Burning Rock Biotech Limited

Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meanings 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, expect, anticipates, 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 risk, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Burning Rock's control.

Statements This is my turn. Hello.

Okay. This is Yu-Sheng Han from Burning Rock. I'm the CEO and founder. And today you also have our CFO Leo Li and our CTO Zhou Zhang online. And today we have a A brief introduction of recent progress, and then I will head on to Leo talking about the financials and then Joe talking about our pipeline program. So, let's turn to page 3, which shows that we're burning rock. We're putting rock 3 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 four, 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 SGMA. And we say that in Q2 this year, we have the first time in Burning Rock to reach the goal. Well, in Q3, actually, there is some interest industry disruption. You know that even most of the medical conferences or meetings would hold an anomaly. So in Q3, there's a little bit impacted by this event. And the profits dropped to the negative part, which is the negative 8.9 million RMB. But we are still moving to the break-even level. especially I think that this kind of volatility will pass by the end of this year. So let's turn to page five that we set a goal to break even sometime this year. And we think that we are moving toward that direction very firmly and without without the disruption. And in terms of the therapy selection, despite of the industry disruption, we still continue to growth for the in-hospital model, which means that the in-hospital revenues has 10% year-on-year growth. And the part that has been impacted was the central lab model. In MRD, we have a strong clinical validation publications with the METL 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 and oesophageal cancer, are on the way. uh you know the struggling time of of capital market for bio farmers we still have a strong growth showing our system systematic value of burning rock with revenue growth of 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. In terms of early detection, there is a big milestone for that. We've got a breakthrough device designation granted by China National Medical Products and Nutrition, which is NIMPA. And we are the only, our multi-cancer early detection product is the only test that has received BDD from both FDA and NIMHA. And let's turn to page six 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-house model is still growing. in terms of volume. And that actually impacts our competitors much more than Burning Rock, because Burning Rock is the only company that's in-house with a model that represents more than half of our revenues. And then I'll turn to Leo about our financials.

Let's move on to page seven. As Yusheng mentioned earlier, the whole China healthcare industry had a disruption during the quarter. And what that meant for us was actually two diverging trends, which actually accelerated the path that we were already on. So if you look at Central Lab, that was down heavily, down 41% on a year-over-year basis in the third quarter. that channel continued to grow and it grew 10% year over year, which is rare in the diagnostics industry, or at least in our specialty industry in China. So I think that continues to prove the value of the in-hospital segments where the real value or the profit is. And central lab, as we mentioned earlier, is being shifted more towards in-hospital. So I think the events in the third quarter only accelerated that and that moved us even more on the right track in terms of moving the mainstream of our businesses towards the in-hospital segments. So at some point last year, we were in more in-hospital segments by volume. And you can see in the third quarter, we are actually in-hospital represented the largest segments. overtaking central lab. So I think with that transition complete at some point down the road, our volume and revenue trends will match again as we complete this transition. Then moving on, we can see that pharma services still had a strong growth quarter in the third quarter. Revenues grew 31% on a year-over-year basis. So we're very pleased with that result. Our backlog continues to grow, particularly from multinational companies, and Yusheng gave an example of a recent win in his remarks, so we're very pleased with the progress and the outlook that we have in the sector. Overall, because of the industry impacts and the drop in central lab, our revenue was down 17% on a year-over-year basis, and we're very conscious of this trend, and we are managing our expense or our cost base appropriately in accordance to the new industry setup. So I think we had a temporary dip in our operating margins for the third quarter, and that should turn for the better in the quarters down the road. So measured on a non-gap basis by gross profits minus SG&A, I mean, we hit a positive territory in the second quarter, but we dipped back into the negative territory a little bit in the third quarter, and we're looking to turn this to a positive number again at some quarter down the road. So we're working towards that. And we have done some rejigging in the recent time period to make sure that we're on the right track. So our operating loss did widen a little bit in the third quarter compared to the second quarter. And we're aware of that. We've made the adjustments towards the end of September. Then we hope to be on a better track going forward. Notably, we're also managing our operating cash flows. We're managing our expenses, our cash expenses very carefully. And you can see the net operating cash outflow this quarter has dropped to 47 million RMB per quarter. And if you look at our operating margins, if you look at our sales and marketing expenses as a percent of revenue, Despite the dropping revenues, I mean, our sales and marketing expenses were 45% of our revenues, similar to 44% that we achieved in the second quarter. And as we think industry volume normalizes down the road, our operating margins should improve. And we hope to get back to the positive non-GAAP territory in the quarters down the road. So that's a quick recap of the P&L for the quarter. Then I think we should also mention our cash position as that's been the focus if we go to page eight. So we had cash outflow of about 532 million in the year of 2022. That's not our run rates for 2023. Our guidance at the start of this year was about 400 million RMB outflow. And you can see in the three quarters so far to this year, we had an outflow of about 249 million RMB. So significantly below the outflow guidance that we set out at the start of this year. And if you look at our third quarter quarterly cash operating cash outflow, 47 million RMB, that's even close to the run rate that we set for the year of 2024. So on that run rate, looking at the cash balance at the end of this period of 637 million RMB, we're sitting on more than three years of cash run rate. So we are in no rush to do anything. We're sitting on ample cash balance, and I just want to reiterate our strong cash position relative to our cash outflow on this page. And the reasons for the reduced cash outflow, I think we have mentioned that before, and I'll just reiterate those here again. So first, our commercial operations is coming towards profitability. We were even slightly positive in the second quarter. Our R&D spend, particularly our early cancer detection programs, are maturing. And as these programs complete, the expenses associated with those programs will run off, and that will help reduce cash spend naturally. So as we look to complete our spend on early cancer detection, And as we move towards better profitability, then we'll look to improve our operating cash outflows and we make sure that we're sitting on ample cash balance. The next I'd like to turn to Joe, who has some important pipeline and clinical publication data to share with you all. Thanks, Leo.

