Q1 2021 Genetron Holdings Ltd Earnings Call
Good day, and thank you for standing by woken up to the Q1, 2020.1 the judge on the outcome of these conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask the question. During the session you will need to press star 1 of them into the.
Please be advised that today's conference is being recorded.
You require any further assistance. Please press star zero I would now like to hand, the conference which of course, they could stay hokey look please go for it.
Keith.
Hello, everyone and welcome to change from how the first quarter 'twenty 'twenty 1 earnings conference call. The company's earnings release issued early yesterday and is available on the company's IR website.
During this call of the company will be making some forward looking statements regarding future events and results.
These statements are made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995.
The statements are not historical facts, including statements about just shrunk beliefs and expectations of.
Forward looking statements forward looking statements involve inherent risks and uncertainty for that.
Information regarding these and other risks that's included in current transpiring with the SEC.
All information provided today is as of the date of this call.
In general and does not undertake any obligation to update any forward looking statements.
As required under applicable law.
With respect to any non ifr S measure of discussed during today's call. The company's reconciliation information related to those measures can be found in the earnings release issued earlier today.
Allow me to introduce the management team on the call today.
She's been Wang co founder and CEO of gene from Health will discuss recent business update and outlook.
Kevin Hu, our CFO will provide financial highlights related to the on all of the growth quarter result of lines in todays release.
Following management's prepared.
The fair remarks, well open up the call for questions.
During the Q&A session, I'll say T O stuff hanging from the Dell and Chief Medical Officer Dr.
Opinion go who will also be available to answer the questions.
With that said I would now like to turn the call a bunch of Mr. She's in line the O of change around the house. She then please go ahead.
Okay. Thank you okay. Good morning, everyone.
And thank you for joining our first quarter 2021, earning conference call.
I would like to direct you to the supplemental earnings presentation of our IR website at the beginning on slide 2.
Thus far in 2021, we have continued to solidify our position as the leading position of oncology company in China.
With a comprehensive portfolio of that covers the entire spectrum of cash management.
Management testing needs and challenges from early screening diagnosis and treatment recommendations.
As well as disease monitoring the.
Turning to slide 4 in the first quarter Jinjiang delivered the strong financial and operational results with close to 20% top line year over year of growth, reaching I mean the.
$92.1 minute.
However, note that lost share in the same period free recorded significant revenue from our Covid COVID-19 IBD.
So if we exclude that.
On the line core oncology business revenue grow 52, 9% year over year.
Our revenue growth was also accompanied by a notable margin improvements.
59, 3% compared to 55% in the first quarter of the months here.
The we're pleased with these results given the backdrop of a challenging operating environment, coupled with the now the resulting from the Chinese new year holiday in February.
As we mentioned all of our laws.
<unk> coal.
In late December and January that was notable COVID-19 researchers in China.
Particularly in northern parts of the country, including Beijing.
All of this and she got around the city not too far away from Beijing.
China is our key markets as of this resurgence.
The resulting the major disruptions in the hospital and the patient topic sales.
The marketing activities and other restrictions the touch we were impacted by this issue throughout the first 2 months of the quarter since March we're starting to see some volume stabilization and we're optimistic that the.
Ken will be more normalized in the coming few months.
Operationally over the last quarter, we continued to make significant progress across all business lines in diagnostic monitoring early screening as well as Biopharma service.
We've had a few key announcements thus far in 2021.
And it will like to highlight some of these developments with you the.
First let's focus on our liver cancer liquid biopsy early screening product hcp's strength.
In the first quarter, we reported the encouraging new clinical data and announced 2 key partnerships to commercialize it.
Recall that in March with share data from our leading prospective study, namely the hit study.
Based on data on 1006 hundred 15 patients interest.
The screen achieved 88% of sensitivity of 93% specificity and of 44, 9% PPV and the 19.9 3% in PD.
These numbers showed better sensitivity and the comparable specificity versus other.
<unk> plus the F P combined.
Which is a standard of care.
As summarized on slide 6 and 7 for review.
The based on these results we plan to initiate a registrational trial in China very soon.
We have had dialogues with them and the MPA now regarding the design of the study.
Which will be of head to head trial, comparing etch the screen versus ultrasound plus F. P.
And of we're carefully follow using clinical sites.
We continue to project the.
The trial to complete by the end of the 2022 and the potential number of approval of HCC screen in 2023.
Turning to page 8.
On the commercialization front in January we established an exclusive strategic partnership for HSBC screen, which didn't that pinching of.
A subsidiary of the Sino Biopharma.
The co promote the product in the hospital market.
The in China.
<unk> has estimated the 30% plus market share.
