Form 6-K Burning Rock Biotech For: May 25

May 25, 2021 7:13 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

Commission File Number: 001-39316

 

 

BURNING ROCK BIOTECH LIMITED

(Registrant’s Name)

 

 

601, 6/F, Building 3, Standard Industrial Unit 2

No.7 Luoxuan 4th Road, International Bio Island

Guangzhou, Guangdong

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒                    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


EXHIBIT INDEX

 

Number

  

Description of Document

99.1    Press release

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Burning Rock Biotech Limited
    By:  

/s/ Leo Li

    Name:   Leo Li
    Title:   Chief Financial Officer
Date: May 25, 2021      

 

3

Exhibit 99.1

Burning Rock Reports First Quarter 2021 Financial Results

GUANGZHOU, China, May 25, 2021—Burning Rock Biotech Limited (NASDAQ: BNR, the “Company” or “Burning Rock”), a company focused on the application of next generation sequencing (NGS) technology in the field of precision oncology, today reported financial results for the three months ended March 31, 2021.

Recent Business Highlights

 

   

Early Detection

 

   

Launched the 11,873-subject PRESCIENT (Pan-canceR Early-Stage deteCtion by lIquid Biopsy tEchNique projecT) study for developing our 22-cancer early detection test. This is in addition to our ongoing PREDICT (Pan-CanceR Early DetectIon ProjeCT) study for the development of our 9-cancer early detection test.

 

   

Presented at the 10th National Health Check-up Department Directors Summit (April 23—April 25, 2021), where our early detection technology platform, product performance data and clinical programs were discussed at a keynote presentation.

 

   

Therapy Selection

 

   

Achieved strong performance in the FDA-led SEQC2 (sequencing quality control) study. Full results of the liquid biopsy study were published in Nature Biotechnology (article link here: https://www.nature.com/articles/s41587-021-00857-z), and results of the targeted tissue-based panels were also published separately (article link here: https://genomebiology.biomedcentral.com/articles/10.1186/s13059-021-02315-0).

 

   

Featured in the 2021 “Consensus on Colorectal Cancer High-throughput Sequencing Molecular Diagnostics in China,”1 in which our NGS-based bioinformatics algorithm for microsatellite instability (MSI) detection was endorsed and recommended.

 

   

Pharma Services

 

   

Launched with Abbisko Therapeutics the companion diagnostics (CDx) development for ABSK091, which is an innovative small molecule FGFR inhibitor that has obtained National Medical Products Administration (NMPA) investigational new drug (IND) approval for the treatment of patients with urothelial carcinoma.

First Quarter 2021 Financial Results

Revenues were RMB106.6 million (US$16.3 million) for the three months ended March 31, 2021, representing a 58.4% increase from RMB67.3 million for the same period in 2020, or a 19.1% sequential decrease from RMB131.7 million for the three months ended December 31, 2020. The sequential decrease was primarily due to negative impact associated with the COVID-19 pandemic in January 2021 and seasonality during the Chinese New Year holidays in February 2021.

 

   

Revenue generated from central laboratory business was RMB74.6 million (US$11.4 million) for the three months ended March 31, 2021, representing a 61.6% increase from RMB46.1 million for the same period in 2020, primarily attributable to the year-on-year volume growth of the central laboratory business. Number of patients tested in the central laboratory channel was 7,716 for the three months ended March 31, 2021, representing a 64.9% increase from 4,680 for the same period in 2020.

 

   

Revenue generated from in-hospital business was RMB29.0 million (US$4.4 million) for the three months ended March 31, 2021, representing a 69.3% increase from RMB17.1 million for the same period in 2020. Number of contracted partner hospitals in the in-hospital channel increased to 32 as of March 31, 2021 from 29 as of December 31, 2020 and 21 as of March 31, 2020.

 

   

Revenue generated from pharma research and development services was RMB3.1 million (US$0.5 million) for the three months ended March 31, 2021, representing a 24.5% decrease from RMB4.1 million for the same period in 2020, due to less pharmaceutical testing performed during the quarter, while the pipeline of our pharmaceutical projects has been building over time.

 

1 

Published in Chinese Clinical Oncology, Mar. 2021, Vol.26, No.3

 

1


Cost of revenues was RMB29.7 million (US$4.5 million) for the three months ended March 31, 2021, representing a 31.7% increase from RMB22.5 million for the same period in 2020, which was generally in line with the Company’s continued business growth.

