GUANGZHOU, China, Nov. 15, 2021 (GLOBE NEWSWIRE) — 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 September 30, 2021. Business Updates Early Detection 6-cancer product: we have successfully signed contracts with a small number of pilot hospitals in China for the commercialization of our 6-cancer early detection product, and will focus on customer education and contracting more hospitals.9-cancer product: we expect our 9-cancer early detection product development read-out in the first half of 2022, with potential performance improvement over that of our 6-cancer early detection product. Pharma Services Pharma service contract backlog continues to build rapidly. The total value of new contracts we entered into during the nine months ended September 30, 2021 amounted to RMB144 million, which is approximately 4.5 times of the new contract value signed in full-year 2020.Pharma projects involving our Clinical Laboratory Improvement Amendments (CLIA)-certified and College of American Pathologists (CAP)-accredited laboratory in California continue to grow. For instance, in early November, we announced further collaboration with IMPACT Therapeutics where our Guangzhou and California laboratories would provide testing services in connection with IMPACT Therapeutics’ development of its ATR inhibitor IMP9064, which has received the Investigational New Drug (IND) clearance from the U.S. Food and Drug Administration (FDA) for the Phase I/II clinical study. Therapy Selection Continued execution of our strategic shift towards more in-hospital testing, with industry-leading scale and growth rate. The volume of in-hospital NGS-based test kits grew 37% year-over-year to over 11,000 tests during the third quarter of 2021, despite the negative COVID-19 impact in August. Third Quarter 2021 Financial Results Revenues were RMB126.6 million (US$19.7 million) for the three months ended September 30, 2021, representing a 2.2% increase from RMB123.9 million for the same period in 2020, or a 0.5% sequential decrease from RMB127.3 million for the three months ended June 30, 2021. Revenue generated from central laboratory business was RMB78.8 million (US$12.2 million) for the three months ended September 30, 2021, representing a 12.3% decrease from RMB89.9 million for the same period in 2020, primarily attributable to a decrease in the number of patients tested in the central laboratory channel to 7,808 for the three months ended September 30, 2021, representing a 9.7% decrease from 8,644 for the same period in 2020.Revenue generated from in-hospital business was RMB43.7 million (US$6.8 million) for the three months ended September 30, 2021, representing a 37.9% increase from RMB31.7 million for the same period in 2020, driven by in-hospital testing volume growth.Revenue generated from pharma research and development services was RMB4.1 million (US$0.6 million) for the three months ended September 30, 2021, representing a 79.3% increase from RMB2.3 million for the same period in 2020, primarily attributable to increased testing performed for our pharma customers and growth in companion diagnostics development services. Cost of revenues was RMB35.0 million (US$5.4 million) for the three months ended September 30, 2021, representing an 8.4% increase from RMB32.3 million for the same period in 2020, which was generally in line with the Company’s continued business growth. Gross profit was RMB91.6 million (US$14.2 million) for the three months ended September 30, 2021, which was remained relatively stable compared to the same period in 2020. Gross margin was 72.3% for the three months ended September 30, 2021, compared to 73.9% for the same period in 2020. Operating expenses were RMB262.6 million (US$40.8 million) for the three months ended September 30, 2021, representing a 21.5% increase from RMB216.2 million for the same period in 2020. The increase was primarily driven by headcount growth to support our business expansion. Research and development expenses were RMB69.6 million (US$10.8 million) for the three months ended September 30, 2021, representing a 0.5% increase from RMB69.3 million for the same period in 2020, primarily due to an increase in research and development personnel’s staff