Genetron Holdings Limited

Good day, and thank you for standing by. Welcome to the fourth quarter 2021 Gentron Health Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your host today, Hokie Luke, Head of Investor Relations. Please go ahead.

Thank you. Hello, everyone, and welcome to Gintron Health's fourth quarter and full year 2021 earnings conference call. The company's earnings release was issued earlier today and is available on the company's IR website. During this call, the company will be making some forward-looking statements regarding future events and results. These statements are made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Ginteron Health's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in Ginteron Health's filing to the FCC. All information provided today is as of the date of this call. and GeneTron Health does not undertake any obligation to update any forward-looking statements, except as required under applicable law. With respect to any non-IFRS measures discussed during today's call, the company's reconciliation information related to those measures can be found in the earliest release issued earlier today. Allow me to introduce the management team on the call today. She's in Wang, co-founder, chairman and CEO of FinTron Health, will discuss recent business updates and upcoming catalysts. Evan Hsu, our CFO, will provide financial highlights related to the unanswered fourth quarter results outlined in today's release, as well as our outlook for 2022. Following management's prepared remarks, we will open up the call to questions. During the Q&A session, our co-founder and chief scientific officer, Dr. Haiyan, Chief Technology Officer, Dr. Yuchen Zhao, and Chief Medical Officer will also be available to answer questions. With that said, I would like to turn the call over to Mr. Zhijun Wang, Co-Founder, Chairman, and CEO of Jintran Health. Zhijun, please go ahead.

Thank you, Hokey. Good morning and good evening, everyone, and thank you for joining our fourth quarter and full year 2021 EARLINGS Conference Call. First, I would like to direct you to the supplemental earnings presentation on our investor relationships website and begin on slide two. 2021 was indeed a year filled with accomplishments for Genetron. Our total revenue grew over 25% year over year, highlighted by our continued penetrations in the cancer diagnosis and monitoring market, as well as the liver cancer early screening segment. We also established several key partnerships with the likes of AstraZeneca, Fosun Pharma, and recently with HatchMed to develop new tests and expand the commercialization of existing tests while further validating our products and technologies with impactful publications. In 2022, We're excited to build on this momentum by advancing our pipeline to broaden our precision oncology platform and to enhance our value proposition. If you turn to slide four, as a foremost provider of precision oncology products and service in China, our comprehensive portfolio covers the entire spectrum of cancer management, spanning early screening, therapy selection, MRD monitoring, and developing CDX with biopharma companies. In 2021, we grow diagnosis monitoring revenue by 28% to RMB 492.4 million. The primary driver of this growth was a 64% increase of IVD in hospital cells, driven by greater adoption of our sequencing platforms and assets including the JingChuan S5 instrument and the aging lung cancer assay. As some of you may know, in China, as the current regulations stand, the IVD in-hospital market is a segment where there is a clear pathway for potential government reimbursement. Moving forward, we intend to invest resources to further penetrate the in-hospital market with our solutions. We're very pleased that we have gained good traction in the past few quarters by establishing 30 IVD hospital contracts at the end of the year 2021. On the LDT side of the business, we grow revenue by 16%, led by sales of our early screening tests, in addition to our LDT diagnostic test volume growth of 11%. This was the first full year that we introduced our early screening test as an LDT. And we are happy with the performance and believe that early screening access will be a growth driver continuously for 2022 as we continue to roll out our commercialization strategy. The COVID impact headwinds persisted in the fourth quarter and weighted on top-line year-over-year growth of 10% on revenue of renminbi 146.9 million. Our IVD business grew over 66% thanks to the continued uptake of our S5 instrument and Long 8 NGS assay. The LDT business was more heavily impacted by China's zero-COVID strategy. As we discussed in the past, zero-COVID focus of the government has led to large-scale testing and other travel restrictions throughout the country's outbreak areas and resulted in declines in patient traffic to many of our LDT customers. Operationally, we had an eventful year focused on further strengthening our position on college portfolio, and now I will discuss a few of the key developments. So let me start off with our early screening segment on slide five. In November, We initiated a NAMPA registrational trial for our early detection assay in HCC by beginning the enrollment