Q3 2021 Genetron Holdings Ltd Earnings Call
Earnings Conference call.
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I'd now like to had the conference over to your first speaker for today Ms Hokey.
Look thank you. Please go ahead.
Hello, everyone and welcome to the third.
What our 2021 earnings conference call.
The company's earnings release issued earlier today and is available on the company's IR website.
During this call 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 blood clot.
The Securities Litigation Reform Act of one thing.
Bye.
Statements that are not historical facts.
The Biogen.
Ah patient.
Forward looking statements.
Forward looking statements involve inherent risks and uncertainties.
Information and other risks.
In <unk> filings with the SEC.
All information provided today, if that's not the case that this call.
<unk> does not undertake any obligation to update any forward looking statement.
As required under applicable law.
With respect to any.
Measures discussed during today's call. The company reconciliation information related to these questions can be found in the earnings release issued earlier today.
Allow me to introduce the management team on the call today.
Mr season wine alcohol.
All of Jean Charles will discuss recent business updates and upcoming catalysts.
Our Chief Medical Officer, who will discuss our early early screening program.
Kevin Shea, our CFO will provide financial highlights related to the.
Third quarter results aligning can easily I felt I thought all of them for 2021.
Following management's prepared remarks, we'll open up the call for questions. During the Q&A session, our co founder and Chief Scientific officer and stuff behind them.
Our Chief Technology Officer.
It will also be available to answer questions.
But that said I would now like.
To turn the call over to Mr. Qi.
Neil Ginger Hot season this fall.
Thank you Okay. Good morning, and good evening, everyone and.
Thank you for joining our third quarter 2021 earnings conference call.
I would like to direct you to the supplemental earnings presentation on our Investor Relations website.
Beginning on slide two.
In the third quarter, we continued to expand our foundation as the foremost provider of positioning oncology tests and services in China.
Our comprehensive portfolio covers the entire spectrum of cancer management.
Enabling our customers to address patient needs and challenges from early screening.
Diagnosis monitoring as well as treatment recommendations.
Turning to slide four.
In spite of a COVID-19 impact on our business in the quarter.
We delivered strong results.
With 36, 2% top line year over year growth on revenue of Renminbi 152.5 minutes.
Our IBD business grow over 70, 70%.
Thanks to the continued uptake of our <unk> five instruments at eight and J S and G S assay.
The L D T business also increased over 30%.
Primarily driven by our liquid biopsy already screening product H C C screen.
We also saw notable margin improvements.
With gross margin at six 9% compared to 62, 2% in the third quarter of last year.
Thanks to improvement in both L. D T Navi deepest slides.
Operationally, we have achieved signaled to the milestones since the supporter to further strengthen our position in oncology portfolio.
So let me start off with our early screening segment.
We're pleased to share with you that we have now initiated <unk> registrational trial for.
Our early detection assay in HCC.
Let me also share our updated strategy on these key pipeline product.
After careful considerations.
Turning to the multi omics mgs based assay, which is green.
We have decided that the best approach would be to add a PCR based assay to our registrational strategy.
This structure will allow us to more broadly cover the market and potentially accelerate market penetration with the test.
Dr <unk>, who will present more details on this later on the call.
Turning to slide five.
On the <unk> side, our efforts have resulted in a very exciting the major achievements recently.
Last night, we have announced a multiyear co development agreement with Astrazeneca R&D China.
N D S based personalized MLD test for solid tumors in China.
This is a singleton the milestone for genco.
As the collaboration and highlights the value of the MRV is solid tumor data generated by our proprietary mutation types of platform.
More importantly, we.
Eight of these support we expect the partnership to further accelerate the development timeline for these sassy.
With this partnership the company's will jointly invest capital and we'll work together to develop and validate these assays for cancer monitoring and recurrence in China.
Joining committee will also be established to oversee the product development.
In addition for solid tumor clinical trials in China that incorporate the use of LNG as space to personalize that might be tests.
He plans to use these co develop and learn detached full China specific trials.
The company's May also extend the partnership later to include the IBD registration and commercialization.
Overall this agreement represents the first step of a long term exclusive collaborations and the partner school.
