Burning Rock Biotech Limited (NASDAQ:BNR) Q3 2023 Earnings Call Transcript
Burning Rock Biotech Limited (NASDAQ:BNR) Q3 2023 Earnings Call Transcript November 30, 2023
Operator: Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the 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, expect, anticipate, future, intends, plans, believes, estimates, target, confident and similar statements. 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.
Yusheng Han: Yes. Is it my turn? Well, this is Yusheng Han from Burning Rock, I'm the CEO and Founder. And today, we also have our CFO, Leo Li, and our CTO, Joe Zhang online. And today, we have a brief introduction of recent progress, and then I will hand over to Leo talking about the financials. And then Joe talking about our pipeline programs. So let's turn to Page 3, which shows what Burning Rock doing and we started from therapy selection and expect to expand it to early detection, MRD and biopharma business. And so far, that's our business construction. And let's turn to Page 4, which is the page that I think most of the investors care about most, that's about breakeven. And we set a goal to breakeven in terms of non-GAAP profit minus SG&A.
And we say that in Q2 this year, we have -- this is the first time in Burning Rock to reach the goal. Well, in Q3, actually, there is some industry disruption. You know that even most of the medical conferences or meetings would hold anomaly. So in Q3, it's a little bit our -- impacted by this event and the profit dropped to the negative part, which is a negative RMB8.9 million. But we are still moving to the breakeven level. Especially, I think that this kind of volatility will pass by the end of this year. So let's turn to Page 5, that we set a goal to break even sometime this year. And we think that we are moving towards that direction very firmly and without the disruption. And in terms of the therapy selection, despite of the industry disruption, we still continue to growth in the – for the in-hospital model, which means that in-hospital revenues has a 10% year-on-year growth.
And part that has been impacted was the central lab model. In MRD, we have a strong clinical validation publications, with the MEDAL study for lung cancer published in cancer cell, which is a big milestone for our MRD study. And we know that the other studies, for example, like colon cancer, [indiscernible] cancer are underway. For biopharma, despite of the struggling time of capital market for biopharmas, we still have a strong growth, showing our systematic value of Burning Rock with revenue growth up 31% year-on-year. And our backlog still keeps growing. And one thing to mention is that, we just signed a CDx contract with BI. And then in terms of early detection, there is a big step, I mean, a big milestone for that is, we've got a Breakthrough Device Designation granted by China National Medical Products Administration, which NMPA.
And we are the only -- our multi-cancer early detection product is the only test that has received BDD from both FDA and NMPA. And let's turn to Page 6 to explain how the industry volatility impact our volume. You can see that the central lab model has been impacted negative 31%, while for in-hospital model is still growing in terms of volume. So we think that -- and that actually impacts our competitors much more than Burning Rock because Burning Rock is the only company that the in-hospital model represents more than half of our revenues. And then I'll turn to Leo about our financials.
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