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Burning Rock Biotech Limited (BNR) Q4 2021 Earnings Call Transcript

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Burning Rock Biotech Limited ( BNR 4.21% )
Q4 2021 Earnings Call
Mar 22, 2022, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


This presentation contains forward-looking statements. These statements constitute forward-looking statements within the meaning of the section of 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 terminologies such as will, expects, anticipates, future, intends, plans, believes, estimates, target, confident and similar statements.

Burning Rock may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by the officers, directors, or employees to third parties. Statements that are not historical facts include 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 risks, uncertainties, and other factors, all of which are difficult to predict and may — and many of which are beyond Burning Rock’s control. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements.

All information provided in this presentation is as of today, and Burning Rock does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law. I would now like to hand the conference over to your speaker today, Mr. Han, CEO.

Yusheng HanChief Executive Officer and Founder

Thank you, and welcome to Burning Rock 2021 annual conference call. I’m Yusheng Han, the CEO and founder of Burning Rock. And today, we have our COO, CTO, and CFO in the meeting. So let’s turn to the Page 3 first, and I will recap the highlights of 2021 and our recent progress.

Then I will go through the outlook of 2022. After that, our COO, Shannon will elaborate on our product line, especially early detection in MRD. Then our CFO, Leo, will walk you through the financials. The Burning Rock started with the therapy selection business in 2024 and has grown to the market leader in this segment.

The leading position has laid a good foundation and given us advantages moving forward to new business of early detection MRD in pharmaceutical collaborations. We have strong branding on our technology and product quality, which help us attract talent, and the network we have built across thousands of oncologists and hundreds of hospitals enable us rapid initiation of R&D started on new products such as — as well as fast distribution when they go to the market. The existing high testing volume makes it possible for us to continue lowering the cost. That’s why we aim to tackle the therapy selection, MRD, and early detection market in parallel in the coming few years.

Let’s turn to Page 4 and recap our 2021 and recent progress. For therapy selection, we recorded a 38% volume increase in 2021 and reached 70,000 units despite of the COVID influence. And in-hospital model growth was 63%, proving in-hospital model is a reliable and fast-growing model. And several days ago, we achieved NMPA approval of our second NGS kit.

It’s a nine-gene kit for non-small cell lung cancer, but its meaning is much bigger than our first kit and exceeds all the existing NMPA approved kits in the market. And I will talk about that a little bit later on. We have talked several times about our tumor-informed MRD technology, brPROPHET. It has shown very promising performance with the sensitivity on par with what has been shown in Natera and Archer’s publication.

And we have some exciting readouts that will be released in AACR, and Shannon will elaborate more on that. For pharma collaborations, the growth trend continues and new contract value risk RMB 183 million in 2021, which is 5.7 times versus 2020 full year. In terms of early detection, the nine-cancer test development is on track, and the first large cohort will read out in 2022. The commercialization of six-cancer early detection is almost ready.

We will collaborate with our partner hospitals to start commercialization once the COVID lockdown is released. And let’s turn to Page 5. In Page 5, I’ll walk you — I will talk about what we can expect in 2022. For therapy selection, new product line will start to contribute to revenue including DetermaRx, which we’re licensing from OncoCyte and myChoice HRD Plus, which we’re licensing from Myriad.

The trend of our in-hospital model growth will continue with more new contracted hospital and more type of products contracted with existing hospitals. With the growing top line, we expect the operational efficiency of therapy selection better than before. For MRD we launched the commercialization in March based on the solid data we have accumulated. The initial feedback from the market is quite positive.

And we — as I said a minute ago, we will release the data on lung cancer baseline and AACR. And additional studies in other type of cancers are under planning. The business of pharmaceutical collaboration will continue to grow and contribute higher value to our revenue this year. For early detection, we have two large product development studies going on, each over 10,000 subjects, and which you might have already known.

And the first intent of use population multi-cancer interventional study in China will launch in 2022. Let’s turn to Page 6, I’ll spend probably one minute explaining the meaning of the new approved nine-gene kit. Although it’s still a small panel, it’s a very meaningful step compared with existing approved panels. First, the DNA input is only 30 nanograms, which means that much lower than all the other capture sequencing base kit, meaning it can be applied to small samples from imaginary puncture biopsy.

