Genetron Holdings Limited

Good morning, and thank you for standing by. Welcome to the first quarter 2022 GeneTron 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 the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Evan Hsu. CFO at GeneTron Health. Please go ahead.

Hello, everyone, and welcome to GeneTron's first quarter 2022 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 provision of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Jinchuan 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 Jinchuan Health's filings with the SEC. All information provided today is as of the date of this call, and Jin Chong House does not undertake any obligation to update any forward-looking statements except as required under applicable law. With respect to any non-effortless measures discussed during today's call, the company's reconciliation information related to those measures can be found in the earnings release issued earlier today. Allow me to introduce the management team on the call today. Zijuan Wen, co-founder, chairman, and the CEO of Yunchuan Health, will discuss recent business updates and upcoming catalysts. And I will provide financial highlights related to the unaudited first 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. Hai Yan, chief technology officer, Dr. Yu Chengjiao, and chief medical officer, Dr. Yunfu Hu, will also be available to answer questions. With that said, I would now like to turn the call over to Mr. Sijuan Wen. Sijuan, please go ahead. Thank you, Yanen.

Hello, everyone. Thank you for joining our first quarter 2022 Earnings Conference Forum. I would like to direct you to the supplemental earnings presentation on our investor relations website and begin on slide two. As a leading provider of precision oncology product services in China, our comprehensive portfolio covers the entire spectrum of cancer management from early screening and therapy selection to MRD monitoring and the development of CDX with biopharma companies. In each of the segments, we are increasing adoption and penetration of our products. Attending to slide four, the first quarter was rather productive for GENTRA. We continue to demonstrate the strengths and increase awareness for our precision college platform. The recent highlights include a new CDX collaboration agreement with Hatchpad for their alpha-thesis drug for non-small cell lung cancer. using our marketed aging lung cancer assay, receiving the C mark of the SecMRD kit for the detection of hematologic cancers, as well as FusionScan Plus, which uses integrated DNA and RNA as templates for genetic alteration detection. A peer-reviewed publication of mutation capsules potential in MRD assay development in clinical and translational medicine as well as 17 clinical data presentations at the American Association for Cancer Research channel meeting. So in the first quarter of 2022, we grow diagnosis and monitoring revenue by 14% to RMB 99.5 million, of which IVD in hospital cells rose 18%, driven by greater adoption of our sequencing platforms and assets, including the JingChong S5 instrument and aging lung cancer assay. As we have mentioned, we plan to prioritize and further penetrate this reimbursed in-hospital market with our solution. We have gained solid traction here and increased the number of contracted in-hospital partners to 31 at the end of the quarter, and are excited to build on this momentum. On the LDT side of the business, we grow revenue by 14%, of which diagnostic Test volume grow about 9% year over year in the first quarter. We continue to operate in a challenging environment where COVID outbreaks and the zero COVID policies are affecting commercial opportunities across health care facilities. Relatively speaking, within our portfolio, the LDT business was more heavily impacted by virus containment policy, which caused declines of patient traffic to many of our LDT customers. services revenue more than doubled in the quarter. In addition to higher sequencing revenues, the growth was also a result of increasing biopharma partnerships and the meaningful progress we're making with each. Against the backdrop of a challenging operating environment, we're committed to forging ahead with our major pipeline assets that we expect will be key drivers for our future growth. So on slide five, let me start off with our early screening segment. In November 2021, we initiated a NAMPA registration trial for our HCCC early detection assay. By beginning the enrollment for the trial, our methylation multi-marker PCR-based assay HCCC scan. Recall that this was a 5,000 patient trial in nine clinical sites, and we intend to select a few of these sites for our multi-omics NGS-based HCCC screen trial. As a result of COVID disruptions, the HCC screen trial has been delayed and we now project to begin running subjects in third quarter. We continue to believe that this structure of both PCR and MDS tests is the best strategy to help the most patients and expand the addressable market for the assets. There is