Pepsis antiviral drugs the sales team of over 7000 rats and the network of over 2000, the general in liver disease focused hospitals.
Thinks of the announcement the teams from both companies have already set up a net of a group.
Group to book on the initial rollout to about 50 hospitals. So we expect this partnership to become more productive and allow us to launch its the screen effectively into the hospital over the next few quarters.
And.
Just a few days ago, we have announced a strategic partnership with J D House.
A subsidiary of J D dotcom.
The largest online healthcare platform in China.
For this partnership includes interest you see spring as well as our Napa approved non cancer aging problems.
Well HCC screen. This represents of force commercialization pathway. In addition to our existing channels through medical examination centers.
Of the house project in hospice.
They are already a series of upcoming marketing the educational activities planned for high risk liver cancer patient population.
And for a long 8 the plans are also on the way for this product to be offered through <unk> network of the outlying hospitals and the retail pharmacies.
The JD health has market, allowing users along with just because of the network of doctors and pharmacies were very excited to be working with the top notch technology, given domestic housecat company by combining gene transposition of oncology capabilities with the online platform. The other resources with the this collaboration has any of the made of commercial.
<unk> strategy for molecular diagnostic products in oncology and.
And we expect this to become a more prominent channel overtime.
The touching on our U S plans for HSBC spring wholesale receipt of the breakthrough device designation of next step is to perform of met free studies of high risk cohort in the U S population with the U S medical institutions now.
Now of lap the Maryland is cleaner set by the <unk> will be used to facilitate the U S studies for <unk>.
The screen as.
As well as to serve global pharma companies R&D in the commercialization.
So moving onto slide 10.
The record of HCC screening is powered by gene cause the innovative and proprietary mutation types of technology, which enables detection of the multiple inflation operations in parallel with mutations in the cell free DNA from blood samples.
Lets you see screen.
Is the first product out of this platform and we're pleased to see all of the progress we have made.
Our next cancer indication.
We'll be in CRC of which we expect to report the case control data this year.
Now our strategy is to find the best performing biomarkers each single cancer assay.
In contact with respect to the studies with the long term goal of efficiently combining the status and core data to create a panel for multi cancer screen.
The addition to its application of the early screening profit development. We are of also leveraged mutation capsule.
Technology to develop our MRV products.
Based on early encouraging results observed we're planning to start larger multicenter studies for our MRM deliberate and the CRC panels.
We continue the expect to report case control liver MRV data.
Later, this year or first half of the next year.
Turning to slide 12 on the.
The IBD side of the way you have recently formed a strategic partnership with Siemens health near that.
That was announced.
Just a few weeks ago at the China medical equipment there.
This partnership aims to promote income S..5 platform in lung cancer aging IBD assay from Chinese hospitals in order to provide of non small cell lung cancer patients with efficient and the accurate.
The lives diagnosis treatment guidance.
The baseball once FC technology, the lung cancer aging IV the assay can detect many mutations from the fusion of the cost 8 different gains at the 1 for.
For targeted therapy selection in non small cell lung cancer.
Combined with <unk> 5 it offers advantage in detection of efficiency ease of use.
<unk> value and achieve the 2 day turnaround time.
It's suitable for independent clinical molecular testing in Chinese hospitals on all levels.
Another product that we leveraged off of our 1 step seek technology is our second <unk> product for blood cancer.
We plan to launch our second party pump shortly.
But as a global leading IBD in diagnostic imaging player with the extensive distribution and sales network in China. The Siemens is the desirable IBD upon the book income.
As of the end of the first quarter, we have plenty of stream hospital purchase agreement of all we anticipate the partnership with them is to help us continue to expand our distribution reach of our as 5 of long 8 non cancer aging IBD assay.
Looking at all of our other IV deposits in the portfolio.
The trial is our blood based alarm Egfr IBD assay as was tissue based the Saar at cancer IV. The assay are both progressing accordingly.
Also we recently participated in.
The round for startup tell bio.
Which focus on developing it held dx circulating tumor cell or CDC.
Technology and complementary tell Rx therapeutics platform subs.
So that's part of the strategic agreement, we will license and distribute <unk> with.
The within China, and the collaborated with <unk> to improve the platform.
We remain king.
Flooring, new tech and leveraging our capabilities to bring them the China.
So now I will turn the call over to our CFO, Mr. <unk> to provide more details on our first quarter financials.
Thank you once again.
I will provide of updates of our financial performance during the reporting quarter. Please note that all the numbers provided.
In RMB terms and that all comparisons are made on year over year basis.
Starting on slide 14.
In the first quarter total revenue increased by 19, 8% to RMB 92 point of 1 million for.