And the second meaning is that if the first kit that copy number variation is approved in the MET, the gene-MET is included in that. And also, this is a kit with open side of the detection of fusion. So that’s basically the overlook of 2022. Now I will turn to Shannon about the product line development.

Thank you.

Shaokun ChuaiChief Operating Officer and Director

OK. So let’s move on to Page 8. This is the overview of our early detection product development road map. This might look very similar to you because we have actually shared this map for quite a few times in the past calls.

So the overall program stays the same as previously communicated, where our six clinical product has entered commercialization and now the development and navigation work are now heavily going on for our nine-cancer product. And then, if we go to Page 9, here we have a little bit more details. In the most recent months, we have two particular updates, I think, are worth mentioning. First, on our six-cancer product.

During our last quarter’s call, I think we talked about the prospective and interventional studies intended-use population that we were planning on. So we are now happy to share that this study, which is now named Prevent, has most recently obtained approval from the human genetic resources administration in China, and so is now ready to start approval. And the second thing we want to share is that we had our first data readout on the nine-cancer product from the case-control pilot validation study called Promise. The performance so far looked quite promising.

Since the statistics are still being summarized and finalized, we couldn’t share more details right here, but we are submitting the results from Promise to ESMO conference this year. So please stay tuned on that if you’re interested. And also on the set note on the Predict study, which we have talked about many times, it’s a larger scale, two-phase case-control cohort study. It was expected to have some data readout later this year.

However, due to the recent COVID situation in China, we are having a mild delay on the enrollment speed and we now expect to complete enrollment for Predict Phase 1 in the three months and we will have the data readout in 2023. So now let’s go on to Page 10. This page lists our publications on our early detection technology ELSA-seq. At the bottom are some new some information which are our two most recent posters, which will be shown in the upcoming AACR conference.

And on Page 11, here we show a little bit more detail on one of the posters. In this poster, we will release part of the analytical validation data for ELSA-seq in six-cancer. And we were able to demonstrate a limit of detection between 0.02% and 0.11% across different cancer types. Again, we invite you to pay close attention to our posters in AACR if you’re interested.

So now let’s actually skip the next couple of pages and jump to Page 15 directly, and I would like to spend some time to talk about our progresses on MRD. First of all, this page — this graph on Page 15 actually come from an interesting review article from document [Inaudible] MRD applications on solid tumors. I think they are a good demonstration on the evolving knowledge and evidence of clinical utility of MRD, that’s why we put them here as an introduction sort of. The main message here is that MRD can potentially be used in two clinical scenarios.

The first one is the so-called landmark analysis, where MRD status is assessed right after operation or other curative therapy for cancer patients. It serves as a highly significant predictor for prognosis and almost unanimously in all studies across all cancer types, this utility was proved again and again. The second is the so-called surveillance analysis where MRD status is assessed longitudinally and repeatedly along the way. The plausible hypothesis here is that such monitoring through MRD tests may be able to flag relapse events ahead of time before radiological signs.

However, that earlier intervention based on MRD monitoring can lead to survival gain. In the end, it’s actually far less clear than the prognosis prediction effect itself, and it has been — there has been some reasons conflicting — conflicting on conclusion published on the surveillance analysis utility. So there’s more debate on that. And then on Page 16, the IMvigor010 study shown here in our opinion is a very important study to demonstrate clinical utility of MRD beyond prognosis prediction, based on the landmark analysis because in this study, it was shown quite clearly even though from a retrospective analysis that only MRD-positive patients benefited from the adjuvant immunotherapy, but not the MRD-negative patients.

Of course, more evidence needs to be generated, and we are also seeing some conflicting data such as from IMpower010. So still a long way before a full consensus can we reached on MRD utility and industry standards. Nonetheless, it has shown great promises and Burning Rock — in Burning Rock, we are also actively collaborating with Chinese clinicians to validate our MRD technology and establish utility for our MRD products. On the right side on Page 16, is a consensus on MRD application for lung cancer by Chinese clinicians, led by Dr.

[Inaudible]. And this was developed and published about exactly a year ago. So this is an example to show the fast adoption of MRD by Chinese doctors, and we are witnessing right now, similar consensus being discussed and developed in other cancer types such as colorectal cancer. So let’s skip Page 17, go directly to Page 18.

