Good day, ladies and gentlemen, thank you for standing by, and welcome to Burning Rock 2022 First Quarter Earnings Conference Call. This presentation contains forward-looking statements. These statements constitute forward-looking statements within the meaning of Section 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, expect, anticipate, future, intend, 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 release and other written materials and in oral statements made by its officers, directors or employees to third-parties. Statements that are historical facts, including 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 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'd now like to turn the call over to your speaker host and CEO, Mr. Han. Please go ahead.

Thanks. Welcome to Burning Rock’s 2022 Q1 conference call. I'm Yusheng Han, the CEO and Founder of Burning Rock. And today, we have our COO, Shannon; CTO, Joe; and CFO, Leo in the meeting. The first, I will recap our business fundamentals and then go through some important recent business program. And I believe that what our investors care about most, especially in the situation of COVID impact in the past five months you know is the business. And since most of our product development efforts are moving forward as laid out in previous call. We will directly go to CFO Leo, who will walk you through the financials, and elaborate on our growth trend after my presentation. So let's turn to Page 3. The Burning Rock started with therapy selection business in 2014 and has grown to the market leader in this segment. So we were the first NGS company to cultivate the in-hospital channel and the first to have an oncology NGS-based kit approved by NMPA in China. Our initial strategy of developing this unique in-hospital channel in China has 10 years of our efforts that have really started to realize a rapid market growth in the past quarters. This advantage is especially shown during the pandemic situation and our leading position has laid a good foundation and given us advantage moving forward to new business of early detection, MRD and pharmaceutical collaboration and our strong branding on technology and product quality also help us attract the remain key talent. So that's what we are doing. And let's turn to Page 5 (ph) to recent business program. So the first thing I want to talk about is the strong policy push from the government on cancer early detection and NGS, which has -- which happened most regionally. In…

Thanks, Yusheng. And just a quick highlight before we go into financials. On our Page 9, we did lay out our clinical program progress recently. And for the 9-cancer, which is on the development, we have the PROMISE study, as Yusheng mentioned that has completed enrollment and analysis. We are submitting that to a conference this year. So now we're looking to a readout of the PROMISE study this year. In addition, the PREDICT study, which is a larger study to follow, we do have over 50% enrollment, despite the COVID challenges. So I want to quickly highlight the clinical progress. Then going on to our financials, we'd like to cover three topics today. First is a review of our first quarter. The second topic on our latest trends and operating numbers as COVID has been a concern and focus for everybody. And number three, our progress regarding operating expenses optimization. Now let's go to Page 22, which shows our quarterly volumes. We continued to deliver strong growth despite COVID challenges. In the first quarter, we saw very strong volume growth at 42% year-over-year. And for the in-hospital segment, the volume grew over 83% year-over-year. Our growth rate has accelerated in the first quarter compared to the growth rate we saw in the fourth quarter 2021. At that quarter, we saw overall volume growth at 33% year-over-year, and in-hospital volume growth at 62% year-over-year. So the first quarter ‘22 accelerated further compared to a good quarter that we delivered in the fourth quarter 2021. We are very pleased to see continued strength in the in-hospital segment, despite COVID challenges and as Yusheng mentioned earlier, we are happy to see new products contributing to our growth as well. Now moving on to Page 23, we like to provide a greater granularity…

[Operator Instructions] And our first question coming from the line of Max Masucci with Cowen. Your line is open.

Hi. Thanks for taking the questions. First one on biopharma, how much of the accelerating pharma growth is being driven by your MRD monitoring solutions versus therapy selection? And if you look at the mix of your prospective versus retrospective biopharma projects, how should we think about the pace that you can convert, the biopharma contract backlog to revenue here in 2022 compared to 2021?

Well so far, if you look at our pharma business is mainly contributed by therapy selection. As I said that, we just launched the MRD in March. So that we can -- we think that MRD did positive impact for the pharma business probably will be like several months later or even one year later, sometimes the China pharmaceutical and biotech companies, they are relatively slower than their U.S. peers. So we think that -- but we are very, very positive about the potential MRD at -- to the pharmaceutical contracts and revenues. And in terms of numbers, Leo can illustrate more.

Sure. So for this year, I think we are expecting high-double digit growth out of the pharma segment. A lot of that is on the back of backlog projects that we have signed already, so some visibility with -- and we are building the backlog as well. We look to convert more. So in terms of pacing, I think high double-digits for this year that we have shown two good quarters, fourth quarter last year, and first quarter this year as well.

Okay. Great. Second one, just to be curious, did the Chinese lung cancer clinician consensus highlighted a specific data set or clinical evidence that spurred the guideline update for MRD monitoring in non-small cell lung cancer patients and do the updated guidelines recommend MRD testing only for relapse risk prediction in patients that have completed any adjuvant therapy regimen and are in remission or does it also include the use of MRD tests that are used to guide decisions about adjuvant therapy?

Shannon, can you answer?

