Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

 

 

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 December 2024

Commission File Number: 001-39316

 

 

BURNING ROCK BIOTECH LIMITED

(Registrant’s Name)

 

 

No.5 Xingdao Ring Road North, 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 ☐

 

 

 

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INCORPORATION BY REFERENCE

Exhibit 99.1 (excluding the paragraphs under the heading “Non-GAAP Measures,” the table under the heading “Burning Rock Biotech Limited Reconciliations of GAAP and Non-GAAP Results,” and other discussions on non-GAAP measures therein) of this current report on Form 6-K (the “Report”) shall be incorporated by reference into the Company’s registration statements on Form F-3, which became effective on September 30, 2022 (File no. 333-264577).

 

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EXHIBIT INDEX

 

Number		Description of Document
Exhibit 99.1		Press release

 

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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/ Yusheng Han
Name:		Yusheng Han
Title:		Chief Executive Officer

 

Date: December 4, 2024

 

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Exhibit 99.1

Burning Rock Reports Third Quarter 2024 Financial Results

GUANGZHOU, China, December 4, 2024—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, 2024.

Recent Business Updates

 

•

Therapy Selection

 

•

Presented study results at the 2024 World Conference on Lung Cancer in September 2024. “Neoadjuvant sintilimab plus chemotherapy could be an optional treatment modality in selected EGFR-mutant NSCLC” and “Distinct Genomic and Immune Microenvironment Features of Solid or Micropapillary Predominant Subtype in Stage I Lung Adenocarcinomas”.

 

•

Signed a strategic cooperation agreement with MGI Tech Co., Ltd in October 2024, aiming to fully complement each other’s platform and technological advantages to further promote the clinical application progress and global business of precision oncology.

 

•

Pharma Services

 

•

The companion diagnostic (CDx) for EGFR exon 20 insertion mutation (exon20ins) for sunvozertinib, developed through the collaboration of Burning Rock and Dizal, has been approved by the National Medical Products Administration (NMPA) of China, which marks the first co-developed NGS-based CDx for lung cancer approved by NMPA since the release of the CDx guideline in China.

Third Quarter 2024 Financial Results

Total revenues were RMB128.6 million (US$18.3 million) for the three months ended September 30, 2024, representing a 0.8% increase from RMB127.6 million for the same period in 2023, the increased revenue of in-hospital business was offset by the decrease of central-lab business, as we transition from central-lab to more in-hospital based testing.

 

•

Revenue generated from in-hospital business was RMB63.8 million (US$9.1 million) for the three months ended September 30, 2024, representing a 17.0% increase from RMB54.5 million for the same period in 2023, driven by an increase in sales volume.

 

•

Revenue generated from central laboratory business was RMB40.0 million (US$5.7 million) for the three months ended September 30, 2024, representing a 25.2% decrease from RMB53.5 million for the same period in 2023, primarily attributable to a decrease in the number of tests, as we continued our transition towards in-hospital testing.

 

•

Revenue generated from pharma research and development services was RMB24.9 million (US$3.5 million) for the three months ended September 30, 2024, representing a 27.1% increase from RMB19.6 million for the same period in 2023, primarily attributable to an increased development and testing services performed for our pharma customers.

Cost of revenues was RMB36.8 million (US$5.2 million) for the three months ended September 30, 2024, representing an 11.6% decrease from RMB41.6 million for the same period in 2023, primarily due to (i) a decrease in cost of central laboratory business, which was in line with the decrease in revenue generated from this business; (ii) a decrease in amortization expense for all kinds of business; and (iii) the receipt of a government grant for Guangzhou headquarters building.

Gross profit was RMB91.8 million (US$13.1 million) for the three months ended September 30, 2024, representing a 6.9% increase from RMB85.9 million for the same period in 2023. Gross margin was 71.4% for the three months ended September 30, 2024, compared to 67.4% for the same period in 2023. By channel, gross margin of central laboratory business was 83.2% for the three months ended September 30, 2024, compared to 77.6% during the same period in 2023, primarily due to the decreased depreciation and rental cost in relation to our laboratory of Guangzhou headquarters; gross margin of in-hospital business was 73.0% for the three months ended September 30, 2024, compared to 65.1% during the same period in 2023, primarily due to the same reason; gross margin of pharma research and development services was 48.2% for the three months ended September 30, 2024, compared to 45.8% during the same period of 2023.

 

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Non-GAAP gross profit, which excludes depreciation and amortization expenses, was RMB97.8 million (US$13.9million) for the three months ended September 30, 2024, representing a 2.8% increase from RMB95.1 million for the same period in 2023. Non-GAAP gross margin was 76.0% for the three months ended September 30, 2024, compared to 74.5% for the same period in 2023.