We wanted to show you some of our own progresses. On Page 18, we outlined Burning Rock’s development and validation work for our MRD products. In the upcoming AACR conference, we have two posters showing our first data readout on our personalized MRD technology, called brPROPHET on lung cancer and colorectal cancer, respectively. We have more details on the next two pages on that.

In addition, as mentioned before, we have also launched our MRD product on commercialization based on brPROPHET just a couple of weeks ago. So now I’ll take a few minutes to talk a little bit about our MRD validation data itself. First, on Page 19, we compared our brPROPHET, which is again our personalized MRD approach with our fixed liquid biopsy panel on our group has got lung cancer patients from the Medal study. So very interestingly, we used both tumor-naive calling and tumor-informed calling for the fixed panels, and we compared both with the personalized approach.

So this is meant to compare and contract whether and how much the personalized approach is more sensitive than the fixed panel approach. As you can see here, while both fixed panel and brPROPHET generated highly significant prediction for prognosis, brPROPHET was still indeed more sensitive because it identified more MRD-positive patients at the landmark and also it showed higher relapse-free rate among MRD-negative patients. I also wanted to point out that what’s being shown on the graph are just a subgroup enriched for patients who relapsed in the full Medal cohort, which we just most recently had the data, the full Medal cohort containing about 200 patients, MRD-negative patients assessed by brPROPHET actually achieved a 12-month recurrence-free rate of greater than 95%. So we were — we are right now preparing for publishing this data somewhere later this year.

So on the next page, on Page 20, let’s take a quick look on our data in colorectal cancer. Even though this is a smaller cohort, it showed similar results as in lung cancer. brPROPHET showed greater sensitivity than fixed panel approach when comparing their positive rate among preoperative baseline samples. And then for the landmark analysis, brPROPHET actually showed greater specificity than the tumor-naive calling approach.

Again, we’ll be able to show more details during our AACR poster presentation. So stay tuned if you’re interested in more detail. So now I’ll turn to our CFO, Leo to walk you through our financials.

Leo LiChief Technology Officer

Great. Thank you, Shannon. And first, let’s turn to Page 22. We’d like to briefly recap the COVID situation in China.

As we called back in November during our last quarterly results, COVID was spreading in China in late 2021. Despite that challenge, we closed the fourth quarter with strong volume and top-line numbers, which we’ll go through a little later. Then heading into 2022, COVID impact in China did not go away, despite that we had strong numbers during January to February 2022, and we’ll walk you through that as well. But the current wave in March is looking pretty severe.

It’s actually the worst I have seen since China imposed a nationwide lockdown back in the first quarter 2020 when COVID first erupted. We listed some of the impacts that we saw during March on the slide page here for your reference. And we note that Shanghai has many of China’s top oncology centers. It’s a large market for us, and it is heavily impacted for the month of March.

Then go to Page 23. Here, we list out our volume numbers and trends. First of all, we think 2021 is a much better year compared to 2020. And going into the trends that we saw back in 2021, first COVID disruptions and tightening or increased preference for hospitals to run NGS-based tests in-house has resulted in a step-wise change in the second quarter of 2021.

In that quarter, we saw a strong jump in volumes in the in-hospital channel, and we saw continued strength in the in-hospital segment throughout the year. Looking then at volumes of the central lab channel, which is the green bars here. Starting in the second quarter of 2021, the stepwise change in the industry that we just talked about, led to headwind of our central lab volumes as more tests were shifted to the in-hospital format but notably, central lab volumes turned to positive growth in the fourth quarter of 2021, and that trend improved further in January and February this year. So that turnaround is mostly supported by the new products that we launched which are highly differentiated in the market in China.

And looking at some of the numbers here for central lab, the volume growth of central lab was negative 10% year over year during the third quarter 2021 that turns to a positive 3% during the fourth quarter, and that further improved to 11% in January and February 2022 year over year. Then moving on to Page 24. We list out some of the metrics for the in-hospital segment. In summary, we have achieved more share and outgrew the industry through the in-hospital formats and our installed base, i.e., the number of hospitals that we have completed contracts and our booking revenues from increased at a faster pace during 2021 compared to the previous years.

Now let’s head to our financials on Page 25. We closed the fourth quarter in a stronger position versus where we were when we reported our third-quarter results earlier — sorry, back in 2021. We went through our volume metrics on Page 23. So going into the revenue figures, fourth quarter improved further in terms of year-over-year growth rate and sequential trend compared to the third quarter 2021, primarily driven by our volume growth in each of the segments.