So I'm going to present a little bit, give you guys an introduction about the pipeline update, majorly focused on the MRD, which is Minimal Residual Disease or Molecular Residual Disease. So let's turn to page 10. So page 10 basically representing the Burning Rock MRD clinical publication. So basically, MRD has a lot of utilities. as shown in the picture showing here, basically, it can be done before the new adjuvant to look at the baseline ctDNA level. Then also, we can do optin-adjust adjuvant therapy to look at treatment exactness. Or more commonly, it's going to be used as post-surgical after resection to look at a landmark MRD to get a prognosis or either some kind of a prediction value based on MRD status. There also could be a lot of treatment effectiveness assessment after the treatment therapy, and also the longitudinal monitoring for the surveillance. So, Burning Rock has a bunch of different kinds of publications related to different kinds of cancer types. That's including the non-small cell lung cancer, as well as the colorectal cancer, gastric cancer, pancreatic cancer, BTC, biliary tract cancer. So all the publication, most of them are actually showing in the poster format being presented in different kind of academic meeting or clinical meeting happened like within two years. So the major one, I just want to give you guys a little bit more introduction about the cancer cell publication, which is related to the non-small cell lung cancer. Let's turn to page 11. So the technology we've been using actually called BR-PROFIT. In brief, it's called PROFIT. So basically, it's based on a whole exome sequencing. We got the tumor whole exome sequencing up to 50 mutations, which is tumor-specific. Then we designed the personalized panel, MRD panel, and use this personalized panel trying to capture a potential ctDNA fragment from the plasm collect from the same patient. Based on the proprietary ultra-deep sequencing and also the proprietary sequencing result as well as the MRD calling algorithm, then we can determine the MRD status of that patient for that time point of blood collection. So on the right page, basically it's showing the analytical performance of this BR-PROFIT assay. So it's including the two type of... So on the top right panel, basically talking about a contrived cell line sample diluted down to 8 ppm. As you can see here, we still can see out of 50 loci, there's quite a bit different significant difference compared to the baseline, which is the uncontrived, which is the background cell line. So this gives us some kind of confidence showing this assay is sensitive enough to detect a very low allele frequency, very rare tumor fraction based on the CT DNA from the patient. On the top right, bottom right panel, that's showing the quantitative property of this assay. Based on the algorithm we used, we can estimate, based on the detection capability as well as the allele frequency of each load set, we can estimate what's the ctDNA fraction from that patient. As you can see here, this is the contrived data, but it definitely gave us a lot of confidence showing the expectation and the estimation showing very good correlation. So, based on this technology, we moved to page 12, basically. We work with a top-tier hospital in Beijing, Pipou Hospital, and we published this technology utilization on non-small cell lung cancer in Cancer Cell, which is a top-tier journal for translational medicine. As you can see here, so this is being published in October 9. And there's a couple of highlights. I don't want to read it one by one, but you can look at it. Mostly, it's just showing the profit outperformed the fixed panel MRD assay in a head-to-head comparison in non-small cell lung cancer. Move to page 13 basically gave you an overview of this study. So the cohort is that we enrolled about 181 patient non-small cell lung cancer. But as you can see here, most of them actually 63% are stage one patient, very early stage patient after surgery. And also there's a few stage two and stage three. And the sampling time is we basically collect the tumor adjacent pair of tissue, normal tissue, collect at surgery, and we do the whole exon sequencing on those. as well as we collect the blood sample, collect the preoperative, and the three days and 30 days after surgery. And also, we do follow-up time. So every time one patient go back to see the doctor, after like six months after or a year after, if possible, we collect the follow-up blood sample. And then we're