BNR - Earnings call transcript Q2 2021 | Burning Rock Biotech Limited

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Operator

Good day and thank you for standing by. Welcome to the Burning Rock Biotech 2021 Second Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded.

Before we begin, I’d like to remind you that this conference call contains 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. be intends, terminologies confident plans, statements. can expects, as and statements future, anticipates, believes, forward-looking identified such by will, similar These estimates, target, that about including expectations Statements forward-looking historical beliefs are Rock’s and statements statements. not are Burning facts, Burning to expectations which other based conditions control. and which factors, Rock’s to that all current relate are unknown or difficult current involve market of Such statements known management’s predict risks, and of are events upon beyond and operating many and uncertainties are and

applicable Forward-looking differ contained factors Rock results such statements a information, obligation and conference could future that as go of Han, you. other law. hand Burning like statement ahead, to any I over CEO result Thank involve risks, materially events today, the to would uncertainties of or new to cause actual now, otherwise, forward-looking update Mr. under does statements. in to not Please first sir. undertake required And speaker your Rock. Yusheng those any from Burning any except as

Yusheng Han

Leo and CEO Thank the call. the am CTO, conference I Burning COO, Today, and QX have Rock’s Han, Shannon; Joe; CFO, to Burning meeting. our Founder Yusheng we of and welcome Rock. in you

through progress, through financials. highlights some you I on First, go will COO, of then our Shannon, product expansion, the exciting Leo, and walk CFO, will recent line our our elaborate will then our

detection, advantages pharmaceutical therapy new selection has leader and XXXX and – let’s first, moving us in in Burning position The turn Rock of So new business segment. business businesses good laid leading to the Page has toward foundation early to with the this MRD grown started given collaborations. and a to market X.

existing of tackle aim distribution branding R&D The parallel detection possible testing product continue as high And rapidly MRD and well cost. we early faster selection, help and our the to innovation in us as oncologists to therapy on products the attract thousands hundreds studies the have market. we quality, lowering coming We to products on talents. which for built it hospitals of the us volumes and in the across why when strong enable years. have few the to go market and network make that’s us technology And new

Page some Let’s for turn of to recent X our programs. highlights

very that of very First machine and all, our fully a recent maturation-based which published endorsement version of Even early solid laid doesn’t of of it development. algorithm most of been earlier foundation commercialization we innovation, Engineering. a detection about We has a the a nice are our of detection it’s technology preparation proud combining reflect our our the Nature the learning-based early early on year. product, Biomedical for detection though product in this line assay mentioned

so are interested early you that, the CRM on of build For knowing who we those the program, team, access operations have X,XXX call a in center far, tested a over and team. an progress through samples out

insurance Our management be channel initial and with health hospital companies. commercialization department innovative will

KOLs. national far conferences with on so or health management have We regional XX presented hospital

the on test doctors. attention attracted from X-cancer data validation great Our the

X entered far, with decent very contracting have we hospitals a pace. see So scoring we number stage the and

some made MRD. also have on progress We exciting

Archer’s promising publications. shown in tumor-informed BR It been and has platform MRD par a Prophet. has sensitivity very developing are testing on We what called shown with with Nature performance in

are cancer trials under several have types other a on cancer study and We there for started lung planning.

growing this of value is some illustrate rapidly, in I full new the time in-hospital will XXXX, detail first anticipating year has in-hospital been reached versus collaboration in volume of a Last recorded introduce I quarter, We spend Xx in million year that RMBXX to selection, segment. increase It new which but by last For new exciting volumes test page. XX,XXX per a the business. our business opportunity driven contract our next not time XXXX. some strong is will therapy first model. the exceed mainly we in quarter. unit half this outlook pharma model BU started during XX% The year on the least,

let’s Pharma is half until years for company turn major not business market U.S., the a ago. So, sorry, new to NGS in X. Page X.X China in been this but about business hasn’t –

approval first in Some is recent model. drivers includes therapy targeted shift regulating in the NTA toward the the trends paradigm moving CDx drug

pressure for with are government pharma seeking volume-based procurement, companies the some domestic expansion of Second, global innovation opportunities.