First, looking at central lab. Third-quarter revenue was down 12% year over year, returned that to negative 0.8% in the first quarter — in the fourth quarter, and that improved further to positive single digits year-over-year in January and February combined in 2022. But as we noted earlier, regarding the COVID situation in China with caution regarding the impact of the current Omicron wave in China. So we — at the moment, we can’t take the January, February’s number as an indication for our first quarter.

We need to see how large of an impact that makes and if there is any change to the COVID zero strategy in China. And as a side note, we have seen oral antivirals arriving in China in the recent couple of weeks, but there has been no official change of strategy that we have seen or sensed so far. Then second, looking at the in-hospital segment, we had a high base back in fourth quarter 2020. We recorded our best quarter for in-hospital for the fourth quarter 2021, we grew 25% in revenue terms or 62% in volume terms in the fourth quarter.

We explained in our previous earnings call that volumetric leads revenue metric due to our billing and revenue recognition for the in-hospital channel. We booked a majority component upon our customer receiving the test kits, and we booked the remaining minority components when we received payment. So, generally, strong volume trends, I would expect should drive continued revenue growth over time for the in-hospital segment. I should also mention the biopharma service segment, which is growing rapidly, coming off a small base though.

We expect biopharma revenue to accelerate in 2022 driven by the rapid rise of project backlog that we have built during 2021, as Yusheng had called out earlier in the call. Then next go to ASP and gross profit margin trends. These are broadly stable within each of the central lab and in-hospital channel. As we’ve noted before, in-hospital revenues are chunkier, and can have quarter-over-quarter fluctuations.

So it’s more representative to look at margins of that segment over a rolling four quarters. On that basis, it’s largely stable over time. Then turning to our operating expenses. First, some context.

During 2021, we expanded our organization in preparation for three business goals: number one, accelerated in-hospital penetration for the patient testing business and new product launches; number two, early detection clinical program execution. Recall that we have two large studies, each over 10,000 subjects currently ongoing. We are launching another 10,000 intended to use population interventional study this year; and number three, early detection commercialization. We’re happy to see these efforts starting to bear fruit, particularly for Item 1 and 2.

We are also happy to report that the organizational buildup that has been largely completed at the end of 2021. So in terms of direction of travel going into 2022, we would not expect significant further headcount increases in 2022. As headcount is the largest component of our opex, we expect opex increase to slow significantly over the course of 2022. And translating this to numbers, our opex growth, excluding clinical studies, has more or less peaked on a sequential basis in the fourth quarter 2021.

In terms of year-over-year trend, we had a rising base throughout 2021. So the year-over-year increase will come down as well as we progress into 2022. Now I’d like to briefly touch on each of the opex lines. First, on R&D.

The increase in fourth quarter ’21 was primarily driven by good progress of our early detection clinical programs as enrollments and testing accelerated during the quarter, and also driven by R&D headcount increase back in 2021. Second, looking at sales and marketing. The year-over-year increase was 80% compared to the fourth quarter 2020. But if we strip out early detection related and one-off items, so if we just focus on recurring items for our patient testing business, the rate of increase was about 40%.

Going forward, as the customer and new product coverage build-out was largely complete at the end of 2021, we would expect sales and marketing increase to slow significantly in 2022. Along with continued top-line growth, we expect to see operating leverage on the sales and marketing line starting in the second half of 2022. Then looking at the G&A line, the increase was mostly driven by expansion of headcount and our physical footprint during 2021. A driver of the increase was our new early detection lab and office building, about 17,000 square meters in size or about 183,000 square feet.

In terms of outlook, the G&A line should generally follow our opex trend, as we outlined a little earlier, i.e., we’re looking at improving operating efficiency for this line as well. Then turning to our guidance for 2022. Our initial guidance for the year is top-line RMB 620 million, an increase of 22% over 2021. This guidance includes new products from our cancer patient testing business, including our personalized MRD products, which we launched this month, and that is gaining good traction.

The guidance does not bake in any early detection revenue as we’re still at an early stage of our early detection commercialization. Then lastly, looking at cash balance. At the end of 2021, our cash equivalents plus short-term investments was about RMB 1.5 billion or USD 236 million, which we think is sufficient for funding all our existing programs. So with that, we’d like to conclude our operating remarks — sorry, our opening remarks and turn to Q&A, please.