using three different kind of approach to look at MRD status. The first one is a Basically, it's showing on the top right, it's a whole axon sequencing-based personalized panel design, as well as doing this kind of MRD assay we call BR-PROFIT assay. As comparison, we're also using a fixed panel target sequencing. to do the tumor, either tumor-agnostic or tumor-informed calling to determine the MRD assay. But you can think about it this way. So basically, whole exon sequencing gave us many more potential mutation loci compared to a relatively smaller fixed panel target sequencing. So by using this data, let's move to page 14. Basically, there are several major conclusions observation we have seen. So the page 14 showing actually, if you look at a preoperative plasma sample, since you know this sample is basically untreated patient coming from the blood coming from untreated patient. And that's why, ideally, if your assay is perfect, you should be able to see every patient blood will get close to a very high percentage of detection sensitivity. As you can see here, the sensitivity definitely grows up. from stage 1a to stage 3. And at stage 3, you got the highest sensitivity, detection sensitivity. But as you can see here, the orange color, which is representing the profit asset. It outperformed the tumor-agnostic panel sequencing as well as tumor-informed fixed panel sequencing. So, totally, basically, at the stage 2b, we already see 40 percent detectability, and also stage 2, we see 75. Stage 3, we see 83 percent positivity. And as you can see here in the panel B showing on the right page, as you can see here, for all three MRD-positive patient sample, the CFD and CT DNA fraction showing the highest one, which is showing in the box plot with the red background. But if you look at the orange color, which means on the right, there's a 30-patient preoperative patient only showing a positive in BR-PROFIT assay, but the ctDNA fraction is way lower. It's actually two magnitudes lower than the all three positive patients. This is just to reflect the detection sensitivity importance, trying to get those kinds of very low allele frequency, very low tumor fraction patients. trying to confirm the MRD status. Of course, this is a preoperative. So let's move to the page 15. Basically, we use a postoperative blood sample to determine the real MRD status and also associate this kind of a status with the relapse potential to look at the disease-free survival. On the last page, basically, we are using the landmark time point, which is three days, which is time point B, or 30 days after surgery, which is time point C, to look at the survival curve. As you can see, the DFS survival percentage, if you are MRD negative, the patient usually showing even from one time point, landmark time point, to check and follow up to like 1,200 days, used to show way higher disease-free survival compared to MRD-positive patients, which is showing the HR ratio reached to basically for time point C, the HR hazard ratio reached to 16.4, which is a pretty significant difference. And on the right page, right side of the panel, we're basically utilizing longitudinal MRD analysis. This is basically for multiple point, time point assessment on the post-surgery patient plasma sample. And if there's any MRD-positive signal showing any time of the blood collection, we deem as MRD-positive. But if all the sample collected from our patient is MRD-negative, then we deem it MRD-negative. As you can see here, the separation will be even better. That just gives us a lot of confidence, also reflects a lot of other publications. See, continuous surveillance require multiple time point collection usually give us better separation of the disease-free survival. So basically, it's also not related to the stage 1 or stage 2 and 3, basically showing very similar trend. So in summary, basically, this paper published in Cancer Cell gave us very good example showing how the personalized West-based MRD assay can give a very good prognosis value on the non-small cell lung cancer, even at stage one, and also two and three. And so, of course, we still keep working on this assay and trying to work on multiple different kinds of cancer types. and also trying to work with other top-tier hospitals. Not only prognosis value, we also want to look at the predictive value and to see any kind of clinical utility related to drug selection or any kind of treatment effectiveness assessment. So that concludes my part. Thank you.

