SEC Filing | Burning Rock Biotech Limited

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FORM 6-K

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 August 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

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: August 31, 2021

EX-99.1

Exhibit 99.1

Burning Rock Reports Second Quarter 2021 Financial Results

GUANGZHOU, China, August 31, 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 June 30, 2021.

Business Updates

•

Early Detection

•

Technology foundation manuscript was published in Nature Biomedical Engineering (article link: https://www.nature.com/articles/s41551-021-00746-5). The results demonstrate that our proprietary technology of deep methylation sequencing, aided by a machine-learning classifier of methylation patterns, enables ultrasensitive detection of circulating tumor DNA.

•

We continued to conduct an early-access program (over 2,000 volunteers tested) to prepare for operational readiness of our 6-cancer early detection product.

•

2022 commercialization is well on track. We are entering into contract signing stage with 6 hospitals where our 6-cancer test will be offered at the health check-up departments of those hospitals.

•

New products for early-stage cancer patients

•

Development of minimal residual disease (MRD) products is on track. Products are targeted to be launched in 2022. Lung-cancer data read-out is likely to take place in the first half of 2022. Clinical trials on colon, esophageal and other cancers are also under planning.

•

Pharma Services

•

Biopharma service contracts backlog grew rapidly. Total value of the contracts entered into during the first half of 2021 amounted to RMB98.2 million, three times the amount in full-year 2020.

•

We are jointly developing, together with IMPACT Therapeutics, companion diagnostics (CDx) for a targeted oncology drug, Senaparib, (IMP4297), a PARP inhibitor, for the treatment of prostate cancer globally. Senaparib’s pivotal clinical study under the FDA pathway is in progress. This project uses our Clinical Laboratory Improvement Amendments (CLIA)-certified and College of American Pathologists (CAP)-accredited laboratory in California, US.

•

Therapy Selection

•

Continued to strategically focus on the in-hospital channel. The volume of in-hospital NGS-based test kits grew 70% year-over-year to over 10,000 tests in the second quarter of 2021.

Second Quarter 2021 Financial Results

Revenues were RMB127.3 million (US$19.7 million) for the three months ended June 30, 2021, representing a 19.0% increase from RMB107.0 million for the same period in 2020, or a 19.4% sequential increase from RMB106.6 million for the three months ended March 31, 2021.

•

Revenue generated from central laboratory business was RMB80.0 million (US$12.4 million) for the three months ended June 30, 2021, representing a 7.2% increase from RMB74.6 million for the same period in 2020, primarily attributable to the year-over-year volume growth of the central laboratory business. Number of patients tested in the central laboratory channel was 8,155 for the three months ended June 30, 2021, representing a 12.5% increase from 7,252 for the same period in 2020.

•

Revenue generated from in-hospital business was RMB40.5 million (US$6.3 million) for the three months ended June 30, 2021, representing a 46.8% increase from RMB27.6 million for the same period in 2020, primarily attributable to the year-on-year volume growth of 70% of the in-hospital business. Number of contracted partner hospitals in the in-hospital channel increased to 34 as of June 30, 2021 from 32 as of March 31, 2020 and 24 as of June 30, 2020.

•

Revenue generated from pharma research and development services was RMB6.8 million (US$1.0 million) for the three months ended June 30, 2021, representing a 41.9% increase from RMB4.8 million for the same period in 2020, primarily attributable to the building of pipeline of pharmaceutical projects.

Cost of revenues was RMB37.0 million (US$5.7 million) for the three months ended June 30, 2021, representing a 29.7% increase from RMB28.6 million for the same period in 2020, which was generally in line with the Company’s continued business growth.

Gross profit was RMB90.2 million (US$14.0 million) for the three months ended June 30, 2021, representing a 15.1% increase from RMB78.4 million for the same period in 2020. Gross margin was 70.9% for the three months ended June 30, 2021, compared to 73.3% for the same period in 2020.

Operating expenses were RMB292.3 million (US$45.3 million) for the three months ended June 30, 2021, representing a 93% increase from RMB151.4 million for the same period in 2020. The increase was primarily driven by headcount growth and increase in other costs to support business expansion.

•

Research and development expenses were RMB108.1 million (US$16.7 million) for the three months ended June 30, 2021, representing a 51.8% increase from RMB71.2 million for the same period in 2020, primarily due to an increase in research and development personnel’s staff cost and other costs incurred in research and development projects.