Questions & Answers:


Thank you. [Operator instructions] Our first question comes from Max Masucci with Cowen and Company. Your line is open.

Max MasucciCowen and Company — Analyst

Hi. Thanks for taking the questions. First one on some of the licensed products. It sounds like DetermaRx is becoming a more meaningful contributor to revenues.

So it would be great to hear about the adoption trends you’ve seen for DetermaRx and whether you see an opportunity to sign additional agreements like this to bring other NGS-based tests to a large Chinese precision oncology market.

Leo LiChief Technology Officer

Sure, Max. On DetermaRx, we don’t break out revenue or volume by individual products, but we had a good trend on DetermaRx. And it’s not just the DetermaRx, we also, as Yusheng called out at the start of the call, we also had another product from Myriad on myChoice plus HRD score that measurement. And that product is also receiving good feedback in the markets.

And our MRD product formally launched this month, and it’s also gaining good traction. So we believe new product is going to be an important driver for this year. And MRD, we think has strong potential over a multiyear time horizon. And there’s a bit of synergy between MRD and Determa regarding early stage lung cancer patients.

So that’s how we look at it. In terms of new products, we have an open mind, and we’ve been looking at products but we also need to bear in mind how that product fits into the China market. We believe that the two we have in-licensed makes very good sense, having strong potential market with strength on the products, having good validation data. So with that, we still apply that same framework when we look at potential products.

So I guess that’s — we have on licensing opportunities.

Max MasucciCowen and Company — Analyst

That’s great. So moving on to the recent NMPA approval. Would just be curious to hear now that we have the official approval, what sort of demand you’re expecting for the use of LungCure CDx with biopharma partners and then also in the clinical setting. And just curious if you’re expecting prior users of the original first generation, the 2018 version of LungCure to switch over to the nine-gene kit?

Yusheng HanChief Executive Officer and Founder

So for the nine-gene kit, I mean the first meaning is that for the bidding of each tender, it would take a lot of advantages. So for the in-hospital model, I mean that with officially approved kits from NMPA is critical. And most of the time, the parameter of the kit are important. So we think that nine-gene we’ll add a lot of competitiveness of our existing line.

And in terms of pharmaceutical collaboration, I think, yes, we think that companion diagnostic by the effort of both pharma and diagnostic company will bring a better future to the market. So the demand, I think we have already talked about several times is after the amendment of the requirement from NMPA, the companion diagnostic need is significantly increasing and that will accelerate to the pharmaceutical collaboration as well.

Max MasucciCowen and Company — Analyst

That’s great. Maybe a final one for Leo. It’s been over two years, we have over two years of experience with COVID so far. So it was nice to hear some of the trends that we’ve seen in terms of the bounce back once lockdowns are lifted.

So it sounds like there’s still some major disruption here in March. But just curious, as we look at the 2022 guidance, how we should think about a rebound in your business as the lockdowns are lifted just based on the experience we’ve had so far?

Leo LiChief Technology Officer

Yes. I think first, take a brief step back, we tried — in principle, we tried to break out COVID and ex-COVID impacts in the past. But conceptually, we think that may not make sense because China so far has always kept a COVID-zero policy in place. And as more infectious the disease becomes the bigger impact that generates on the market.

So despite that, how we’re looking at this is, number one, new product launches; and number two, taking share in the markets and primarily that was down through the in-hospital strategy. So regardless of COVID impact, we will want to do these two. And if you look at our historical volumes, we were growing at high double digits before COVID hit China. So it’s kind of hard for us to break out number quantitatively.

But then looking at the guidance for 2022, we have built in the elements of caution as we have seen the current impact on the ground, although we wait for any opportunity of how that might change or if the official COVID strategy in China might change, although it’s too early to speculate at this stage. So we need to keep a close eye on this. So as we execute and we progress into 2022, we’ll keep you informed regarding the latest trends in our guidance.

Max MasucciCowen and Company — Analyst

Great. Thanks for taking the questions. Looking forward to the data at AACR.

Leo LiChief Technology Officer

Thank you, Max.


[Operator instructions] Our next question comes from Alexis Yan with Morgan Stanley. Your line is open.

