Good day. And thank you for standing by. Welcome to Burning Rock's 2021 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded.

Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended, and as defined in the US Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terminologies such as will, expects, anticipates, future, intends, plans, believes, estimates, target, confident and similar statements. Statements that are not historical facts, including statements about Burning Rock's beliefs and expectations are forward-looking statements.

Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Burning Rock's control.

Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements.

Burning Rock does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. And now, I'd like to hand the conference over to the management team of Burning Rock. Thank you, please go ahead..

Thank you. Welcome to Burning Rock's earnings call. I am Yusheng Han, the CEO and Founder of Burning Rock. And today we also have our COO, Shannon Chuai; our CTO, Joe Zhang; and our CFO, Leo Li in this call. The Burning Rock is China's molecular diagnostic leader for precision oncology. There are two parts of our business.

The first one is early detection and using liquid biopsy for pan-cancer. And the second is for therapy selection and MRD. Please turn to page four. So today, we're going to recap the recent progress for those early detection and therapy selection.

So for early detection, we are very excited to launch the multi-omics 22-cancer test, which is called PRESCIENT. And the second cancer [ph] PREDICT trial for 9-cancer test it's going well, mostly. And our COO, Shannon Chuai will talk about these two trials in detail.

And meantime, the preparation of our commercialization of the 6-cancer test is ongoing. And we are continuously building our commercial and operating team and optimizing the SLPS [ph] Nothing significantly important to report for the 6-cancer so far. But if you have any question, welcome to ask at our Q&A session.

And for the therapy selection, we have great news that finally the results of liquid biopsy part of SEQC2 has published in Nature Biotechnology, which proved us that Burning Rock's quality is at the top tier level in the world. And our CTO, Joe will talk about that in detail. And after that, our CFO, Leo, will talk about the financial numbers.

So let's turn to Shannon first to talk about the early detection part.

Shannon?.

All right, thanks. Thanks, Yusheng. So, if we go to page six, this is to recap the product development roadmap for our early detection program. So we started with a proof-of-concept on lung cancer and the study and the methodology has been actually most recently accepted for publication. And a manuscript is pending publication right now.

And then we move on to 3-cancer test, which we presented the data last year in January in the AACR Special Conference on Liquid Biopsy. We were able to achieve a 95% specificity and 81% sensitivity. And then most recently, I think a lot of you are familiar with our 6-cancer test results that we released last year in November on the ESMO Asia.

The 6-cancer test includes or covers lung cancer, colorectal cancer, liver, ovarian, pancreatic and esophageal. And the data showed that we - were able to maintain our 81% sensitivity, while improved the specificity - improving the specificity to 80 - about 98%.

And we also were able to achieve a reasonably good accuracy for TOO analysis, tissue-of-origin analysis from this, as high as about 81% accuracy from the six-cancer test, in the results we released last year.

And then for the 6-cancer test, after the THUNDER study, which was a case-control study to validate the specificity and sensitivity of the product, we also were planning to move on to a prospective interventional study for asymptomatic population. So that study is currently under planning. And I'm going to show you an overview in later pages.

And today, we really wanted to focus on the most recent, very exciting progresses that we are making on the 9-cancer test and looking forward to the 22-cancer test.

As Yusheng had mentioned, for the 9-cancer test, our current status is that the PREDICT study that we started earlier is ongoing very smoothly and the progress is as expected, and also for the 22-cancer test, first of all, the 22-cancer will eventually cover about 88% of China's cancer incidence altogether.

And then for the 22-cancer tests that we have just kicked off a large clinical development study, a few weeks ago in May 2021, and it's called PRESCIENT. So in the later pages, I'm going to tell you about - a little bit about the design and timeline for both the PREDICT study and the PRESCIENT study.

So if we go to page seven, this is sort of an overview of the clinical programs that we are looking at for our early detection program. And so for each product, or each version, or each generation of our products, there are four, roughly four phases for the product development or clinical development.

The first is the assay development in which we do the panel design, the marker selection and also the essay chemistry on finalization. And then we do the analytical validation to validate the performance analytical way, including using reference materials or clinical samples to validate the performance specifications.

And then we move on to the case-control study. And for this one, you can sort of think of the CCGA studies from Grail. It's similar to what we are laying out here as the case-control study. In these studies they are real clinical cases and controls or healthy controls.

And in these studies, we will be able to validate the sensitivity, specificity and TOO accuracy, the key statistical performance features for the - for early detection product.

And then after that, eventually, we'll go on - to move on to the asymptomatic population in which we will be able to validate again the sensitivity, specificity, TOO accuracy in these eventually intended to use - intend to use population.

And for this one, you can sort of compare that to the [indiscernible] trial from Grail as well, in which is testing gallery [ph] on the asymptomatic population in a prospectively recruited cohort. So for our 3-cancer test, we - after we finish the assay development and analytical validation, we did move on to the clinical development.