Gross profit was RMB76.9 million (US$11.7 million) for the three months ended March 31, 2021, representing an 71.8% increase from RMB44.8 million for the same period in 2020. Gross margin was 72.2% for the three months ended March 31, 2021, compared to 66.5% for the same period in 2020.

Operating expenses were RMB248.8 million (US$38.0 million) for the three months ended March 31, 2021, representing a 138.9% increase from RMB104.1 million for the same period in 2020.

 

   

Research and development expenses were RMB77.4 million (US$11.8 million) for the three months ended March 31, 2021, representing an 93.5% increase from RMB40.0 million for the same period in 2020, primarily due to an increase in research and development personnel’s staff cost and share-based compensation expenses.

 

   

Selling and marketing expenses were RMB55.1 million (US$8.4 million) for the three months ended March 31, 2021, representing an 84.9% increase from RMB29.8 million for the same period in 2020, primarily due to an increase in staff cost of sales and marketing personnel.

 

   

General and administrative expenses increased significantly to RMB116.3 million (US$17.7 million) for the three months ended March 31, 2021 from RMB34.3 million for the same period in 2020, primarily due to an increase in general and administrative personnel’s staff cost and share-based compensation expenses.

Net loss was RMB171.4 million (US$26.2 million) for the three months ended March 31, 2021, compared to RMB52.6 million for the same period in 2020.

Cash, cash equivalents, restricted cash and short-term investments were RMB 2,149.0 million (US$328.0 million) as of March 31, 2021.

2021 Financial Guidance

Burning Rock reiterates its guidance that, assuming there are no additional COVID-19 related restrictions imposed in China, which might negatively affect patient volumes and cancer testing, its full year 2021 revenues is expected to be approximately RMB610 million (US$93.1 million), implying a 41.9% growth over full year 2020.

Recent Developments

Mr. Hao Liu has resigned as the Company’s chief medical officer for personal reasons, effective May 31, 2021. Mr. Liu will continue to serve as a senior advisor to the Company.

“Hao has always been our prominent partner and close friend,” said Mr. Yusheng Han, chairman and chief executive officer of Burning Rock, “for the past six years, he has devoted himself to Burning Rock’s rapid growth with his deep knowledge of precision oncology. I am grateful to have worked alongside Hao and would like to thank him for his commitment and dedication to Burning Rock. We wish him the best of luck with his new endeavors.”

Mr. Liu said “There is no doubt that my years at Burning Rock have been the most extraordinary experience of my career. I am deeply honored to have worked alongside a group of people with passion, faith and dreams. These moments will remain vivid to me for years to come. Through our collective efforts, we have built Burning Rock from a startup into a global pioneer of its field. I am grateful to Yusheng and the management team for the trust and support, and I have a tremendous belief in the future of Burning Rock.”

Conference Call Information

Burning Rock will host a conference call to discuss the first quarter 2021 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on May 25, 2021.

Details of the conference call are as follows:

 

2


International:

   +65 67135090

U.S.:

   +1 8456750437

U.K.:

   +44 2036214779

Hong Kong:

   +852 30186771

China Mobile:

   4006208038

China Landline:

   8008190121

Conference ID:

   6193891

A replay of the conference call will be available for one week (dial-in number: +61 2 8199 0299; same conference ID as shown above).

About Burning Rock

Burning Rock Biotech Limited (NASDAQ: BNR), whose mission is to guard life via science, focuses on the application of next generation sequencing (NGS) technology in the field of precision oncology. Its business consists of i) NGS-based therapy selection testing for late-stage cancer patients, with the leading market share in China and over 273,000 tissue and liquid-based tests completed cumulatively, and ii) cancer early detection, which has moved beyond proof-of-concept R&D into the clinical validation stage.

For more information about Burning Rock, please visit: ir.brbiotech.com.

Safe Harbor Statement

This press release 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,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Burning Rock may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Burning Rock’s beliefs and expectations, are forward-looking statements. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock’s control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this press release is as of the date of this press release, and Burning Rock does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

3


Selected Operating Data

 

     For the three months ended  
     March 31,
2020
     June 30,
2020
     September 30,
2020
     December 31,
2020
     March 31,
2021
 

Central Laboratory Channel:

              

Number of patients tested

     4,680        7,252        8,644        7,989        7,716  

Number of ordering physicians(1)

     810        1,175        1,194        1,114        1,082  

Number of ordering hospitals(2)

     232        284        289        294        303  

 

(1) 

Represents physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.

(2) 

Represents hospitals whose residing physicians who on average order at least one test from us every month during a relevant period in the central laboratory channel.