a more established PCR infrastructure with readily available workflows in many hospitals and clinics in China. Based on the logistics assets, testing needs and associate government-led infrastructure built since COVID PCR capabilities continue to increase across healthcare system in China. Additionally, a few months ago, the DNA methylation and other genetic testing were added to some Beijing and other provincial insurance programs. This reimbursement established a benchmark price of around RMB 800 for methylation-based tests and around RMB 1,500 for NIPT-NJs-based testing. Based on these dynamics, we believe that adding a high-performing PCR-based assay would be commercially viable, while also providing self-pay patients in lower-tier markets with a cost-optimal solution. Overall, we are confident that we can deploy both in-hospital and central lab models to increase accessibility and efficiently penetrate the liver cancer early screening market. As for our HCC screening plans in the U.S., we have started a complementary study with two medical institutions in the U.S. and may present the data at an upcoming conference. 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 learning course. showing over 91% of sensitivity and 95% of specificity. We continue to expect to have CRC data published sometime in 2022. To turn into slide six, on the MRD side, recall that we have announced an exciting multi-year co-development agreement with AstraZeneca R&D China for a NGS-based personalized MRD test for solid tumors in China. MRD testing has the potential to help in the clinical management for patients well before metastatic lesions grow to the size detectable by conventional methods such as MRI and CT scan. With this partnership, AZ plans to use this 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 assay optimization is currently ongoing and expected to finish by year-end. Concurrently, we're also planning a pilot LDT launch in the second quarter and expect to expand to official launch before year-end. So now moving to slide eight. The assay would be developed based on GeneTrans' patent mutation capsule platform, a method for detecting mutation and methylation of tumor-specific genes in ctDNA, The mutation capture platforms enables multiple test analysis based on a single CFDNA sample, providing head-to-head comparisons between multiple MRD strategies, such as personalized and non-personalized assays, as shown in slide 9 and 10, with some of the early data we generate from gastric, rectal, and liver cancer patients. The liver data was recently published in Clinical and Translational Medicine demonstrating the technology's potential in MRD assay developments. The mutation capsule also allows more sensitive detection in low-yield CFDNA samples with higher conversion efficiency of CFDNA molecules. Beyond tumor-informed MRD assay, we're also exploring tumor-naive MRD approach based on the same technology platform. We look forward to sharing more updates as these programs proceed. Currently, there are only a handful of companies in China that may have the capability to develop a high-performing MRD athlete. We continue to be optimistic about MRD solid tumor market in China, and in particular, Jingcheng's competitive position after the AstraZeneca collaboration. On slide 11, for second MRD in hematological malignancies, Our exclusive partnership with Futsun Pharma in China is progressing well. We have expanded our clinical launch in the second quarter. This assay is also generating many dialogues with biopharma partners. And we anticipate a few more partners to sign on in the next few months. Overall, we're pleased with continued support by the health care authorities of MRD testing in hematological amygdala in China. And we believe that our NGS-based SecMRD represents an innovative and differentiated solution. So now turning to slide 12, moving on to discuss our biopharma service business. In the first quarter, we have signed on an additional four biopharma partners, increasing the total now to 64 partners. We continue to maintain a strong pipeline, as we have the opportunity to form partnerships through our key products, including SecMRD, OncopanScan, FusionScan, and others. So recently, we have announced our CDX partnership with HatchMed for salamonidinib in non-small cell lung cancer using our already marketed aging lung cancer IVD assay. As mentioned, Our aging lung cancer assay is 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 4 of a pretenib, which has entered the NAMPAD priority review and approval process. In China, the trend of CDX demand is growing stronger, resulting from NAMPAD's increasing focus on genomic testing for innovative targeted immunotherapies. Together with our CLIA lab in Maryland, we have excellent opportunities to work on cross-border trials and CDX developments. We anticipate continued strong growth in this business segment. So now I will turn the call over to our CFO, Mr. Evan Chu, to provide more details on our first quarter financials. Evan.