Is that a word class tumor informed MRV product.
We are optimistic about already solid tumor market in China and in particular <unk> competitive position. After this collaboration.
Currently there are only a handful of companies in China.
They have the capability to develop a high performing at Murphy USA.
As these clinical capability and leading position in college or sickle distantly hence.
Our product development.
Also the use of the co developed assay in many of their trying to trials not only will represent revenues for us, but the accumulated clinical experience will be valuable you know product optimization process.
Beyond this tumor informed and Marty assay internally, we are also exploring a chemo naive MRV approach.
We look forward to sharing more updates as these programs proceed.
In regards to MRV data released recently.
Analysis of personalized MRV assay developed based on our mutation capsule technology has been published in the journal of Hematology and oncology a high impact journal.
The study has shown excellent sensitivity to detect point.
Point is there's a 1% tumor DNA.
In precise prediction.
Pretty tonio dissemination and gastric cancer patients.
Through use of the peritoneal lavage fluid.
This is exciting validation of our technologies ability to detect MRV recurrence in the fluids.
As for solid tumor solid tumor blood based I'm already data, we continue to anticipate publications by the first half of 2022.
For second Mardi in blood cancer.
Simply we announced a exclusive partnership with <unk> pharma.
Co marketing co promote the assay.
Hematology focused hospitals and clinics.
Ross designated regions in China.
Boston has a robust sales force of roughly.
1500 reps and that its to sell innovative drugs that target hematology, and then Boyd malignancies solid tumors and others.
There will be a strong partner.
First providing.
Turning to leverage the sizable sales force and the valuable relationships with clinics hospitals kols and distributors.
Our second Marty assay has been optimized with our poetry wants that seek technology.
Which enables the DNA library construction process for gene sequencing to finish with a single PCR reaction.
These simple operational feature together with our fully automated pipe thematic solutions.
Enable second part b to achieve high throughput and accuracy.
Good evening deformity.
High cost efficiency and fast turnaround times.
When compared with traditional detection mssrs.
To date second Marty has been tested with thousands of samples of I O L. A L. L M M and the C O L in China.
The recently Napa <unk> center for drug evaluation issued guidelines for.
It might be testing of multiple melanoma clinical trials.
We're pleased with its continued support of MRV testing and blood cancers in China and believe our N. G. S. Based second Marty represents innovative and competitive option in the market.
Turning to slide six moving on to discuss our Biopharma services business in third quarter, we have signed an additional seven.
Pharma partners, increasing the total now to 47 partners.
We continue to see a strong pipeline as we have the opportunity to form partnerships throughout key products, including second Mardi uncle Pan scan fusion scan and others.
In China, the trend of C. D X demand is becoming stronger resulting from Memphis, Memphis, increasing focus on genomic testing innovative targeted and immunotherapies.
Immunotherapies.
In the U S. Our CLIA lab in.
In Maryland is up and running.
Providing us with a solid platform to offer services for cross border trials in CTX developments.
With the booming Chinese biotech sector, we are optimistic.
About our growth in this business segment.
And recently, we announced a strategic partnership with Neogenomics to drive global oncology drug research and development.
As outlined in this agreement.
The partners will provide select among nice clinical trials.
Mobile translational research for pharmaceutical groups and technology platform providers that need a China arm.
Global or China focused trials.
Additionally, neogenomics will support our trials in the U S. A P J and the EMEA regions.
Combined the two partners have 15 Cup.
Our credit and clear certified laboratories.
<unk> team of hundreds of scientists and the season clinical drug trial.
Pharmaceutical services team.
These assets will enable business partners to synchronize global clinical drug trials and companion diagnostic development.
Development.
Lastly on slide seven.
We have achieved a major milestone in November with the receipt of CE Mark for our tissue based large panel uncle Pan scan mutation detection kit.
In China, we have completed the typing test.
For our Registrational trial, and we plan to initiate enrollment in the first quarter of 2022.
I will now turn the call to Dr. <unk> to provide more color on our HSBC early screening Registrational trial telson strategy painful.
Okay.
Thank you Dan.