it liquid companies biopsy both both first, must For former developed registration for samples; have Europe Japan, NGS other drugs, product targeted and partner and of available sometimes U.S. high-quality capability China also second, and the a includes: and on in therapy need and countries. therapy in

criteria third can that third – driver is that CDx The China. need MNCs that in companies is the do NGS

with for companies NGS in regulation HGR regulation. very registration However, challenging China this it’s genome the human foreign to of operate to due trial

with NGS So ideal operations company is global company, choice. as a the Chinese

this result, published the a our have Biotechnology chance, technology. credit. setup U.S. Nature our and SEQCX we lab, And in seeing which now So cap certificate is we endorse clear strongly

device We very years. to We experience in us. join trend of submission to and us the VP of join that invited key years We in believe will X the invited experience in QA. covering have and had the FDA who molecular GRAIL continue X RA talent Sharon also Liang, as diagnostic years coming

our that. the the our is pharma are of is very about globally And pharma, of that step expansion So, expansion. we first excited global really

the Thank So, what I will Shannon? Shannon part. talk am I next, going that’s all today. to you. about to And shift operation

Shannon Chuai

Thank Yes. you, Yes. Yusheng.

So, we some product an updates on you now pipeline. would overview important It’s Page Burning give move and to Rock’s X. like to let’s

cancer detection the X-cancer reported all, take a on let’s last THUNDER asymptomatic this people. from sector, look November. the our at In product early of study the First for have validation results we

first study XXXX. plan data we meanwhile, access commercialization a are of then tests impact our to false-negative We on provide academy we prospective is multi-site X-cancer year, utility leading early more on to case just the study control have population that, the of already studies, as people. PREDICT PRESCIENT, detection PI. by as recruit Each might XX-cancer earlier and PREDICT a of In will you is our participants than and more the Yusheng study this the XX,XXX each and prospective know. And early Chinese expected member the our led more on cancer start intend-to-use have also readout With products by will launching the then on and are clinical also products, about excited will accumulated our and X-cancer that and validation early XXXX. XXXX PRESCIENT readouts more and that the we we launched two intend-to-use false-positive have in data data to population XXXX. quite in And end through clarity in the have launched have product program of early-stage patients, we also of mentioned. terms on

by one product MRD in-house, already developed a is Yusheng The tumor-informed mentioned. first ourselves as

adjuvant other cancer prediction from that is to the for determine The patients our market. we app, China lung prediction licensed into one chemotherapy to prognosis in benefit which the product and is OncoCyte go

colon data MRD are products, on some cancer patients studies clinical validation initiating and on also the cancer such putting lung other and now validation as together types we we For esophageal. are

Chinese validation precision and transfer completing and and MRD For patients providing will start We DetermaRx assay in DetermaRx, analytical will be we product we the getting are the shortly. most Chinese studies close of product early molecular to a really change. and testing, synergy form cancer from patients to the offering able to believe patients for medicine to not lung benefit solutions doctors to we look patients, which who promising and group used in forward it’s market to be but about stage to this

to the product NGS on registration mostly pathway. phase late line, moving So, this therapy entering stage are our section segment panels and development the past the in

focus registration on will more prospectus. We

our the liquid NMPA approval in first Japan X-gene timeline XXXX, another are XX-gene panel near future. now panel. importantly, the we panel more we on after tissue So XXX-gene anticipate and But and obtained in pushing on in our China regulatory approval our XXX-gene panel now the

will For paradigm to we in-hospital ultimately the approvals also panels, start in on on months. few a brought panels in NGS go We aiming landscape think shift and competitive of for pivotal are these NMPA adoption study the those large use. a

the break by to am each. to move segments on. down let’s I each So, going it three

on move tap. early let’s Page X detection with to for So, the

Yusheng this as of process year. earlier as early show glad our this X we reiterate older I are nearly took imagine Engineering the both to that model publication mentioned, technology since version is Biomedical So, wanted that years. and an has detection the can you by to Nature published was actually assay