Operating expenses were RMB130.4 million (US$18.6 million) for the three months ended September 30, 2024, representing a 50.7% decrease from RMB264.7 million for the same period in 2023. The decrease was primarily driven by decreases in amortized expense on share-based compensation, budget control measures and headcount reduction to improve the Company’s operating efficiency.

 

•

Research and development expenses were RMB49.2 million (US$7.0 million) for the three months ended September 30, 2024, representing a 41.3% decrease from RMB83.7 million for the same period in 2023, primarily due to (i) a decrease in staff cost resulted from the reorganization of our research and development department to improve operating efficiency; (ii) a decrease in the expenditure for research projects; (iii) a decrease in amortized expense on share-based compensation; and (iv) a decrease in amortized expenses for office building decoration.

 

•

Selling and marketing expenses were RMB48.4 million (US$6.9 million) for the three months ended September 30, 2024, representing a 22.3% decrease from RMB62.3 million for the same period in 2023, primarily due to (i) a decrease in staff cost resulted from the reorganization of the sales department and improvement in operating efficiency; (ii) a decrease in conference fee; and (iii) a decrease in entertainment expense.

 

•

General and administrative expenses were RMB32.9 million (US$4.7 million) for the three months ended September 30, 2024, representing a 72.3% decrease from RMB118.7 million for the same period in 2023, primarily due to (i) a decrease in amortized expense on share-based compensation; (ii) a decrease in amortized expenses for office building decoration; (iii) a decrease in operating lease; and (iv) a decrease in general and administrative personnel’s staff cost.

Net loss was RMB35.7 million (US$5.10 million) for the three months ended September 30, 2024, compared to RMB175.0 million for the same period in 2023.

Cash, cash equivalents, restricted cash and short-term investments were RMB498.2 million (US$71.0 million) as of September 30, 2024.

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, 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.

 

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Non-GAAP Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP gross profit and non-GAAP gross margin, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The company defines non-GAAP gross profit as gross profit excluding depreciation and amortization. The company defines non-GAAP gross margin as gross margin excluding depreciation and amortization.

The company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The company believe non-GAAP gross profit and non-GAAP gross margin excluding non-cash impact of depreciation and amortization reflect the company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons.

Contact: [e-mail]

 

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Selected Operating Data

 

		As of
		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024
In-hospital Channel:
Pipeline partner hospitals(1)			29				28				28				29				30
Contracted partner hospitals(2)			55				59				59				59				61
Total number of partner hospitals			84				87				87				88				91

 

(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.

 

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Selected Financial Data

 

		For the three months ended
Revenues		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024
		(RMB in thousands)
Central laboratory channel			53,481				51,288				47,614				48,773				39,984
In-hospital channel			54,496				28,809				57,387				59,872				63,769
Pharma research and development channel			19,589				40,988				20,622				26,888				24,891
Total revenues			127,566				121,085				125,623				135,533				128,644
		For the three months ended
Gross profit		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024
		(RMB in thousands)
Central laboratory channel			41,487				41,886				37,002				38,424				33,262
In-hospital channel			35,459				12,910				39,192				44,058				46,580
Pharma research and development channel			8,974				23,317				9,500				12,956				12,004
Total gross profit			85,920				78,113				85,694				95,438				91,846
		For the three months ended
Share-based compensation expenses		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024
		(RMB in thousands)
Cost of revenues			680				654				596				464				289
Research and development expenses			12,161				12,401				12,287				12,008				3,180
Selling and marketing expenses			2,848				1,816				508				1,232				1,917
General and administrative expenses			57,704				56,472				55,990				54,407				4,732
Total share-based compensation expenses			73,393				71,343				69,381				68,111				10,118

 

