On March 25, 2021 Genetron Holdings Limited ("Genetron Health" or the "Company", NASDAQ:GTH), a leading precision oncology platform company in China that specializes in offering molecular profiling tests, early cancer screening products and companion diagnostics development, reported unaudited preliminary financial results for the fourth quarter and full year ended December 31, 2020 (Press release, Genetron Health Technologies, MAR 25, 2021, View Source [SID1234577169]).

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2020 Financial Highlights

Recorded total revenue of RMB133.9 million (US$20.5 million) for the fourth quarter of 2020 and RMB424.5 million (US$65.1 million) for the full year 2020, representing 30.1% and 31.3% increases over the same period of 2019, respectively.
HCCscreenTM, our most advanced liquid-biopsy early screening product for hepatocellular carcinoma, is currently commercialized as LDT in China. LDT revenue derived from HCCscreenTM sales, as well as IVD revenue largely driven by the sales of S5 instrument and 8-gene Lung Cancer Assay (Tissue), grew significantly in 2020.
Gross margin improved to 62.8% for the fourth quarter 2020 and 61.3% for the full year 2020, compared to 44.5% and 44.8% in the same period of 2019, respectively.
Operating loss narrowed to RMB268.4 million (US$41.1 million) for 2020, from RMB306.9 million in 2019.
Non-IFRS loss(1) improved to RMB215.7 million (US$33.1 million) in 2020, compared to RMB280.2 million in 2019.
2020 Business and Recent Highlights

Successfully raised US$256 million gross proceeds from IPO on Nasdaq.
Early detection – HCCscreenTM:
Genetron Health announced new data on 1,615 patients from its HCCscreenTM prospective cohort study (the "HIT" study). The assay demonstrated 88% sensitivity and 93% specificity, compared to 71% and 95%, respectively, for ultrasound plus AFP combined. HCCscreenTM also achieved 40.9% PPV and 99.3% NPV (detailed press release here).
Exclusive strategic partnership with Chia Tai Tianqing Pharmaceutical Group, a subsidiary of Sino Biopharmaceutical Limited (HKEX: 1177), targeting the hospital market in China.
Selected by the National Cancer Center in China and the Wuxi municipal government for a public health initiative, composing of 150,000 tests over three years.
Received Breakthrough Device Designation by the U.S. FDA.
Joined national R&D project led by the Ministry of Science and Technology in China on lung and digestive cancer early screening.
Obtained NMPA approval on 8-gene Lung Cancer Assay (Tissue), which together with Genetron S5, form a highly efficient in-hospital NGS solution with a two-day turnaround time.
Entered into an exclusive global licensing agreement with ImmuQuad Biotechnologies to develop and commercialize minimal residual disease (MRD) assays in hematologic cancer.
Dr. Yun-fu Hu, formerly deputy director of the U.S. FDA’s Center for Devices and Radiological Health (CDRH) division, joined Genetron Health as Chief Medical Officer. Dr. Hu is tasked to lead the Company’s product development, IVD registration, regulatory affairs, and biopharma business.
Note:
(1) Non-IFRS loss for the period is defined as loss for the period excluding share-based compensation expenses, fair value change and other loss of financial instruments with preferred rights.

"In 2020, despite the challenges caused by the global pandemic, we completed a successful IPO and made significant commercial and clinical progress across all of our business lines. We delivered robust revenue growth with 31.3% year-over-year increase, and we are particularly pleased with the commercial uptakes of HCCscreenTM and our IVD products. Compared to a year ago, our gross margin expanded to 61.3% from 44.8%, and we also markedly improved our SG&A operational efficiencies," remarked Mr. Sizhen Wang, co-founder and CEO of Genetron Health. "We announced new HCCscreenTM data from our prospective cohort study, which showed overall better sensitivity data, and comparable specificity data versus the standard-of-care. We are encouraged by the further validation of this leading liquid-biopsy early detection assay, and will move forward to initiate an NMPA registrational study in the second quarter of this year."

"In 2021, based on the current environment and providing no further major COVID-19-related disruptions in our key markets, we are forecasting our sales to grow around 45% to 47% to reach RMB615 million to RMB625 million. On the pipeline front, we plan to provide case-control early screening data for colorectal cancer this year. Thanks to our Mutation CapsuleTM early screening technology, we are advancing well on our plans to expand our single-cancer assay to become a multi-cancer product. We also continue to make progress on our MRD projects in liver and colorectal cancers. Overall, Genetron Health is well-positioned to capture market share in the fast-growing precision oncology sector, and we are excited about our growth prospects. More importantly, we remain highly committed to developing innovative products that would benefit cancer patients and save more lives," concluded Mr. Wang.

Fourth Quarter 2020 Unaudited Preliminary Financial Results

Total revenue for the fourth quarter 2020 increased by 30.1% to RMB133.9 million (US$20.5 million) from RMB102.9 million in the same period of 2019.

Diagnosis and monitoring revenue increased by 44.0% to RMB123.5 million (US$18.9 million) in the fourth quarter 2020 from RMB85.8 million in the same period of 2019. The increase was driven by the growth in the revenues generated from both the provision of LDT services, particularly in early screening, and the sale of IVD products.

Revenue generated from the provision of LDT services increased by 48.5% to RMB96.9 million (US$14.9 million) during the fourth quarter 2020 from RMB65.3 million in the same period of 2019. In the fourth quarter, sales of LDT services included sales of our early screening test, HCCscreenTM, which contributed to growing portion of total LDT revenue. LDT diagnostic tests sold in the fourth quarter 2020 totaled approximately 5,340 units, representing a decrease of 16% compared to the number of LDT diagnostic tests sold in the same period of 2019, primarily due to the resurgence of COVID-19 in our key sales territories in the fourth quarter. However, the average selling price increased compared to the same period in 2019, attributable to a shift to higher value products such as Onco PanScan, and better pricing management.
Revenue generated from sale of IVD products increased by 29.5% to RMB26.5 million (US$4.1 million) in the fourth quarter 2020 from RMB20.5 million in the fourth quarter 2019. The increase was mainly driven by the increase in the number of assays and sequencing platforms sold in the fourth quarter 2020.