Burning Rock Biotech Ltd

Burning Rock Biotech Limited operates in the cancer diagnostics industry, focusing on Next-Generation Sequencing (NGS)-based cancer therapy selection and early cancer detection. The company commercially launched its first cancer therapy selection test in 2014 ¹ and its first Molecular Residual Disease (MRD) product, CanCatch®, in March 2022 ². The company's early detection product, OverC™ Multi-Cancer Detection Blood Test, received Breakthrough Device Designation from both the FDA and the NMPA in January 2023 and October 2023, respectively ³.

The core business model of Burning Rock Biotech Limited revolves around generating revenue through NGS-based cancer therapy selection and prognosis prediction tests. The company employs a two-pronged commercial infrastructure: a central laboratory model and an in-hospital model. The central laboratory processes samples delivered from hospitals across China, while the in-hospital model involves partnering with hospitals to establish in-house laboratories and selling them reagent kits on a recurring basis. The company's revenue mix includes both transactional income from tests and recurring sales of reagent kits. Primary customer segments include hospitals, physicians, patients, and pharmaceutical companies.

Burning Rock offers 33 NGS-based cancer therapy selection and prognosis prediction tests ⁴ applicable to various cancer types, utilizing both tissue and liquid biopsy samples. Key therapy selection tests include OncoScreen™ Focus (LungCure CDx), OncoCompass™ Plus/OncoScreen™ Plus, and OncoCompass™ Target. OncoScreen™ Focus (LungCure CDx) is a human nine-gene mutation joint detection kit approved by the NMPA in March 2022 ⁵ for non-small cell lung cancer, guiding targeted therapy. OncoScreen™ Plus and OncoCompass™ Plus are pan-cancer tests profiling 520 genes ⁶ for solid tumors, detecting immunotherapy biomarkers like TMB and MSI. OncoCompass™ Target is a ctDNA liquid biopsy-based test for NSCLC, upgraded to a pan-cancer test, analyzing 168 genes ⁷ and detecting MSI. The company also offers ColonCore for gastrointestinal and related cancers, assessing 82 microsatellite loci ⁸ and detecting mutations in 46 genes ⁹. The MRD product, CanCatch®, launched in March 2022 ¹⁰, is a self-developed personalized MRD product.

For the fiscal year ended December 31, 2025, Burning Rock Biotech Limited reported total revenues of RMB539.568 million (US$77.157 million) ¹¹. Gross profit for the same period was RMB402.9 million (US$57.6 million) ¹², resulting in a gross profit margin of 74.7% ¹³. The company incurred a net loss of RMB55.346 million (US$7.916 million) ¹⁴. Cash and cash equivalents stood at RMB478.392 million (US$68.409 million) ¹⁵ as of December 31, 2025. Total liabilities were RMB285.111 million (US$40.770 million) ¹⁶ as of December 31, 2025.

Comparing year-over-year, revenues increased from RMB515.822 million ¹⁷ in 2024 to RMB539.568 million ¹⁸ in 2025. Gross profit increased from RMB362.4 million ¹⁹ in 2024 to RMB402.9 million ²⁰ in 2025, with gross profit margin expanding from 70.3% ²¹ to 74.7% ²². The net loss significantly narrowed from RMB346.626 million ²³ in 2024 to RMB55.346 million ²⁴ in 2025. Research and development expenses decreased from RMB232.3 million ²⁵ in 2024 to RMB166.5 million (US$23.8 million) ²⁶ in 2025.

During the reported period, the company's LungCure CDx, a human nine-gene mutation joint detection kit, was approved by the NMPA in March 2022 ²⁷. In October 2024, a co-developed NGS-based CDx for EGFR exon 20 insertion mutation for sunvozertinib of Dizal was approved by the NMPA ²⁸. The company's Magnis BR, a fully automated NGS library preparation system, received clearance as a Class II medical device for IVD use in China in 2022 ²⁹, and as of the date of the annual report, 20 hospitals in China had adopted it ³⁰. The MEDAL study, related to the MRD product CanCatch®, was published in Cancer Cell in September 2023 ³¹. The OverC™ Multi-Cancer Detection Blood Test was granted Breakthrough Device Designation by the FDA in January 2023 ³² and by the NMPA in October 2023 ³³. The 6-cancer THUNDER study was published in Annals of Oncology in 2023 ³⁴. The company also completed a share repurchase program, repurchasing a total of 3,023,138 Class A ordinary shares ³⁵ in the form of ADSs. The company voluntarily delisted its ADSs from the London Stock Exchange, effective September 18, 2024 ³⁶, and effected an ADS ratio change from one ADS representing one Class A ordinary share to one ADS representing ten Class A ordinary shares, effective May 15, 2024 ³⁷.

Burning Rock Biotech Limited plans to continue its research and development in early cancer detection, which is described as technically challenging. The company also intends to further implement its strategy to expand collaboration with partner hospitals under the in-hospital model. The company is developing and validating cancer early detection products to cover more cancer types. It has successfully signed contracts with a small number of pilot hospitals in China for the commercialization of its OverC™ product and expects to focus on customer education and contracting more hospitals. The company is in the early stages of developing a second-generation multi-cancer early detection (MCED) test designed to detect up to 22 cancer types. This candidate will be evaluated through analytical and clinical validation activities, including training, validation, and independent validation using a case-control study design, with the case-control cohort having completed sample collection.