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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
		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024				September 30, 2024
		RMB				RMB				RMB				RMB				RMB				US$
Revenues			127,566				121,085				125,623				135,533				128,644				18,331
Cost of revenues			(41,646	)			(42,972	)			(39,929	)			(40,095	)			(36,798	)			(5,243	)
Gross profit			85,920				78,113				85,694				95,438				91,846				13,088
Operating expenses:
Research and development expenses			(83,701	)			(73,119	)			(65,985	)			(64,952	)			(49,150	)			(7,004	)
Selling and marketing expenses			(62,310	)			(49,785	)			(46,856	)			(48,907	)			(48,411	)			(6,899	)
General and administrative expenses			(118,724	)			(121,533	)			(98,681	)			(92,794	)			(32,874	)			(4,685	)
Total operating expenses			(264,735	)			(244,437	)			(211,522	)			(206,653	)			(130,435	)			(18,588	)
Loss from operations			(178,815	)			(166,324	)			(125,828	)			(111,215	)			(38,589	)			(5,500	)
Interest income			4,018				5,539				4,038				3,187				3,173				452
Other income (expense), net			(157	)			160				434				(82	)			1				—
Foreign exchange (loss) gain, net			423				(517	)			(13	)			262				(129	)			(18	)
Loss before income tax			(174,531	)			(161,142	)			(121,369	)			(107,848	)			(35,544	)			(5,066	)
Income tax expenses			(450	)			(1,071	)			(180	)			(190	)			(201	)			(29	)
Net loss			(174,981	)			(162,213	)			(121,549	)			(108,038	)			(35,745	)			(5,095	)
Net loss attributable to Burning Rock Biotech Limited’s shareholders			(174,981	)			(162,213	)			(121,549	)			(108,038	)			(35,745	)			(5,095	)
Net loss attributable to ordinary shareholders			(174,981	)			(162,213	)			(121,549	)			(108,038	)			(35,745	)			(5,095	)
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted			(1.71	)			(1.58	)			(1.19	)			(1.05	)			(0.35	)			(0.05	)
Class B ordinary shares - basic and diluted			(1.71	)			(1.58	)			(1.19	)			(1.05	)			(0.35	)			(0.05	)
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted			85,000,869				85,071,360				85,219,188				85,271,858				85,902,670				85,902,670
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
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments			(1,955	)			(3,026	)			590				940				(4,054	)			(578	)
Total comprehensive loss			(176,936	)			(165,239	)			(120,959	)			(107,098	)			(39,799	)			(5,673	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders			(176,936	)			(165,239	)			(120,959	)			(107,098	)			(39,799	)			(5,673	)

 

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Burning Rock Biotech Limited

Unaudited Condensed Statements of Comprehensive Loss

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

 

		For the nine months ended
		September 30, 2023				September 30, 2024				September 30, 2024
		RMB				RMB				US$
Revenues			416,350				389,800				55,546
Cost of revenues			(131,236	)			(116,822	)			(16,648	)
Gross profit			285,114				272,978				38,898
Operating expenses:
Research and development expenses			(273,897	)			(180,087	)			(25,662	)
Selling and marketing expenses			(197,926	)			(144,174	)			(20,545	)
General and administrative expenses			(316,288	)			(224,349	)			(31,969	)
Total operating expenses			(788,111	)			(548,610	)			(78,176	)
Loss from operations			(502,997	)			(275,632	)			(39,278	)
Interest income			12,417				10,398				1,482
Other income, net			324				353				50
Foreign exchange gain, net			97				120				17
Loss before income tax			(490,159	)			(264,761	)			(37,729	)
Income tax expenses			(1,317	)			(571	)			(81	)
Net loss			(491,476	)			(265,332	)			(37,810	)
Net loss attributable to Burning Rock Biotech Limited’s shareholders			(491,476	)			(265,332	)			(37,810	)
Net loss attributable to ordinary shareholders			(491,476	)			(265,332	)			(37,810	)
Loss per share for class A and class B ordinary shares:
Class A ordinary shares - basic and diluted			(4.80	)			(2.58	)			(0.37	)
Class B ordinary shares - basic and diluted			(4.80	)			(2.58	)			(0.37	)
Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted			85,070,921				85,467,131				85,467,131
Class B ordinary shares - basic and diluted			17,324,848				17,324,848				17,324,848
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments			7,215				(2,524	)			(360	)
Total comprehensive loss			(484,261	)			(267,856	)			(38,170	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders			(484,261	)			(267,856	)			(38,170	)

 

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Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

		As of
		December 31, 2023				September 30, 2024				September 30, 2024
		RMB				RMB				US$
ASSETS
Current assets:
Cash and cash equivalents			615,096				497,969				70,960
Restricted cash			120				278				40
Accounts receivable, net			126,858				166,491				23,725
Contract assets, net			22,748				17,750				2,529
Inventories, net			69,020				66,444				9,468
Prepayments and other current assets, net			50,254				30,623				4,364
Convertible note receivable			—				5,320				758
Total current assets			884,096				784,875				111,844
Non-current assets:
Equity method investment			337				243				35
Convertible note receivable			5,320				—				—
Property and equipment, net			131,912				90,139				12,845
Operating right-of-use assets			12,284				99,301				14,150
Intangible assets, net			964				525				75
Other non-current assets			5,088				9,722				1,385
Total non-current assets			155,905				199,930				28,490
TOTAL ASSETS			1,040,001				984,805				140,334