for the trial of our methylation multi-marker PCR-based assay, HCC scan. Recall that this was a 5,000-patient trial in nine planned clinical sites, of which we have started in five sites already. We also intend to select some of these same sites for our multi-omics NGS-based HCC screen trial. The HCC screen trial has been slightly delayed based on COVID-related disruptions, but we do plan to enroll subjects around end of the second quarter. We continue to believe that this structure of both PCR and NGS tests would be a sound strategy. PCR has a more established presence and readily available workflows in many hospitals and clinics in China. and the trend continues to accelerate based on the nucleic acid testing needs and the associated government-led infrastructure built since COVID. In addition, a few months ago, DNA methylation and other genetic testing were included in some of Beijing and other provincial insurance programs, establishing a benchmark pricing of around RMB 800 for methylation-based tests and around RMB 1,500 for NIPT NGS-based testing. Based on these dynamics, our company sees that adding a high-performing PCR-based assay would be commercially viable, while also providing self-paid patients in lower-tier markets with a cost-optimal solution. So overall, we're confident that we can deploy both in-hospital and central lab models to increase accessibility and penetrate the liver cancer early screening market more effectively. As for our HCCC screen plans in the U.S., we have started a confirmatory study with two leading medical institutions in the U.S. and may present data at an upcoming conference later. So beyond liver cancer, we have plans to develop a multi-cancer product in the future. We have already shared some early retrospective CRC data during our last earning call, showing over 91% of sensitivity and 95% of specificity. We continue to expect the CRC data to be published sometime in 2022. So now turning to slide six, on solid tumor MRD, recall that we have announced a multi-year co-development agreement with AstraZeneca R&D China for an NGS-based personalized MRD test in China. MRD testing may help in the clinical management for patients. Well before metastatic lesion growth of the glisten size detectable by conventional methods such as MRI and CT scan, both AZ and JingChang teams have been working together very diligently since the partnership started. Assay optimization is currently ongoing and expect to finish by year end. Concurrently, we are also planning a pilot LDT launch in the second quarter and expect to expand the official full launch before year end. Recall that with this partnership, AZA plans to use the co-developed MRD test for China-specific solid tumor clinical trials. that are designed to incorporate the use of NGS-based personalized MRD tests. The companies may also expand the partnership later to include IVD registration and commercialization. So touching on the specific development plan for this co-developed personalized assay, the assay prototype development has been complete based on our proprietary mutation capsule platform. We have shown great analytical validation results as demonstrated by gastric cancer data in the publication on Journal of Hematology and Oncology in which the personalized assay showed excellent sensitivity to detect .001% tumor DNA from peritoneal lavage fluid samples for precise prediction of peritoneal dissemination. In terms of clinical validation work, Data in locally advanced rectal cancer patients were recently published in eBiomedicine, part of the Lancet Discovery Science. So in the study, analysis was conducted on different MRD approaches after neoadjuvant therapy. We're also excited the publication has been accepted for a high-impact journal for our HCCC MRD data, and it is expected to be available in the next few months. So these data are highlighted in slides 9 and 10. The chart on slide 7 shows the general workflow of the tumor-informed approach. Essentially, mutation markers are selected based on whole exon sequencing of tumor tissues, and a personalized panel is then designed for subsequent blood-based cdDNA testing. The advantage of this approach is that the panel performance is maximized and the false-positive and negative results can be avoided as much as possible. The disadvantage is that this method requires tumor tissue sample and is a costly and long design process. On slide eight, we would discuss the advantage of using mutation capsule technology in solid tumor MRD development. The mutation capsule is a method for detecting mutation and methylation of tumor-specific genes in ctDNA. and it supports both our early screening tests as well as our tumor-informed and tumor-naive assay developments. The platform enables multiple test analysis based on single cfDNA sample, thereby reducing panel validation time and providing head-to-head comparisons between multiple MRD strategies. So beyond tumor-informed MRD assay, we're also exploring tumor-naive MRD approach based on mutation capsule to evaluate the performance of different types of biomarkers, including mutation, fragmentation, methylation, et cetera. We look forward to sharing more updates as these programs proceed. Mutation