BEIJING, March 29, 2022 (GLOBE NEWSWIRE) -- Genetron Holdings Limited (("Genetron Health" or the "Company", NASDAQ:GTH), a leading precision oncology platform company in China that specializes in offering molecular profiling tests, early cancer screening products and companion diagnostics development, today announced its unaudited preliminary financial results for the fourth quarter and full year ended December 31, 2021.

2021 and Recent Business Highlights

• Therapy Selection:
  • As of December 31, 2021, the Company had 58 hospital partners, of which 30 were IVD hospital partners. Genetron Health is continuing to enhance its in-hospital sales effort.
• Early Screening:
  • The Company successfully introduced HCCscreen™ in China as an LDT service for hepatocellular carcinoma (HCC), along with establishing collaborations with channel partners involving government procurements, medical examination centers, hospitals, and online platforms.
  • After reporting HCCscreen™ prospective cohort study data in March 2021, the Company has broadened its registrational strategy for its early screening program with two clinical trials. The enrollment of subjects in the clinical trial of the PCR-based assay, HCCscan, is currently on track, with five participating institutions already started as of the date hereof. The Company currently plans to enroll subjects for the clinical trial of NGS-based HCCscreen™ around late second quarter in 2022.
  • The Company developed a multi-omics blood-based CRC early screening assay, with preliminary retrospective data showing >91% sensitivity and 95% specificity. Full details are expected to be published in 2022.
• MRD:
  • Genetron Health formed a co-development agreement with AstraZeneca R&D China for personalized MRD tests for solid tumors in China. Our partner plans to incorporate the co-developed tests for China-specific studies. This is an exclusive, multi-year collaboration between both parties.
  • Published MRD assay data based on Mutation Capsule:
    • Gastric cancer data in the Journal of Hematology & Oncology: The personalized MRD assay showed sensitivity to detect 0.001% tumor DNA from peritoneal lavage fluid samples for precise prediction of peritoneal dissemination.
    • Locally advanced rectal cancer data in eBioMedicine, part of THE LANCET Discovery Science: Analysis on different MRD approaches after neoadjuvant therapy.
    • HCC data: Publication has been accepted for a high impact journal and would be available in the next few months
  • The Company formed an exclusive agreement with Fosun Pharma to commercialize Seq-MRD®. The partnership marks the launch of Genetron Health's first product for hematologic cancer and the first validated NGS-based MRD detection assay in the China market.
• Companion Diagnostics (CDx):
  • The Company formed a collaboration agreement with HUTCHMED (China) for the joint development of a CDx test for ORPATHYS^® (savolitinib) for NSCLC in China, using Genetron Health's approved NGS-based 8-gene Lung Cancer Assay (Tissue).
  • Onco Panscan, the Company's CE-marked comprehensive genomic profiling assay, has passed the type testing in China. Patient enrollment for the registrational trial is planned to begin in late second quarter in 2022.
  • AYVAKIT® (avapritinib) CDx kit, developed in partnership with CStone Pharmaceuticals, has entered the NMPA priority review and approval process in China.
• Other IVD Pipeline:
  • Thyroid Basic, a PCR-based assay under development for molecular classification and prognosis for thyroid cancer, is undergoing a registrational trial at four clinical sites. The trial is expected to complete in 2022 with potential IVD approval in 2023.
• New Patent Issuance:
  • Genetron Health's innovative Mutation Capsule technology, a method for detecting mutation and methylation of tumor specific genes in ctDNA, was granted an invention patent (201910983038.8) by the China National Intellectual Property Administration.

Fourth Quarter and Full Year 2021 Financial Highlights

• Recorded total revenue of RMB146.9 million (US$23.0 million) in the fourth quarter of 2021 and RMB532.0 million (US$83.5 million) for the full year of 2021, representing 9.6% and 25.3% increases over the same periods in 2020, respectively.
  • IVD revenue was RMB44.1 million (US$6.9 million) in the fourth quarter of 2021 and RMB 154.5 million (US $24.3 million) for the full year of 2021, representing 66.4% and 64.4% increases over the same periods in 2020, respectively.
  • LDT revenue was RMB85.9 million (US$13.5 million) in the fourth quarter of 2021 and RMB337.8 million (US$53.0 million) for the full year of 2021, representing an 11.4% decrease and a 15.8% increase over the same periods in 2020, respectively.
  • Development services revenue was RMB16.9 million (US$2.7 million) in the fourth quarter of 2021 and RMB39.6 million (US$6.2 million) for the full year of 2021, representing 60.9% and 2.0% increases over the same periods in 2020, respectively.
• Gross margin increased to 63.5% for the full year 2021, compared to 61.3% for the year 2020.

