AnPac Bio-Medical Science Co., Ltd. (“AnPac Bio,” the “Company” or
“we”) (NASDAQ: ANPC), a biotechnology company with operations in
China and the United States, announced today its unaudited
financial results for the nine months ended September 30, 2021. The
Company's financial statements and related financial information
for the quarter ended September 30, 2021 are unaudited and have not
been reviewed by the Company's independent registered accountant.
These financial results could differ materially if they were
reviewed by the Company’s independent registered accountant.
Financial highlights:
- Total revenue was approximately RMB13.7 million (US$2.1
million) for the nine months ended September 30, 2021, an increase
of 55.3% from RMB8.8 million for the same period of 2020.
- Gross profit margin was 59.3% for the nine months ended
September 30, 2021, representing an increase of 8.8% from 50.5% for
the same period of 2020, primarily due to higher selling prices
charged for cancer differentiation analysis (“CDA”)-based tests and
improved operational efficiency during the nine months ended
September 30, 2021.
- The average selling price (“ASP”) of CDA-based tests was
RMB463(US$71.6) for the nine months ended September 30, 2021, an
increase of RMB194, or 72.3% from RMB269 in the same period of
2020, primarily due to a broader product offering of more
comprehensive multi-cancer detection tests at higher price
points.
- Net loss was approximately RMB89.0 million (US$13.8 million)
for the nine months ended September 30, 2021, representing an
increase of approximately RMB19.5 million from RMB69.5 million for
the same period of 2020, primarily due to the Company recognized an
aggregated unrealized loss of approximately RMB9.3 million (US$1.4
million) in related to changes in fair value of convertible debt
for the nine months ended September 30, 2021, while in the same
period of 2020 it was an unrealized gain of approximately RMB7.3
million.
- Non-GAAP net loss1 was approximately RMB55.0 million
(US$8.5 million) for the nine months ended September 30, 2021,
reduced from a non-GAAP net loss of approximately RMB59.1 million
for the nine months ended September 30, 2020. Non-GAAP net loss was
reduced by 6.8% compared with the nine months ended September 30,
2020.
- Short-term debt was approximately RMB30.0 million (US$4.6
million) as of September 30, 2021, an increase of 264.5% from
RMB8.2 million at the end of last fiscal year (December 31, 2020).
The increase in short-term debt was mainly due to issuance of
additional convertible debentures.
- As of September 30, 2021, the Company had cash and cash
equivalents of approximately RMB5.5 million (US$0.8 million),
compared to RMB3.0 million as of December 31, 2020.
(1) Non-GAAP net loss is defined as net loss excluding
change in fair value of convertible debts and stock-based
compensation. For more information, refer to “Use of Non-GAAP
Financial Measures” and “Reconciliations of Non-GAAP Results” at
the end of this press release.
Business Highlights for the Nine Months Ended September
30, 2021
- On August 18, 2021, the Company completed an acquisition of 60%
equity interest in Anpai (Shanghai) Health Management Consulting
Co., Ltd (“Anpai Shanghai”), consisting of an acquisition
of 40% equity interest of Anpai Shanghai from Dr. Chris Chang
Yu for a consideration of RMB 8.5 million approved by the
Board of Directors, and an investment of 20% equity interest
in Anpai Shanghai which the Company has already held prior to
August 18, 2021. Anpai Shanghai is engaged in providing medical
screen and detection service in the PRC.
- The Company continued to receive validation on the efficacy of
CDA testing through clinical study follow-ups. As of
September 30, 2021, AnPac Bio had contacted 24,823 individuals
tested using CDA packages in China and received substantive
feedback regarding health conditions and disease development from
14,806 individuals.
- Completed development and evaluation of a second-generation
cancer detection sensor with improvements in multiple areas
including reduced device cost, improved signal stability, cancer
detection sensitivity and specificity.
- Launched a joint venture to focus on a novel cancer treatment
technology and medical device development which leverages AnPac
Bio’s deep and extensive knowledge and experience in biophysics and
its correlations with cancer occurrence and cancer detection.
- As of September 30, 2021, the Company filed 261 patent
applications globally, among which 150 patents had been granted,
including 20 patents granted in the United States, 66 in greater
China (including eight in Taiwan), and 64 in other countries and
regions.
