BNR - Earnings call transcript Q1 2022 | Burning Rock Biotech Limited

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Operator

Good day, ladies and gentlemen, thank you for standing by, and welcome to Burning Rock 2022 First Quarter Earnings Conference Call. This presentation contains forward-looking statements. These statements constitute 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. These forward-looking statements can be identified by terminology such as will, expect, anticipates, future, intend, plans, believes, estimates, target, confident and similar statements. and make to oral annual by the shareholders, press also its statements report its may and in reports materials employees periodic SEC release officers, Rock directors written statements to forward-looking or in to in or Burning oral written third-parties. made other and its are are historical about Statements statements. including that Burning Rock's forward-looking statements facts, beliefs and expectations or upon and events predict based are are are management's risks, known operating that control. and statements and which market Burning current beyond other Such current and and to conditions relate involve of which factors, unknown uncertainties expectations, Rock's many all of to difficult

applicable involve is not undertake results All and such could statement statements. events go does Forward-looking materially as other to information, Burning provided except Rock in speaker to uncertainties cause as to this result of to in of Please any factors information over CEO, actual update today presentation that new from host under I'd as risks, a your any and and any Mr. differ those or otherwise, forward-looking obligation the contained call law. Han. future ahead. now statement required turn like

Yusheng Han

I'm Burning we Burning Thanks. QX Welcome Leo Founder meeting. the Shannon; CFO, in our Yusheng Rock’s Han, CTO, and conference COO, Rock. to CEO call. have the today, XXXX of And Joe; and

development is our moving Since most, And impact months recap of fundamentals then some forward in the know especially and will laid COVID situation I business that are investor product call. the most out of past believe in previous I as progress. first, what business. five our care recent in So business you efforts go through the our important about

trend to CFO my you who after on We presentation. growth our through the will walk financials, then elaborate directly will go Leo,

XXXX business market So Burning to started this leader in segment. let's grown in with therapy X. the Page has and Rock turn selection The to

channel strategy rapid our in-hospital in XX NPA have to a past an cultivate to unique first -- company channel this have years approved the developing NGS were and we growth oncology our initial quarters. the NGS-based of to started realize in has the really of We the market effort that So by China. China in-hospital kit first in

during As has has and attract talent. quality branding and on pandemic product us and situation the advantage to advantage also especially new help laid our shown and leading detection, pharmaceutical business the key early moving good in position of our forward given remain foundation collaboration a MRD technology the strong

progress. turn to we Page what let's doing. (ph) that's are recent X to And So business

So the NGS, every first and announced cancer the has five as development detection China's thing development China I XXth, influential on NGS and strong is from which been policy want detection to roadmap the cancer happened those areas. for most most which early recently. talk industry In society which about early plan, five years -- years. spare government is has key out had and -- the been push

encouraging in our will environment coming the which for months, local give healthcare adopt an and expect department will roadmap industry on We development. act the

year-over-year. in For therapy myChoice+. DetermaRx, market including we recorded we and testing by XX% total patient share We growing that MRD, XX model line, MRD, new business, in-hospital selection volume believe including product XXXX, and are in-hospital increased with volume gaining QX

the and impact may April. a down As been of know, you Shanghai experienced beginning since has China locked heavy COVID

our it's more, new that MRD, that also note and heavy including increase XX%. volume central at even see DetermaRx to such hit, is we I in-hospital volume if XX% worthwhile as of a And contributed And X% a myChoice in revenue. the So it I that’s lab of our mean, among you despite month products, look total April. still increase -- said,

first-month launch. our a just We is of found encouraging. product MRD number So that considering quite of March

the cell connectivity and saw As (ph) technology. our data MRD technology, quarter's performance of at they for profit AACR. and of cancer specificity MRD are We call, CRC lung state-of-the-art validation have our mentioned last non-small in been released

early validation data X.XX% demonstrating (ph) types. have analytical in cancer multi-cancer across the released we AACR detection, our well, For different LoD X.X% as to

early than study, [indiscernible] study have including validation the doing later our X-cancer We X-cancer well. growth the ongoing, is products, year. our business, pharmaceutical for several with completed in starting of progress contract And completed which of readout value, And PROMISE this our terms with for XXX% case-control was over product. is year-over-year XXX% participant progress detection for new The has QX, In and study year-over-year commercialization backlog (ph) data continued chain our is in pharma the RMBXX expected XX% -- growth. hospitals is more including generating our over PREDICT XX,XXX revenues. which million