cost resulted from an increase in headcount, partially offset by a decrease in share-based compensation for research and development personnel.Selling and marketing expenses were RMB76.7 million (US$11.9 million) for the three months ended September 30, 2021, representing a 73.6% increase from RMB44.2 million for the same period in 2020, primarily due to an increase in staff cost resulted from increase in headcount to strengthen our commercial presence in the therapy selection business and build up our early detection commercialization team.General and administrative expenses were RMB116.3 million (US$18.1 million) for the three months ended September 30, 2021, representing a 13.2% increase from RMB102.7 million for the same period in 2020, primarily due to an increase in general and administrative personnel’s staff cost resulted from an increase in headcount and share-based compensation expenses. Net loss was RMB170.5 million (US$26.5 million) for the three months ended September 30, 2021, compared to RMB127.1 million for the same period in 2020. Cash, cash equivalents, restricted cash and short-term investments were RMB1,685.4 million (US$261.6 million) as of September 30, 2021. 2021 Financial Guidance Starting late October, another wave of COVID resurgence has been reported in multiples cities in China, and the relevant governmental authorities have imposed travel restrictions and other measures. As of the date of this earnings release, the current wave has not been cleared out and the corresponding travel restrictions and other measures have not been lifted. We expect our central-laboratory testing volumes and, to a lesser extent, the growth of our in-hospital testing volumes, to be significantly impacted. We thus expect our 2021 full-year revenue to be at or around RMB500 million, subject to future development of the current wave of COVID resurgence. Conference Call Information Burning Rock will host a conference call to discuss the third quarter 2021 financial results at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Hong Kong time) on November 16, 2021. Details of the conference call are as follows: International:+65 67135590U.S.:+1 3322089468U.K.:+44 2036928125Hong Kong:+852 30186771China Mobile:4008205286China Landline:8008208659Conference ID:2277434 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. Contact: IR@brbiotech.com Selected Operating Data For the three months ended March 31,2020 June 30,2020 September 30,2020 December 31,2020 March 31,2021 June 30,2021 September 30,2021Central Laboratory Channel: Number of patients tested4,680 7,252 8,644 7,989 7,7168,1557,808Number of ordering physicians(1)810 1,175 1,194 1,114 1,0821,013920Number of ordering hospitals(2)232 284 289 294 303300287 (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 June 30,2021 September 30,2021In-hospital Channel: Pipeline partner hospitals(1)23 23 22 23 22 22 24Contracted partner hospitals(2)21 24 25 29 32 34 34Total number of partner hospitals44 47 47 52 54 56 58 (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. Selected Financial Data For the three months endedRevenuesMarch 31,2020 June 30,2020 September 30,2020 December 31,2020 March 31,2021 June 30,2021 September 30,2021 (RMB in thousands)Central laboratory channel46,141 74,607 89,899 86,695 74,561 79,999 78,817In-hospital channel17,123 27,588 31,704 41,457 28,994 40,502 43,714Pharma research and development channel4,065 4,776 2,278 3,570 3,068 6,778 4,084Total revenues67,329 106,971 123,881 131,722 106,623 127,279 126,615 For the three months ended Gross profitMarch 31,2020 June 30,2020 September 30,|2020 December 31,2020 March 31,2021 June 30，2021 September 30,2021 (RMB in thousands)Central laboratory channel32,434 56,556 67,804 66,588 55,212 58,681 58,387In-hospital channel10,126 19,269 22,410 30,218 20,070 29,426 31,111Pharma research and development channel2,224 2,573 1,373 2,347 1,658 2,124 2,098Total gross profit44,784 78,398 91,587 99,153 76,940 90,231 91,596 For the three months endedShare-based compensation expensesMarch 31,2020 June 30,2020 September 30,2020 December 31,2020 March 31,2021 June 30，2021 September 30,2021 (RMB in thousands)Cost of revenues176 183 160 277 339 406267 Research and