Let's go to slide eight.
As Dan mentioned earlier.
Our advance our early detecting liver cancer program with two assets.
In addition to the multi omics and yet I see it.
This is screen that we have discussed in the past.
We are introducing the investigation multi marker PCR based assays.
The scan.
First let's discuss the scan.
A couple of major policy development.
And your last year, which let us to Detroit.
<unk> based assay to the program will be wiser approach.
The first development with government infrastructure built in spending.
China piece.
PCR has more steps to present and ready to available workflows, many hospitals and clinics.
As the COVID-19 outbreak.
The council.
It has required hospitals at the county level and above.
She capability for nucleic acid testing for a salary Sir you hospital testing market.
The second development was related to government insurance coverage, a few months ago deem isolation or genetic testing was included.
And some other purpose and reinsurance programs.
<unk> seen that benchmark.
And if around them in the 800 missile listen with test.
And around RMB, 1500, <unk> and just basic testing.
This development.
Our company states, adding a high.
Performing pea surfaced as it would've been potentially extend the coverage of the product.
In addition.
Or the self pay population.
China has a unique market, where affordability could vary significantly across the country.
Offering a Pcr products.
It also provides a selfie patients in lower tier markets with a cost optimized solutions.
As such we have selected nine clinical sites and have just started our opinion enrollment Richardson the trial.
Yeah.
In this trial, we are evaluating scant alone.
Skim class ultrasound worst as standard of care, which is ultrasound plus AFP with the target of 5000 patients.
A similar cohort side this is the screen.
We expect to complete by the end of 'twenty to 'twenty two.
Thus far.
And just with the trial.
It continued to be committed to this trial and have further progress with our preparation work.
We have selected our asset platform.
And have complete optimization and locked down our algorithm.
Quinn.
In addition.
With the ongoing PCR trial to be taking place at mine side.
We plan to select and narrowed down to four to five of these sites that we believe are more suitable and efficient to run our in this study.
The design of the trial remains unchanged.
Would be head to head trial.
So all the patients compare it to the screen versus ultrasound plus AFP.
We expect enrollment to start in the next few months.
And for the trial to be complete by the end of 2022 as we discussed in the past.
Overall, we have broadened our strategy to offer agencies and screened we are confident we can play both new hospital and central lab models to increase accessibility and penetrate the market Boris fishing there.
We have committed.
We have communicated our trial design implants with M. P. E. And then continued to predict potential N. P. A approval was for both skin and it's just a screen in 'twenty to 'twenty three.
As for early screening in order to counter types.
We haven't got or premium.
Cost control.
Our theater.
Moving to slide number.
Number nine based.
Based on what Youre, taking capture technology.
We have developed.
Based profiling.
Profiling, multi omics biomarkers, including methylation mutations and copy number variations from C. F D. A.
Algorithm was trained.
With respect to cohort 100 cases, and 100 controllers and validate you're dependent cohort of similar size.
The RSA provides.
Greater than 90% sensitivity with 95% leased are encouraging and we plan to reduce full details of this cohort sometime in 2022.
Finally.
As shown on slide 10, I would like to highlight.
The results were recently published tennis Journal Chromatology.
This peer reviewed journals, including two articles.
Green.
First <unk>.
Expert consensus concluded that.
T study data that we reported in March this year from 1650 patients show better screening performance.
F P plus up with them.
And the assay performance.
Those two value or identify early stage HCC.
The second expert reviewed articles suggest that multi omics strategy could offer a higher sensitivity and specificity and FTE for early.
Green and monitoring.
This journal the prestigious publication, the liver disease medical community in China.
He is viewed as having significant influence on clinical practice among physicians.
There are no good approach and of course, the study read out were well received by the leading industry experts.
Now I'll turn the call to our CFO, Mr. <unk> to provide more details on our third quarter financials Kevin.
Thank you you fool.
Provide an update on our financial performance during the reporting quarter.
Please note that all numbers provided.
RMB terms and Thats all comparisons are made on a year over year basis.
Starting on slide 12 in the third quarter total revenue increased by 36% to RMB 153 million from $112 million in the same period of 2020.