- The Company continued to build a cancer risk assessment
database, which totaled approximately 244,310 samples as of
September 30, 2021, including approximately 200,330 samples
from commercial CDA-based tests and approximately 43,980 samples
from research studies.
Dr. Chris Yu, AnPac Bio’s Chairman and CEO commented: “We are
very pleased with our progress in research and development,
commercialization, and operational performance for the first 9
months in 2021. We grew revenue by 55.3% and gross margin by 8.8
percentage points. At the same time, we reduced non-GAAP loss by
6.0%. Our number of issued patents, and clinical and commercial
sample sizes all reached record high in Q3, 2021. We are making
solid progress in obtaining regulatory approval for our class III
medical device for lung cancer assisting in diagnosis and have also
submitted application for registration testing of our multi-cancer
detection medical device for 11 types of cancer. We are also
working very hard to obtain Laboratory Developed Test (LDT) status
for our CDA cancer test in the US. Based on our current status and
progress, we now expect to obtain registration approval for our
class III medical device (for lung cancer assisting in diagnosis)
in late 2022.”
Key Items of Financial Results for the
Nine Months Ended September 30, 2021
Revenue
Total revenues increased by 55.3% to approximately
RMB13.7 million (US$2.1million) for the nine months ended September
30, 2021 from approximately RMB8.8 million for the same period of
2020, primarily due to a significant increase in our revenue from
cancer screening and detection tests.
Cost of Revenues
Cost of revenues increased by 27.8% to
approximately RMB5.6 million (US$862,000) for the nine months ended
September 30, 2021 from approximately RMB4.4 million for the same
period of 2020, primarily due to the increased staff costs.
Gross Profit and Gross Margin
Gross margin was 59.3% for the nine months ended
September 30, 2021, representing a significant increase from 50.5%
for the same period of 2020, primarily due to higher selling prices
we charged for CDA-based tests.
Selling and Marketing Expenses
Selling and marketing expenses increased by 66.4%
to approximately RMB17.3 million (US$2.7 million) for the nine
months ended September 30, 2021 from approximately RMB10.4 million
in the same period of 2020, primarily due to higher marketing
expenses as a result of our enhanced marketing efforts.
Research and Development Expenses
Research and development expenses increased by 5.7%
to approximately RMB11.9 million (US$1.8 million) for the nine
months ended September 30, 2021 from approximately RMB11.2 million
for the same period of 2020, primarily due to the increased
share-based compensation for our research and development
personnel.
General and Administrative Expenses
General and administrative expenses decreased by
3.1% to approximately RMB58.9 million (US$9.1 million) for the nine
months ended September 30, 2021 from approximately RMB60.8 million
for the same period of 2020, primarily due to the decreased
listing-related professional fees.
Change in fair value of convertible debt
The Company recognized the convertible debt at fair
value. For the nine months ended September 30, 2021 and 2020, the
Company recognized an aggregated unrealized loss of approximately
RMB9.3 million (US$1.4 million) and unrealized gain of
approximately RMB7.3 million, respectively, due to changes in fair
value of convertible debt.
Gain from fair value change in equity
investment
For the nine months ended September 30, 2020,
the Company recorded a gain from fair value change in equity
investment of approximately RMB3.2 million (US$489,000) due to the
acquisition of Anpai Shanghai.
Net Loss
Net loss increased to approximately RMB89.0 million
(US$13.8 million) for the nine months ended September 30, 2021,
compared to approximately RMB69.5 million for the same period of
2020. Basic and diluted loss per share was RMB6.52 (US$1.01) for
the nine months ended September 30, 2021, compared to that of
RMB6.22 for the same period of 2020.
Balance Sheet
As of September 30, 2021, the Company had cash and
cash equivalents of approximately RMB5.5 million (US$0.8 million),
compared to approximately RMB3.0 million as of December 31,
2020.