RMB $76.8 million in the same period of 2020.
The Jim mentioned.
Excluding revenue from Jean Charles the COVID-19 of IBD test.
Test the revenue in the first quarter of 2020 total revenue grew.
52 point of 9% year over year.
I can also send the monetary revenue increased by 30 point of 4% to RMB 87 point of $1 million in the first quarter 'twenty 'twenty, 1 from RMB $66.8 million in the same period of 2020 the.
The increase was driven by growth in the revenues generated from the provision of value to your services in both diagnosis and early screening.
Net revenue in the first quarter was impacted by COVID-19 of resurgence in.
Some of our key sales territories, which.
<unk> will then discuss the earlier.
The was the Chinese new year holiday.
All of <unk> revenue increased by 51% to RMB 71, 8 million during the first quarter 'twenty 'twenty 1 from RMB 47 point of 6 million in the same period of 2020. This was driven by.
HTC screen cell as well as the ODT diagnostic tests.
How did it diagnostic tests.
First quarter 'twenty of anyway total approximately 5100 of units.
Representing an increase of 29, 6%.
Compared to the number of the LGD tests, so the and the LDC diagnostic tests building in the same period of 2020.
I read the revenue decreased by 25% to RMB $15.3 million in the first quarter 'twenty 'twenty 1 from.
RMB 19 point of 2 million the first quarter of 2020. The decrease was due to RMB 16, 6 million of COVID-19 revenue that was booked in the first quarter of 2020.
So excluding that revenue sales of IBD of products grew 490 per cent.
Driven primarily by sales of our savvy instrument.
We continue to expect our expanding installation base.
Propelled by Jean Charles Diabetes sales team along without without the collaboration with Siemens to drive our reagent and overall sales in the core.
Coming quarters.
Revenue generated from development services decreased by 56 per cent to RMB 5 billion.
From the first quarter 'twenty 'twenty, 1 from RMB 10 point of 1 million in the same period of 2020 the change mainly resulted from the decrease in.
In sequencing services.
Letting our continue the adjustment until the business strategy towards more highly value high value of Biopharma services.
Biopharmaceutical revenue continued to increase by several of those compared to a year ago and a way out of the optimistic overall biopharma services trend.
Cost of revenue increased by $8.8 4% to RMB $37.5 million for the 3 months ended March 31st of many 1 compared to the.
To RMB 34 point of 6 million in the same period of 2020.
Moving to slide 15.
Gross profit increased by 29 point of 1% to RMB $54.5 million in the first quarter 'twenty 'twenty, 1 from RMB $42.2 million in the same period of 2020 gross margin increased.
So the 59, 3%, but for the first quarter of 'twenty 'twenty 1.
<unk> 255 per cent in the same period of last year.
In particular gross margin for our L. D. T segment was 68 per cent compared to.
60 point of 2 per cent a year ago.
To better scale in the product optimization.
For all of IBD segment gross margin was 34, 2% versus 17.9 point of 9% last year.
Note that every day gross margin in 2021st quarter was up of normally high due to the oversize of the revenue from the COVID-19 test.
We saw a mix shift in the first quarter of 'twenty 'twenty, 1.2 substantial instrument sales of compared to prior quarter, which resulted in lower IBD gross margin.
Maybe the kit sales were lower primarily due to seasonality.
We expect this to normalize going forward.
Operating expenses increased by $49.5 per cent to RMB 163 point of 5 minutes for the first quarter.
From RMB 100 of $9.4 million.
The same period of last year.
Operating expenses are broken out on slide 16.
And are as follows.
Selling expenses increased by 10 point of 9% to RMB 59 point of $7 million in the first quarter 2020.1 from RMB $53.8 million of the same period last year selling expenses the percentage of revenue decreased to 64, 8% in this quarter from 70 per cent loss.
The year.
The decrease was primarily due to better scale and different revenue mix.
Administrative expenses increased by 106, 3% to RMB for.
What are you for the $6 million in the first quarter 'twenty 'twenty 1 from RMB 21 of 6 million of the same period of the 20th of knee.
In Australia of expenses as a percentage of revenue increased to $48 for me.
What are the age when the ascent in.
In the first quarter 'twenty of Honeywell from 28, 1% in the first quarter from the money the.
The increase was primarily due to more head count as well as higher.
Professional fees after IPO.
Research and development expenses increased by 80 points of 9% to RMB 15 million in the first quarter 'twenty 'twenty, 1 from RMB $27.6 million in the same period of 2020.
R&D expenses the percentage of revenue increased to <unk>.
54, 3% in the first quarter of 'twenty 'twenty 1 from.