Diagnosis in the monetary revenue increased by 42% to RMB $144 million.
Third quarter this year from 100, and a $2 million in the prior year.
<unk> revenue increased by 30% to $93 million.
During this quarter.
$71 million.
In the last year.
L D T diagnostic tests soda in this quarter totaled approximately 5900 units similar to a year ago.
In the third quarter South of L. D. T services included sales of our early screening tests.
We continue to be pleased with our early screening liver cancer screening sales uptake.
And the growing adoption in the market.
We'll continue to support from our collaborations.
This includes the work we are doing with JD health icon Wishy government et cetera.
Moving to slide 13.
<unk> revenue increased by 71%.
To RMB $51 million in the third quarter 2021 from $30 million in.
In the prior year.
The increase was mainly driven by sales of the sequencer as well as IBD cuts as.
That's over the end of the.
Third quarter, we had a total.
54 hospital contracts, including 29 IBD ones.
Our pipeline continues to be strong as we signed on several additional IBD contracts since October.
And expanding in select installation base is expected to drive a reagent and overall sales in the coming quarters.
Revenue generated from the development services decreased two 8 million in.
In this quarter from $10 million in the prior year. This was mainly driven by the decline in sequencing services.
As we continue to focus on higher margin Biopharma services.
Pharma services revenue in this quarter continued to grow compared to a prior year.
Moving to slide 14 cost of revenue increased by 12% to RMB 47 million for this quarter compared to $42 million in the prior year.
Gross profit increase.
Increased by 51%.
To RMB $105 million in the third quarter 2021.
$70 million in apparel year.
Gross margin improved to 16, 9% compared to 62% in the prior year, thanks to higher gross margins for both the ODT and IBD business lines in particular gross margin for our OTT segment was 70% this quarter compared to 69% a year ago.
For IBD segment gross margin was 76% versus 61% in the prior year.
Thanks to our one step six technology.
What kind of ability to manufacture D.
18 lung cancer assay with our own raw material sources.
We are able to enjoy a healthy margin.
Operating expenses increased by 79% to RMB $230 million for.
For this quarter compared to $122 million in apparel year operating expenses are broken out on slide 15.
Are as follows.
Selling expenses increased by 56% to RMB $95 million in this quarter.
From 61 million in the same period of 2020 selling expenses the ratio decreased to 62% from 54% in the prior year.
The increase was primarily resulted from increasing head count to expand our core businesses.
Well as early screening and sales teams.
Administrative expenses increased by 94% to $63 million in this quarter from $32 million in apparel year.
Other expenses ratio increased to 41% in this quarter from 29% in the prior year.
The increases were mainly due to more headcount higher professional fees.
And it expenses.
Yes.
Research and development expenses increased by 62% to RMB $62 million in this quarter from 39 million in the same period of 2020.
R&D expenses ratio increased to 41% in this quarter from 34% in the prior year. The increases were driven by higher R&D headcount and related expenses as well as continued innovation efforts, including.
Key product development and clinical trial activities.
As a result.
<unk> loss was $125 million for the third quarter compared to 15 9 million last year.
Light 16th.
Net loss for the period was RMB $130 million compared to $48 million for the third quarter of 2020.
We're also providing a person that had loss figures as management believes these figures would be helpful to show the trends of our underlying business no adverse loss excludes share based compensation expenses fair value change and other loss.
In Asia instruments with preferred rights.
No I first net loss was RMB 110 million for this quarter compared to $44 million for the prior year.
Basic loss per ordinary share was RMB <unk> two eight.
The third quarter of 2021.
<unk> two <unk>.
RMB zero point to one one for the same period of 2020.
No I first basic loss per ordinary share was RMB <unk> two for the third quarter of 2021, compared with RMB zero point to one for the same period of 2020 diluted loss per ordinary share is equivalent to a basic loss per share.
We have a very strong cash position cash cash equivalents restricted cash and current financial assets at fair value through profit and loss well.
Well close to RMB 1 billion or U S dollar $156 million as of September 32021.
Now moving to discuss our outlook for 2021.
Let's go to slide 17.
