This story has been updated with additional information from a company conference call.
NEW YORK - Burning Rock Biotech reported on Tuesday morning that its second quarter revenues were up 19 percent year over year.
The Chinese precision oncology firm recorded total revenues of RMB 127.3 million ($19.7 million) for the three months ended June 30, 2021, up from RMB 107 million for the same period in 2020.
The company generated RMB 80 million from its central laboratory business during the second quarter, a 7 percent increase from RMB 74.6 million in the same period of 2020. This was primarily due to corresponding test volume growth with the number of patients tested in Burning Rock's central lab reaching 8,155 in Q2 2021 compared to 7,252 in the prior year's quarter.
Revenue generated from in-hospital testing was RMB 40.5 million, up 47 percent from RMB 27.6 million for the same period in 2020, also attributable to year-on-year volume growth. Burning Rock said its contracted partner hospitals grew to 34 as of June 30, 2021, up from 24 at the same time last year.
On a call discussing Burning Rock's quarterly results, CEO Yusheng Han said that the company has now tested over 2,000 samples through an early-access program for its multi-cancer early detection product, which it intends to launch next year.
He added that the firm is also continuing to make progress on a planned tumor informed MRD test, also slated for 2022. In internal studies, this product "has shown very promising performance with sensitivity on par with what has been shown [by competitors like] Natera and Archer," Han said.
According to Burning Rock COO Shannon Chuai, the firm sees in-hospital testing as its primary strategic focus for the future. "When it comes to competition, we think the in-hospital model will come to a dominant position when large NGS panel and liquid-based NGS panels obtain [National Medical Products Administration] approval, which will likely happen about two years down the road," Chuai said.
"We believe Burning Rock is well positioned in this paradigm shift, but we do recognize that since the in-hospital model has lower unit price than the central-lab model, we will see lower blended ASP in the transition process," she added.
Burning Rock also brought in RMB6.8 million from pharma research and development services in the quarter, a 42 percent increase from RMB4.8 million in the same period of 2020, reflecting a growing pipeline of pharmaceutical projects.
"The pharma business is not a new business for NGS companies in the US, but this market hasn't been major in China until about 1.5 years ago," Han said. However, recent trends, including changes in regulatory pathways, and broader expansion opportunities for pharma firms, have shifted more attention to global trials — something the company believes will continue in coming years.
Burning Rock's net loss was RMB 203.7 million, or RMB 1.96 per share, in Q2 2021, compared to RMB 71.1 million, or RMB 2.68 per share, in the year-ago quarter.
The firm's second quarter research and development expenses were RMB 108.1 million, up 52 percent from RMB 71.2 million. SG&A costs were RMB 184.2 million for the three months ended June 30, 2021, more than double the RMB 80.3 million reported for the same period in 2020.
Burning Rock ended the quarter with RMB 1.85 billion in cash and cash equivalents.
The company said it was adjusting its full-year revenue guidance to approximately RMB 500 million, anticipating COVID-19-related travel restrictions in multiple major cities in China and a shift in its testing mix toward lower priced in-hospital IVD sales.