Let's to turn X. Page

and Conference. under to conference MCED. was this and I registration liquid-based So early and diagnostic by first-time the like It's two-day participating recent topic Rock name, such technologies of event in speakers KOLs [indiscernible] on more Burning chaired this panelist. hold from that event would as XXX Burning conference own Page the to companion fellows China conference brand or and which pathway three Biopsy MRD was The we for -- It total virtual highlight X, April. the a new that one over Academy the place of Liquid recent from Rock’s Sciences than took -- XX,XXX as audience medical people

promote how should China understanding group concept while market lot heated discussion in technologies, patients. awareness are with about they hosted very a conference new but new is the doctors relatively -- education So to the these important, of Chinese apply to doctors this of and work still and to we

move let's X. to Page Now

growth of promising here this pharma business. So illustrate trend graph the our

call doubled and which As I continuous the from inherited now, has in XXXX. trend mentioned we just first the quarter been year-over-year value a contract

of continuous pharma portfolio pursue So we team risk key capability (ph), global excellent growth will our BD build-on our factors registration the are business. to and

for progress that's will to brief our So Leo financials. recent of a pass the and I

Leo Li

a And which X-cancer, And into go PROMISE highlight analysis. mentioned Page is Thanks, program as development, out on enrollment our financials. has quick the we the the just X, lay we and did for study, before progress we Yusheng that Yusheng. have our clinical On completed recently.

We are a conference year. to this that submitting

So to PROMISE study this a the of now readout year. we're looking

the PREDICT XX% is which addition, the In we over COVID larger a follow, despite study, enrollment, have study to challenges. do

clinical cover I So the to highlight to want we'd quickly like to our topics on Then financials, progress. three today. going

first our is a of First review quarter.

and on COVID optimization. been second our topic regarding progress latest focus number our concern The expenses three, and numbers has operating And a for operating everybody. as trends

our to quarterly go let's Now Page which XX, shows volumes.

the very strong strong deliver we despite XX% the saw growth year-over-year. grew at the challenges. for In first to segment, quarter, over COVID growth year-over-year. in-hospital continued XX% volume volume We And

first XX% volume in accelerated we in XX% year-over-year, quarter growth the compared in-hospital to has overall saw year-over-year. rate volume the quarter and XXXX. fourth growth saw rate we growth Our growth quarter, at At the that at

delivered first fourth the XXXX. quarter So further compared that accelerated in ‘XX quarter the to good quarter we a

March pleased a to Page Then to strength Yusheng XX, mentioned COVID continued segment, we to China and very see granularity contributing on a are months. provide much affected has April and a to greater as in city moving had are standstill was of in new growth during our despite impact in-hospital the that earlier, products to month pretty recent on well. the the large challenges see starting happy Shanghai our month in to the We very we recent given of came COVID May. like and trend, the as

April partial Beijing end the lockdowns during saw a May. of addition, In and school closures at

January, in growth here impact And positive overall volumes single-digit closed was with on monthly year. show started our growth In but impact XX% a see us April. had our this are to haven't at for we up trended start in XX% and and (ph) looking In-hospital to strong of was and So up the over likely the to in down table, estimate the volume volume amongst May. haven't year-over-year. COVID a double-digit, a overall we green for grew is lower very XX% month with COVID March to sentiment. was month. be May month And this of the compared we April horrific yet, we May, only that -- And of we larger

worse triple-digit the month exclude We can overall again impact table in-hospital regions, in half the the to up up we and Shanghai kept excluding Shanghai, and the see the of April. up April. strong months. of Shanghai bottom If COVID a overall growth our XX%, severe recent for So up the lot of for volume in month was was growth despite not excluding April in-hospital Shanghai, sorry, was XX%, to -- other here compared that excluding