•

Selling and marketing expenses were RMB68.1 million (US$10.5 million) for the three months ended June 30, 2021, representing a 79.1% increase from RMB38.0 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 RMB116.1 million (US$18.0 million) for the three months ended June 30, 2021 from RMB42.3 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 RMB203.7 million (US$31.5 million) for the three months ended June 30, 2021, compared to RMB71.1 million for the same period in 2020.

Cash, cash equivalents, restricted cash and short-term investments were RMB1,918.8 million (US$297.2 million) as of June 30, 2021.

Appointment of VP of Regulatory Affairs (US and Europe) and Quality Assurance

Dr. Sharon Liang joined Burning Rock as the VP of Regulatory Affairs (US and Europe) and Quality Assurance in late June this year. She is a human genetics expert with nearly two decades of experience in molecular cancer diagnostic medical device product development and regulatory in academia, government and industry. She was the US FDA committee member for the US President’s Precision Medicine Initiative (PMI) Project leading Bioinformatics group. She led and contributed to the development of many molecular diagnostic devices approved by the FDA, including the first NGS sequencer, first NGS Oncopanel, first NGS tumor profiling assay, first Direct-to-Consumer test, first microarray genetic tests, and companion diagnostics. Before joining Burning Rock, Dr. Liang worked at GRAIL, a cancer early detection diagnostic company, primarily responsible for regulatory strategy and execution.

2021 Financial Guidance

For the third quarter of this year, COVID-related travel restrictions in multiple major cities in China will impact our central-laboratory testing volumes and, to a lesser extent, the growth of our in-hospital testing volumes. The relatively stronger growth expected for in-hospital testing will also be driven by the industry structural shift from central-laboratory towards in-hospital testing. We believe that we are well-positioned in the in-hospital segment, and we view the revenues from in-hospital as higher quality, given our product and competitive advantages, leading to stickier revenues. As the testing mix of our therapy selection business transitions towards the in-hospital segment, our blended average sales price will decline, due to lower prices of IVD testing kits that we supply to hospitals in the in-hospital segment, compared with prices of LDT testing service that we charge to patients in the central-laboratory segment. This will result, during this transition period, in a lower revenue growth rate compared with volume growth rate, for our therapy selection business. As such, the Company adjusts its 2021 full-year revenue guidance to approximately RMB500 million.

Conference Call Information

Burning Rock will host a conference call to discuss the second quarter 2021 financial results at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Hong Kong time) on August 31, 2021.

Details of the conference call are as follows:


International:		+65 67135090
U.S.:		+1 8456750437
U.K.:		+44 2036214779
Hong Kong:		+852 30186771
China Mobile:		4006208038
China Landline:		8008190121
Conference ID:		2309539

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.

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
Central Laboratory Channel:
Number of patients tested		4,680		7,252		8,644		7,989		7,716		8,155
Number of ordering physicians⁽¹⁾		810		1,175		1,194		1,114		1,082		1,013
Number of ordering hospitals⁽²⁾		232		284		289		294		303		300

⁽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
In-hospital Channel:
Pipeline partner hospitals⁽¹⁾		23		23		22		23		22		22
Contracted partner hospitals⁽²⁾		21		24		25		29		32		34
Total number of partner hospitals		44		47		47		52		54		56

⁽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 ended
Revenues	March 31, 2020		June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021
	(RMB in thousands)
Central laboratory channel		46,141		74,607		89,899		86,695		74,561		79,999
In-hospital channel		17,123		27,588		31,704		41,457		28,994		40,502
Pharma research and development channel		4,065		4,776		2,278		3,570		3,068		6,778
Total revenues		67,329		106,971		123,881		131,722		106,623		127,279


	For the three months ended
Gross profit	March 31, 2020		June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021
	(RMB in thousands)
Central laboratory channel		32,434		56,556		67,804		66,588		55,212		58,681
In-hospital channel		10,126		19,269		22,410		30,218		20,070		29,426
Pharma research and development channel		2,224		2,573		1,373		2,347		1,658		2,124
Total gross profit		44,784		78,398		91,587		99,153		76,940		90,231


	For the three months ended
Share-based compensation expenses	March 31, 2020		June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021
	(RMB in thousands)
Cost of revenues		176		183		160		277		339		406
Research and development expenses		2,072		25,314		10,572		11,843		22,404		20,825
Selling and marketing expenses		253		491		341		2,372		2,633		2,809
General and administrative expenses		1,665		1,639		57,805		58,057		59,382		59,369
Total share-based compensation expenses		4,166		27,627		68,878		72,549		84,758		83,409

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			June 30, 2021
	RMB			RMB			RMB			RMB			RMB			RMB			US$
Revenues		67,329			106,971			123,881			131,722			106,623			127,279			19,713