About AnPac Bio
AnPac Bio is a biotechnology company focused on
early cancer screening and detection, with 150 issued patents as of
September 30, 2021. With two certified clinical laboratories in
China and one CLIA and CAP accredited clinical laboratory in the
United States, AnPac Bio performs a suite of cancer screening and
detection tests, including CDA (Cancer Differentiation Analysis),
bio-chemical, immunological, and genomics tests. According to Frost
& Sullivan, AnPac Bio ranked third worldwide among companies
offering next-generation early cancer screening and detection
technologies in terms of the number of clinical samples for cancer
screening and detection, based on approximately 43,980 clinical
samples as of September 30, 2021. AnPac Bio’s CDA technology
platform has been shown in retrospective validation studies to be
able to detect the risk of over 20 different cancer types with high
sensitivity and specificity.
For more information, please
visit: https://www.Anpacbio.com.
For investor and media inquiries, please
contact:
Company:Phil Case, Marketing and Investor
RelationsPhone: +1-267-810-6776
(US)Email: phil_case@AnPacbio.com
Investor Relations:Ascent Investor Relations
LLCTina Xiao, PresidentPhone: +1-917-609-0333
(US)Email: tina.xiao@ascent-ir.com
Safe Harbor Statement
This announcement contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements are made under the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 and are relating to the Company’s future financial and
operating performance. The Company has attempted to identify
forward-looking statements by terminologies including “believes,”
“estimates,” “anticipates,” “expects,” “plans,” “projects,”
“intends,” “potential,” “target,” “aim,” “predict,” “outlook,”
“seek,” “goal” “objective,” “assume,” “contemplate,” “continue,”
“positioned,” “forecast,” “likely,” “may,” “could,” “might,”
“will,” “should,” “approximately” or other words that convey
uncertainty of future events or outcomes to identify these
forward-looking statements. These statements are based on current
expectations, assumptions and uncertainties involving judgments
about, among other things, future economic, competitive and market
conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond the Company’s control. These statements also involve known
and unknown risks, uncertainties and other factors that may cause
the Company’s actual results to be materially different from those
expressed or implied by any forward-looking statement. Known and
unknown risks, uncertainties and other factors include, but are not
limited to, the implementation of our business model and growth
strategies; trends and competition in the cancer screening and
detection market; our expectations regarding demand for and market
acceptance of our cancer screening and detection tests and our
ability to expand our customer base; our ability to obtain and
maintain intellectual property protections for our CDA technology
and our continued research and development to keep pace with
technology developments; our ability to obtain and maintain
regulatory approvals from the NMPA, the FDA and the relevant U.S.
states and have our laboratories certified or accredited by
authorities including the CLIA; our future business development,
financial condition and results of operations and our ability to
obtain financing cost-effectively; potential changes of government
regulations; general economic and business conditions in China and
elsewhere; our ability to hire and maintain key personnel; our
relationship with our major business partners and customers; and
the duration of the coronavirus outbreaks and their potential
adverse impact on the economic conditions and financial markets and
our business and financial performance, such as resulting from
reduced commercial activities due to quarantines and travel
restrictions instituted by China, the U.S. and many other countries
around the world to contain the spread of the virus. Additionally,
all forward-looking statements are subject to the “Risk Factors”
detailed from time to time in the Company’s most recent Annual
Report on Form 20-F and other filings with the U.S. Securities
and Exchange Commission. Because of these and other risks,
uncertainties and assumptions, undue reliance should not be placed
on these forward-looking statements. In addition, these statements
speak only as of the date of this press release and, except as may
be required by law, the Company undertakes no obligation to revise
or update publicly any forward-looking statements for any
reason.