Sure. Yes. Thanks for the question. It's -- yeah, it's indeed a very interesting consensus actually from almost two years ago and we were -- there is also very pleasantly surprised that the Chinese lung cancer patients are adopting the MRD concept so quickly. For the consensus itself its mostly for one, for relapse or prognosis prediction is not for adjuvant therapy and guiding to differential adjuvant therapy paradigm yet because there hasn't been enough interventional evidence that clinicians feel sufficient for the lung cancer -- in the lung cancer realm yet. And then for two, I think the consensus is also very encouraging in the area that it calls for more on clinical trials or clinical studies or investigator-initiated studies in China to start embed, the MRD dimensions into as many as possible interventional clinical trials when collaborating with the drug companies. So that, given that calling down the road, I think that's where the clinicians really hope to start seeing on clear path on how to embed MRD into interventional trials and then generate evidence on that. And then, I think it's only after they see the interventional on type of evidence that then we will update the consensus or guideline to upgrade on it for adjuvant therapy traction as well.

That's very helpful. Thank you. One final question, so in April central lab revenues if they took it -- took a dip understandably so, but the in-hospital growth doubled to over 100% growth year-over-year compared to the prior month. So I would just would be great to hear, sort of how the central lab business and the in-hospital business are interacting? Is any of that growth in-hospital coming at the expense of the central lab business? Is there any cannibalization, and that would be great. Thanks.

So yeah, I can -- I can deal with that question. So, in a very beginning of our business, there was no hospital model. For any new technology or new products introduced to the market. We had to start from the central lab model, talk to physicians one by one. And then, when the technology and product getting more and more mature, there will be more possibility for the product to transfer to in-hospital model. So from our observation relatively long-time, there will be a great synergy for these two model. It means that for the central lab model, some clinicians, they just feel not that encouraging to send the samples outside of the hospital. So you know pretty, in-hospital model make them relatively easy to prescribe on their computers. So in most of the hospital, when we put that platform into the hospital, we have been trend at that, both the central lab and in-hospital model grew. So there is a quite interesting thing. And if you look at some, a little bit drop of the central lab model, I think that some of -- that is because of the COVID-19 impact actually influenced the central lab model. But if, in the long run, in the long-run when more and more technology getting matured. I think that for the mature product pipeline, there will be some so-called cannibalization, but if you look at the volume increase of the in-hospital model actually that is not cannibalization, it’s the kind of a huge increase from the hospital model. So I would say that in different stages of different products, it depends. So our understanding for any material product new hospital model will take mainstream in the future.

Great. Thanks for taking my questions and nice update.

Thanks, Max.

And our next question coming from the line of Alexis Yan with Morgan Stanley. Your line is open.

Thanks for taking my questions, and congrats on a good growth in the first quarter. So I just have a few quick questions. First is on the in-hospital segment. Could you help us just better understand the drivers behind the good growth in this segment has been, for example, how much of it comes from the -- more revenue from our like flagship partner hospitals and how much comes from the so called like, mid-sized hospitals? And also how much did the big panel NGS and also other new products contribute to the growth to this segment?

So I think that the drivers for in-hospital, the first thing is the convenience. It's much more convenient for our doctors to prescribe. And also if you look at the big environment test so hospitals are encouraging doctors to come to the in-hospital lab. And also some hospitals are with the hospital labs are [indiscernible] samples sending out the hospitals. So that is one of the drivers. And the other thing is that, you can see is that just more and more high priced panels are coming into the hospital -- in fully the middle-size panel, big panel even some liquid biopsy panel coming to the hospital lab. So that they are also the drivers for the new revenue. Does that answer your question.

Yes. They’re helpful. My next question is on the pipeline. Just wondering if there are any potential like delayed due to COVID impact in terms of patient recruitment or higher like, recruitment costs should we be expecting? Just maybe remind us of the key milestones we should be looking at?

So Shannon hit that question.

Yes. Right. Thanks for the questions. Yes. Apparently the recruitments for both our early detection in PREDICT on trial and also for the six-cancer early detection product PREVENT trial and they have both been influenced by the -- impacted by the COVID at S&P (ph) in some degree. And we are seeing a few months of delay for the PREDICT recruitments and that's why we were initially expecting a data readout later by the end of this year or early next year. Now, which will probably will see it a few months later. And for the PREVENT trial which was the -- for [indiscernible] study for the 6-cancer type study, the initiation of the trial was delayed for couple of months into the COVID, but it’s mainly -- it's not related to the patient approval, et cetera. It's mainly the administrative process being delayed and where it’s back into indicate that study soon, so maybe within a week. So far that’s visibility of the timeline today. Yeah, that is manageable so far.

Thank you. Just one last question from me. Do we have some color on like, our bottom line loss or cash burn over the next few years?

Yeah. So looking at our cash balance and our burn rate, I think we are doing, okay, in terms of having a good around two-year cash runway ahead of us and there is flexibility to make adjustment circumstances do require us to adjust. So I think we are happy with the cash balance and we are putting higher focus on our efficiency, so higher focus towards EBITDA progress of the patient testing business, but we don't have formal guidance yet. So I think for this year, we will see operating expenses as a trend to go down over time, not necessarily a straight line, but that’s the direction of travel that we could see, and that will provide us with better visibility in the way Yusheng about it as we move along.

Sure. Understood. That's all from me. Thanks a lot.

Thank you.

I'm showing no further questions at this time, I would now like to turn the call back over to our speakers for any closing remarks.

Thank you, operator, and thanks everybody for attending today. Any questions please do come back to us and thanks again for your time.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.