NEW YORK – Genetron Health said on Thursday that its fourth quarter revenues were up 30 percent year over year, as sales of sequencing instruments, kits, and LDT testing, all grew significantly.
For the three months ended Dec. 31, 2020, the Chinese precision oncology platform company reported RMB133.9 million (US$20.5 million) for the quarter, up from RMB102.9 million in the same period of 2019.
Genetron's Q4 cancer diagnosis and monitoring revenue increased 44 percent to RMB123.5 million from RMB85.8 million, driven by the growth in revenues generated from both the provision of LDT services, particularly in early screening, and the sale of IVD products, the Beijing-based firm said.
Revenue generated from development services was RMB10.5 million in Q4 2020 down 39 percent from RMB17.2 million in the same period of 2019. According to the company, this mainly resulted from a decrease in sequencing services, reflecting the continued adjustment of Genetron's business strategy towards biopharmaceutical services.
"Sequencing services has a low margin, so we deliberately reduced that [revenue] within the development services," Genetron CFO Evan Ce Xu said during a call discussing the firm's financial results.
The company's LDT services revenues increased by 49 percent to RMB96.9 million from RMB65.3 million in the same period of 2019. This included sales of the firm's liver cancer screening test, HCCscreen, which executives said is contributing to a growing portion of total LDT revenue.
The firm sold approximately 5,340 LDT tests during the quarter, a decrease of 16 percent from Q4 2019, reflecting the resurgence of COVID-19 in key sales territories. At the same time, the average per-test sales price increased compared to the prior-year quarter.
Q4 revenue from sales of Genetron's IVD products increased by about 30 percent to RMB26.5 million from RMB20.5 million in the fourth quarter of 2019.
"We are particularly pleased with the commercial uptakes of HCCscreen and our IVD products," Genetron Cofounder and CEO Sizhen Wang said in a statement. In light of strong new sensitivity and specificity data announced this week, Wang said the company is now moving forward with a National Medical Products Administration registrational study, slated for the second quarter of this year.
Among other recent milestones, the firm highlighted the November decision by the National Cancer Center in China and the Wuxi municipal government, which selected Genetron for a public health initiative deploying 150,000 HCCscreen tests over three years.
The assay has also received Breakthrough Device Designation from the US Food and Drug Administration.
On the call, Xu said that HCCscreen testing — both as part of the new Wuxi project and through the company's existing deal with iKang Healthcare Group — represented some of the firm's LDT revenue in Q4, but because the commercialization of the test is still in its early stages, the firm is not reporting separate revenues for the assay for that period.
"We do anticipate that HCCscreen will continue to gain traction … and that sales will contribute between 10 percent [and] 15 percent of 2021's revenue," he added.
As the year progresses, Genetron plans to share additional new data on the expansion of its early detection technology to colorectal cancer, as it works to build a larger multi-cancer product, Wang added.
The firm's Q4 R&D expenses were RMB53 million, up 64 percent from RMB32.4 million in the same period of 2019. Its SG&A expenses were RMB116.3 million, a 19 percent increase from RMB97.7 million.
Genetron's net loss for the quarter was RMB73.2 million, or RMB0.16 per share, compared to RMB134.8 million, or RMB1.06 per share, in Q4 2019. On an adjusted basis, the company had a per-share loss of RMB.14 in Q4 2020.
For full-year 2020, the company reported RMB424.5 million in total revenues, a 31 percent increase over RMB323.4 million in 2019.
Its diagnosis and monitoring revenue increased by 43 percent to RMB385.7 million from RMB269.5 million, and revenue generated from the provision of LDT services increased by 24 percent to RMB291.7 from RMB234.6 million.
Genetron said it sold approximately 21,900 LDT diagnostic tests in 2020, a decrease of 4.1 percent year over year.
Full-year revenue generated from the sale of IVD products was RMB94.0 million, up 169 percent from RMB34.9 million in 2019. Development services brought in RMB38.8 million in 2020, a 28 percent decrease from RMB53.9 million.
Its R&D expenses increased 63 percent to RMB149.0 million from RMB91.7 million, while its SG&A spending was up slightly at RMB373.3 million compared to RMB370.8 million.
Genetron's net loss for the year was RMB3.1 billion, or RMB10.18 per share, compared to RMB676.0 million, or RMB5.41 per share, in 2019. Adjusted loss per share for 2020 was RMB.72
The firm ended the year with RMB 140 million in cash and cash equivalents.
Absent any major COVID-19-related disruptions, Genetron executives projected that the company's 2021 revenues will be RMB615 million to RMB625 million, representing approximately 45 percent to 47 percent growth over 2020.