ANPAC BIO-MEDICAL SCIENCE
CO., LTD.UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS(Amounts in thousands of Renminbi
(“RMB”) and U.S. dollars (“US$”), except for number of
shares and per share data)
|
|
December 31, 2020 |
|
September 30, 2021 |
|
September 30, 2021 |
|
|
RMB |
|
RMB |
|
US$ |
ASSETS |
|
|
|
(Unaudited) |
|
(Unaudited) |
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
3,016 |
|
|
5,463 |
|
|
846 |
|
Advances to suppliers |
|
5,588 |
|
|
4,157 |
|
|
644 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
7,792 |
|
|
7,128 |
|
|
1,104 |
|
Amounts due from related parties |
|
1,277 |
|
|
960 |
|
|
149 |
|
Inventories |
|
312 |
|
|
347 |
|
|
54 |
|
Other current assets |
|
3,303 |
|
|
4,263 |
|
|
661 |
|
Total current assets |
|
21,288 |
|
|
22,318 |
|
|
3,458 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
19,267 |
|
|
20,356 |
|
|
3,152 |
|
Land use rights, net |
|
1,166 |
|
|
1,145 |
|
|
177 |
|
Intangible assets, net |
|
4,596 |
|
|
13,196 |
|
|
2,043 |
|
Goodwill |
|
2,223 |
|
|
15,270 |
|
|
2,365 |
|
Long-term investments |
|
883 |
|
|
803 |
|
|
124 |
|
Other assets |
|
464 |
|
|
459 |
|
|
71 |
|
TOTAL ASSETS. |
|
49,887 |
|
|
73,547 |
|
|
11,390 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Short-term debt |
|
8,232 |
|
|
30,006 |
|
|
4,647 |
|
Accounts payable |
|
2,127 |
|
|
1,682 |
|
|
261 |
|
Advance from customers |
|
3,682 |
|
|
4,806 |
|
|
744 |
|
Amounts due to related parties |
|
4,130 |
|
|
3,738 |
|
|
579 |
|
Accrued expenses and other current liabilities |
|
25,353 |
|
|
23,612 |
|
|
3,656 |
|
Total current liabilities |
|
43,524 |
|
|
63,844 |
|
|
9,887 |
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
1,045 |
|
|
3,227 |
|
|
500 |
|
Other long-term liabilities |
|
2,041 |
|
|
1,114 |
|
|
172 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES. |
|
46,610 |
|
|
68,185 |
|
|
10,559 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ deficit: |
|
|
|
|
|
|
Class A Ordinary shares ((US$0.01 par value per share; 70,000,000
shares authorized, 9,192,660 and 14,992,657 shares issued and
outstanding as of December 31, 2020 and September 30, 2021,
respectively) |
|
618 |
|
|
993 |
|
|
154 |
|
Class B Ordinary shares ((US$0.01 par value per share; 30,000,000
authorized, 2,863,100 and 2,773,100 shares issued and outstanding
as of December 31, 2020 and September 30, 2021) |
|
191 |
|
|
185 |
|
|
29 |
|
Additional paid-in capital |
|
354,295 |
|
|
438,407 |
|
|
67,886 |
|
Accumulated deficit |
|
(356,951 |
) |
|
(444,538 |
) |
|
(68,835 |
) |
Accumulated other comprehensive income |
|
4,795 |
|
|
4,631 |
|
|
717 |
|
|
|
|
|
|
|
|
Total AnPac Bio-Medical Science Co., Ltd. shareholders’ equity |
|
2,948 |
|
|
(322 |
) |
|
(49 |
) |
Non-controlling interests |
|
329 |
|
|
5,684 |
|
|
880 |
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
3,277 |
|
|
5,362 |
|
|
831 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
49,887 |
|
|
73,547 |
|
|
11,390 |
|
ANPAC BIO-MEDICAL SCIENCE
CO., LTD.UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS(Amounts in
thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for
number of shares and per share data)
|
|
Nine Months Ended September
30, |
|
|
2020 |
|
2021 |
|
2021 |
|
|
RMB |
|
RMB |
|
US$ |
Revenues: |
|
|
|
|
|
|
Cancer screening and detection tests |
|
8,729 |
|
|
13,634 |
|
|
2,111 |
|
Physical checkup packages |
|
77 |
|
|
46 |
|
|
7 |
|
Total revenues |
|
8,806 |
|
|
13,680 |
|
|
2,118 |
|
|
|
|
|
|
|
|
Cost of revenues |
|
(4,357 |
) |
|
(5,567 |
) |
|
(862 |
) |
|
|
|
|
|
|
|
Gross Profit |
|
4,449 |
|
|
8,113 |
|
|
1,256 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Selling and marketing expenses |
|
(10,416 |
) |
|
(17,335 |
) |
|
(2,684 |
) |
Research and development expenses |
|
(11,221 |
) |
|
(11,863 |