We have made our to working novelty the move technology and And this let’s the Nonetheless, endorses ever then, Page of of our utility XX. technology. since. multiple

for wanted So, to on revisit X-cancer X-cancer, three the the I program and products, XX-cancer this clinical products. page, our

data regulatory. is we that the intend-to-use population, our performance the have gave we More have clear are communications helping report is us share well for on over program. well specifically we that just have you down to world. past we in we One us study observed months the that the through mentioned the the specificity promising X-cancer real of case-control design as our which in happy as with We this piece prospective are and samples cumulative in very our demonstrated a that’s can study on among far the actually seminar access ongoing nicely X,XXX the so with on progressing road the What product, estimate early all from testing few track. programs with thing the quite a is interventional holding

studies of as and of in the planned gave forward. about XX-cancer what readout going X-cancer for That’s this we PREDICT us Again, this in confidence lot quote. first And share progressing PRESCIENT can we PREDICT So, by are terms of products, end the anticipate the both of XXXX. accrual. and then

So, XX assays which development haven’t products, a we key wanted talked that emphasize XX MRD to detail MRD X.XXX%. has is Xx a on validation personalized analytical lot of have BR to MRD. actually which approaching Page completed LOD, testing. minus a recently previously. which to about move the little we progress here bit technology update talk shows of Prophet, Page novel now, development in One is named we limit detection, target X, on about We tumor-informed most let’s our for a and

types, also including clinical cancer in of cancer on first lung validation XXXX studies data expect on Prophet report BR We on are the colon to and esophageal. other we initiating half

NGS recent year, in We clear Chinese by also to cell in the recommended it’s In trends most LOD consensus, for we MRD Chinese months. for clinicians which an that a methods MRD is lung is are X.X% low non-small to past cancer made section for the as only panel Actually, ours, than earlier that have to oncologists for. predict not liquid-based offered higher same to LOD reach for has as X.XX%, solutions enough adoption what be test MRD including risk this used therapy few in lung early-stage some able which It’s patients. in detection. like MRD relapsed around aiming share testing cancer among should Xx also been noteworthy X.X%, consensus this help

of imagine line on companies MRD And market, pharma of are seeing terms So, very recently. new will this embedding applications, oncologists research studies are that work a that it of lot in we you into exploring and terms the can be of technology. trends a in actively

advance So years. expect to market greatly we now coming in this the

– very OncoCompass you strong this briefly sensitivities kits the lot to our and to be talk study, with NGS specifications, when let’s testing compared U.S. Therapy test robustness liquid this Page from on briefly four the showed So, Selection. ability XX On with A might move familiar liquid recap the of panel From already performance post other it. including the on study. to SEQCX we page, on

of in so keep we will publication and take a published time. liquid-based And endorsement on last So the at very questions quarter, Biotechnology. the materials reference interested our went testing these through results have Nature extensive from this would details this are more. is And share But results we the you nice to been technology. in love the we if

to past lab driven partially are very The the our in business months. to business we rapidly On XX the XX, bit little been actually we on transitioning the demonstrate from So past let’s is in-hospital model predicted have working has a see Page how Page the blue accelerated, to in-hospital test This The move trend over being a that part bar top the our bar quarter. showing volume the central graph here the and being the beginning, green most pandemic. but the model. bar model it’s recently the by side.

You past been total in can quarters, the the three see model. has the clearly volume driven test that mostly by in-hospital growth

the impact has due to trend So this been of our matches greatly COVID. expectation, accelerated but

the hospitals. in During have things the two pandemic, changed

First, channels top restriction mostly cities have central the their of impacts hospitals. in more nearby from among travel city to or the in-hospital This and NGS problems. rigid change tests small rules to hospitals with made for difficult capital large top patients cities the only much it app offered both are travel

Second, made tighter for almost visits. all hospitals rules have doctor

about So products. it’s clinicians the been prescribing harder the test just introducing to new reach and

unlike in-hospital change the only but model. one central lab impact the positively impacts this However, the actually negatively first model

positioned road. believe this years – the that will the we dominant however, in lower to down page, ASP we and it X competition. NGS liquid-based We we So in-hospital well panels which a in-hospital Burning other shift, wanted in also as reiterate the do paradigm approval, focus we unit bottom to on come we because price lower hand, than the and when more panel think NMPA model the why of will since to NGS it’s is obtain a comes stickier large about likely such part process. channel do this in-hospital the in model when see has product and model, transitioning will our the see central-lab quality driven Rock and happen position We recognize, strategic model blended

So business will you I Leo product this through financial Leo? have to and is numbers. what And walk on the to side. the turn I