The 36% midterm period of 10 of 20, the increases were driven by higher R&D headcount.
And the related expenses as well as the continued innovation efforts.
<unk> product development and the clinical trial initiatives.
As a result operating loss was RMB 100 of 9 million and the.
First quarter compared to $67.2 million last year on slide 17.
Net loss for the period was RMB 150 million for the.
First quarter compared to the M b.
100 of 5100 of $15.5 million for the first quarter of 2020.
We're also providing I first net loss figures are the management believes these numbers would be helpful.
To show the trend of the underlying business.
<unk> net loss excludes share based compensation expenses.
Why the change and all of the loss of financial instruments with preferred the rights.
No I first net loss was RMB 100, and the <unk> 5 point of $8 million for the first quarter 'twenty 'twenty, 1 compared to 60.
The $65.6 million for the prior year.
Basic loss per ordinary share attributable to ordinary shareholders of the company was RMB the other point.
2.5 for the first quarter of turning 21 compared to RMB there of point to 9 <unk>.
The other point of 92 for the same period over the last year.
No I first basic basic loss per ordinary share of contributor book attributable to ordinary shareholders of the company was RMB is there a point of 2.3 for the first quarter of the 'twenty 'twenty 1.
Compared to RMB there of point of 5.2 for the same period of 2020 day.
Diluted loss per ordinary share of the equivalent to basic loss per ordinary share.
We have a very strong cash position cash on the cash equivalents in the financial assets at fair value.
We'll close to RMB.
1.4 billion or.
U S 200, 212, 1.7 million as of March 31, 2021.
Our cash and cash equivalents decreased compared to the end of last quarter due to net cash used in operating and investing activities, primarily attributable to the net loss of RMB $115 million and Kurt.
And the purchase of cash and the currency management products of <unk>.
197.1 million.
Now moving to discuss of our revenue outlook for the turn until the 'twenty 'twenty 1 on slide 18.
Based on the current environment.
In the providing no further major COVID-19 related disruptions in our key markets.
We remain confident in delivering revenue growth to be in the range of 45 per cent to 47 per cent.
Which represents 20.
<unk> 'twenty 'twenty, 1 revenue in the range of 615 to 625 minutes.
This concludes the discussion of our first quarter financial results I will now turn the call back to the surgeon.
Cynthia of it.
In closing we were had a good start to 2021 financially and operationally.
Highlighted by our new strategic collaborations and the encouraging STC screen data.
Shown on slides 20, and 21, our strategic focus going forward will be to accelerate the development of the liquid biopsy based solutions.
Across the full cycle tenants of management, particularly in the early screening and then Mardi.
While continuing to ramp up of our commercialization efforts and grow our base business.
We remain on track to initiate the Registrational trials of at GTC Springer non core Penn scan shortly.
Adult as well as the launching MRV for all of our pharma customers in their critical house for hematologic cancers.
And we look forward to sharing the CRC case control early screening data and the MRV liver cancer data with you in the near future.
The overall, we remain confident that we are well positioned in the fast growing position oncology sector.
And we are excited about our growth prospects.
And last but not least we remain highly committed to focusing on the innovation.
To develop high quality of products that would benefit more cancer patients.
So this concludes the prepared remarks portion of today's call operator, we're now ready for questions.
Certainly as the.
A reminder.
To ask a question you will need to press star 1 on the telephone terrific value.
First in the first round or Ashkey. Please standby, while we compile the Q&A of of stuff at Star followed by 1 to ask the question. Thank.
Thank you.
We had the first question from the line of some Gmail from BTG. Please go ahead.
Hi, Thanks for taking the questions maybe starting out with your Biopharma business could you talk about the trend there.
Obviously was also impacted by the pandemic and just kind of curious you saw growth year over year again this quarter or are you seeing that business normalizing you know anticipate more projects.
The Biopharma work clinical trials.
Well continue to normalize going forward.
Right so.
The definitely you are looking at a very fast growth space of greenhouse business. In fact, our CMO has just got back from the very busy meeting in Suzhou over the weekend the IEEE meeting in China.
And there are so many.
So much biopharma activities going on in China wisdom might of been the stabilizing the in fact, we see the biopharma activities are picking up and generally coming back to normal pace.
Starting in the second half of last year.
Although we have the disruption in the first quarter of this year, especially the timber essentially.
The December last year in the January of this year.
But with the.
The the environment back the normal in March.
Like I said the bombers activities are really picking up speed.
And <unk> again, the very well positioned to serve the surge of demand from the Spa commerce sector given that we are.
The very few players in the market.
Assess the net well run that of capability to help the mean, there arent any of the drug development.
