Genetron Health Reports Q3 2021 Financial Results: Revenue Reaches RMB 152.5 Million, Up 36.2% Year-over-Year
On November 30, 2021, Genetron Holdings Limited (NASDAQ: GTH), a Chinese precision oncology company focused on providing molecular tumor testing, cancer early screening products, and companion diagnostic development services, announced its unaudited financial results for the third quarter ended September 30, 2021. The financial report showed that Genetron’s total revenue in the third quarter of 2021 reached RMB 152.5 million, representing a year-on-year increase of 36.2% compared to the same period in 2020. In the third quarter of 2021, Genetron’s gross profit margin also increased from 62.2% in the same period last year to 69%.
In the third quarter of 2021, Genetron Holdings Limited reported total revenue of RMB 152.5 million, representing a year-on-year increase of 36.2% from RMB 112 million in the same period of 2020.
In the Diagnostics and Monitoring BusinessGenetron Holdings Limited achieved revenues of RMB 144.3 million, representing a year-on-year increase of 42.2% compared to RMB 101.5 million in the same period of 2020. The revenue growth was primarily driven by increased sales of Genetron’s LDT and IVD products. Benefiting from the rise in volume of liver cancer early screening tests, Genetron’s LDT service revenue reached RMB 93 million, a year-on-year increase of 30.2%. In the third quarter, approximately 5,900 LDT diagnostic tests were sold. Furthermore, due to growth in sales of gene sequencers and reagent kits, its IVD product sales revenue also reached RMB 51.3 million, marking a 70.5% increase from RMB 30.1 million in the same period of 2020.
Overall, in the third quarter of 2021, Genetron Holdings LimitedGross Profitamounting to RMB 105.2 million, compared with RMB 69.6 million in the same period of 2020, representing a year-on-year increase of 51.1%. Driven by improved gross profit margins in its LDT and IVD businesses, the overall gross profit margin for the third quarter rose to 69%, up from 62.2% in the same period of 2020.
Regarding sales expenses, in the third quarter of 2021, Genetron Holdings Limited’s sales expenses as a percentage of revenue stood at 62%, higher than the 54.1% recorded in the same period of 2020, primarily due to additional hiring for its core business market expansion and early screening product sales teams.
Due to the increase in the number of employees, professional agency service fees, and operating expenses such as IT, Genetron Holdings LimitedAdministrative Expensesfurther increased to RMB 63 million, representing a 94.1% increase from RMB 32.4 million in the same period of 2020; the ratio of administrative expenses to revenue increased from 29% in the same period of 2020 to 41.3% in the third quarter of 2021.
R&DGenetron Holdings Limited’s R&D expenses in the third quarter amounted to RMB 62.4 million, representing a 61.7% increase from RMB 38.6 million in the same period of 2020. The ratio of R&D expenses to revenue rose from 34.4% in the third quarter of 2020 to 40.9% in the same period of 2021. This increase was primarily driven by higher compensation and related costs due to an expansion in R&D personnel, as well as the company’s continued investment in R&D innovation, including new product development and clinical trials.
Alongside the release of its third-quarter financial results, Genetron Holdings Limited also showcased the latest progress in its product pipeline and achievements in scientific research.
Let's first take a look atProduct Aspectof the achievements—
First, in terms of early screening products:
Genetron has expanded its registration strategy for its hepatocellular carcinoma (HCC) early screening pipeline. Starting in November, Genetron began patient recruitment for the clinical trial of its PCR-based kit and plans to initiate patient recruitment for the clinical trial of its NGS-based kit several months later. Genetron anticipates that both trials will receive approval from the National Medical Products Administration (NMPA) in 2023.
Genetron Holdings Limited has developed a colorectal cancer early screening kit based on liquid biopsy multi-omics technology. The model was trained in a retrospective cohort study (100 cases and 100 controls) and validated in an independent cohort of the same size, achieving a sensitivity of over 91% at a specificity of 95%. Detailed research findings are scheduled for publication in a journal in 2022.
Secondly, regarding MRD products:
Genetron Holdings Limited has entered into an exclusive collaboration agreement with the AstraZeneca Global R&D China Center to jointly develop personalized minimal residual disease (MRD) testing for patients with solid tumors in China. The AstraZeneca Global R&D China Center plans to utilize the co-developed product in its clinical trials conducted in China.
It also collaborated with Fosun Pharma on Genetron’s Seq-MRD®Signed an exclusive commercialization cooperation agreement for testing services in China. This collaboration also marks the domestic market launch of Genetron Holdings Limited’s first product in the fields of hematologic malignancies and MRD testing.
While advancing the commercialization of its product development, Genetron Holdings Limited has also achievedResearch Achievementsthe continuous advancement.
For example,In the field of early screening, Genetron's early screening product for hepatocellular carcinoma (HCC), HCCscreenTMThe clinical trial results and technical research findings were included in expert consensus and published in the Chinese Journal of Hepatology in October 2021, a journal with significant influence in China’s hepatology community.
In the MRD field, Genetron Holdings Limited’s analytical results for personalized MRD testing developed based on Mutation Capsule technology were published in the Journal of Hematology & Oncology (Impact Factor: 17.4). In tests using peritoneal lavage fluid from gastric cancer patients as samples, the sensitivity for detecting tumor DNA reached 0.001%, indicating that this assay can accurately predict peritoneal dissemination.
In the field of bioinformatics, data on the enhanced variant detection performance developed by Genetron’s bioinformatics team were published in Briefings in Bioinformatics (Impact Factor: 11.6).
In addition, progress in two other areas of Genetron Holdings Limited was also announced in the third-quarter financial report:
First, Genetron Holdings Limited has established a strategic partnership with NeoGenomics (NASDAQ: NEO, hereinafter referred to as “NeoGenomics”) to jointly drive the global research and development of oncology drugs; meanwhile, it has also formed a strategic partnership with ImabioPharma to jointly advance the development of its synthetic lethality product pipeline.
Second, Genetron Holdings’ Onco PanScan, a large-panel product covering more than 800 genes.TMObtained EU CE certification.
“Despite the impact of the COVID-19 pandemic, Genetron Holdings Limited achieved a robust 36.2% year-over-year revenue growth in the third quarter of 2021. Revenue from its hospital-based IVD business surged by more than 70%, and its gross profit margin continued to rise steadily. On the operational front, we made significant progress, including initiating the registrational clinical trial for our first HCC early screening product, entering into a major strategic cooperation agreement in the MRD field, and having our research findings published in several prestigious journals,” stated Mr. Wang Sizhen, Co-founder and CEO of Genetron Holdings.