Leo Li

was China And the share strong both our We representing in to moving the and the the shown volumes combined which close second volume quarter. like Shannon. the volume the metric, of you, progress Page financials, at of overall on year-over-year. in scale was a growth growth Thank reached believe testing volumes China. our in Therapy units absolute XX,XXX XX% first, recap is quarter, quarter and leading quarter, of In the NGS volume Selection Central-lab important to Testing market. in-hospital rate of we’d is XX. most second total our the and second to second that industry growth during

second channel, Now grew at moving XX,XXX growth. year-over-year by the to XX year-over-year while volume volume central-lab more quarter at to XX% over strong in-hospital, in-hospital first, Slide was moderate in XX% growth a units

in-hospital a to the leader what in years from segment. That As is is China. accelerating is Shannon paradigm we’ve strategically a we of clear in mentioned, shift ago, in-hospital number accelerating in-hospital been central-lab and anticipated the

been achieve second able to in accelerated progress see the pleased that We are we’ve the to quarter.

June, to kits. hospitals to And with end hospitals testing supply complete a contracting. the is our As of contracted of of NGS we are additional backlog there officially XX an look XX that we

In with hard accelerate represent even time can about or to terms this as tests XXX has be mainstream historically, more in hope our becomes centers, of some contracting China. to in-house. testing breadth, are working the contracting lion’s long at lead been top hospitals NGS X nation’s the offered The China’s years, cases, coverage And that in list more on we longer. share oncology so our of target hospital a the NGS XXX market we efforts which of

We ones tests have after such very top-tier as and Shanghai installed in had hospitals Beijing wider have top NGS the acceptance in-house. the NGS of seen

hospitals, the of some available We this also heads phenomenon, increasing industry. NGS have like from behind talk industry-wide the is We in-hospital in We two our there think observation, peers accelerate our help trends to this slowdown. we data in listed the the efforts. central-lab are interest recent in is moderated XX seen will period on our slowdown. central-lab think from and Then Slide has an in growth publicly factors and think and moving channel, year to this about we us these this of our

XX, page. has COVID, China. on in COVID we been off laid impact on have And on Page the is First China in on out the on and which

patients schools In nationwide in as China because mentioned For China. and Eastern a before, time. And restrictions in and Southern impacted. Beijing, Shannon and May, example, starting significantly January, Shanghai in China, had other adoption Guangzhou July, NGS in spread in Nanjing, And back has shut started for we travel period of this patient is is business have leading volumes. province flow Beijing, of cases of that restrictions the significant were parts bulk other China, concentrated the outside a significant located cities province or as travel parts make mix. any cities, such X particularly for true as in hospitals at impact Guangzhou, patient up This in Tier the Shanghai, the where major in overall of we

So the penetrated well NGS, we community transitional different impact more hospitals. commoditized is and testing, on think, lower-tier very which and COVID is compared to into

impact, travel in may also reduce are the offered the number to there addition reported city. In of hospitals appointments a cases when

regulation lab, related the norm model differs hospital The just actually most hospital. out factors regarding LDT medical this typical test, positive year Historically, this not full. went should in relies rules to qualified related the It been regulations institutions. of and regulation this the factor. And central will entry through very that medical that drafting developed regulated to the the the came for were device is we or outside that detailed in effect regulation on is of typical areas no allowed XX where so gray within June in outside in Article testing will through two spelled cuts work central-lab companies. the implementation related and the LDT laboratory the there is in competition has a the products, leading rather year barrier regulation LDT IVD regulation. China, that to COVID is XX into second we the is paying The China clear on. in to be from in Article test China. of specifically, approved for in format four for device new scope low where administered Out LDT. The is think, third-party Burning our LDT, than Rock. impacting be this China testing China area patients channel. It factor be this in And performed pays states for resulted, to tests clear becoming makes LDTs hospitals And rules the the NMPA where a and medical

the long-term. erect in increasing segment regulatory reduce from related also barriers LDT in the in think channel, cutting outside help participated LDTs clear have LDTs and is been more regulation industry the second hospitals share, the Under outside are And control of and hospital. the able entry changing in-hospital to We regulatory scrutiny low-quality on some of offerings putting focus is will central-lab business. competitive the for our this important for market saw intensity for conducted the with rule-making. the increasing in and tightening We this We scrutiny. more take discussions leveraging to we we’ve hospitals or backdrop, which entirely quarter. think And better strength higher

in-house tests which We our more financials, to our are XX. like Then efforts on is hospitals. to accelerating at talk put Page our about we’d

