine-cancer test becoming the first commercial product. However, "with the recent response we have received from potential partners or collaborators, we have decided to speed up the commercialization plan," she said, and company researchers are now in the process of communicating with participating sites and investigators for a prospective validation.

"In the target market for early detection in China, there are some emerging early detection players, but most of them are focusing on single cancer types," Chuai said. Burning Rock's six-cancer test would cover approximately 49 percent of cancer incidence in the country, and the nine-cancer assay would address 63 percent of all cancers in China.

Yusheng Han, Burning Rock's founder, CEO and board chairman, added that the company hopes to significantly accelerate its market penetration for existing tests in 2021, especially its disseminated, in-hospital assays. The firm is also focused on building out its product menu by completing technology transfer and validation efforts for two recently in-licensed products: Myriad Genetics' myChoice HRD and Oncocyte's DetermaRx.

For DetermaRx specifically, Han highlighted that non-small cell lung cancer represents a large component of China's overall cancer incidence. With strong clinical validation data, the detection assay, licensed from US firm OncoCyte, could open a significant new market for the firm.

Burning Rock's Q4 net loss rose to RMB156.5 million, or RMB1.51 per share, compared toRMB95.1 million, or RMB5.49 per share, in the prior year's quarter.

Its R&D expenses for the quarter rose 60 percent to RMB83.4 million from RMB52.2 million for the same period in 2019, primarily due to rising staff costs. The firm's SG&A expenses rose about 74 percent year over year to RMB171.1 million from RMB98.2 million, due to an increase in staff costs, as well as share-based compensation expenses.

For the full year 2020, Burning Rock reported RMB429.9 million in total revenues, a 13 percent increase from RMB381.7 million for 2019.

Earnings from the firm's central laboratory business totaled RMB297.3 million, up 8 percent from RMB276.3 million in 2019. The company tested 25,262 patients in its central laboratory in 2020, almost 10 percent more than the 23,075 tests it processed in 2019.

Full-year revenues from its in-hospital business were up 34 percent year over year at RMB117.9 million compared to RMB87.7 million in 2019. Pharma research and development services represented RMB14.7 million in revenue, a 17 percent decrease from RMB17.7 million in 2019.

Burning Rock's full-year net loss was RMB407.2 million, or RMB6.88 per share, compared to  a loss of RMB169.2 million, or RMB14.23 per share, in 2019.

The company's R&D expenses were RMB263.9 million during 2020, up 68 percent from RMB156.9 million in 2019. It's SG&A costs were RMB462.4 million, a 10 percent increase from RMB285.5 million.

The firm ended the quarter with RMB1.9 billion in cash and cash equivalents, RMB29.9 million in restricted cash, and RMB362.1 million in short-term investments.

For the upcoming year, Burning Rock projected that its revenues will be approximately RMB610 million, assuming no additional Covid-19 related restrictions imposed in China.