The company's research and development efforts are primarily focused on the development and improvement of NGS-based cancer therapy selection products, including designing products with lower sample input, higher library conversion rates, and shorter hands-on time. There is also a continuous effort to increase the automation of NGS-based cancer therapy selection products to reduce manual workload and enhance precision. The bioinformatics team is dedicated to improving data analysis algorithms and developing the analysis pipeline. The validation team is thoroughly evaluating the sensitivity, specificity, reproducibility, and accuracy of each product before launch. The company is currently working on an improved hyb-capture based workflow to achieve a fast turn-around-time from sample to answer within 24 hours. Bioinformatically, a new algorithm is under development to enable tumor-only somatic variant calling and tumor fraction estimation in both tissue and liquid biopsy, which is expected to greatly improve gene copy number alteration detection, particularly for copy number deletion and partial gene loss.

Burning Rock is developing a number of products targeting different cancers for NMPA approval, implementing strict design control processes, performing analytical validation, and conforming manufacturing to GMP and ISO13485 standards. Corresponding software solutions are also under development for these products, utilizing the new algorithm. Building upon CanCatch® Personalized MRD, the company is continuously conducting analytical and clinical validation studies on its UMI-based liquid biopsy products for sensitivity and utility in MRD detection, aiming to demonstrate clinical benefits for early-stage patients by predicting recurrence risk after treatment. The company is also actively developing methylation-based tumor agnostic MRD and therapy response products.

In early cancer detection, building upon brELSA™, its targeted DNA methylation-based library preparation method, and brMERMAID™, its machine learning algorithm, the company will continue to improve the biochemistry to enhance background noise suppression, allowing for more accurate qualification and compatibility with more sequencers. Improvements to early detection prediction models for cancer detection sensitivity, specificity, and tissue origin determination accuracy are also ongoing. The company has initiated two prospective, multi-center studies, the PREDICT study and the PRESCIENT study, to further develop and validate its pan-cancer early detection test. The PRESCIENT study, launched in May 2021 ³⁸, is China's first blood-based, pan-cancer early-detection study using a multi-omics approach. In June 2022 ³⁹, the PREVENT study, China's first prospective interventional study, was launched to evaluate the performance of OverC™ in the asymptomatic population, having enrolled approximately 5,000 asymptomatic individuals ⁴⁰.

To alleviate complicated workflows for NGS-based cancer therapy selection products, the company is developing multiple automation solutions to streamline workflows and reduce human intervention and turnaround time. These solutions include robotic liquid handling systems and corresponding laboratory information management system integration to meet high, medium, and low throughput laboratory requirements. Additionally, research and development are being conducted on additional clinically actionable biomarkers, such as sequencing RNA samples to detect clinically significant RNA alterations, which is expected to supplement DNA sequencing.

Based on the current business plan, the company believes its cash and cash equivalents, along with cash generated from financing activities, will be sufficient to meet current and anticipated needs for general corporate purposes for at least the next 12 months.

The company faces several material risks, including those related to its operations primarily in China, where it is subject to evolving PRC laws concerning data security and foreign investment restrictions in scientific research and technical services, as outlined in the Negative List (2024 Edition). Changes in China's economic, political, or social conditions or government policies, or substantial intervention and influence by the PRC government, could materially and adversely affect the business. Specifically, the company may be subject to cybersecurity review if identified as a Critical Information Infrastructure Operator (CIIO) or Network Platform Operator (NPO) that processes more than one million users' personal information ⁴¹ or whose data processing activities affect national security, potentially limiting its ability to offer securities. The company also faces risks from the Holding Foreign Companies Accountable Act (HFCA Act), which could prohibit its ADSs from trading on a U.S. national securities exchange if its auditor is not subject to inspection by the PCAOB for two consecutive years ⁴². Furthermore, the company's Variable Interest Entity (VIE) structure, used to comply with PRC foreign investment restrictions, may not be as effective as direct ownership, and changes in PRC laws or their interpretation could lead to severe penalties or forced relinquishment of interests in those operations. The company is also exposed to geopolitical tensions, particularly Sino-U.S. relations, which could result in sanctions, export controls, tariffs, or investment restrictions, potentially increasing costs for imported reagents and laboratory equipment, and discouraging investments in China-based issuers.

Management emphasizes the company's mission to transform precision oncology and early cancer detection, highlighting its position as China's leading NGS-based cancer therapy selection company. They underscore the importance of their advanced proprietary technologies, comprehensive product portfolio, and a two-pronged commercial infrastructure comprising central and in-hospital laboratories to maximize market penetration. Management is focused on continued investment in the in-hospital model, which is expected to be an increasingly important segment of China's NGS-based cancer therapy selection market. A key strategic priority is the ongoing research and development in early cancer detection, with the aim of developing pan-cancer early detection products, building on the Breakthrough Device Designation received for OverC™ from both the FDA and the NMPA. Management also stresses the importance of maintaining high quality standards, as evidenced by various certifications and regulatory approvals, and fostering academic and pharmaceutical collaborations to drive market adoption and endorsement of their products. The company believes its cash and cash equivalents, along with cash generated from financing activities, will be sufficient to meet its current and anticipated needs for general corporate purposes for at least the next 12 months.