"Throughout 2021 we experienced strong growth led by our in-hospital IVD sales, advanced our early screening registrational strategy for hepatocellular carcinoma, developed a multi-omics blood-based CRC early screening assay, established partnerships with AstraZeneca R&D China and Fosun Pharma to develop and commercialize MRD products, and expanded the body of clinical evidence and publications that are expected to reinforce and support the clinical value of our tests. These accomplishments have positioned Genetron Health favorably to advance precision oncology diagnostics," said Mr. Sizhen Wang, co-founder, Chairman and CEO of Genetron Health. "As we have communicated, the continued enforcement of the "zero COVID" strategy in China has created a challenging operating environment that we will continue to navigate. We plan to execute across the business in a catalyst rich 2022 by introducing new products to the market, advancing our innovative pipeline and providing key data and trial updates that will further differentiate our portfolio of diagnostics. We are confident that our solutions can address emerging medical needs in China, and we expect to witness a significant long-term growth potential, amid a favorable macro environment where the government policy prioritizes optimal healthcare for citizens."

Fourth Quarter 2021 Unaudited Financial Results

Total revenue increased by 9.6% to RMB146.9 million (US$23.0 million) in the fourth quarter of 2021 from RMB133.9 million in the same period of 2020.

Diagnosis and monitoring revenue increased by 5.3% to RMB130.0 million (US$20.4 million) in the fourth quarter of 2021 from RMB123.5 million for the same period in 2020. The increase was primarily driven by the growth in revenue generated from the sale of IVD products, partially offset by a decrease in revenue generated from the provision of LDT services.

• Revenue generated from the provision of LDT services decreased by 11.4% to RMB85.9 million (US$13.5 million) in the fourth quarter of 2021 from RMB96.9 million in the same period of 2020. Approximately 5,880 units of LDT diagnostic tests were sold in the fourth quarter of 2021, representing an increase of 10.1% compared to the number of LDT diagnostic tests sold in the same period of 2020. Sales from the Company's liquid biopsy early screening product HCCscreen™ were also included in the fourth quarter sales of LDT services.
  
   
• Revenue generated from the sale of IVD products increased by 66.4% to RMB44.1 million (US$6.9 million) in the fourth quarter of 2021 from RMB 26.5 million in the same period of 2020. The increase was driven by sales of the Genetron S5 instrument and 8-gene Lung Cancer Assay (Tissue).

The following table sets forth the number of the Company's contracted in-hospital partners as of the end of the periods presented:

Revenue generated from development services increased by 60.9% to RMB16.9 million (US$2.7million) in the fourth quarter of 2021 from RMB10.5 million in the same period of 2020. The increase was primarily driven by the growth in revenue generated from biopharmaceutical services.

Gross profit was RMB83.7 million (US$13.1 million) in the fourth quarter of 2021, compared to RMB84.1 million in the same period of 2020. Gross margin decreased to 57.0% in the fourth quarter of 2021, compared to 62.8% in the same period of 2020, based on temporary impact resulting from new promotional activities.

Operating expenses increased by 54.7% to RMB267.5 million (US$42.0 million) in the fourth quarter of 2021 from RMB173.0 million in the same period of 2020.

Selling expenses increased by 39.5% to RMB100.3 million (US$15.7 million) in the fourth quarter of 2021 from RMB72.0 million in the same period of 2020. The increase was primarily driven by higher headcount to expand Genetron Health's sales teams. Selling expenses as a percentage of revenue increased to 68.3% in the fourth quarter of 2021 from 53.7% in the same period of 2020.

Administrative expenses increased by 46.2% to RMB64.8 million (US$10.2 million) in the fourth quarter of 2021 from RMB44.3 million in the same period of 2020. The increase was mainly driven by higher headcount and professional fees. Administrative expenses as a percentage of revenue increased to 44.1% in the fourth quarter of 2021 from 33.1% in the same period of 2020.

Research and development expenses increased by 61.3% to RMB85.5 million (US$13.4 million) in the fourth quarter of 2021 from RMB53.0 million in the same period of 2020. The increase was primarily driven by higher research and development headcount and related expenses, as well as the Company's continued efforts in the development of MRD tests, and clinical activities related to early screening and key product such as Onco Panscan. Research and development expenses as a percentage of revenue increased to 58.2% in the fourth quarter of 2021 from 39.5% in the same period of 2020.

As a result of the above, operating loss increased to RMB183.8 million (US$28.8 million) in the fourth quarter of December 31, 2021 from RMB88.9 million in the same period of 2020.