The true site club there dropped the balance given that we have a strong R&D capability and we have the probably the world class regulatory of capability as well as the we already build up.
Nice coverage in terms of the.
The testing market.
So we basically have.
Everything that the Palmer our partners are looking for so that's why we see of strong demand in this line of business of Jin Kang.
So remember we had a very slow start last year, but now we have over 40 I think we have a 40 Biopharma partners now, including the Big MNC sales was.
Really the cutting age the leading local startups.
And the covering the French from.
The small molecule.
The 2 CTG to sell.
Celgene for cdti sector in the cell gene therapy sector.
We are leveraging fully.
Our proprietary the technologies such as once the technology the fusion scan as well as the mutation capsule and the work collaborating loans, representing an increase of novel of between 9.6%.
Compared to the number of where all the tests for the in the oddity of diagnostic tests for the in the same period of 2020, sorry, operator, I really the operator decreased by 25% to RMB $15 of JV or the phases.
Barring any day of recording for pain.
For the $19.2 million of the first quarter of 2020 the decrease.
The current.
Pinpoint the $6 million of COVID-19 has revenue net of all of the book in the first quarter of 2020.
So excluding that revenue sales of IBD product through for.
And with the 90%.
Driven primarily by the wall with 5 instruments.
We continue to expect all of our extending installation base.
The record of him along with us with our collaboration with the Mezz.
To drive volume maybe of Hannibal annoying, calling in from the coming quarters.
Revenue generated from development services decreased.
56% of RMB 5 billion.
In the first quarter came from the 1 for R&D.
R&D pinpoint the $1 million.
Same period of 2020, the change mainly resulted from the decrease in <unk>.
Sequencing services.
Reflecting our continued assessment of business strategy towards more highly value high value of <unk>.
The pharma services.
Biopharmaceutical revenue continued to increase by several fold compared to.
Hello.
Hello.
Hi.
Hi, Ken.
Okay.
Thank you Karen.
Hello.
Peter.
Yes.
Yes.
Operator, we have most of the line for the carriers.
I think that you have.
For the range of a disconnected.
Okay, I think the economy.
So the redial.
They are calling back.
Thank you.
For.
Okay.
Thank you.
Yeah.
Uh huh.
For the process.
Pardon the interruption.
Of the Speaker line.
Okay.
Okay.
Yeah, we're back.
Hello.
Alright.
Yeah.
Yeah could I follow up with a couple more questions. So.
So thank you so much for that that was true.
Maybe 1 of them soon and obviously I seem to talk to me or is it exciting.
Of the partnership there could you talk about the based on my knowledge. They have not found a lot of.
Partnerships in terms of on the genomic diagnostic side is pretty unique from that standpoint, so we'd love to share kind of what day, they might be thinking as well and if there are opportunities for them to further expand into the area of it also from you guys of the standpoint.
Are there opportunities off the partner with other multinational.
Large IDB per share.
The other day matters.
Yes.
Yeah. So.
You're right Angie.
We're pleased that we established the partnership with the Siemens Health near.
You know that they are they do have a sizable IBD business our portfolio in China and then they are I think the fourth largest player among all the the big International players.
Such as rush.
Diagnostics or a book.
And they do have extensive average to the hospital of testing market in China.
The special.
All of them.
Our presence in being in certain.
Areas and the right out in their offering they do see the moniker profiling of our molecular diagnostics are offering is a relatively weakness for that.
Why they do have.
The strong.
Motivation to collaborate with the it at a.
Range medical direct us oncology molecular diagnostic players.
Players like <unk> and.
So you didn't want to have 1 of the leading molecular diagnostic solutions for oncology in China.
<unk>.
Hum.
With the combination of the FY the medium for the sequencer.
With our west of <unk> technology based lung cancer, a gene assay.
We have the sort of offer we have the the solution that the that the hospitals need.
For their for their more effective of treatment on the lung cancer patient.
So we do believe that the partnership.
2 of our innovative product solutions with their extensive distribution network, while you're out good results.
In this fast growing in hospital at the market in China.
And you know.
For your second part of the question, Yes, we are definitely open.
And I can share you know what exactly or other partnerships, we might be making but I can tell you is that of that income is a innovative company focusing on developing the.
The first class.
For the back then I'll stick solutions, right and we will be always looking for the right hunger.
Order too.
The the educating the penetrate the market together more effectively.
Great Super helpful. And then lastly from me just a clarification you mentioned the timeline for the CRC screening.
Take control study data read out.
What about the M. R. D for Trc did you guys talk about the timeline there in terms of when the for data readout might be available. Thank you.