While we were pleased with the resilience of our business in the third quarter.
Covid situation has worsened since October.
The Delta of Varian continues to take hold in China.
Although the absolute total number of Covid cases remained remains small compared to the other parts of the word.
Health officials in China continued to maintain a zero COVID-19 policy.
More than 20 provinces and regions in China have reported new cases since October.
Control measures in the foremost uniforms of Lockdowns mass testing travel restrictions have been implemented diligently across many places to contain the spread over the virus.
And many of our key markets, including Beijing, Shanghai learning and the chancel.
Patient traffic to hospitals has been limited.
<unk> significantly impacted our <unk> segment.
Since it is a highly reliant on patient visits.
In Beijing.
If it's a patient over the Winter Olympics and the National People's Congress in 2022 restrictions have been particularly severe and this level of high alert.
It's a persistent.
Moving to slide 18 in the second quarter, we communicated that the Covid situation says tent well worth it we would update our revenue outlook for the year.
At this point, we believe this new COVID-19 wave and related restrictions to be more persistent than originally anticipated as.
As such we are now revising our 2021 expected revenue to be around RMB $530 million, representing approximately 25% of gross compared to 2020.
This concludes the discussion of our.
Our third quarter financial results I will now turn the call back to suggest.
Thank you Evan.
In closing, we're very pleased with the success, we've achieved both financially and operationally in the face of adversity relate to covet.
I would like to emphasize the strong underlying long term fundamentals of our business and.
And we remain very well positioned to drive substantial growth.
<unk> continued commercial clinical and the pipeline development execution.
On slides 20 and 21.
We remain focused on the development of liquid biopsy based solutions across the full cycle cancer management.
Particularly in early screening and Marty.
While continuing to ramp up our commercialization efforts and grow our base business.
Last but not least.
We also continue to see favorable macro environment for our business.
Under China.
State Council's healthy China 2030 plant.
The goal is to increase five year cancer cancer survival rate from the current approximately 40% to over 46%.
As a leading position oncology player in China, we expect the rapid emergence of target any amongst shop lease will increase demand for our diagnosis in the monitoring business as well as our Biopharma services.
While early detection.
Particularly liberal cancer also remains a focus for the government and.
And the companies with differentiated technologies like us I highly encouraged to introduce innovative solutions to address unmet medical needs.
Recently.
National Health Commission also issued a oncology diagnosis and treatment quality improvement action plan as its key task.
From 2021% to 2024.
These action plan one of the key initiatives is to improve cancer diagnostics capabilities and standardize the management the medical testing laboratories.
Tom Welcome six policies that target to raise industry standards for example.
Our Guangzhou lap we have recently passed a final review allow oncor uncle Pan scan as that LDP test by Guangdong Center for clinical laboratory referees.
Overall, we remain confident about the growth prospects of the precision oncology sector in China.
And we anticipate gene Tom to be a continued and.
Beneficiary from the policy tailwind.
This concludes the prepared remarks portion of today's call operator, we're now ready for questions.
Yes. Thank you.
A reminder to ask a question you will need to classes part and the number one on your telephone.
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Once again, please press star one on your telephone.
My first question is from the line.
So in Jinan V T. I G. Your line is open. Please go ahead.
Hi, Thanks for taking the questions.
Congratulations on all the progress that you're making.
So my first question is on the the PCR versus the MGIC.
Hey.
He can versus HD screen.
Are there any kind of comparisons in terms of performance characteristics are at this point or is the point of the TCR T trial.
The performance characteristics are comparable to the MTS and what's kind of your expectation there.
Some of the performance characteristic standpoint.
Between the two I'd say.
Yes, Sandy this is a very important question thanks for raising it.
Obviously, we have done our homework before we decided to go forward with a ratio of additional trial for HCC scan. So maybe we will have our CTO adopt each and gel to address the performance data question.
Thank you for the question well, where did you see that.
PCR based IFC the ICT industry.
Three different cohorts and it shows.
85% to 90% sensitivity in retrospect case control co house based.
Specificity of 90% to 95%.
Do not have the data on the direct comparison of both FCC scan the pizza or at least I think.