As a that reduced. the charge metric, ASP is We of IVD we an we the to lower words, move charge from to to quarters, prices supply testing will central-lab ASP having short-term. volume We to across two more more be our that shifting testing prices testing the we the in mix revenues hospitals. generate rate on this does number a testing, our be rate to numerically growth service more period NGS share sales blended testing volume The other ASP aim with channels impact we of the or lower hospitals segment in-hospital from difference our turn, that transitional volume which channel. growth would by like of revenue in-hospital the during mean in for compared the price will business to expect during in-house partner phase. compared the the to our in to average from In be meaningful revenue central-lab kits patients in LDT be capturing hospital. transitional We,

On strong X% was overall we that we is was volume digits The year-over-year. XX% than a XX% at primarily reason revenue year-over-year, and By difference in not do at in which channel, is growth was second the billing that lower we between This our with growth is there the for ASP single quarter, the this and XX% revenue numbers. revenue are quarter. in-hospital in-hospital the year-over-year. growth central-lab billing For components. volume revenue to changed And and growth channel, do just prices second the at growth growth our there recognition, for XX% rates recognition two second Volume explained. was notice our quarter. revenue growth

which in by booked majority, the first, correlates volumes The quarter. is a component This customer. being upon test, with kits the the received the shipped and is

booked The supplier is own follow second component, among is this terms hospital’s few minority a differ when payment generally Generally, the hospitals. Payment occurs. terms and each quarters.

volume base a growing moving fast summary, revenue our to in lead at and growth base at rate is segment, revenue in Then pharma over and off So growing a coming which should small rate. in-hospital growth small a fast time. a

to seeing on are and and progress our subject These rapid of segment and backlog multiyear revenue mentioned overall clinical time. a saw as greater over we from also expect typically discussed partners’ We Page we contribution our to this are we buildup projects X.

delta Page we Before we’d for guidance like impacts which to to out the the on XX. variant’s laid we recap go China, on year, our

leading located in China. hospitals adoption before, mentioned major As is at cities we in the concentrated NGS

non-pharmaceutical flare-ups, China. tool COVID one the travel mainly interventions, and restrictions, I During are number containment by this, in mean,

and spread worse delta earlier than will stronger quarter June worse and year, being travel July July. easily function more We than that in and versus third significantly earlier we impact significantly saw this wider flare-ups a versus the August reaction our variants, As observed being in August volumes. restrictions

to in-hospital in-hospital channel. in-hospital third towards year-over-year the growing quarter, So in But shift on we structural expect for down central-lab we industry and our to volumes a of actually strength because keep basis. be expect the the

continue expect year, the chiefly remainder the grow in-hospital. through For our we to to business of

a the growth strong, but growth lead to lower ASP revenue We will channel remain volume expect drag to from rate. shift mix

And are and effect, XXXX, reducing talking about guidance think full RMBXXX for we about XXXX million. the like to drivers our revenue all, we in forward, after we quantitative combining impact is guidance the year going and Page XX. all talk this about channel growth accelerated on qualitatively also shown to shift our how So COVID our

For NGS to share additional our mainstream segment. hospitals the in In as advantages the is industry long-term, competition. our of take in-hospital market our strength control and this increasingly near-term, Therapy Selection in-hospital us gain shifting testing. allows more business, becomes greater towards NGS and through sets low-quality apart greater more that regulatory the play us to and product a from role allows In testing

So this we key out believe a we are beneficiary of industry trend.

addition, mentioned of the the call, start In just than Therapy Burning more Rock usual at as Selection. is

developed we Over products years, the have Early of a MRD. pipeline across Detection,

expanded serve X-cancer first be in to CDx detection the our and that start our started that this our in have XXXX year California, operational beyond will China QX test. with projects starting we We year. lab pharma commercializing presence

strong commercial been we this traction that recently far readiness, last have November so the completed for discussed of year start for are call. We the since at preparing as product this back in operational the development as product

