Burning Rock Reports Third Quarter 2024 Financial Results

Core Viewpoint - Burning Rock Biotech Limited reported its financial results for Q3 2024, showing a slight increase in total revenues but significant changes in revenue streams and operating expenses, reflecting a strategic shift towards in-hospital testing and improved operational efficiency [1][3][11]. Recent Business Updates - The company presented study results at the 2024 World Conference on Lung Cancer, highlighting potential treatment modalities for specific lung cancer subtypes [2]. - A strategic cooperation agreement was signed with MGI Tech Co., Ltd to enhance clinical applications in precision oncology [2]. - The companion diagnostic for EGFR exon 20 insertion mutation for sunvozertinib was approved by the National Medical Products Administration in China, marking a significant milestone in NGS-based diagnostics for lung cancer [2]. Financial Results - Total revenues for Q3 2024 were RMB 128.6 million (US$ 18.3 million), a 0.8% increase from RMB 127.6 million in Q3 2023 [3]. - In-hospital business revenue increased by 17.0% to RMB 63.8 million (US$ 9.1 million) compared to RMB 54.5 million in Q3 2023, driven by higher sales volume [4]. - Central laboratory business revenue decreased by 25.2% to RMB 40.0 million (US$ 5.7 million) due to a reduction in the number of tests conducted [4]. - Revenue from pharma research and development services rose by 27.1% to RMB 24.9 million (US$ 3.5 million) compared to RMB 19.6 million in Q3 2023 [4]. Cost and Profitability - Cost of revenues decreased by 11.6% to RMB 36.8 million (US$ 5.2 million) in Q3 2024, aligning with the decline in central laboratory revenue [5]. - Gross profit increased by 6.9% to RMB 91.8 million (US$ 13.1 million), with a gross margin of 71.4%, up from 67.4% in Q3 2023 [6]. - Non-GAAP gross profit, excluding depreciation and amortization, was RMB 97.8 million (US$ 13.9 million), a 2.8% increase from RMB 95.1 million in Q3 2023 [7][8]. Operating Expenses - Total operating expenses decreased significantly by 50.7% to RMB 130.4 million (US$ 18.6 million) compared to RMB 264.7 million in Q3 2023, driven by cost control measures and headcount reductions [9]. - Research and development expenses fell by 41.3% to RMB 49.2 million (US$ 7.0 million) due to staff cost reductions and decreased project expenditures [10]. - Selling and marketing expenses decreased by 22.3% to RMB 48.4 million (US$ 6.9 million) [10]. Net Loss and Cash Position - The net loss for Q3 2024 was RMB 35.7 million (US$ 5.1 million), a significant reduction from RMB 175.0 million in Q3 2023 [11]. - As of September 30, 2024, the company had cash, cash equivalents, restricted cash, and short-term investments totaling RMB 498.2 million (US$ 71.0 million) [11].