This is the green to undress as it because we get limited DNA from one large jaw and individual onto submit them to the <unk> and Jeff.
Thank you.
Okay got you that's very helpful.
And then what's curious about what are your next steps for the Oh really.
CRT screen screening tests I realize you're you'll.
You'll be publishing.
The initial data, but curious what are the next steps.
Hi, My standpoint.
The question is about the CRC assay Hello, right. So I don't want it.
The question is not on the CRC assay right. Okay, yes.
Okay.
Are there any.
Yeah.
Yes.
To submit and to try to publish that.
With respect to your cohort data early next year.
To start the prospect to a cohort validation is very important for the.
<unk>, yes.
Yes.
We're in fact very encouraged by the retrospective.
Study data we have.
<unk>.
So far and we believe that with the infrastructure, we have built through the.
Prospective cohort study.
The screen as well as the.
The real world.
Cohort that we established through the HTC screen commercial validation.
We will have a much better infrastructure to launch the.
Perspective cohort study for these new assays that CRC assay.
And we anticipate it.
We will actually complete the respective cohort study.
In the next year also and we will people to move these products into.
Potentially a registrational trial and also we can launch it as a.
Historic pilot launch.
Two for the <unk> commercialization.
Okay.
Gotcha, and then just lastly for me.
Just to clarify on the the MRV solid tumor partnership with Astrazeneca.
Does that include you mentioned that you were also looking at the tumor naive approach down the road is that the tumor nave approach included in the current partnership and also if you could talk about which of the cancer indications do you think are kind of.
You know.
Maybe.
On your priority list at this point.
Hi.
Given the the tiny.
Market for cancer.
Yes, so the collaboration with AZ.
Is based on our tumor important product right and.
It is a multi cancer study.
But obviously that lung cancer will be the number one goal.
I think you joined together with our.
We will have.
A very good combination of clinical resources and experience to expedite the product development.
And you know in the past research that the gene costs contact that we have accumulated.
Good data on other cancer types as well such as the liver cancer and CRC.
And you know as we mentioned in the conference call, we do expect to.
Publish the study's readout in the first half half of next year 2022.
In terms of tumor naive I think probably you can share some details here yes.
As Jim mentioned.
Right.
Oh, so you're getting a good trials and the data.
In addition, though to the gastric cancer, which hasn't been published our liver cancer CRC Amazon already because our data that's based on their personal lives.
Informed but oncology into the feature of our technology mutation capsule.
<unk> blood sample for multiple times different ic's. This means we are attacking the tumor.
Let's see what kind of tests at the tumor naive identity all of these.
The samples so that we kind of how the information at the port.
<unk> of the tumor not universal panel immediately without having to collect njoku hawes collect new clinical information.
The Association.
Compared to a tumor you Suvs are already very sordid personalized message.
Optimize the algorithm and so let's see to check holiday timeframe.
Thank you.
Great. Thank you so much.
Thank you.
Once again for those who wish to ask a question. Please press star and the number one cleaning.
The name to be announced.
Our next question is from the line of credit.
Credit Suisse. Please go ahead.
Oh, thank you.
My first question is also about a scam.
Okay.
Like huh.
Our new strategy for a while part of the screen portfolio.
What I'm trying to understand at age two to scan is testing.
Methylation sites, although mass electrifies. The also being tested in all screen and just using kind of different approach or.
I'll kind of.
Is it the difference between between the two paths.
Besides our approach was the chest and why that should pay off.
Yeah. Thank you for the kitchen.
D C Sky has the methylation site basically seem too.
Included in the pioneer of the HTC screen the way that <unk> based IFC, we start from the maturation of size in the panel of HTC screening of which we used to apply it but.
S D a breakthrough device designation.
And.
Also as a few master lesion size, that's not included in that panel because those sites cannot be detected the better method.
At least.
Yes, but can be detected by our cookies are IC. So in this COVID-19 how the tenure.
Panel and after the genius and setting up the archive them, we've got a kind of fixed.
Religion size and most of them.
From the actually disagree.
Thank you.
I see.