Finance income-net increased to RMB18.6 million (US$2.9 million) in the fourth quarter of 2021 from RMB15.6 million in the same period of 2020. The increase was primarily due to foreign currency exchange gains.

Loss for the period was RMB165.3 million (US$25.9 million) for the three months ended December 31, 2021, compared to RMB73.2 million for the same period of 2020.

Non-IFRS loss for the period, defined as loss for the period excluding share-based compensation expenses and fair value loss of financial instruments with preferred rights was RMB153.1 million (US$24.0 million) for the three months ended December 31, 2021, compared to RMB62.5 million for the same period of 2020. Please refer to the section titled "Non-IFRS Financial Measures" in this press release for details.

Basic loss per share attributable to owners of the company was RMB0.35 (US$0.06) for the fourth quarter of 2021, compared with a basic loss per share attributable to owners of the company of RMB0.16 for the same period of 2020. Excluding share-based compensation expenses and fair value loss of financial instruments with preferred rights, non-IFRS basic loss per share attributable to owners of the company was RMB0.33 (US$0.05) for the fourth quarter of 2021, compared with non-IFRS basic loss per share attributable to owners of the company of RMB0.14 for the same period of 2020. Diluted loss per share attributable to owners of the company was equivalent to basic loss per share in respective periods. Each ADS represents five ordinary shares, par value US$0.00002 per share. Please refer to the section titled "Non-IFRS Financial Measures" in this press release for details.

Full Year 2021 Financial Results

Total revenue increased by 25.3% to RMB532.0 million (US$83.5 million) in 2021 from RMB424.5 million in 2020.

Diagnosis and monitoring revenue increased by 27.7% to RMB492.4 million (US$77.3 million) in 2021 from RMB385.7 million in 2020. The increase was driven by the growth in the revenue generated from both the provision of LDT services and the sale of IVD products.

• Revenue generated from the provision of LDT services increased by 15.8% to RMB337.8 million (US$53.0 million) in 2021 from RMB291.7 million in 2020. Approximately 24,360 units of LDT diagnostic tests were sold in 2021, representing an increase of 11.2% compared to the number of LDT diagnostic tests sold in 2020. Sales of LDT services also included sales of our early screening test, HCCscreen™, which has contributed to our revenue growth in 2021.
  
   
• Revenue generated from sale of IVD products increased by 64.4% to RMB154.5 million (US$24.3 million) in 2021 from RMB94.0 million in 2020. The increase was driven by a growing number of assays and sequencing platforms sold in 2021, notably the Genetron S5 instrument and 8-gene Lung Cancer Assay (Tissue).                                 

Revenue generated from development services increased by 2.0% to RMB39.6 million (US$6.2 million) in 2021 from RMB38.8 million in 2020. The increase was primarily driven by the growth in revenue generated from biopharmaceutical services, partially offset by a decrease in revenue generated from sequencing services.

Gross profit increased by 29.9% to RMB338.0 million (US$53.0 million) in 2021 from RMB260.2 million in 2020. Gross margin increased to 63.5% in 2021, compared to 61.3% in 2020. In 2021, gross margin improvements were seen across all major business lines.

Operating expenses increased by 61.9% to RMB855.8 million (US$134.3 million) in 2021 from RMB528.6 million in 2020.

Selling expenses increased by 39.0% to RMB343.2 million (US$53.9 million) in 2021 from RMB 247.0 million in 2020, primarily due to increased headcount to expand Genetron Health's core business as well as early screening sales teams. Selling expenses as a percentage of revenue increased to 64.5% in 2021 from 58.2% in 2020.

Administrative expenses increased by 79.7% to RMB227.0 million (US$35.6 million) in 2021 from RMB126.3 million in 2020, primarily due to higher headcount and professional fees. Administrative expenses as a percentage of revenue increased to 42.7% in 2021 from 29.8% in 2020.

Research and development expenses increased by 70.4% to RMB254.0 million (US$39.9 million) in 2021 from RMB149.0 million in 2020. The increase was primarily driven by higher research and development headcount and related expenses, as well as the Company's continued efforts in the development of MRD tests, and clinical activities related to early screening and key product such as Onco Panscan. Research and development expenses as a percentage of revenue increased to 47.7% in 2021 from 35.1% in 2020.

As a result of the above, operating loss increased to RMB517.8 million (US$81.3 million) for 2021, from RMB 268.4 million in 2020.

Finance income-net decreased to RMB15.3 million (US$2.4 million) in 2021 from RMB22.7 million in 2020. The decrease was related to foreign currency exchange fluctuations.

Loss for the year was RMB502.6 million (US$78.9 million) in 2021, compared to RMB3,069.0 million in 2020.

