NEW YORK – Genetron Health reported on Monday morning that its third quarter revenues were up 38 percent year over year.
The Beijing-based precision oncology firm reported total revenues of RMB112.0 million ($16.5 million) for the quarter ended Sept. 30 compared to RMB81.3 million in the same period of 2019. Wall Street analysts, on average, had estimated revenues of $16.1 million.
The firm said Q3 revenue from liquid biopsy diagnosis and monitoring testing increased 45 percent to RMB101.5 million from RMB70.0 million in Q3 of 2019, driven by growth in LDT testing services and the sale of IVD products.
Revenue from LDT services increased 18 percent to RMB71.4 million during the quarter from RMB60.5 million in the same period of 2019. The company sold approximately 5,900 LDT diagnostic tests, an increase of 5 percent compared to Q3 of 2019.
Q3 revenue from IVD product sales more than tripled to RMB30.1 million from RMB9.5 million in the third quarter of 2019, driven mainly by an increase in the number of assays and sequencing platforms sold, notably the Genetron S5 instrument and Lung 8 Assay.
"Despite COVID-19 pandemic’s impact in some of our major markets in the third quarter, we continued to see robust top-line growth … accompanied by strong margin improvements and SG&A operational efficiencies, compared to the same period last year," Sizhen Wang, Genetron Health's co-founder and CEO, said in a statement.
During a conference call to discuss the financial results, Wang added that "operationally over the past quarter we have made significant progress across all business lines — in diagnostics, monitoring, early screening, as well as biopharma services. These developments are all in line with our long-term growth strategy and the further solidifying of our position as a leading precision oncology player in China." In September, the firm received a breakthrough device designation from the US Food and Drug Administration for its blood-based hepatocellular carcinoma early detection NGS test, HCCscreen.
Wang said that this new application alone represents an approximately $7 billion market opportunity in China, adding that the company is currently analyzing data that could support the launching of an IVD registration trial that could support even broader use of the technology.
Additionally, Genetron believes its mutation capsule technology, which underlies the HCC detection test, could be applicable beyond liver cancer, and has plans in lung and digestive cancers that are now moving forward.
In this vein, the company announced in Q3 that it had joined a major research and development project led by China's Ministry of Science and Technology for early screening of lung and digestive system cancers.
Companion diagnostics also represent an area of increasing focus for Genetron, Wang said. In September, for example, the firm launched a clinical trial in China aimed at validating a companion diagnostic test for avapritinib with its strategic partner CStone Pharmaceuticals.
Also, in an effort to continue to grow its development services business, Genetron established a partnership with dMed Biopharmaceuticals to pioneer a "one-stop" new drug research and development service for biopharma customers in both China and the US.
During Q3, Genetron Health's net loss fell to RMB48.0 million, or RMB0.11 per share, compared to RMB274.1 million, or RMB2.15 per share, in the prior year's quarter.
The company's R&D expenses rose 86 percent year over year to RMB38.6 million from RMB20.8 million in Q3 of 2019. Its SG&A expenses dropped about 6 percent to RMB93.0 million compared to RMB99.1 million in the same quarter last year.
Genetron ended the quarter with RMB140.0 million in cash and cash equivalents.
In morning trading on the Nasdaq, Genetron's stock was up about 10 percent at $10.80 per share.