Let's back to the moderator. Yeah.

Thank you for participating in today's call. You may now disconnect. Everyone, have a great day.

Thank you.

You're welcome. Thank you. Thank you. Thank you.

Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meanings 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, expect, anticipates, 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 risk, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Burning Rock's control. Statements... My turn?

Hello? Okay. This is Yusheng Han from Burning Rock. I'm the CEO and founder. And today you also have our CFO Leo Li and our CTO Zhou Zhang online. And today we have a brief introduction of recent progress. And then I will hand on to Leo talking about the financials And then Joe talking about our pipeline program. So let's turn to page three, which shows that what Burning Rock, what Burning Rock is doing. We started from therapy selection and expanded to early detection, MRD, and biopharma business. And so far, that's our business construction. Let's turn to page four, 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 SGMA. And we say that in Q2 this year, we have the first time in Burning Rock to reach the goal. Well, in Q3, Actually, there is some interest industry disruption. You know that even most of the medical conferences or meetings would hold an anomaly. So in Q3, there's a little bit impacted by this event. And the profits It's up to the negative part, which is the negative 9.9 million RMB. But we are still moving to the break-even level, especially I think that this kind of volatility will pass by the end of this year. So let's turn to page five. that we set a goal to break even sometime this year. And we think that we are moving toward 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 for the in-hospital model, which means that the in-hospital revenues has 10% year-on-year growth. And the part that has been impacted was the central lab model. In MRD, we have a strong clinical validation publications. which with the metal 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 and oesophageal cancer are on the way. For biopharma, despite of the, you know, the struggling time of capital market for biopharmers. We still have a strong growth showing our systematic value of burning rock with revenue growth of 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 in terms of early detection, there is a big step, I mean, a big milestone for that. We got a breakthrough device designation granted by China National Medical Products Administration, which is NIMPA. And we are the only, our multi-cancer early detection product is the only test that has received a BDD from both FDA and NIMHA. And let's turn to page six to explain how the industry volatility impact our volume. You can see that the central lab model has been impact negative 31% while for in-house model is still growing in terms of volume. So we think that, yeah, and that actually impacts our competitors much more than Burning Rock because Burning Rock is the only company that in-house model represents more than half of our revenues. And then I'll turn to Leo about our financials.

Let's move on to page seven. As Yusheng mentioned earlier, the whole China healthcare industry had a disruption during the quarter. And what that meant for us was actually two diverging trends, which actually accelerated the path that we were already on. So if you look at Central Lab, that was down heavily, down 41% on a year-over-year basis in the third quarter. that channel continued to grow, and it grew 10% year over year, which is rare in the diagnostics industry, or at least in our specialty industry in China. So I think that continues to prove the value of the in-hospital segment, where the real value or the profit is. And central lab, as we mentioned earlier, is being shifted more towards in-hospital. So I think the events in the third quarter only accelerated that and that moved us even more on the right track in terms of moving the mainstream of our businesses towards the in-hospital segment. So at some point last year, we were in more in-hospital segments by volume. And you can see in the third quarter, we are actually in-hospital represented the largest segment. overtaking central lab. So I think with that transition complete at some point down the road, our volume and revenue trends will match again as we complete this transition. Then moving on, we can see that pharma services still had a strong growth quarter in the third quarter. Revenues grew 31 percent on a year-over-year basis. So we're very pleased with that result. Our backlog continues to grow, particularly from multinational companies. And Yusheng gave an example of a recent win in his remarks. So we're very pleased with the progress and the outlook that we have in the sector. Overall, because of the industry impacts and the drop in central lab, our revenue was down 17% on a year-over-year basis. And we're very conscious of this trend, and we are managing our expense or our cost base appropriately in accordance to the new industry setup. So I think we had a temporary dip in our operating margins for the third quarter, and that should turn for the better in the quarters down the road. So measured on a non-gap basis by gross profits minus SG&A, I mean, we hit a positive territory in the second quarter, but we dipped back into the negative territory in the third quarter, and we're looking to turn this to a positive number again at some quarter down the road. So we're working towards that. And we have done some rejigging in the recent time period to make sure that we're on the right track. So our operating loss did widen a little bit in the third quarter compared to the second quarter. And we're aware of that. We've made the adjustments towards the end of September. Then we hope to be on a better track going forward. Notably, we're also managing our operating cash flows. We're managing our expenses, our cash expenses very carefully. And you can see the net operating cash outflow this quarter has dropped to 47 million RMB per quarter. And if you look at our operating margins, if you look at our sales and marketing expenses as a percent of revenue, Despite the dropping revenues, I mean, our sales and marketing expenses were 45% of our revenues, similar to 44% that we achieved in the second quarter. And as we think industry volume normalizes down the road, our operating margins should improve. And we hope to get back to the positive non-gap territory in the quarters down the road. So that's a quick recap of the P&L for the quarter. Then I think we should also mention our cash position as that's been the focus if we go to page eight. So we had cash outflow of about 532 million in the year of 2022. That's not our run rates for 2023. Our guidance at the start of this year was about 400 million RMB outflow. And you can see in the three quarters so far to this year, we had an outflow of about 249 million RMB. So significantly below the outflow guidance that we set out at the start of this year. And if you look at our third quarter quarterly cash operating cash outflow, 47 million RMB, that's even close to the run rate that we set for the year of 2024. So on that run rate, looking at the cash balance at the end of this period of 637 million RMB, we're sitting on more than three years of cash run rate. So we are in no rush to do anything. We're sitting on ample cash balance, and I just want to reiterate our strong cash position relative to our cash outflow on this page. And the reasons for the reduced cash outflow, I think we have mentioned that before, and I'll just reiterate those here again. So first, our commercial operations is coming towards profitability. We were even slightly positive in the second quarter. Our R&D spend, particularly our early cancer detection programs, are maturing. And as these programs complete, the expenses associated with those programs will run off, and that will help reduce cash spend naturally. So as we look to complete our spend on early cancer detection, And as we move towards better profitability, then we'll look to improve our operating cash outflows and we make sure that we're sitting on ample cash balance. The next I'd like to turn to Joe, who has some important pipeline and clinical publication data to share with you all. Thanks, Leo.