Non-IFRS loss for the year, defined as loss for the year excluding share-based compensation expenses and fair value loss of financial instruments with preferred rights, was RMB448.5 million (US$70.4 million) for 2021, compared to RMB215.7 million in 2020. Please refer to the section titled "Non-IFRS Financial Measures" in this press release for details.

Basic loss per share attributable to owners of the company was RMB1.08 (US$0.17) for 2021, compared with a basic loss per share attributable to owners of the company of RMB10.18 for 2020. Excluding share-based compensation expenses and fair value loss of financial instruments with preferred rights, non-IFRS basic loss per share attributable to owners of the company was RMB0.96 (US$0.15) for 2021, compared with non-IFRS basic loss per share of RMB0.72 for 2020. Diluted loss per share attributable to owners of the company was equivalent to basic loss per share attributable to owners of the company for respective periods. Each ADS represents five ordinary shares, par value US$0.00002 per share. Please refer to the section titled "Non-IFRS Financial Measures" in this press release for details.

Cash and cash equivalents and current financial assets at fair value were RMB790.5 million (US$124.0 million) as of December 31, 2021.

Financial Guidance

In the first quarter of 2022, Genetron Health expects to grow its revenue to approximately RMB 106 million, or around 15.1% year-over-year growth. Genetron Health expects its full year 2022 revenue to be around RMB 585-638 million, representing 10-20% growth over its revenue in 2021.

Conference Call

A conference call and webcast to discuss the results will be held at 8:30 a.m. U.S. Eastern Time on March 29, 2022 (or at 8:30 p.m. Beijing Time on March 29, 2022). Interested parties may listen to the conference call by dialing numbers below:

Participants are encouraged to dial into the call at least 15 minutes in advance due to high call volumes.

A simultaneous webcast of the conference call will be available on the "Events and Presentations" page of the Company's IR website. A replay of the webcast will be available for 30 days following the event. For more information, please visit ir.genetronhealth.com.

Exchange Rate Information

All translations made in the financial statements or elsewhere in this press release made from RMB into United States dollars ("US$") are solely for convenience and calculated at the rate of US$1.00 = RMB6.3726, representing the exchange rate as of December 30, 2021, set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate, on December 30, 2021.

Non-IFRS Financial Measures

The Company uses non-IFRS loss and non-IFRS loss per share attributable to owners of the Company for the year/period, which are non-IFRS financial measures, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that non-IFRS loss and non-IFRS loss per share attributable to owners of the Company help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes in its loss for the year/period. The Company believes that non-IFRS loss and non-IFRS loss per share attributable to owners of the Company for the year/period provide useful information about its results of operations, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

Non-IFRS loss and non-IFRS loss per share attributable to owners of the Company for the year/period should not be considered in isolation or construed as an alternative to operating loss, loss for the year/period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS loss and non-IFRS loss per share attributable to owners of the Company for the year/period and the reconciliation to their most directly comparable IFRS measures. Non-IFRS loss and non-IFRS loss per share attributable to owners of the Company for the year/period presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Non-IFRS loss for the year/period represent loss for the year/period excluding share-based compensation expenses and fair value loss of financial instruments with preferred rights. Please see the "Unaudited Non-IFRS Financial Measures" included in this press release for a full reconciliation of non-IFRS loss for the year/period to loss for the year/period and non-IFRS loss per share attributable to owners of the Company for the year/period to loss per share attributable to owners of the Company for the year/period.

About Genetron Holdings Limited

Genetron Holdings Limited ("Genetron Health" or the "Company") (NASDAQ:GTH) is a leading precision oncology platform company in China that specializes in cancer molecular profiling and harnesses advanced technologies in molecular biology and data science to transform cancer treatment. The Company has developed a comprehensive oncology portfolio that covers the entire spectrum of cancer management, addressing needs and challenges from early screening, diagnosis and treatment recommendations, as well as continuous disease monitoring and care. Genetron Health also partners with global biopharmaceutical companies and offers customized services and products. For more information, please visit ir.genetronhealth.com.

Safe Harbor Statement

This press release contains forward-looking statements. 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 the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may", "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact

US:

Hoki Luk

Head of Investor Relations

Email: hoki.luk@genetronhealth.com 

Phone: +1 (408) 891-9255

Philip Trip Taylor

Vice President | Gilmartin Group

ir@genetronhealth.com 

Media Relations Contact

Yanrong Zhao

Genetron Health

yanrong.zhao@genetronhealth.com 

Edmond Lococo

ICR

Edmond.Lococo@icrinc.com 

Mobile: +86 138-1079-1408

genetron.pr@icrinc.com