 

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Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)

 

		As of
		December 31, 2023				September 30, 2024				September 30, 2024
		RMB				RMB				US$
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			18,061				25,213				3,593
Deferred revenue			130,537				110,748				15,781
Accrued liabilities and other current liabilities			104,935				94,110				13,411
Customer deposits			1,197				567				81
Current portion of operating lease liabilities			8,634				27,842				3,967
Total current liabilities			263,364				258,480				36,833
Non-current liabilities:
Non-current portion of operating lease liabilities			3,690				73,055				10,410
Other non-current liabilities			4,537				5,104				728
Total non-current liabilities			8,227				78,159				11,138
TOTAL LIABILITIES			271,591				336,639				47,971
Shareholders’ equity:
Class A ordinary shares			116				118				17
Class B ordinary shares			21				21				3
Additional paid-in capital			4,849,337				4,996,947				712,059
Treasury stock			(65,896	)			(65,896	)			(9,390	)
Accumulated deficits			(3,853,635	)			(4,118,967	)			(586,948	)
Accumulated other comprehensive loss			(161,533	)			(164,057	)			(23,378	)
Total shareholders’ equity			768,410				648,166				92,363
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			1,040,001				984,805				140,334

 

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Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)

 

		For the three months ended
		September 30, 2023				September 30, 2024				September 30, 2024
		RMB				RMB				US$
Net cash used in operating activities			(47,417	)			(30,278	)			(4,315	)
Net cash used in investing activities			(1,985	)			(987	)			(141	)
Net cash (used in)/generated from financing activities			(45,888	)			2				—
Effect of exchange rate on cash, cash equivalents and restricted cash			(1,239	)			(3,537	)			(503	)
Net decrease in cash, cash equivalents and restricted cash			(96,529	)			(34,800	)			(4,959	)
Cash, cash equivalents and restricted cash at the beginning of period			733,278				533,047				75,959
Cash, cash equivalents and restricted cash at the end of period			636,749				498,247				71,000
		For the nine months ended
		September 30, 2023				September 30, 2024				September 30, 2024
		RMB				RMB				US$
Net cash used in operating activities			(239,764	)			(111,323	)			(15,863	)
Net cash used in investing activities			(8,972	)			(3,600	)			(513	)
Net cash (used in)/generated from financing activities			(46,923	)			2				—
Effect of exchange rate on cash, cash equivalents and restricted cash			7,140				(2,048	)			(292	)
Net decrease in cash, cash equivalents and restricted cash			(288,519	)			(116,969	)			(16,668	)
Cash, cash equivalents and restricted cash at the beginning of period			925,268				615,216				87,668
Cash, cash equivalents and restricted cash at the end of period			636,749				498,247				71,000

 

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Burning Rock Biotech Limited

Reconciliations of GAAP and Non-GAAP Results

 

		For the three months ended
		September 30, 2023				December 31, 2023				March 31, 2024				June 30, 2024				September 30, 2024
		(RMB in thousands)
Gross profit:
Central laboratory channel			41,487				41,886				37,002				38,424				33,262
In-hospital channel			35,459				12,910				39,192				44,058				46,580
Pharma research and development channel			8,974				23,317				9,500				12,956				12,004
Total gross profit			85,920				78,113				85,694				95,438				91,846
Add: depreciation and amortization:
Central laboratory channel			2,550				2,414				1,919				1,226				1,277
In-hospital channel			2,751				2,728				1,524				824				798
Pharma research and development channel			3,863				3,808				3,856				4,417				3,846
Total depreciation and amortization included in cost of revenues			9,164				8,950				7,299				6,467				5,921
Non-GAAP gross profit:
Central laboratory channel			44,037				44,300				38,921				39,650				34,539
In-hospital channel			38,210				15,638				40,716				44,882				47,378
Pharma research and development channel			12,837				27,125				13,356				17,373				15,850
Total non-GAAP gross profit			95,084				87,063				92,993				101,905				97,767
Non-GAAP gross margin:
Central laboratory channel			82.3	%			86.4	%			81.7	%			81.3	%			86.4	%
In-hospital channel			70.1	%			54.3	%			70.9	%			75.0	%			74.3	%
Pharma research and development channel			65.5	%			66.2	%			64.8	%			64.6	%			63.7	%
Total non-GAAP gross margin			74.5	%			71.9	%			74.0	%			75.2	%			76.0	%

 

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