Alexis YanMorgan Stanley — Analyst

Thanks for taking my question. I have two questions. The first one is on the — it’s actually a follow-up on the NGS kit approval. We understand that in terms of the LDT-based market, the NGS market is actually quite crowded.

But the registration pathway is actually very lengthy and unclear. So just want to better understand what are the key hurdles that we have cleared while the other players are still working on so that we were able to obtain multiple registration certificates for the NGS kits. And if that’s applicable to the registration of our future products, and also even the early detection products in the outer years. And on top of that, if there will be any changes or thoughts on the commercial strategies now that these two products could be officially on the hospital procurement list.

This is my first question.

Yusheng HanChief Executive Officer and Founder

Sorry. I muted. So if you look at the tenders of hospitals, usually, the price will follow with some key parameters, such as the number of the genes type of variants that you can detect. And also other contents such as service and efficiency, I mean, the turnaround time.

So nine-gene is quite competitive, it’s quite strong compared with the existing kits available in the market. As I said, that it’s the first kit that can detect copy number valuation. And also, it’s a nine-gene testing with one of the most genes can be detected. Now so if you look at the fusion, it’s the first kit with open detection of any fusion, so quite different from the several sides fusion that can be detected by the other kits.

So we think that is a strong product in the market. In terms of the future registration. To be honest, if you look at the company who are competing for the registration, it’s not that crowded, like probably just five to six companies have the competitiveness in the market. And people are competing for liquid biopsy and also probably bigger panel.

And in terms of early detection, I think we — the registration of early detection, we talk to the NMPA, as we reported, is a totally new product type. And also, we think that the conversation is encouraging that multi-cancer early detection is quite new in China. But the technology is quite new from the other products. In this algorithm quite complicated calculating score based on tens of thousands of sites, which is totally new to the NMPA regulation.

So we think that the future is bright, but we think we need to do a lot of efforts. And that is why we are launching the first big — large-scale interventional study to add approval to add from a some very important data for registration. Does that answer your question?

Alexis YanMorgan Stanley — Analyst

Yes. Yes. My second question is related to the commercialization of the six cancer product and also the MRD products. So the — yes, the MRD obviously started commercialization recently, and our early detection is, I recall, last time, we said it’s contracting with a couple of hospitals.

Just wondering, while COVID may have delayed the sales for the moment, how is the hospital discussions so far and any indicators that we should watch out for in terms of the initial sales color?

Yusheng HanChief Executive Officer and Founder

Yes. In terms of the hospitals, we talked to, I think it was three months ago. Actually, we have already signed a contract with them. But since it’s a new one, after signing the contract, there’s a lot of process we need to go through the hospital in terms of the volume in order to make the volume come up.

So — and that needs our on-site employee to collaborate with the doctors and nurses in the health checkup department. And with the COVID-19, the most important thing that people are forgetting about healthcare checkup, they’re locked at home. And I think that it’s quite easy to make a conclusion that once the COVID come in, you never think that health checkup is the most important thing. That’s why I think that’s how we will start commercialization once the COVID lockdown is released.

And in terms of — but there are some numbers that I can — I think that for the healthcare checkup population, in a normal situation, the high-value consumer will not be impacted a lot by the COVID-19. I think they will come back after the COVID-19. And for the MRD commercialization, it’s on the early — it’s only early stage of telling the effect. But since we launched in March, the response from the doctors are really quite positive.

I mean the educational situation for MRD nowadays is different from what we can see like two years ago. Two years ago, when we talked to the doctors, they will say that if MRD is a positive, whether it means that my surgery is not as successful. And nowadays, they will not say that because they have been influenced by the global opinion leaders, they noticed that MRD is a very useful tool for them in the early stage cancer patient.

Alexis YanMorgan Stanley — Analyst

That’s it. Thank you.

Yusheng HanChief Executive Officer and Founder



Thank you. [Operator instructions] And I’m showing no further questions in the queue. This concludes today’s conference call. Thank you for participating.

You may now disconnect. Everyone, have a great day.

Yusheng HanChief Executive Officer and Founder

Thank you.

Duration: 46 minutes

Call participants:

Yusheng HanChief Executive Officer and Founder

Shaokun ChuaiChief Operating Officer and Director

Leo LiChief Technology Officer

Max MasucciCowen and Company — Analyst

Alexis YanMorgan Stanley — Analyst

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