Yeah, I think we mentioned over the pole that we're making for the businesses progressing in our already by the rich offline.
So leveraging the same addition cups of technology.
We are not only pushing our HFC from spring into the ratios from Ohio at the plan.
But also we are the.
<unk> already started our work the study on <unk>.
CRC.
Or the screen and the.
Do you expect to release.
On the case of preliminary case control data sometime this year on CRC.
And again by leveraging the.
The advantages of limitation capsule rise of basically what we can the profile and the patients in parallel with the methylation changes. So we are developing our <unk> product platform at the wall.
And we do expect to release.
Our preliminary liver cancer.
It might be a study of data sometime this year.
And we also see some encouraging on the early encouraging early data on CRC as well and as I mentioned in the coal.
We will be launching a larger multicenter study.
The liver cancer on Monday, as well of CRC MRV, sometimes of this year.
Great. Thank you so much.
And thank you Sandy.
Yeah.
The line from Credit Suisse is open you can ask your question now thank you.
Yes.
Yeah.
Okay.
Young Kwon from Credit Suisse. Your line is open you can ask your question now.
Okay. Thank you.
Yes cause the young from credit Suisse, and the congrats for the ninth quarter of.
For us closer I was about the H C C.
Your line is from progress of the first call her for kind of your provider of the maybe more color.
Sales to screen for all.
Cover number from what does the percentage of ships.
Our LTV Phil.
And the second day.
Can you provide the more detail the songs.
All of the sort of traditional trial, where I was going to launch later this quarter for all of interest to the.
The Green I suppose we now have the computer.
Trial design did you tell and the.
And the also we probably would have oh.
Number of clinical trial of 5 being mined.
Yes sure young.
Yeah to answer your first question about the.
The update on the commercialization progress of HSBC screen. So remember we previously guided.
Revenue from HSBC screen will be roughly about 10% to 15% of our annual revenue of about 2021.
In the first quarter I mean at this point of will have not broken out our HSBC screen quarterly sales yet.
But I can tell you is that early screening revenue.
Is it gives us in the in Q1.
You know it is a part of the it's part of the reason that the <unk> T cells Roses.
Quite strong in Q1, and I can also share here of that.
You know is the developing the all of these channels. So we have the setup.
Since the the Q4 of last year, we do see that the.
It's the C screening are the new service the new products.
Start to generate is already the exhibited the ability to generate sustainable growth.
So we do expect the of the revenue from this product that will continue the growth for the rest of this year.
So.
For the for the channels right and you see that Oh, we.
We have started the work of the rollout with the icon of last year and.
Starting the beginning of this year were in the Q1 this year were pretty much in the all of their major house chat.
Jackie has done the centers and we do observe the trend of the 10 hotels.
He is actually growing.
Months by months. So this is the very good trend that we observed.
As this reflect that the with the proper education.
The copper.
Our rich to the customer.
Where does the effect of the channel we will we are starting the generate.
Essentially the awareness among the high risk population in the amendment.
And that the buying the.
The buying interest of from these people.
Is going strong.
So this reflect our.
Leave that we at this stage, we want to work with the best of partners to invest heavily into.
The market education, we need to help the people who needs the early screening.
And where and what product with debt and that's the area. We will continue to invest along with our partners and we believe it will.
Translate eventually too high.
The property revenue growth.
And you know Jan the also yeah I'm pretty sure you also noticed that the recent announcements of Alex I understood.
With.
Sorry.
So okay. So so you probably have the also noted that the the recent announcements.
Our partnership with the J D House.
Yeah. So that's essentially another very good channel, we believe that we will.
Be able to effectively educate the market and will be effectively build up the brand.
Build of the awareness and again like I said it will eventually translate to the sustainable revenue growth.
The effects of the by the way is either going to consider.
Oh gosh.
Hi, this is for each of the screen for this year.
Not yet.
Well I think you know us.
As you can imagine all of these channels have the.
Really great potential right and.
These channel these partnerships.
Will position us well for future revenue growth, but we have no doubt about that.
But again all of these partnership building and then the like of that the market education the penetration.
We'll take time right, we will take all steps.
<unk>.
As the company not only.
Focusing on commercializing.
The issues of thing.
Green of LDP service, but also we're investing heavily into pushing this into.
Our research and kind of internally the into eventually IBD product.
And we do believe that the big big potential.
Essentially the $1 billion of revenue.
The product like S. UCT screen its true potential will be hit.
When you.
Get the regulatory approval and the way you are working your way over these partnerships to build again of buildup of the awareness among your packet population.
And we do.
Do you have a you know high.
Hi, expectation that we're going to complete the trial and get approval of timely.