So we moved forward to the 6-cancer test. And for the 6-cancer cast, we have on so far completed the assay development and analytical validation, as well as the case-control study, which was what we mentioned in the last page as the THUNDER study.

The THUNDER study we're able to show in training [ph] and a pre-specified validation cohort, the 81% of sensitivity and 98% of specificity. And then again, on the prospective interventional study on the asymptomatic population for the 6-cancer test is currently under planning.

And we hope that we will be able to disclose more details about that study once its finalized and released, or kicked off in the near future. And then, we in the meanwhile, in parallel, we are also moving on to more cancer - to cover more cancer types.

Of course, so for that 9-cancer test we have already finished the assay development, which means that we have finalized the chemistry and also the marker selection, the panel design, et cetera. And the analytical validation for that product is currently ongoing.

And in the meanwhile, we were able to start the enrollment on the case-control, the predictive study in parallel to sort of – to shorten the develop development time overall. And the PREDICT study, if you might recall, it actually contains two phases.

And in phase two, it does contain a factor of testing or validating amount of a small asymptomatic cohort or healthy controls. So that's why over here we are sort of standing that a little bit beyond the case-control study even though it's not fully powered to task on the healthy or asymptomatic population.

So in the later pages, I will be able to give you more details of how the two phases of this study were worked out. And then for the 22-cancer test, we are actually working on developing the next generation of the product in the meanwhile, and it's currently under the assay development stage.

However, because we collected a lot of information or preliminary results from the previous versions of the product, we were able to finalize the design of that PRESCIENT study as the case-control study that we are planning for the 22-cancer test.

So that's why we have kicked off the enrollment of the studies, so we will be able to recruit samples, clinical samples for future testing or validation for this 22-cancer test in parallel with the product development efforts. So if we move on to page eight. This outlines the study design of the PREDICT study.

Again, it covers 9-cancer types, which are listed out on the upper right here. And overall, this study contains more than 14,000 participants, about 55% of them coming from cancer, about 10%, I think 10% coming from benign diseases and the rest from healthy controls.

And one thing we wanted to point out is that 70 - more than 75%, at least 75% of the cancer participants will be from stage 1, 2, 3. So most of the cases we will focus primarily on the early stage patients, we wanted to know or be able to assess our sensitivity among the early stage patients because that's what really matters.

And then in terms of the study design, as I mentioned, there will be two phases, the Phase I will be an open-label design, which means that for Phase I we will divide the Phase I samples into the pre-specified training and testing sets and within the training we will be able to customize or tune or model and cut off and then to be able to report the results or performances on the validations that set within the Phase I cohorts.

And then after that, the model, both the assay and the model will be locked and then we move on to Phase II sample processing.

So in Phase II we will have a totally independent set of data to test or to validate the performance of the locked model or method from Phase I, and to be able to have a rather accurate assessment of the model performance for the 9-cancer test.

And then one thing we also wanted to point out is that for PREDICT, PREDICT study participants, we are planning for a 12 month follow up, especially on the housing controls [ph] which will have a positive testing result, so that we will be able to have a positive predictive value assessment among these healthy control cohorts over the follow up.

So, on the next page, we listed our objectives and timeline for PREDICT. So, of course, the primary objective will be to test the - to train and validate the sensitivity, specificity and TOO analysis of our cfDNA methylation-based model for these 9-cancer - 9 types of cancers.

And then, for the secondary objectives, we, of course, wanted to learn about the performance among different types of cancers and also among different stages of cancers.

And also, we wanted to know whether other biomarkers, including protein biomarkers that we are processing, in parallel in these PREDICT samples, whether they will help in a way, which we do expect in my – they might help in at least some of the cancer types, and how do they help and how do we combine them with the methylation markers, that's something we will explore from the PREDICT data.

And then last but not least, we will have a chance to evaluate the PPV in this cohort as well after the 12 month follow-up period. And then in terms of the timeline, we expect the Phase I enrollment to finish - to complete by 2022. And then we will be able to have a readout for Phase I data by the end of 2022.

And then by the end of 2023 we will have the readout for Phase II data. And by 2024, we will be able to finish the follow-up and have complete data set for the PREDICT study. On page 10, we wanted to break [ph] so we mentioned the point of attention that the PREDICT study has attracted among the Chinese oncology community.

And this is a picture of the principal investigator Dr. Zefei Jiang, when he presented as a keynote speech on the National Oncology Conference on Standardized Diagnosis and Treatment Conference in - that was held a couple of weeks ago in Beijing and the PREDICT study design and also the news was announced during that conference by Dr.

Zefei Jiang and it has attracted a lot of interest and attention from the community so far. And then moving on to the next page, page 11 lays out the study design for the PRESCIENT study. So compared to the PREDICT study, PRESCIENT study actually has two dimensions of expansion.