development expenses2,072 25,314 10,572 11,843 22,404 20,825(9,559)Selling and marketing expenses253 491 341 2,372 2,633 2,8092,044 General and administrative expenses1,665 1,639 57,805 58,057 59,382 59,36960,803 Total share-based compensation expenses4,166 27,627 68,878 72,549 84,758 83,40953,555 Burning Rock Biotech Limited Unaudited Condensed Statements of Comprehensive Loss (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 June 30,2021 September 30,2021 September 30,2021 RMBRMBRMBRMBRMBRMBRMBUS$Revenues67,329 106,971 123,881 131,722 106,623 127,279 126,615 19,650 Cost of revenues(22,545) (28,573) (32,294) (32,569) (29,683) (37,048) (35,019) (5,435)Gross profit44,784 78,398 91,587 99,153 76,940 90,231 91,596 14,215 Operating expenses: Research and development expenses(40,016) (71,176)(69,330) (83,418) (77,414)(108,071)(69,649) (10,809)Selling and marketing expenses(29,815) (37,992)(44,174) (56,606) (55,130)(68,058)(76,687) (11,902)General and administrative expenses(34,295) (42,272) (102,731) (114,502) (116,259) (116,130) (116,304) (18,050)Total operating expenses(104,126) (151,440) (216,235) (254,526 ) (248,803 ) (292,259) (262,640) (40,761)Loss from operations (59,342) (73,042) (124,648) (155,373 ) (171,863 ) (202,028) (171,044) (26,546)Interest income3,985 44 698 1,341 787 681 958 149 Interest expense(1,178) 1,939 (776) (652) (510)(565)(367) (57)Other (expense) income, net(151) 122 (176) (682) 118 433 20 3 Foreign exchange loss, net611 (118)(2,228) (1,112) 57 (560)380 59 Change in fair value of warrant liability3,503 – – – – – – – Loss before income tax(52,572) (71,055) (127,130) (156,478 ) (171,411 ) (202,039) (170,053) (26,392)Income tax expenses- – – – – (1,626) (424) (66) Net loss(52,572) (71,055) (127,130) (156,478 ) (171,411 ) (203,665) (170,477) (26,458)Net loss attributable to Burning Rock Biotech Limited’s shareholders(52,572) (71,055)(127,130) (156,478) (171,411)(203,665)(170,477) (26,458)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 )(203,665)(170,477) (26,458)Loss per share: Ordinary shares – basic and diluted(3.15) – – – – – – Class A ordinary shares – basic and diluted- (2.68)(1.22) (1.51) (1.65)(1.96)(1.64) (0.25)Class B ordinary shares – basic and diluted- (2.68)(1.22) (1.51) (1.65)(1.96)(1.64) (0.25)Weighted average shares outstanding used in loss per share computation: Ordinary shares – basic and diluted25,031,575 – – – – – – Class A ordinary shares – basic and diluted- 23,461,319 86,479,686 86,511,799 86,721,263 86,764,260 86,908,975 86,908,975 Class B ordinary shares – basic and diluted- 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 17,324,848 Other comprehensive (loss) income, net of tax of nil: Foreign currency translation adjustments11,422 (2,336)(91,093) (94,881) 14,080 (34,980)6,146 954 Total comprehensive loss(41,150) (73,391) (218,223) (251,359) (157,331 )(238,645)(164,331) (25,504)Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(41,150) (73,391) (218,223) (251,359) (157,331 )(238,645)(164,331) (25,504) Burning Rock Biotech Limited Unaudited Condensed Statements of Comprehensive Loss (in thousands, except for share and per share data) For the nine months ended September 30, 2020 September 30, 2021 September 30, 2021 RMB RMB USD Revenues298,181 360,517 55,952 Cost of revenues(83,412)(101,750)(15,791)Gross profit214,769 258,767 40,161 Operating expenses: Research and development expenses(180,522)(255,134)(39,596)Selling and marketing expenses(111,981)(199,875)(31,020)General and administrative expenses(179,298)(348,693)(54,116)Total operating expenses(471,801)(803,702)(124,732)Loss from operations (257,032)(544,935)(84,571)Interest income4,727 2,426 377 Interest expense(15)(1,442)(224)Other (expense) income, net(205)571 88 Foreign exchange loss, net(1,735)(123)(19)Change in fair value of warrant liability3,503.00 – – Loss before income tax(250,757) (543,503)(84,349)Income tax expenses- (2,050)(318)Net loss(250,757) (545,553)(84,667)Net loss attributable to Burning Rock Biotech Limited’s shareholders(250,757)(545,553)(84,667)Accretion of convertible preferred shares(64,688)- – Net loss attributable to ordinary shareholders(315,445)(545,553)(84,667) Loss per share: Class A ordinary shares – basic and diluted(5.56)(5.24)(0.81)Class