So I'm going to present a little bit, give you guys an introduction about the pipeline update, majorly focused on the MRD, which is minimal residual disease or molecular residual disease. So let's turn to page 10. So page 10 basically representing the Burning Rock MRD clinical publication. So basically, MRD has a lot of utilities. as shown in the picture showing here, basically, it can be done before the new adjuvant to look at the baseline ctDNA level. Then also, we can do optin-adjust adjuvant therapy to look at treatment exactness. Or more commonly, it's going to be used at post-surgical or after resection to look at a landmark MRD to get a prognosis or either some kind of a prediction value based on MRD status. There also could be a lot of treatment effectiveness assessment after the adjuvant therapy, and also the longitudinal monitoring for the surveillance. So, Burning Rock has a bunch of different kinds of publications related to different kinds of cancer types, including the non-small cell lung cancer, as well as the colorectal cancer, gastric cancer, pancreatic cancer, BTC, biliary tract cancer. So all the publication, most of them are actually showing in the poster format being presented in different kind of academic meeting or clinical meeting happened like within two years. So the major one, I just want to give you guys a little bit more introduction about the cancer cell publication, which is related to the non-small cell lung cancer. Let's turn to page 11. So the technology we've been using actually called BR-PROFIT. In brief, they call it PROFIT. So basically, it's based on a whole exome sequencing. We got the tumor whole exome sequencing at up to 50 mutations, which is tumor-specific. Then we designed the personalized panel, MRD panel, and use this personalized panel trying to capture a potential ctDNA fragment from the plasm collect from the same patient. Based on the proprietary ultra-deep sequencing and also the proprietary sequencing result as well as the MRD calling algorithm, then we can determine the MRD status of that patient. for that time point of blood collection. So on the right page, basically showing the analytical performance of this BR-PROFIT assay. So it's including the two type of... So on the top right panel, basically talking about a contrived cell line sample diluted down to 8 ppm. As you can see here, we still can see out of 50 loci, there's quite a bit different significant difference compared to the baseline, which is the uncontrived, which is the background cell line. So this gives us some kind of confidence showing this assay is sensitive enough to detect a very low allele frequency, very rare tumor fraction based on the CT DNA from the patient. On the bottom right panel, that's showing the quantitative property of this assay. Based on the algorithm we used, we can estimate, based on the detection capability as well as the allele frequency of each loci, we can assess, estimate what's the ctDNA fraction from that patient. As you can see here, this is the contrived data, but it definitely gave us a lot of confidence showing the expectation and the estimation showing very good correlation. So, based on this technology, we moved to page 12, basically. We work with a top-tier hospital in Beijing, Pipou Hospital, and we published this technology utilization on the non-small cell lung cancer in Cancer Cell, which is a top-tier journal for translational medicine. As you can see here, so this is being published in October 9th. And there's a couple of highlights. I don't want to read it one by one, but you can look at it. Mostly, it's just showing the profit outperformed the fixed panel MRD assay in a head-to-head comparison in non-small cell lung cancer. Move to page 13 basically gave you an overview of this study. So the cohort is that we enrolled about 181 patient non-small cell lung cancer. But as you can see here, most of them actually 63% are stage one patient, very early stage patient after surgery. And also there's a few stage two and stage three. And the sampling time is we basically collect the tumor adjacent pair of tissue, normal tissue, collect at surgery, and we do the whole exon sequencing on those. as well as we collect the blood sample, collect the preoperative, and the three days and 30 days after surgery. And also we do follow-up time. So every time one patient go back to see the doctor, after like six months or a year after, if possible, we collect the follow-up blood sample. And then we're using three different kind of approach to look at MRD status. The first one is a Basically, it's showing