) |
|
(1,837 |
) |
General and administrative expenses |
|
(60,808 |
) |
|
(58,926 |
) |
|
(9,124 |
) |
Impairment of long-term investments |
|
(820 |
) |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Loss from operations |
|
(78,816 |
) |
|
(80,011 |
) |
|
(12,389 |
) |
|
|
|
|
|
|
|
Non-operating income and expenses: |
|
|
|
|
|
|
Interest expense, net |
|
(581 |
) |
|
(4,140 |
) |
|
(641 |
) |
Foreign exchange loss, net |
|
(81 |
) |
|
(260 |
) |
|
(40 |
) |
Share of net gain (loss) in equity method investments |
|
(51 |
) |
|
13 |
|
|
2 |
|
Other income, net |
|
2,750 |
|
|
1,453 |
|
|
225 |
|
Change in fair value of convertible debt |
|
7,254 |
|
|
(9,278 |
) |
|
(1,437 |
) |
Gain from fair value change in equity investment |
|
- |
|
|
3,160 |
|
|
489 |
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(69,525 |
) |
|
(89,063 |
) |
|
(13,791 |
) |
Income tax benefit |
|
66 |
|
|
111 |
|
|
17 |
|
|
|
|
|
|
|
|
Net loss |
|
(69,459 |
) |
|
(88,952 |
) |
|
(13,774 |
) |
|
|
|
|
|
|
|
Net gain (loss) attributable to non-controlling
interests |
|
127 |
|
|
(1,365 |
) |
|
(211 |
) |
|
|
|
|
|
|
|
Net loss attributable to ordinary
shareholders |
|
(69,586 |
) |
|
(87,587 |
) |
|
(13,563 |
) |
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
Class A and B Ordinary shares - basic and diluted |
|
(6.22 |
) |
|
(6.52 |
) |
|
(1.01 |
) |
|
|
|
|
|
|
|
Weighted average shares outstanding used in calculating
basic and diluted loss per share |
|
|
|
|
|
|
Ordinary shares - basic and diluted |
|
11,195,807 |
|
|
13,434,731 |
|
|
13,434,731 |
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of
tax: |
|
|
|
|
|
|
Fair value change relating to Company’s own credit risk on
convertible loan |
|
(108 |
) |
|
- |
|
|
- |
|
Foreign currency translation differences |
|
2,980 |
|
|
(164 |
) |
|
(25 |
) |
|
|
|
|
|
|
|
Total comprehensive loss |
|
(66,587 |
) |
|
(89,116 |
) |
|
(13,799 |
) |
Total comprehensive gain (loss) attributable to non-controlling
interests |
|
127 |
|
|
(1,365 |
) |
|
(211 |
) |
|
|
|
|
|
|
|
Total comprehensive loss attributable to ordinary
shareholders |
|
(66,714 |
) |
|
(87,751 |
) |
|
(13,588 |
) |
Use of Non-GAAP Financial
Measures
Non-GAAP net loss is calculated as net income
adjusted for change in fair value of convertible debts and
stock-based compensation expense. The non-GAAP financial measures
are presented to enhance investors’ overall understanding of the
Company’s financial performance and should not be considered a
substitute for, or superior to, the financial information prepared
and presented in accordance with U.S. GAAP. Investors are
encouraged to review the reconciliation of the historical non-GAAP
financial measures to its most directly comparable GAAP financial
measures. As non-GAAP financial measures have material limitations
as analytical metrics and may not be calculated in the same manner
by all companies, they may not be comparable to other similarly
titled measures used by other companies. In light of the foregoing
limitations, you should not consider non-GAAP financial measures as
a substitute for, or superior to, such metrics in accordance with
US GAAP.
Reconciliations of Non-GAAP
Results
Reconciliations of Non-GAAP net loss
(All amounts in thousands, except share and per
share data or otherwise stated)
|
|
For the nine months ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2020 |
|
2021 |
|
2021 |
|
|
RMB |
|
RMB |
|
US$ |
Net loss |
|
(69,459 |
) |
|
(88,952 |
) |
|
(13,774 |
) |
Less: |
|
|
|
|
|
|
Change in fair value of convertible debts |
|
(7,254 |
) |
|
9,278 |
|
|
1,437 |
|
Stock based compensation expense |
|
17,656 |
|
|
24,650 |
|
|
3,817 |
|
Non-GAAP net loss |
|
(59,057 |
) |
|
(55,024 |
) |
|
(8,520 |
) |
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