was margin just year-over-year, from months, as quarter fourth on excluding inventory to was primarily our Page rate the write-offs, recent accelerated which the bad year-over-year. moving the the call, was and driven first and how month I of on mentioned revenue higher strong GP amortization, through growth In gives just I a last our our April growth, by quarter, is compared by depreciation backlog which which margin a has year looking Pharma growth excluding quarter at as that margin XXXX, the The on XX. speak so outside the of been profit up at numbers closed is in again that triple-digits fourth Shanghai Page XX% for moving fourth rate XX% year-over-year this XX% our non-GAAP at given pharma growth to in-hospital, last By we was segments, us gross of to this margin XX.X%. on accelerated in quarter our than and X. led the will be for first revenue level. about first quarter year, OpEx So back reported walked through our resilience the growing Page which ramp a growth. was first The China the typical growth we this in and by of going growth And inventory XX%. volume earnings the grew last strong of COVID excluding impact on at, we quarter which margin profit larger rate of believe. the think par Yusheng walked gross XX. gross in to the XX.X%, ’XX, to And Revenue a margins, in that impact year, even quarter strong revenue which grew and amortization, year-over-year in quarter write-offs Then continue position, lines. on was due financials saw with to on at quarter the to and driven quarter in growth XX% rates depreciation we gross drop

the space our lab was we efficiencies complete we largely and and operating build-out forward. As would XXXX before, organizational greater mentioned of at going expect end

dropped expense And our looking expenses a line, OpEx excluding the line, related R&D decrease by project. OpEx our on sequential compensation at line by driven research looking decreased So share-based of at to these basis. quarter-over-quarter, X% clinical expenses

marketing of a challenges us I detection our that share-based brings early a New And busy we trend, and large do there and R&D conference impact on line Chinese in decrease excluding behind expenses, expenses. was again Year enrollment, that meeting keep expense during despite sequential compensation mentioned February in also X, on the on will was reason and datasets staff in basis, because due Page and XX% Q-on-Q a sequential to work. drop road our this also dropped think March. as sales we already have that But COVID COVID on sequential

oncologists China, we As engagement quite virtual throughout good this were format COVID getting to oncologists format. spread to and in continue with able are the used

basis (ph) the Biopsy forward. mark-to-market believe reduced was of efficiency strong that oncologists expenses share-based The Then of going not happy Then number determined attend we of a compensation Liquid of Conference, lower and to general lastly, a was where on amortized are events not booking admin keep have and and cost Our we high the excluding engagement, delivered a attracted slightly sequential the spend on Yusheng flagship a was but our at a that compensation the in share-based of time value rounds we component. share-based large dropped can mentioned we period of format. over most a expense time mostly stock compensation, enough. does awards, as

at terms Then of and quarter room more straight given guidance; first focus on putting and the going time OpEx in our line, call, higher generally as will we expecting COVID So to Number put COVID-impact our while outperformed; but was our we focus of one, year mentioned generally relatively in compensation need reducing, be we reopen so in was over greater on a this terms the time down last sticky. expect to to as travel We some OpEx down line there buffer our three did for full impacting be impact does going forward. And to is guidance a trend of direction while on of guidance number setting drop we for Shanghai starting on gradually efficiency least the of leave believe cap we year looking pre-determined we appears COVID that and as three, would is our necessarily OpEx June are most that share-based for our plan. to back change this factors. non-cash market assuming the trend number are efficiency, no go speak, forward. Not X. Second, and line, to we

and of market Shanghai, is rest catch we demand an lastly, our we And to year. us. of regions for cash as we're our the performance the happy hope strong growth to pent-up reopen first about position. particularly quarter some Then remain committed important So for up the which on

We of quarter first have billion XXXX. $XXX including of or cash million, RMBX.XX the short-term a at investments end balance

net was first the operating RMBXXX Our million. flow in quarter cash

burn a I our on given reasonable are we say rates where So would balance.