capsule also allows more sensitive detection in low-yield CFDNA samples with higher conversion efficiency of CFDNA molecules. Just last week, the China National Electrical Property Administration granted an invention patent to Jingcheng. We're very excited this grant further strengthens our competitive position in developing new assets in emerging segments such as MRD and early screening. On slide nine, we present the analytical validation of our tumor-informed MRD assets in gastric cancer. In a prospective cohort, of 104 gastric cancer patients. The MRD assay detect all the cases that developed peritoneal dissemination with 100% sensitivity and 85% specificity. MRD positive patients were associated with decreased recurrency-free survival and overall survival. On slide 10, we present our clinical studies comparing personalized assays with fixed panel assay in CRC and liver cancer, respectively. Compared with personalized assay, the performance of MRD profiling based on fixed panels varies on different tumor types and clinical application scenarios. So for second MRD in hematological cancers shown on slide 11 is a validation data from 128 clinically confirmed patient samples. The positive detection results of traditional flow cytometry and secMRD were highly consistent. Notably, 10 cases were detected MRD-positive by secMRD but negative by FCN. Suggesting higher sensitivity of the secMRD in this study, we believe this is the first validated NGS-based MRD detection assay in China for hematological malignancies. Commercially, our pilot launch with Fusum Pharma that started in January is progressing well. Based upon positive market feedback, we're planning for a full launch of SecumRD in the second quarter. This assay is also generating many dialogues with biopharma partners with just a sign of partnership with Juno WC, the JW Therapeutics. We anticipate a few more partners, influential partners, to sign on in the next few months. So overall, we're pleased with continued support by the healthcare authorities of MRD testing in hematological cancers in China, and believe that our NGS-based SEC MRD represents an innovative, competitive option in the market. So turning to slide 12, moving on to discuss our biopharma service business. In the fourth quarter, we have signed on additional 13 biopharma partners, increasing the total now to 60 partners. We continue to see a strong pipeline as we have the opportunity to form partnerships through our key products, including SeqMRD, OncopanScan, FusionScan, and others. For OncopanScan, CE marked comprehensive genomic profiling panel. A few posters utilizing this large panel product would be presented at the upcoming AACR, including its capability in revealing molecular profiles of pediatric and adult sarcoma, gene fusions in glioma patients, and germline gene alteration and mutation in glioma and gastric cancer. For our registrational pathway, OncoPenscan has passed the typing test. that we're finishing the site selections and the patient enrollment is planned to begin in late second quarter of this year. Slide 13. Recently, we have announced our CDX partnership with HutchMed for salmoneed TNIP in non-small cell lung cancer using our already marketed aging lung cancer IVD assay. As mentioned, Our aging lung cancer assays are already gaining very good traction in the IVD in-hospital use market. We're excited about this partnership as it is our second major CDX after our first one with system for , which has already entered the NAMPA priority review and approval process. In China, the trend of CDX demand is growing stronger, resulting from NAMPA's increasing focus on genomic testing. for innovative targeted immunotherapies. This, together with our CLIR lab in Maryland, provide us with lots of opportunity to work on cross-border trials and CDX developments. We anticipate continued strong growth in this exciting business segment. So now let's move on to slide 14. So this shows our approved IVD products as well as those in the registration pipeline. We have a strong NAMPA-approved product portfolio, which gives us competitive advantage in driving the in-hospital model and IVD revenue growth. Our registration pipeline represents one of the most comprehensive molecular testing pipelines in the market. I have touched upon Oncopan scan, HCC scan, HCC screen, lung cancer aging CDX and PDGFRI kits, We have, in fact, two more products under development. Firstly, the thyroid basic, a PCR-based kit that was developed as an essential tool for molecular classification and prognosis for thyroid cancer. We're currently conducting a registrational trial for thyroid basic at four clinical sites. We anticipate a complete trial in 2022 with potential IVD approval next year. China has more than 220,000 thyroid cancer new incidence per year. These assets can leverage the existing and expanding PCR presence in China, providing smaller and mid-sized hospitals with more options. So secondly, we're launching a new liquid biopsy genomic profiling panel in a very exciting new product, and we look forward to sharing more updates in the coming months. So now I will turn over the call to our CFO, Mr. Evan Chu, to provide more details on our fourth quarter financials. Evan.