on the top right, it's hold axon sequencing-based personalized panel design, as well as doing this kind of MRD assay we call BR-PROFIT assay. As comparison, we're also using a fixed panel target sequencing. to do the tumor, either tumor-agnostic or tumor-informed calling to determine the MRD assay. But you can think about it this way. So basically, whole exon sequencing gave us many more potential mutation loci compared to a relatively smaller fixed panel target sequencing. So by using this data, let's move to page 14. Basically, there are several major conclusions observation we have seen. So the page 14 showing actually, if you look at a preoperative plasma sample, since you know this sample is basically untreated patient coming from the blood coming from untreated patient. And that's why ideally if your assay is perfect, you should be able to see every patient blood will get like close to a very high percentage of detection sensitivity. As you can see here, the sensitivity definitely grows up from stage 1a to stage 3. And at stage 3, you've got the highest sensitivity, detection sensitivity. But as you can see here, the orange color, which is representing the profit asset. It outperformed the tumor-agnostic panel sequencing as well as tumor-informed fixed panel sequencing. So, totally, basically, at the stage 2b, we already see 40 percent detectability, and also stage 2, we see 75. Stage 3, we see 83 percent positivity. And as you can see here in the panel B showing on the right page, as you can see here, for all three MRD-positive patient sample, the CFD and CTDNA fraction showing the highest one, which is showing in the box plot with the red background. But if you look at the orange color, which means on the right, there's a 30-patient preoperative patient only showing a positive in BR profit assay, but the ctDNA fraction is way lower. It's actually two magnitudes lower than the all three positive patients. This is just to reflect the detection sensitivity importance, trying to get those kinds of very low allele frequency, very low tumor fraction patients. Trying to confirm the MRD status. Of course, this is a preoperative. So let's move to the page 15 Basically, we we use a post-operative Blood sample to determine the real MRD status and also come associate this kind of a status with the with the relapse potential the to look at the disease-free survival and On the left page, basically, we are using the landmark time point, which is three days, which is time point B, or 30 days after surgery, which is time point C, to look at the survival curve. As you can see, the DFS survival percentage, if you are MRD negative, the patient, usually showing even from one time point, landmark time point, to check and follow up to like 1,200 days, used to show way higher disease-free survival compared to MRD-positive patients, which is showing the HR ratio reached to basically for time point C, the HR hazard ratio reached to 16.4, which is a pretty significant difference. And on the right page, right side of the panel, we're basically utilizing longitudinal MRD analysis. This is basically for multiple point, time point assessment on the post-surgery patient plasma sample. And if there's any MRD-positive signal showing any time of the blood collection, we deem as MRD-positive. But if all the sample collected from our patient is MRD-negative, then we deem it MRD-negative. As you can see here, the separation will be even better. That just gives us a lot of confidence, also reflects a lot of other publications, say continuous surveillance require multiple time point collection usually give us better separation of the disease-free survival. So basically, it's also not related to the stage 1 or stage 2 and 3, basically showing very similar trend. So in summary, basically, this paper published in Cancer Cell gave us very good example showing how the personalized West-based MRD assay can give a very good prognosis value on the non-small cell lung cancer, even at the stage one, and also two and three. And so, of course, we are still keep working on this assay and trying to working on multiple different kinds of cancer type. and also trying to work with other top tier hospital on the not only prognosis value, we also want to look at the predictive value and to see any kind of clinical utility related to drug selection or any kind of treatment effectiveness assessment. So that concludes my part. Thank you. Let's back to the moderator. Yeah.

Thank you for participating in today's call. You may now disconnect. Everyone have a great day.

Thank you. You're welcome.