The thing that.
We are accelerating we're trying to accelerate that introduces cant Rob constantly are pocketing line quite cost five four interest at Essakane trial, although we are only.
Using four to five clinical sites.
The screen so it seem rather interesting scan where L. B Foster trial, so does that mean kind of our strategy.
It's kind of a shift to focus on P. C. All first and then Jeff Max.
Yeah. So maybe let me address this question first thing that you can fully you can feel free to add.
More details so first let me let me clarify right. So we emphasized it in earning KOL.
We still anticipate to complete both trials at UPC scan and she's thesis screen by end of next year, and we anticipate to get approval from them pop on both assets.
We also mentioned that is C that we will start with nine sites for HCC scanner or select for two five sites for HCP screen.
The reason that we're live in numbers of the clinical continent that clinical trial sites for <unk> screening is because we have selected the <unk> platform.
Four mgs assay.
A lot more preparation work in terms of the instrument.
Installation in terms of the patient enrollment.
Is that essentially that the testing after they patient enrollment.
For a mgs assay. So we believe it'll be good to.
Choose the bigger sites or other sites most suitable for Engie S operation.
So all in all we anticipate.
For a.
Long period for a large portion of next year.
We'll have these two trials.
Moving forward forward in parallel.
So again they value.
Launching or.
Implementing a PCR based.
Modulation detection kit for.
For liver cancer screening is we believe that.
All the infrastructure that.
And that the PCR PCR machine is being installed up to the county level hospitals due to the debt.
The China policy to fight COVID-19 across the nation, we feel that to having a.
Installation of a PCR based assay will greatly broadened coverage our product offering.
It will greatly help.
The speed of the market penetration and when we launch those products.
So the combination of these products will enable Jin Kang.
To solidify our leading position.
<unk>.
Huge liver cancer screening market in China.
Okay got it and then my.
Loss cost trends, it's volatile.
Cut out number for LTE, but anyway I'll do two we said that a number of paas.
Is more or less similar light.
Through Q compared to last through Q cause revenue increase.
Does that mean Prizing, Chris all there is a significant change on mixed thoughts in the past.
Sure so.
Yes.
So you have followed up with our US our OTT services includes first both LPT diagnosis as well as the ODT early screening revenue.
As you know we started to commercialize our already squint liver test.
Primarily this year.
So this is also.
Yeah.
The first year the.
Contribution from this is still not as significant right. So the OTT revenue.
It does include both.
And you'll notice that the number of test as mentioned in the call earlier.
We.
We looked at the Covid outbreak and especially starting from Q3.
Since October.
The widespread to over 20 provinces.
<unk> had a direct hits.
On the.
On the hospitals.
It's more correlated to the ODT diagnosis service revenue.
And.
Q1 into Q2, we're relatively.
Okay.
Q3, and Q4, we have a team of worsening.
Given that the wider.
By region.
Now our business now in the Covid the region.
For early screening.
40 screening while all in all this year represents.
Strong growth from last year right as we start to work with.
Collaborators to commercialize.
And.
Looking ahead to Q4.
We do see that there are.
Some softening given that originally we were hoping we're hoping that Q4 will be a very strong quarter for us this year given that towards the end of the year.
The government spending.
First of all it is.
Usually our peak season, secondly, there are opportunities for government increased spending.
However, given the current environment, we do see that there are some <unk> into the early screening business is entering into Q4. So that's how we.
Look at the numbers and Thats why.
<unk>.
<unk> just been to the overall outlook for the for this year.
Okay. Thanks, a lot.
Thank you.
Once again for those who wish to ask a question. Please press star and the number one and wait for your name to be announced.
Well your question, Please press star and the number one.
So your question is the best time to number one and wait we need to be announced.
Okay.
No question.
And Oh, My God the conference back to MS Ho Kingdom.
For closing remarks.
Okay.
Thank you again for joining us on first quarter earnings.
We appreciate your ongoing support.
Well do you have any questions.
School to reach out to the IR team. Thank you don't have to pick one.
Thank you and this concludes today's conference call.
Thank you for participating.
You may now disconnect.
Okay.
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