 

     As of  
     March 31,
2020
     June 30,
2020
     September
30, 2020
     December
31, 2020
     March 31,
2021
 

In-hospital Channel:

              

Pipeline partner hospitals(1)

     23        23        22        23        22  

Contracted partner hospitals(2)

     21        24        25        29        32  

Total number of partner hospitals

     44        47        47        52        54  

 

(1) 

Refers to hospitals that are in the process of establishing in-hospital laboratories, laboratory equipment procurement or installation, staff training or pilot testing using the Company’s products.

(2) 

Refers to hospitals that have entered into contracts to purchase the Company’s products for use on a recurring basis in their respective in-hospital laboratories the Company helped them establish. Kit revenue is generated from contracted hospitals.

 

4


Selected Financial Data

 

     For the three months ended  
Revenues    March 31,
2020
     June 30,
2020
     September 30,
2020
     December 31,
2020
     March 31,
2021
 
     (RMB in thousands)  

Central laboratory channel

     46,141        74,607        89,899        86,695        74,561  

In-hospital channel

     17,123        27,588        31,704        41,457        28,994  

Pharma research and development channel

     4,065        4,776        2,278        3,570        3,068  

Total revenues

     67,329        106,971        123,881        131,722        106,623  

 

     For the three months ended  
Gross profit    March 31,
2020
     June 30,
2020
     September 30,
2020
     December 31,
2020
     March 31,
2021
 
     (RMB in thousands)  

Central laboratory channel

     32,434        56,556        67,804        66,588        55,212  

In-hospital channel

     10,126        19,269        22,410        30,218        20,070  

Pharma research and development channel

     2,224        2,573        1,373        2,347        1,658  

Total gross profit

     44,784        78,398        91,587        99,153        76,940  

 

     For the three months ended  
Share-based compensation expenses    March 31,
2020
     June 30,
2020
     September 30,
2020
     December 31,
2020
     March 31,
2021
 
     (RMB in thousands)  

Cost of revenues

     176        183        160        277        339  

Research and development expenses

     2,072        25,314        10,572        11,843        22,404  

Selling and marketing expenses

     253        491        341        2,372        2,633  

General and administrative expenses

     1,665        1,639        57,805        58,057        59,382  

Total share-based compensation expenses

     4,166        27,627        68,878        72,549        84,758  

 

5


Burning Rock Biotech Limited Unaudited Condensed Statements of Comprehensive (Loss) Income

(in thousands, except for number of shares and per share data)

 

     For the three months ended  
     March 31,
2020
    June 30,
2020
    September 30,
2020
    December 31,
2020
    March 31,
2021
    March 31,
2021
 
     RMB     RMB     RMB     RMB     RMB     US$  

Revenues

     67,329       106,971       123,881       131,722       106,623       16,274  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

     (22,545     (28,573     (32,294     (32,569     (29,683     (4,530
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     44,784       78,398       91,587       99,153       76,940       11,744  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Research and development expenses

     (40,016     (71,176     (69,330     (83,418     (77,414     (11,816

Selling and marketing expenses

     (29,815     (37,992     (44,174     (56,606     (55,130     (8,414

General and administrative expenses

     (34,295     (42,272     (102,731     (114,502     (116,259     (17,745
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     (104,126     (151,440     (216,235     (254,526     (248,803     (37,975
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (59,342     (73,042     (124,648     (155,373     (171,863     (26,231
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest income

     3,985       44       698       1,341       787       120  

Interest expense

     (1,178     1,939       (776     (652     (510     (78

Other (expense) income, net

     (151     122       (176     (682     118       18  

Foreign exchange (loss) gain, net

     611       (118     (2,228     (1,112     57       9  

Change in fair value of warrant liability

     3,503       —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax

     (52,572     (71,055     (127,130     (156,478     (171,411     (26,162
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expenses

     —         —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (52,572     (71,055     (127,130     (156,478     (171,411     (26,162
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to Burning Rock Biotech Limited’s shareholders

     (52,572     (71,055     (127,130     (156,478     (171,411     (26,162

Accretion of convertible preferred shares

     (26,288     (38,400     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to ordinary shareholders

     (78,860     (109,455     (127,130     (156,478     (171,411     (26,162

Loss per share:

            

Ordinary shares—basic and diluted

     (3.15     (2.68     —         —         —         —    

Class A ordinary shares—basic and diluted

     —         —         (1.22     (1.51     (1.65     (0.25

Class B ordinary shares—basic and diluted

     —         —         (1.22     (1.51     (1.65     (0.25

Weighted average shares outstanding used in loss per share computation:

