Burning Rock Biotech Limited

Good day and thank you for standing by. Welcome to the Burning Rocks 2021 Third Quarter Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. Before we begin, I want to remind you that this conference call 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 the terminology such as will, expects, anticipates future intents, plans, beliefs, estimates, targets, confidence, and similar statements. Bedding 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 thought-looking statements. Such statements are based upon management's current expectations, current markets 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. while looking statements involve risks and certainties and other factors that could cause actual results to differ materially from those contained in any such statements. All information provided in this conference call is as of the date of this conference call 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. And now I'd like to hand the conference over to your first speaker today, Mr. Yusheng Han, CEO of Burning Rock. Thank you, sir. Please go ahead.

Thank you. Welcome to Burning Rock Q3 conference call. I'm Yusheng Han, the CEO and founder of Burning Rock. So today we have our CEO, Shannon, CTO, Joe, and CFO, Leo, in the meeting. So first, I will go through some exciting highlights of our recent progress. and our CEO, Shannon, will elaborate on our product line expansion and our CFO, Leo, will walk you through the financials. So, let's turn to page four. So, we all know that Burning Rock started the therapy selection business in 2014 and has grown to the market leader in this segment. So, the leading position has laid a good foundation and it gave us an advantage moving forward to new business of early detection MRD, and pharmaceutical collaborations. And that's what we have described last time. And we have a strong branding from our technology and product quality, which help us attract talents. So the network we have built across thousands of oncologists and hundreds of hospitals enable us rapid initiation of R&D studies on new products, as well as fast distribution when it goes to the market. The existing high testing volume makes it plausible for us to continue lowering the cost. And that's why we aim to tackle the therapy selection, MRD, and therapy selection, sorry, the early detection market in parallel in the coming few years. And then let's turn to page four with some highlights on our recent progress. So, The first one, we talk about the commercialization preparation of the six cancer early detection. We discussed that a lot of time, and I have to say that the preparation is going on well. We have strong confidence to sign six hospitals by the end of this year, sign contract with six hospitals by the end of this year. However, since multi-cancer early detection is a new category of product in the market, and consumers instead of doctors are the real customer. We plan to run the 2C education campaign together with the hospital and doctors. So we will see how it goes, how you are going next year. And in terms of the trials of early detection, We expect the nine cancer product development to read out in H1 2022 with a potential to demonstrate performance improvement versus the six cancer tests, no matter in sensitivity, specificity, and also POO. In our last time, we talked about our tumor-informed MRD technology called BR-PROFIT. It has shown very promising performance with sensitivity on par with what has been shown in Natara and Archer's publication. And the lung cancer readout will be in the first half year to 2022. And we have already launched trials for colon and oesophageal cancers. For therapy selection, we recorded a 37-volume increase in Q3 for the in-hospital model, despite the COVID-19 hit in August, proving that the in-hospital model is a much more stable and reliable model. And last time, I also introduced the fast-growing pharmaceutical collaboration business. if you remember correctly last time by Q2 the contract number was 98 million RMB and by the end of Q3 the number went to 144 million and which is a 4.5 times of the total year of 2020 so yeah are listed in detail on the next page. So if we turn to page five, to remind that the business we have to, I think I need to explain why we separate the pharmaceutical collaboration as an independent business unit. So pharmaceutical business is not a new business for unjust industry in US. But this market hasn't been major in China until about a year and a half ago. So some recent trends and paradigm shift drivers include first, AMPA is moving toward regulating targeted therapy drugs approval in CDX model, which means that the targeted drugs needs test to go to the market together. The second driver is with the pressure of volume-based government procurement, more domestic innovative pharmaceutical companies seeking for global expansion opportunities. And for targeted therapy jobs, the needs of pharmaceuticals include high-quality products available on both FIP and liquid biopsy samples, and registration capability in both US and China and sometimes in the other developed countries like Japan and Europe. And the third driver is the MNC needs NGS company that can do CDX in China. However, it's very challenging for foreign NGS companies to operate registration trial in child due to the regulation of human genome regulation committee. and that Chinese unjust company with global operation is their ideal choice. So that's seen this trend with our US lab, which now is clear and CAP certificated and a high quality and broad portfolio and the global registration capability and strong registration team and our unique advantages for this business. And let's turn to page six. So this is our product line progress. And we will let our COO, Shannon, to go through that from this page on. Shannon?

Okay. Okay, sure. Thank you, Yusheng. So let's move to page six. and we have actually shared this overview of our product pipeline last time, so I'll skip most of the content on the page and just focus on some key updates. First, we now have more clarity on the timeline for launching the three very important products in Q1 next year. We actually mentioned about the commercialization of these three products, but now we have a clear timeline of launching them in the first quarter. and we will start the commercialization of DetomaRx, which is for adjuvant chemotherapy benefit prediction for early stage lung cancer patients. And also our MRD product using our BiProfit technology, as Yusheng just mentioned, for early stage solid tumors, which will become available to those clinicians and also our pharmaceutical customers. And as well as our six cancer early detection product. So we expect these new products to make significant contribution to our growth in the coming years. And then for our cancer early detection program, for the night cancer product development program, we now have more visibility that we can share. We will most likely see some data readout in the first half of next year. I'll give more details on exactly what that means on page 10. And then for our MRD program, besides the lung cancer study, which is called MED-EL, that we have previously talked about, the MED-EL will have data readout released early next year, as I shared before. And also, in the past few months, we have also expanded validation into other solid tumors, including colon, esophageal, and gastric, et cetera. And we expect to have validation data available in 2022 relapse risk prediction on these cancer types from retrospective cohorts. So there are also increasing interest in the China market on MRD-driven adjuvant therapy studies for drug development. and we think Bioprofit will be very well positioned to collaborate with our pharmaceutical partners on that end as well because most of the liquid biopsy products available in the China market are for fixed panels. So Bioprofit will be a very innovative technology in terms of the personalized panel for MRD approach. So let's now move directly to page 10 where I'd like to walk you through more details, some updates for our cancer early detection program. For the six cancer early detection product, we expect to launch a prospective slash interventional study on intended use population in the first half of 2022. This study we think will provide us with key inputs for the design of the future pivotal study for the six cancer test registration in China. And then on our nine cancer product, One key update is that we have finished accrual on a pilot case-control validation study, including over 2,000 participants. We call this study the PROMIS study, and we expect to release some data readouts for the PROMIS study in the first half of 2022. And in the meanwhile, the PREDICT study, which is the main validation study plan for our nine cancer products, with more than 14,000 participants to be enrolled, if you still remember. It's recruiting at full speed right now with about 30 centers contributing to enrollment. We remain our anticipation of having the first data readout for PREDICT around the end of 2022. We also wanted to emphasize that both PREDICT and PRACENT, which is the case control validation study, for our 22 cancer product development. Both these studies have gained approval from the Human Genetics Resources Administration in China. Because all studies with more than 500 subjects need to go through their approval process, so from what we can tell, we wanted to share that PREDICT and PRESSIONS are thus far the only large-scale multi-cancer early detection trials going on in China. So that's about all I wanted to elaborate on. So now I will turn to our CFO, Leo, to walk you through our financials. Leo?