In early product MRD addition in and have commercialization our to data XXXX. release detection, we also

at to and conclude open going off please. prepared revenue that, up we the for we’d And additional think multiple sets up kick XXXX like to it So growth forward. with remarks drivers questions, well

Operator

ahead. from Doug Please Instructions] Cowen. Your from first the go [Operator you. Thank of Schenkel comes line question

Doug Schenkel

Hi. Good morning good and afternoon.

in the trends if trends like maybe final revenue field or is I’m And the continuing sounds that listening comments you to pacing? of about to next of correctly, on would like follow-ups the the couple versus offset Just quickly the direction QX guidance, that somewhat with expect to QX, be interpretation same improve the would pacing, those central wrong both with quarters? of in you the QX sounds two on it a lab, and in but those meaning expect terms QX over

Leo Li

back question. pacing, and helpful thanks I we Yes. was August the see quite to XX, in for impact go Doug guess, can to Page it’s significant. the On COVID

made and out So, that very expectation. QX of challenging our

of lab. So, for QX bad the going is central COVID because

another out rule don’t we QX, COVID flare-up. For

to it’s as do whether you going be certain, August. not won’t, room are buffer bad leave as but We hope want some there. We to we

COVID flare-ups significant a we see. any predict. this more that difficult And of think the is with we absence better. QX becoming But do proceed bit seasonality of it’s should to COVID, So, typical again,

Doug Schenkel

Understood.

quarter balance the the little we of think then the And How on the for year? operating we than more expected. one spend year, spend second higher operating about in Okay. guidance in a came over should

Leo Li

Yes.

So, back the I business to spend. little to are it’s are OpEx. that for regarding a adding There few go a bit areas our helpful guess we

is Yusheng early mentioned, we And detection. and hospitals on with looking to partner First companies. insurance as are

So, on Insurance the Hospital for for sales segment, the personnel the have we funnel segment.

teams. back And and We have the support marketing have on we elements. end, core centers operational other

this to in more on are on early the are So, And these we organizational that clinical infrastructure for place. the executing. these detection starting headcount addition, certainly we and elements. business have adding programs And programs, will add in these and started if traction look early prior well, the remain detection year, is going adding we will then we

looking we And underway expense detection do time, additional the over to time, few and additional Over road. down clinical line. studies quite and So a launch large are draw studies we up will will early as R&D this already. hit increase have

which of current place lab large building So, early that, detection to and adding are think marketing will as efforts. about That double our we in spend well. patient as the product our oncology up footprint, oncology launches Guangzhou. driver. clinical including to pace the new function, addition our support time overall commercialization we be over rented, that will patients, study for an And we in the going team the business, is also offer Then about the for the sales incremental that a on as early so think have we additional building MRD, house and we is detection operation, about

footprint, increasing. overall the which the hit also line, So is will G&A

OpEx trend commercial to progress. up over even this the more time, and expect remain would dependent and on place levels I So, at clinical

Doug Schenkel

of this Great. contracts your you are NGS-based mix how about am as impressive. on be that trends the And indicator line. you these bright China? expect adoption you much time? a biopharma, think share anything in one entered this first pharma performance was projects spot last outlook was pretty that as I in half in you into working markets? biopharmaceutical how test the over one is to your future applications partners, wondering for NGS quarter the how key trend we or weight the adoption at in you of the year of can for of put value on lumpy, the terms for in tools with the should me. And Can view services A the Recognizing clear of

Shannon Chuai

Okay. Doug, answer that I can try question. to

blend In And seeing collaboration our China. and our terms collaboration in diagnostic development able and and both all U.S. IMPACT in biomarker – more product we way domestic it’s and be we our U.S. projects more in are both in and both business, And and serve that mix showing we have Therapeutics, to a service a CDx pipeline capability the with companion we more recently to the to I interest both registration the drug domestic, more – collaboration our mentioned companion formed think CDx U.S. in innovative the companies China. announcement studies and – most between have for pharmaceutical also of collaboration.

