China's Burning Rock Biotech files for US IPO

Founded in 2014 and headquartered in Beijing, the company focuses on NGS (next-generation sequencing) diagnostics solutions. There are three core businesses: cancer patient companion diagnostics, where a test is administered alongside a drug to assess its applicability; early cancer detection; and a cancer genome big data ecosystem.

Burning Rock claims to hold a 26.7% share of China's NGS-based cancer therapy market, based on the number of patients tested last year, citing research by China Insights Consultancy (CIC). A total of 185,000 tests have been performed since inception. It works with 44 grade A hospitals in China to provide on-site testing and processing services. Most of the company's revenue comes from a central laboratory model that covers 602 smaller hospitals across China.

A total of 13 tests are offered that support diagnosis of a broad range of cancer types, using both tissue and liquid biopsy samples. The core products are OncoScreen Plus and LungPlasma. Burning Rock has collaborated on clinical trials with AstraZeneca, Bayer, and Johnson & Johnson. China's NGS cancer testing market is projected to grow from $300 million in 2019 to $4.5 billion by 2030.

The company has created a cloud-based cancer genomic data ecosystem using its test results. It has been used by more than 420 physicians from 120 hospitals. Meanwhile, the early cancer detection business remains somewhat nascent due to difficulties with liquid biopsy-based tests.

Burning Rock generated RMB381.7 million ($53.9 million) in revenue last year, up from RMB208.9 million in 2018. Over the same period, its net loss narrowed from RMB177.5 million to RMB169.2 million.

Northern Light Venture Capital is the largest external shareholder with a 13.7% stake. It provided RMB62 million in Series A funding in 2015 in conjunction with Legend Star, an incubator under Legend Holdings. Sequoia Capital China, Legend Star and Ji Feng Capital contributed to a RMB150 million extension later the same year. Legend retains a 6.1% interest.

In 2016, Burning Rock closed a RMB300 million Series B round, which featured Sequoia, Lyfe Capital, CMB International Capital, and Lilly Asia Ventures (LAV). They re-upped in the RMB850 million Series C in early 2019, which was led by GIC Private. T&Brothers Capital also took part. The prospectus indicates that an extended Series C was completed in late 2019 with contributions from the likes of OrbiMed and LAV.

Sequoia has a 9.1% stake in Burning Rock, while CMB, Lyfe, and GIC hold 8.8%, 7.9%, and 6.1%, respectively.

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• Topics
• Greater China
• IPO
• Healthcare
• China
• Sequoia Capital
• Northern Light Venture Capital
• GIC Private
• Lyfe Capital
• Lilly Asia Ventures