Cost of revenues		(22,545	)		(28,573	)		(32,294	)		(32,569	)		(29,683	)		(37,048	)		(5,738	)

Gross profit		44,784			78,398			91,587			99,153			76,940			90,231			13,975

Operating expenses:
Research and development expenses		(40,016	)		(71,176	)		(69,330	)		(83,418	)		(77,414	)		(108,071	)		(16,738	)
Selling and marketing expenses		(29,815	)		(37,992	)		(44,174	)		(56,606	)		(55,130	)		(68,058	)		(10,541	)
General and administrative expenses		(34,295	)		(42,272	)		(102,731	)		(114,502	)		(116,259	)		(116,130	)		(17,986	)

Total operating expenses		(104,126	)		(151,440	)		(216,235	)		(254,526	)		(248,803	)		(292,259	)		(45,265	)

Loss from operations		(59,342	)		(73,042	)		(124,648	)		(155,373	)		(171,863	)		(202,028	)		(31,290	)

Interest income		3,985			44			698			1,341			787			681			105
Interest expense		(1,178	)		1,939			(776	)		(652	)		(510	)		(565	)		(88	)
Other (expense) income, net		(151	)		122			(176	)		(682	)		118			433			67
Foreign exchange gain (loss), net		611			(118	)		(2,228	)		(1,112	)		57			(560	)		(87	)
Change in fair value of warrant liability		3,503			—			—			—			—			—			—

Loss before income tax		(52,572	)		(71,055	)		(127,130	)		(156,478	)		(171,411	)		(202,039	)		(31,293	)

Income tax expenses		—			—			—			—			—			(1,626	)		(252	)

Net loss		(52,572	)		(71,055	)		(127,130	)		(156,478	)		(171,411	)		(203,665	)		(31,545	)

Net loss attributable to Burning Rock Biotech Limited’s shareholders		(52,572	)		(71,055	)		(127,130	)		(156,478	)		(171,411	)		(203,665	)		(31,545	)
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	)		(31,545	)
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	)		(0.30	)
Class B ordinary shares - basic and diluted		—			(2.68	)		(1.22	)		(1.51	)		(1.65	)		(1.96	)		(0.30	)
Weighted average shares outstanding used in loss per share computation:
Ordinary shares - basic and diluted		25,031,575			—			—			—			—			—			—
Class A ordinary shares - basic and diluted		—			23,461,319			86,479,686			86,511,799			86,721,263			86,764,260			86,764,260
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 (loss) income, net of tax of nil:
Foreign currency translation adjustments		11,422			(2,336	)		(91,093	)		(94,881	)		14,080			(34,980	)		(5,418	)
Total comprehensive loss		(41,150	)		(73,391	)		(218,223	)		(251,359	)		(157,331	)		(238,645	)		(36,963	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders		(41,150	)		(73,391	)		(218,223	)		(251,359	)		(157,331	)		(238,645	)		(36,963	)

Burning Rock Biotech Limited

Unaudited Condensed Statements of Comprehensive Loss

(in thousands, except for share and per share data)


	For the six months ended
	June 30, 2020			June 30, 2021			June 30, 2021
	RMB			RMB			USD
Revenues		174,300			233,902			36,226
Cost of revenues		(51,118	)		(66,731	)		(10,336	)
Gross profit		123,182			167,171			25,890
Operating expenses:
Research and development expenses		(111,192	)		(185,485	)		(28,728	)
Selling and marketing expenses		(67,807	)		(123,188	)		(19,079	)
General and administrative expenses		(76,567	)		(232,389	)		(35,992	)
Total operating expenses		(255,566	)		(541,062	)		(83,799	)
Loss from operations		(132,384	)		(373,891	)		(57,909	)
Interest income		4,029			1,468			227
Interest expense		761			(1,075	)		(166	)
Other (expense) income, net		(29	)		551			85
Foreign exchange gain (loss), net		493			(503	)		(78	)
Change in fair value of warrant liability		3,503			—			—
Loss before income tax		(123,627	)		(373,450	)		(57,841	)
Income tax expenses		—			(1,626	)		(252	)
Net loss		(123,627	)		(375,076	)		(58,093	)
Net loss attributable to Burning Rock Biotech Limited’s shareholders		(123,627	)		(375,076	)		(58,093	)
Accretion of convertible preferred shares		(64,688	)		—			—
Net loss attributable to ordinary shareholders		(188,315	)		(375,076	)		(58,093	)

Loss per share:
Class A ordinary shares - basic and diluted		(5.73	)		(3.60	)		(0.56	)
Class B ordinary shares - basic and diluted		(5.73	)		(3.60	)		(0.56	)