            

Ordinary shares—basic and diluted

     25,031,575       40,786,167       —         —         —         —    

Class A ordinary shares—basic and diluted

     —         —         86,479,686       86,511,799       86,721,263       86,721,263  

Class B ordinary shares—basic and diluted

     —         —         17,324,848       17,324,848       17,324,848       17,324,848  

Other comprehensive (loss) income, net of tax of nil:

            

Foreign currency translation adjustments

     11,422       (2,336     (91,093     (94,881     14,080       2,149  

Total comprehensive loss

     (41,150     (73,391     (218,223     (251,359     (157,331     (24,013

Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders

     (41,150     (73,391     (218,223     (251,359     (157,331     (24,013

 

6


Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

     As of  
     December 31,
2020
     March 31,
2021
     March 31,
2021
 
     RMB      RMB      US$  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     1,895,308        2,085,170        318,259  

Restricted cash

     29,898        27,716        4,230  

Short-term investment

     362,132        36,142        5,516  

Accounts receivable

     88,218        76,159        11,625  

Contract assets

     22,534        24,636        3,760  

Amounts due from related parties

     212        515        79  

Inventories

     68,021        97,752        14,920  

Prepayments and other current assets

     57,329        62,111        9,481  
  

 

 

    

 

 

    

 

 

 

Total current assets

     2,523,652        2,410,201        367,870  
  

 

 

    

 

 

    

 

 

 

Non-current assets:

        

Equity method investment

     1,417        1,489        227  

Property and equipment, net

     111,481        145,438        22,197  

Right-of-use assets

     —          99,167        15,136  

Intangible assets, net

     3,457        3,374        515  

Other non-current assets

     23,021        22,777        3,476  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     139,376        272,245        41,551  
  

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

     2,663,028        2,682,446        409,421  
  

 

 

    

 

 

    

 

 

 

 

7


Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)

 

     As of  
     December 31,
2020
    March 31,
2021
    March 31,
2021
 
     RMB     RMB     US$  

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT) EQUITY

      

Current liabilities:

      

Accounts payable

     35,482       49,861       7,610  

Deferred revenue

     74,402       91,091       13,903  

Capital lease obligations, current

     4,816       —         —    

Accrued liabilities and other current liabilities

     83,648       60,454       9,228  

Customer deposits

     1,120       1,042       159  

Short-term borrowing

     7,370       7,370       1,125  

Current portion of long-term borrowings

     34,695       32,714       4,993  

Current portion of operating lease liabilities

     —         29,039       4,432  

Current portion of financing lease liabilities

     —         3,510       536  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     241,533       275,081       41,986  
  

 

 

   

 

 

   

 

 

 

Non-current liabilities:

      

Deferred government grants

     263       —         —    

Operating lease liabilities

     —         73,435       11,208  

Other non-current liabilities

     228       230       35  
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     491       73,665       11,243  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

     242,024       348,746       53,229  
  

 

 

   

 

 

   

 

 

 

Shareholders’ equity:

      

Class A ordinary shares

     116       116       18  

Class B ordinary shares

     21       21       3  

Additional paid-in capital

     4,006,616       4,090,499       624,332  

Accumulated deficits

     (1,418,160     (1,603,427     (244,731

Accumulated other comprehensive loss

     (167,589     (153,509     (23,430
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     2,421,004       2,333,700       356,192  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

     2,663,028       2,682,446       409,421  
  

 

 

   

 

 

   

 

 

 

 

8


Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

     For the three months ended  
     March 31,
2020
    March 31,
2021
    March 31,
2021
 
     RMB     RMB     US$  

Net cash used in operating activities

     (6,956     (113,145     (17,268
  

 

 

   

 

 

   

 

 

 

Net cash (used in) generated from investing activities

     (3,613     288,329       44,005  
  

 

 

   

 

 

   

 

 

 

Net cash generated from (used in) financing activities

     272,228       (4,162     (635
  

 

 

   

 

 

   

 

 

 

Effect of exchange rate on cash, cash equivalents and restricted cash

     4,641       16,658       2,543  

Net increase cash, cash equivalents and restricted cash

     266,300       187,680       28,645  

Cash, cash equivalents and restricted cash at the beginning of period

     98,244       1,925,206       293,844  

Cash, cash equivalents and restricted cash at the end of period

     364,544       2,112,886       322,489  
  

 

 

   

 

 

   

 

 

 

 

9



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