But well. seeing bit of collaborations that. are biomarker a CDx domestic studies, still lot having on we towards a with we collaboration companies larger projects exploratory trend are of So, service as a

terms then the – companies in and the trend think more of short China, the mix. that clear more CDx that in a for a is towards I or NGS is it’s now concept. companies adopting guess they are adoption, more So, answer drug I And

biomarkers, there you to or either could still and have PCL where PD-LX, NGS. case-by-case, do are that NGS need for to So, you biomarkers then it’s NGS there are NGS. you or example, like it’s and from because there I where IHC or biomarkers more are NGS, think PCR more NGS, don’t transition the and And IHC then gradual, to do traditional

the that I the of therapy drugs there working sharp if immunotherapy that couple into biomarker targeted the to going on lot concept, which the a strategy diagnostic is strategy regulatory not have we are So, on or have phase, years means for it’s true do they approval case-by-case. have a very beginning. companion see was the in China, biomarker a they a drug CDx ago. think of almost especially transition into – companies, transition clear very solution, now of But a And from the they part which from requirement the

to So, China a because we we market for finally, for been U.S. true see excited are think long actually pretty that time. the in that’s

Yusheng Han

I pharma one to the about thing business. want more say

projects contract of So, with it’s total many about Actually, consists partners. and or projects different dominant, one not two values different it value. it’s

that say healthy and it’s trend would observation. a So, my very really from I

Operator

you. Thank

America. Our comes from Please David from next your Lee ask of question Bank question.

David Lee

Great. giving the Thank you, management for me questions. to ask chance

patient, genetic have that China do – policy. business, stricter in feeling risks for will question which of especially the any the overall Thank a lot future? some is especially seems of think It my the you like collected data, data the of regarding the have of and have to data. going the will government our stricter Do So, the from have is healthcare trend you the the regulation the you. of on our a that genetic one regulation we we collect

Yusheng Han

that’s Well, and for important thanks question. asking, a very

have time-to-time them generated data, data China. with that we the stricter we in know report not the let to to in insights make data security and you the time of long getting medical them government started government, care the communication data about we actually, sure China about security. regulate the and to how is it are a And – For ago. stay And was the stricter right,

department, we is so the to government HGR. talk about need first And

up far, and for built I that Burning so Rock. a communication we be will high think risk of a think channel we good don’t have

always are the government the doing that to see. want we way Just

David Lee

you. Thank

Yusheng Han

You’re welcome.

Leo Li

past. add, And or mentioned, violating a HGR that’s as David, the already HGR, to to seen have think, related we just hitting Yusheng for sciences most we human resources, about few increasing life negative HGR impacts industry genetic important, as biotech the regulations the in regulation companies

available. we list decent a laws attention position where like China. a We the of other HGR’s and mention compliant and lot can then notice are it’s HGR of publicly and to And our out out actually projects, space. track paid to would approved this fully biosecurity have we notice approved in record you have ensure can the in of regulation to that regulations you relevant we HGR So, regulation, that

good standards confident to maintain are in going forward regard. we So, this

David Lee

That’s helpful. Thanks Li.

Operator

Thank you.

Our Wu the ask your of question. Please Sean line question next Stanley. comes from Morgan from

Sean Wu

much. very you Thank Thank one businesses. follow-up you my for have question. the I taking question about pharma

a competition expect of out and And the talk [indiscernible]. impact to it’s companies more know kind about business? I pharma this but the biopharma do competitive the to clearly we you in other Can dynamics. for would for also you figure industry think competition I like better about encouraging,

two So, question. And questions. that’s I the have first small other

focus. Okay, we so increased this an that early think market is detection,

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Yusheng Han

Sean. Hi. Thanks for question. your take asking, can I

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quality and mentioned the as that So – is another factor.

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is the philosophy beginning. Our that a market just is

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come Burning from trials the all only So, Rock.

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Operator

Alright. Thank you.

We have the reached question-and-answer of session. the end

we for our for with So that, today. Thank conclude participating. conference you

disconnect. You may all

Yusheng Han	Chief Executive Officer
Shannon Chuai	Chief Operating Officer
Joe Zhang	Chief Technology Officer
Leo Li	Chief Financial Officer
Doug Schenkel	Cowen
David Lee	Bank of America
Sean Wu	Morgan Stanley

Burning Rock Biotech Limited (BNR) 31 Aug 212021 Q2 Earnings call transcript