Yeah.
In the near very near future, we expect now.
As we stated in the earning call that we expect to have the trial done in the next year and a half but the assay approved.
Each of the Attorney Street, and we're also quite optimistic that we can eventually drive down the cost structure at the drive at on the cost and thus drive down the price.
And eventually obtain the.
Net for National reimbursement coverage and then that's when you'll see the product which a.
Hyper growth period, and then well see that this product will.
The large scale application of this product will eventually serve our purpose I mean, all of our ultimate goal of the driving down the debt rate of the of a liver cancer.
And we have you know we are working very hard on that from R&D team directly of the team to sales margin.
Okay, Great and maybe kind of my second question for Ken kind of provide maybe a multi tell us all of the.
The Attritional study for the just because of the screen.
Yes.
Yeah. So the.
Registration.
In the as we stated we will start very soon in the words just finalizing the.
The final list of of clinical site.
And the proud of lying.
As our CMO, who mentioned in the last minute.
A couple of months ago in the last earnings call.
Pretty much finalized debt with.
With Napa.
And the trial design will call for a head to head comparison between the IFC and ups down the road with our product he spring right.
And it will be in the size of our several thousands of the patient enrollment.
And again I like that like I said, we do expect.
The the trial will be completed sometime next year. So we were.
Fully on track for that.
And the okay arm for a lifetime.
We said so the choice of going to kind of 2 of the task to only the baseline and the Zale, we're being known for all the time for the off Alverez chocolate off of it is is that the other thing Ken.
Okay.
I missed the new food, yes, so the.
There will be additional test done at the same time just to get the clinical truth, but it's not the.
Our test.
The mentioned nor be comparison of our test against the <unk>.
F P ultrasound, but the <unk>.
Endpoint is the clinical choose the term by TEP or MRI and our statistical hypothesis.
For test will be superior to the center of care F. P plus the Alco stance in terms of sensitivity of 9 priority for.
For the <unk>.
The city.
And we expect to have.
No fewer than the reported 500 patients.
The <unk> study.
Yeah.
Okay. So I just want to make sure. So we're going to have Oh urgency of its greenhouse as the baseline and the rail and some people will look at the <unk>.
Paradigm of test the.
And the had a ultrasound test.
For the clinical true task the task will be thought of as a baseline of I'll warp is thought of.
Sort of some falloff Todd.
Okay. So all of the patients.
In our study we're half.
Hcp's screen test.
Plus ultrasound and the clinic of twos turned by CTO of MRI at the same time are approximately the same time.
Okay. That's the best of luck.
Yes.
So there will be no okay.
Okay, Okay, Okay, and the Dwayne hallman of size of the weapons of okay.
Yeah.
Oh, you mean, the clinical side we are.
Yeah the camera.
Yeah.
Yeah, well look both the sides probably summer of 5 to 8 sites.
Part of it okay.
The number of patients there's about a 4500, okay got it thank you.
Mhm.
Thank you yeah, thanks for that once again.
Yes.
Yeah.
Thank you once again as a reminder to ask a question. Please press star 1 on the telephone to ask the question.
Did you cancel the request please visit the bonds.
Thank you.
Okay.
Okay.
Not a whole lot.
Okay.
Sure.
Yes.
Yes.
Yes.
Yeah.
The 1 question.
Switzerland, So we'd have a next question from the line of.
Of course, the from HSBC. Please go for it.
Yes.
Hi management.
Thank you for your presentation of congratulation on the results.
So I just kind of a quick question on the COVID-19 test kit.
I think for this quarter, it's quite the.
The significant part of the IBD of revenue. So I'm, just wondering so including that first of all for debt.
The IV the growth to be compared to last year and overall.
How much does this over.
All of it 19 test kit.
As a percentage in terms of the overall I think the revenue from last year. Thank you.
Okay.
Right so.
Regarding your second question the.
The.
Most of the Covid test last year, so it wasn't concentrated in Q1.
Throughout the year there.
There was the.
A small.
Revenue in Q4, as well, but in terms of scale Q1 was the majority of part of the whole year for last year.
Yes.
Yes.
The first can you repeat the first question sorry can you repeat that.
Yeah. So the first question is more on the guidance for this year in terms of ICT revenue Kras.
Oh, okay.
We don't provide a guidance of individual revenue segment.
However.
We do we gave.
We reiterate our flu for.
Got it so.
615 to 17 of 225 million for this year driven by.
Growth in all business segments from L. D T..2 IBD and also other screening and Biopharma services.
And.
Out of these we obviously, we do believe that IBD and early screening revenue will be a.
The strong growth drivers among the.