Weighted average shares outstanding used in loss per share computation:
Class A ordinary shares - basic and diluted		15,540,502			86,742,880			86,742,880
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		9,086			(20,900	)		(3,237	)
Total comprehensive loss		(114,541	)		(395,976	)		(61,330	)
Total comprehensive loss attributable to Burning Rock Biotech Limited’s shareholders		(114,541	)		(395,976	)		(61,330	)

Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets

(In thousands)


	As of
	December 31, 2020		June 30, 2021		June 30, 2021
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		1,895,308		1,852,927		286,982
Restricted cash		29,898		30,338		4,699
Short-term investment		362,132		35,531		5,503
Accounts receivable		88,218		78,141		12,103
Contract assets		22,534		28,345		4,390
Amounts due from related parties		212		628		97
Inventories		68,021		114,434		17,724
Prepayments and other current assets		57,329		76,157		11,795

Total current assets		2,523,652		2,216,501		343,293

Non-current assets:
Equity method investment		1,417		1,261		195
Property and equipment, net		111,481		198,324		30,716
Operating Right-of-use assets		—		89,307		13,832
Intangible assets, net		3,457		4,882		756
Other non-current assets		23,021		29,284		4,536

Total non-current assets		139,376		323,058		50,035

TOTAL ASSETS		2,663,028		2,539,559		393,328

Burning Rock Biotech Limited

Unaudited Condensed Consolidated Balance Sheets (Continued)

(in thousands)


	As of
	December 31, 2020			June 30, 2021			June 30, 2021
	RMB			RMB			US$
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable		35,482			47,983			7,432
Deferred revenue		74,402			101,517			15,723
Capital lease obligations, current		4,816			—
Accrued liabilities and other current liabilities		83,648			79,773			12,356
Customer deposits		1,120			1,042			161
Short-term borrowing		7,370			7,370			1,141
Current portion of long-term borrowings		34,695			30,118			4,665
Current portion of operating lease liabilities		—			32,789			5,078
Current portion of financing lease liabilities		—			2,169			336

Total current liabilities		241,533			302,761			46,892

Non-current liabilities:
Deferred government grants		263			—			—
Operating lease liabilities		—			63,132			9,778
Other non-current liabilities		228			226			35

Total non-current liabilities		491			63,358			9,813

TOTAL LIABILITIES		242,024			366,119			56,705

Shareholders’ equity:
Class A ordinary shares		116			116			18
Class B ordinary shares		21			21			3
Treasury stock		—			(4,270	)		(661	)
Additional paid-in capital		4,006,616			4,173,154			646,339
Accumulated deficits		(1,418,160	)		(1,807,092	)		(279,883	)
Accumulated other comprehensive loss		(167,589	)		(188,489	)		(29,193	)

Total shareholders’ equity		2,421,004			2,173,440			336,623

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		2,663,028			2,539,559			393,328

Burning Rock Biotech Limited

Unaudited Condensed Statements of Cash Flows

(in thousands)


	For the three months ended
	June 30, 2020			June 30, 2021			June 30, 2021
	RMB			RMB			US$
Net cash generated from (used in) operating activities		61,124			(118,998	)		(18,433	)
Net cash generated from (used in) investing activities		296,102			(67,577	)		(10,463	)
Net cash generated from (used in) financing activities		1,845,953			(8,961	)		(1,388	)
Effect of exchange rate on cash, cash equivalents and restricted cash		(1,487	)		(34,085	)		(5,279	)
Net increase cash, cash equivalents and restricted cash		2,201,692			(229,621	)		(35,563	)
Cash, cash equivalents and restricted cash at the beginning of period		364,544			2,112,886			327,244
Cash, cash equivalents and restricted cash at the end of period		2,566,236			1,883,265			291,681


	For the six months ended
	June 30, 2020		June 30, 2021			June 30, 2021
	RMB		RMB			US$
Net cash generated from (used in) operating activities		54,168		(232,143	)		(35,952	)
Net cash generated (used in) investing activities		292,489		220,752			34,188
Net cash generated from (used in) financing activities		2,118,181		(13,123	)		(2,032	)
Effect of exchange rate on cash, cash equivalents and restricted cash		3,154		(17,427	)		(2,699	)
Net increase cash, cash equivalents and restricted cash		2,467,992		(41,941	)		(6,495	)
Cash, cash equivalents and restricted cash at the beginning of period		98,244		1,925,206			298,176
Cash, cash equivalents and restricted cash at the end of period		2,566,236		1,883,265			291,681