prepared remarks concludes that our up So questions. for open operator, and please

Operator

[Operator the with Masucci from Instructions] line Max coming question And of Cowen. our first

open. is line Your

Max Masucci

Hi. for questions. Thanks the taking

of much First think should And in being biopharma prospective here can compared your contract how the one monitoring selection? projects, the backlog the driven about the on therapy pharma retrospective how biopharma, you versus versus growth solutions look you pace biopharma is to at revenue XXXX? that to we MRD mix if by of convert, accelerating your XXXX

Yusheng Han

contributed is selection. far, Well therapy so business mainly pharma at if you look our by

said just we launched in I As the March. MRD that,

So and the than like pharma their U.S. that positive think sometimes be that China even we companies, business probably pharmaceutical one the later, impact will months MRD for peers. they later or can -- year biotech slower several relatively we

but positive terms and -- of in that contract -- think Leo potential we illustrate the very, at MRD So more. about And pharmaceutical very we to the numbers, are revenue. can

Leo Li

Sure.

for So on have well. digit convert backlog that We lot pharma A we of we year, high-double look expecting visibility growth projects of some back think I we already, of signed into the the segment. this is to as more. out are backlog it are and so the that building

first shown year. think two this of terms last quarter In as this year I for pacing, quarter high double-digit quarters, fourth And we well. and year, have

Max Masucci

Great. Okay.

that use did a Second one, it guidelines just to therapy lung to Chinese prediction set be curious, therapy? data tests non-small adjuvant that clinical the and the recommend adjuvant specific in about for remission MRD the cancer relapse highlight only evidence MRD include also regimen patients completed patients are and to clinician risk testing discissions any or does have used are the cancer of in that lung MRD for guideline do (ph) in cell in guide updated for spurred update consensus monitoring

Yusheng Han

answer. Speakers] [Multiple Chuai Shannon

Shannon Chuai

interesting ago are lung there after surprised Sure. the two It's from very were -- also question. adopting concept and indeed patients we it's so very a years cancer almost quickly. pleasantly -- consensus for Yes. the the that yeah, Chinese Thanks MRD is

or clinicians the the feel mostly for therapy for the for interventional sufficient because lung adjuvant trials investigator-initiated is possible dimensions been -- when the yet the realm think guiding enough the For collaborating clinical or clinical there is evidence more lung its two, companies. in studies studies that into consensus yet. cost start also area to for relapse And prognosis paradigm drug on in were itself with encouraging to cancer I the therapy one, many interventional in that and hasn't not as MRD differential as or bad, prediction then for it clinical for in China adjuvant cancer consensus trials

trials then, MRD down the So that's seeing clear I in for of on it selection on on evidence when really after that, evidence to only -- how guideline the they that into where on it's calling hope therapy or that we start the to interventional upgrade adjuvant given see generate road, consensus that. And on think then well. the path will think and as clinicians interventional type to I update that

Max Masucci

so but you. took it question, XXX% over so, dip One Thank April final central helpful. growth growth very took -- a to to if lab they the in doubled year-over-year compared That's month. understandably revenues prior in-hospital the

So growth cannibalization, any any the just business would the are Is be of coming year, central I lab of there lab be great. expense this would in-hospital Is how business? great and business Thanks. in at that sort in-hospital the that of interacting? would the central

Yusheng Han

-- can I [indiscernible]. that, deal yeah, I can So with

a our model model, the to product or hospital by model. mature, no be was talk there technologies any central in physicians lab one. to the possibility new business, the getting new And So, for market. will had the to in-hospital We from beginning for to product more very and when and of more one there introduced transport start products more then, technology

So synergy long-time, the of from the model. relatively be model, also a two our It to observation this hospital. send for great just that know lab encouraging that the feel central means these will there outside -- samples is for they

model in-hospital pretty, their know make you on computers. relatively to prescribe them easy So

hospital, most both we hospital, the have into the and in of put that, when that been model platform we in-hospital So central trend the lab at group.

more look interesting of -- think matured. quite model, a and the And bit the at if in model. long in more now a if, because is is lab that potential when some, lab But impact that of that central some job getting there I the actually influence of you COVID-XX little technology thing. So long-run the the run,

some the the increase you in-hospital cannibalization, of for kind the I is hospital that there a cannibalization, so-called not from pipeline, look for model volume but the that the of increase mature model. actually if think will huge be that it’s at

So depends. I products, say that would different stages of in different it

new model understanding product future. will for mature the take So hospital any our mainstream in

Max Masucci

Great. my questions and Thanks nice taking update. for

Yusheng Han

Thanks, Max.