For the or the business segments and this year, we continued to flow.
Focus on getting more IBD solutions into the hospitals given that last year.
The impact for them and the.
Pandemic our ste.
Bill quite severe throughout the whole year right and this year.
Assuming that.
So it is winning good control.
Our diagnose of this business the key strategic focus is to target the top.
100, us hospitals and 2.
To work with the hospitals and penetrate those hospitals with our IBD solution the <unk>.
The 5 plus 1 of its solution, which provides a lot of competitive advantages compared to other solutions offered by <unk>.
Other players in the sector.
1 of our solution provides a simpler solution as well as the posture of kind of run time from simple to report only requires 2 days and and this has been well received by public hospitals in China.
So this is this will be continued to be our focus in terms of IBD commercialization.
And the we intend to accelerate the.
The.
The number of new hospital of IBD Ownerships.
Okay. Thank you and I have another question on the development of services. So I understand that developments of this has been under pressure because of its shifting away from.
Shifting toward Biopharma services. So I'm just wondering when will the when can we expect to see a turnaround in terms of revenue contribution from the day. Thank you.
Yes.
Yeah, so the other way each quarter of we.
Sure with the investors that within development services, our focus is really the value.
All of you Biopharma partnerships Biopharma services.
Although in terms of absolute dollar amount this is still relatively.
More relatively small percentage of the total revenue.
However, reduce the significance redo value from these ownerships.
The junior introduce it in the beginning.
We are quickly establishing Jeanne Johns reputation and the brand name in.
This community.
Thanks to our CMO of the who and I think by now we can be probably saying that we have we are a leading player and we have earn.
Quite a quite.
Quite a bit of.
Good trust from the.
All of them are.
The community.
Approximately 40 partnerships already established.
Any of the Hunter ships in the contracts it takes time to execute given that they are usually.
Tied to the.
All of our partners research timeline, especially.
For the clinical trials.
To collaborate with them in the sink up with their schedule.
However, all of this backlog of partnerships.
They will help us to establish our solid foundation of you Miss in the commute.
Community and then we believe that this is really a good.
For the start and it will continue to build on top of this and with the more.
Partnerships and the word of mouth.
We're confident the.
The Biopharma revenue soon will become the.
The prominent.
Part of the development of services and eventually will be the major part of the development services segment.
Thank you and in terms of dollar terms.
In terms of percentage terms.
When do you expect the growth territory to the back to positive for development of San Francis overall.
Oh.
I cant kind of.
I I'm not providing a guidance the exact timeline, but I guess my.
My estimate is that in the next few quarters, we should be able to see the.
Development services revenue to return to positive.
The growth trend.
Yeah.
In addition to that and it will start to see the even higher percentage coming from the of high value of high margin Biopharma.
On the service sector.
And while most of them.
The out of this 1 is from somebody was the first question is about the sector of the ball, but we all know that the.
The partnership all of the business. We these biopharma companies not only going to generate revenue immediately for us, but ultimately the goal.
In most of these partnerships or lead to.
The co develop the product.
Or in many cases is accompanying diagnostic kit.
All I can tell you the 1 of our first partnership I don't want 1 of our of course, the early partnerships with system.
With the new drug approved in China, we have already of completed out of the out of any of that of diagnostics.
Diagnostics kit clinical.
We've accomplished that.
It's the PDGF Murray.
The testing kit.
The.
We do expect the the approval.
For the new future.
We'll walk from our first completed.
That cost of the project.
And these kits will lead to sustainable profit levels in the future.
So which means that some of these development services sectors.
This development will lead to future IBD business flows.
We're very excited to see that the growth in this sector and we believe it will translate to more growth in the future of either.
EBIT for the sake.
Okay.
And in terms of the higher margin that you mentioned earlier it sounds like a rough like range or guidance that you are looking at.
Yeah. So like I said right, we cannot provide a detailed breakdown of the different business segments gross margin at this point, especially for the young business segment like are the Biopharma services is still going through it it's far from being mature right. So.
At this stage.
Any projection of our gross margin.
The meaningful.
Okay no problem. Thank you so much.
Okay.
Thanks.
Thank you.
Thank you.
Not for the questions I would like to see from before.
Some of the Cookie Merck for any closing remarks of achievement. Thank you.
Right.
Thank you again for joining us for our first quarter earnings on the business update call.
Christian the other ones ongoing support of you have any questions. Please do not have close of waste trials of Investor Relations.
Have a good day and I'm thankful.
Yeah.
Thank you. This concludes today's date from school.
Thank you for compensating.
Okay.
Pretty true.
Okay.
[music].
Yes.
[music].