The first is obviously extending from the 9-cancer types to the 22-cancer types, which are listed on the upper right again. And also it has similar design, but now divided into the two phases.

However, it has another dimension of extension is that beyond methylation and protein markers we will profile other omics as biomarkers in the PRESCIENT samples, as well we won't be able to disclose too much detail on what exactly are we testing there, but the extension will be on the exploration from the PRESCIENT study will be focused not just on the cancer type test, but also the omics combination.

And then on page 12, again, the objectives for the PRESCIENT study as to - we will be able to validate the methylation plus protein markers among the 22-cancer types, and then we will be able to assess different - the performance among different stages and different types of the cancer.

And then, very importantly, we will be able to evaluate the potential combinations, including methylation protein and other genetic, epigenetic biomarkers from the PRESCIENT study.

And for in terms of the timeline, we expect to complete the enrollment for PRESCIENT by 2023, and then we for the PRESCIENT study we well divided again into specified training and validation sets.

So by the end of 2023, we expect to be able to walk the model for the 22-cancer types from the training - from the training set, and then in another year, we will have the study readout for the validation set. So on page 13. On page 13, this is again to introduce to you the principal investigators for PREDICT and PRESCIENT.

We are very proud that we have successfully attracted the top tier oncologists in China to lead the PREDICT and PRESCIENT trials. So on top Dr. Jia Fan is the leading PI for the PREDICT trial. He is the fellow of the - a fellow of the Chinese Academy of Sciences, and also the President of the Shanghai Zhongshan Hospital.

So for those of you who are not very familiar with the Chinese hospitals, Shanghai Zhongshan Hospital, one of the China's largest comprehensive academic hospital, and it performs more than 100,000 operations each year and serves about 169,000 inpatients per year. And in 2019, it was ranked top five in among China's general hospitals.

So on the on the bottom, Dr. Jie He, he is the leading PI of our PRESCIENT study. And he is also a fellow of the Chinese Academy of Sciences, and also President of the hospital - Cancer Hospital of the Chinese Academy of Medical Sciences. This hospital is arguably the top cancer specialist hospital in China.

So we are very proud that these top oncologists are leading our PREDICT and PRESCIENT study, and it actually reflects the sharply growing interest and acknowledgement from oncologist to community in China for cancer early detection, especially in the past year or so, it has attracted - it did attract a lot of attention in this field.

And also we think high quality of cohorts and data, well ensure timely recruitment and of course successful operation of the study which will serve as a key in establishing a leadership position and maintaining our leadership position in the development of our cancer early detection products.

So we are excited to share with you these PI's, and they are - their level in among the oncologist community in China. So with that, I think I'll pass to our CTO, Dr. Joe Zhang to tell you more about our results released from the SEQC2 study.

Joe?.

Thanks, Shannon. So I'm going to cover a little bit about our therapy selection part, so further slide 15, which is a highlight what's the strengths of Burning Rock in terms of a therapy selection business.

So with regards to superior product, as well as the NMPA approval process for the different IBD kit in the pipeline, but also the commercial penetration. But today I'm going to focus on the first bullet point which is a superior product, which one number the evidence showing is a paper published last month in Nature Biotechnology.

This is in the slide 16. This is basically a learning effort led by consortium - community effort led by - a consortium led by FDA and which they call MAQC Consortium and focusing on the quality control of the sequencing business. So, what you can see here, so the paper has been published.

We participate in both the liquid biopsy part, as well as pan-cancer which is tissue-based. So the liquid biopsy study has been published in last month. So, page 17 basically highlights what's the participating assay, as well as study design.

So there's a five different company participated, they are all kit vendor, which means, all being capable to produce the liquid biopsy panel and while sell as a kit format, and lead the customer to use them. So Burning Rock as a one – as the only Chinese vendor participated in this study and each vendor will distribute their kit to different labs.

Also, the lab will receive the FDA distributed reference material and the performed assay based on the vendor’s kit guidance and trying to generate the library and the sequence and also using the kit vendor’s bioinformatics pipeline to perform analysis. Then all the result will be submitted to FDA.

And for the principal investigator of this study, look at the data and based on the peer project also led by SEQC2 effort and trying to know which is positive - what's the true ground truth for this data and trying to evaluate sensitivity and specificity, we call it false-positive rate, as well as evaluate the reproducibility within lab also the - across labs.

So Burning Rock using the lung plasma v4 panel which we current call OncoCompass Target panel for the liquid biopsy study and in current 168 genes being listed in the top hand table here. So, for the next slide, and slide 18 basically highlights several key performance comparison across different kinds of panel and product.

So Burning Rock is box in the green color. And as you can see in the top part with the fragment depth, which means based on the sequencing result how many unique fragment that we can collect it or recovery - recovered from 25 nanogram reference material.