Operator

And Stanley. our from Yan next Alexis Morgan of line question with the coming

is line Your open.

Alexis Yan

question, my taking growth for the first Thanks in good congrats a on and quarter.

So quick have I just few a questions.

in-hospital First much comes behind been, understand better example, revenue help -- more is profit in on drivers the much segment new hospitals? the this to growth mid-sized like, Could segment. growth for our like from from [indiscernible] NGS how you of good has the comes us from segment? the and to contribute products so hospitals other panel and to how this much also partner how the the [indiscernible] also And big call did

Yusheng Han

So for I new our drivers first the out are [indiscernible] encouraging are promote if hospitals so convenience. big also doctors and to you in-hospital, with standing test think the is to much that also hospital. thing prescribe. more convenient lab And the the doctors look at some It's hospital [indiscernible] the hospitals samples environment for are

the And that coming other even hospital panel, of in is titles So the fully panel lab. the to just big coming more the is liquid drivers. the just some more middle-size that into that, -- hospital one is you panel biopsy see and can five thing high

that they So are Does for question. value. that also the new your drivers the answer

Alexis Yan

on helpful. is They’re question the My next Yes. pipeline.

like, looking we of at? milestones Just expecting? or due any key potential there patient be maybe to COVID should the wondering like we be are higher impact of in delayed if should terms us Just recruitment remind costs recruitment

Yusheng Han

So that question. hit Shannon

Shannon Chuai

both the are by the influenced for the delay a recruitments Apparently questions. that's on the by the this expecting early the year. next initially or a impacted in recruitments COVID early were have degree. detection (ph) early [indiscernible] and end Yes. also product the they for our readout at seeing for PREVENT some been -- detection data trial we both of trial and Thanks by for Right. Yes. later few we and And of year PREDICT months why in S&P PREDICT

soon, was initiation [indiscernible] -- couple for probably the a study type later. few trial of will related where week. it's into process PREVENT indicate not et the approval, which And delayed the for study, maybe for being mainly within delayed into mainly and it’s [indiscernible] which months administrative -- so the of was the COVID, the months back It's Now, it’s a the X-cancer cetera. the but to study trial for that patient

that’s is timeline far. far so the Yeah, that visibility manageable today. of So

Alexis Yan

you. Thank

from on few or Just question one bottom have me. last loss some cash next like, our we burn line years? color the over Do

Leo Li

Yeah.

burn circumstances runway So of adjust. a I terms rate, looking okay, and balance require ahead is adjustment in two-year do to think doing, at us our are cash we good cash to flexibility and around having there of our us make

are towards yet. we business, we balance the higher our higher have of so think but on patient the EBITDA testing and focus progress with efficiency, I are So guidance happy focus cash we don't formal putting

to that’s we a and over of we will it along. line, the I better see, provide for as a will go with direction trend way operating see about year, necessarily time, that So visibility expenses could think this down Yusheng us move in travel but that not the straight we as

Alexis Yan

Sure. Understood. That's me. all lot. Thanks a from

Yusheng Han

you. Thank

Operator

further for this I over I'm showing speakers call time, questions at turn the our remarks. would like closing no to now any back to

Yusheng Han

Thank operator, for and your please back thanks Any attending today. and come do again us time. questions thanks everybody to for you,

Operator

your Ladies for and our today. conclude does Thank for you participation. gentlemen, that conference

may disconnect. You now

Burning Rock Biotech Limited (BNR) 31 May 222022 Q1 Earnings call transcript