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Genetron Health Posts 38 Percent Revenue Increase in Q2

NEW YORK — Genetron Health on Tuesday reported a 38 percent year-over-year increase in its second quarter revenues amid strong growth in sales from its LDT and IVD segments.

For the three-month period ended June 30, Beijing-based Genetron's revenues climbed to RMB 140.5 million ($21.7 million) from RMB 101.7 million a year earlier.

LDT service revenues in the second quarter were up 15 percent to RMB 87.1 million from RMB 75.8 million. Meanwhile, IVD product sales jumped 142 percent to RMB 43.8 million from RMB 18.1 million in the year-ago quarter, largely due to higher sales of the Genetron S5 next-generation sequencing instrument and the company's eight-gene lung cancer assay. Revenues from development services in the quarter were up 22 percent to RMB 9.5 million from RMB 7.8 million the year before.

Genetron posted a Q2 net loss attributable to its owners of RMB 91.8 million, or RMB .20 per share attributable to ordinary shareholders, versus RMB 2.83 billion, or RMB 17.04 per share, last year. The company recorded a RMB 2.78 billion fair value loss of financial instruments with preferred rights in the second quarter 2020, which did not recur in this year's second quarter.

The firm's R&D spending in the second quarter rose 88 percent to RMB 56.2 million from RMB 29.8 million in the same period the year before due to higher R&D headcount and related expenses, as well as continued innovation efforts including product development and clinical trial activities. SG&A costs were up 62 percent to RMB 143.1 million from RMB 88.5 million on higher marketing, employee compensation, professional fees, and IT expenses.

At the end of June, Genetron had cash and cash equivalents totaling RMB 1.38 billion.

Looking ahead, the firm said it is maintaining its 2021 revenue guidance of between RMB 615 million and RMB 625 million.

"Over the past several weeks, the stricter COVID policies in China have impacted our business, which at present we believe is temporary," Sizhen Wang, Genetron cofounder and CEO, said in a statement. "We are moving along with our [National Medical Products Administration] registrational trial preparation for [the liquid biopsy liver cancer screening product] HCCscreen, and we project to release [colorectal cancer] data for early screening later this year. Our efforts in [minimal residual disease] are also progressing with the upcoming LDT launch of Seq-MRD in blood cancers in the clinical settings, as well as other ongoing studies in solid tumors."

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