Burning Rock Biotech Ltd. Q2 FY2022 earnings call

• Despite COVID lockdowns in Shanghai, Beijing, revenue grew year-on-year due to strong in-hospital revenue outside these areas, new product lines like MRD, and pharma business. - Therapy selection segment has been working for 8 years, aiming to make in-hospital model profitable in 2023. - MRD has actionable utilities evolving, with studies like IMvigor010 and DYNAMIC showing potential. - Early detection PROMISE study expanded model to 9 cancers, PREVENT study is first large prospective symptom-free study in China. - Operational efficiency initiatives: Reduced R&D spend on non-core projects, optimized sales and marketing headcount, G&A headcount trending down.

Therapy selection: Started in 2014, in-hospital model is operating profit positive, central lab is not; aiming to make [indiscernible] profitable in 2023. MRD: Revenue grew, launched in March, strong market response, initial clinical validation data released. Pharma business: Profitable, strong growth, contributed 14% of overall revenue in Q2. Early detection: PROMISE study completed, results to be released at ESMO; PREVENT study, a prospective study with over 10,000 participants, started patient enrollment in Q2.

• Retain full-year guidance despite COVID risks. - Underlying growth from market share gains in in-hospital strategy, MRD volume ramp, and pharma project backlog converting to revenue. - Acknowledges lingering COVID risk but believes underlying business momentum is strong.

• COVID situation in China remains fluid; large-scale lockdowns could significantly negatively impact revenues.

Q: Speak to key revenue drivers and assumptions for the second half, confidence in full-year guidance, and COVID impact.

A: COVID impact buffer used in Q2, underlying growth from pharma and MRD strong if no further COVID outbreaks, confident in full-year guidance with pent-up demand in Shanghai and Beijing if normalcy returns.

Q: Color on Shanghai and Beijing's current state, their revenue contribution, and pent-up demand.

A: Shanghai and Beijing make up a significant portion, over half of in-hospital volumes, about a quarter of total volume, improving trends but not back to normal, expect patients to return with pent-up demand if no further impact.

Q: Timeline for colorectal cancer MRD consensus and catalysts for MRD adoption.

A: Colorectal cancer consensus actively discussed, near to midterm catalysts include results from interventional studies like DYNAMIC and CIRCULATE-Japan, and pharmaceutical companies embedding MRD in drug studies.

Q: Whether guidance contemplates uptick in pharma revenues in first half.

A: Pharma has been on track or slightly beating internal forecasts, visibility built on backlog, providing further runway.