B ordinary shares – basic and diluted(5.56)(5.24)(0.81) Weighted average shares outstanding used in loss per share computation: Class A ordinary shares – basic and diluted39,446,747 86,798,854 86,798,854 Class B ordinary shares – basic and diluted17,324,848 17,324,848 17,324,848 Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustmentsForeign currency translation adjustments(82,007)(14,754)(2,290)Total comprehensive loss(332,764)(560,307)(86,957)Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders(332,764) (560,307) (86,957) Burning Rock Biotech Limited Unaudited Condensed Consolidated Balance Sheets (In thousands) As of December 31,2020 September 30,2021 September 30,2021 RMB RMB US$ASSETS Current assets: Cash and cash equivalents1,895,308 1,621,641 251,675Restricted cash29,898 28,069 4,356Short-term investment362,132 35,670 5,536Accounts receivable, net88,218 92,868 14,413Contract assets22,534 37,268 5,783Amounts due from related parties212 966 150Inventories68,021 115,785 17,970Prepayments and other current assets57,329 60,912 9,453Total current assets2,523,652 1,993,179 309,336 Non-current assets: Equity method investment1,417 982 152Property and equipment, net111,481 296,383 45,999Operating Right-of-use assets- 86,813 13,473Intangible assets, net3,457 4,236 657Other non-current assets23,021 44,692 6,936Total non-current assets139,376 433,106 67,217TOTAL ASSETS2,663,028 2,426,285 376,553 Burning Rock Biotech Limited Unaudited Condensed Consolidated Balance Sheets (Continued) (in thousands) As of December 31,2020 September 30,2021 September 30,2021 RMB RMBUS$LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY Current liabilities: Accounts payable35,482 49,122 7,624 Deferred revenue74,402 122,715 19,045 Capital lease obligations, current4,816 – – Accrued liabilities and other current liabilities83,648 90,966 14,116 Customer deposits1,120 1,042 162 Short-term borrowing7,370 7,370 1,144 Current portion of long-term borrowings34,695 – – Current portion of operating lease liabilities- 35,357 5,487 Current portion of financing lease liabilities- 787 122 Total current liabilities241,533 307,359 47,700 Non-current liabilities: Deferred government grants263 – – Operating lease liabilities- 57,530 8,929 Other non-current liabilities228 227 35 Total non-current liabilities491 57,757 8,964 TOTAL LIABILITIES242,024 365,116 56,664 Shareholders’ equity: Class A ordinary shares116 116 18 Class B ordinary shares21 21 3 Additional paid-in capital4,006,616 4,220,944 655,080 Accumulated deficits(1,418,160) (1,977,569) (306,913)Accumulated other comprehensive loss(167,589) (182,343) (28,299)Total shareholders’ equity2,421,004 2,061,169 319,889 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY2,663,028 2,426,285 376,553 Burning Rock Biotech Limited Unaudited Condensed Statements of Cash Flows (in thousands) For the three months ended September 30,2020 September 30,2021 September 30,2021 RMB RMB US$ Net cash generated from (used in) operating activities(37,052) (133,394) (20,705)Net cash generated from (used in) investing activities(365,373) (72,085) (11,183)Net cash generated from (used in) financing activities(20,939) (32,995) (5,122)Effect of exchange rate on cash, cash equivalents and restricted cash(81,043) 4,919 763 Net increase cash, cash equivalents and restricted cash (504,407) (233,555) (36,247)Cash, cash equivalents and restricted cash at the beginning of period2,566,236 1,883,265 292,278 Cash, cash equivalents and restricted cash at the end of period2,061,829 1,649,710 256,031 For the nine months ended September 30,2020 September 30,2021 September 30,2021 RMB RMB US$Net cash generated from (used in) operating activities17,116 (365,537) (56,728)Net cash generated (used in) investing activities(72,884)148,667 23,071 Net cash generated from (used in) financing activities2,097,242 (46,118) (7,158)Effect of exchange rate on cash, cash equivalents and restricted cash(77,889)(12,508) (1,941)Net increase cash, cash equivalents and restricted cash 1,963,585 (275,496) (42,756)Cash, cash equivalents and restricted cash at the beginning of period98,244 1,925,206 298,787 Cash, cash equivalents and restricted cash at the end of period2,061,829 1,649,710 256,031