As you can see here, the data showing the higher the better, which means with limited amount of DNA input, how many real fragment you can collect from the mouth. And the bottom panel compared coverage uniformity, which means like across this panel what's the average coverage and how uniform this panel will be.

And as you can see here, Burning Rock also showing good performance compared to other vendors. Just the all the coverages close to are similar to each other.

So for the next slide, in slide 19, which compare four different hybridization capture panel and look at a different sensitivity, like say, how - what's the calling probability for different kinds of very low frequency things. And as this each different panel has a different kind of true positives, since the panel are different.

But for the - on PI they basically compare based on the ground truth and then look at different than variant – very low frequency being and whether this panel can be able to call it and each column represent a one sample, one replicates in one side, in one lab.

So Burning Rock's on the on the right, most one basically, if it's been colored, which means this variant has been called, if its blank, which means it's variants being missed, as we call false negative here.

As you can see here, basically, almost all the color have been filled for Burning Rock, even if it's applied for 1%, 2.2% of our low frequency being ended, the calling percentage is higher than some other panel.

So this is just to give a lot of confidence showing like our panel, as well as our bioinformatics pipeline showing pretty top performance compared to these - the other vendors, especially this kind of a classic, you know, molecular biology vendors.

So for the reproducibility slide, next slide, slide 20, they just compare across different kind of panel, look at how reproducibility it is across panel, across lab or within lab. So as each lab process same sample four times, also there's multiple labs performed.

As you can see here, the reproducibility also Burning Rock data showing pretty good performance compared to other vendors kit.

Further slide 21, is just briefly compared different kind of input of DNA amount and compared to sensitivity, as we know like the more DNA put in there and within the - then the higher sensitivity there, so each panel showing this kind of trend.

For the green line basically represented by neurons assay for both sensitivity, as well as reproducibility showing the neurons panel as a pretty good performance and very stable on that and also even at a very low frequency 0.1, 2.5% showing high performance.

For the slide 22, very briefly, they just compare analytical accuracy based on the sensitivity and precision curve. And the - as you can - this is the based on 25 nanogram of reference material input and across compare four different panels and the precision representing the, you know, the positive predictive value PPV.

And the sensitivity here is means we call, which means how sensitive you - how many the true positive rate it is. So, the closer to the top right corner of this graph means the better performance. We can see here, the overall analytical accuracy and especially the Burning Rock showing the best comparing to other panels.

So, all these information just give us both from the paper published, and this is a basically a relatively like, say, fair comparison across different panel and using same reference material, and gave us a lot of confidence showing that our product in the therapy selection zone, showing the top performance not only in China, but also compared to the world, as you know, a lot of famous kit vendor, and we've been doing pretty good on that.

So, here basically, I just conclude the therapy selection part highlight. I will hand over to Leo, to talk about financial. Thanks..

Thank you, Joe. Our financials are shown on page 25 of our presentation, and for this quarter we'll focus mostly on our top line numbers. And first, we recap that all our revenues are generated from our therapy selection business. So there is no contribution from early detection yet, which is still under R&D and clinical development.

In the first quarter, we are happy with the year-over-year growth that we've been able to achieve. We grew our revenues by 58% on a year-over-year basis. We grew our gross profits by 72% on a year-over-year basis. By channel, our central lab revenue grew 72 – grew 62%, our in-hospital revenues grew 70%.

In our observation of some anecdotal industry data points, this is above industry growth rate, indicating that we've been able to gain some shares in this period. Within the first quarter, talking about [indiscernible] and the sequential trends. January was impacted by COVID resurgence in Beijing, Shanghai, and a few other key cities in China.

So that did have a negative impact on testing volumes for some of our key customers. February was a quite month due to Chinese New Year and March was an okay month. Because of the negative track from January and February, the sequential growth rates was negative for the first quarter at minus 14% Q-on-Q.

Now looking at the rest of the year, we have a guidance of RMB 610 million for the 2021 full year, which is unchanged from our previous earnings release. We have not hit the monthly run rate yet to achieve that full year target. So there is certainly more work that we need to do.

And in terms of what we're doing, in terms of driving additional NGS penetration, we are doing, number one, executing our in-hospital strategy, putting our test available at more hospitals, which we think is important for building NGS penetration, because this is the most typical format of testing in China.

And second will be the continued execution of our multi year NMPA registration pipeline process which will be key in terms of competitive differentiation. So we remain focused on these initiatives for driving the long-term success of our therapy selection business. Now with that, we conclude our prepared remarks and we open up for questions please..

Thank you. [Operator Instructions] Your first question comes from the line of Doug Schenkel from Cowen. Please go ahead..

Hi, good day and thank you for taking my questions. Starting on the topic of asymptomatic screening, I appreciate all the detail you provided today. You know, regarding the 6-cancer, 9-cancer and 22-cancer asymptomatic screening programs. Three things that are pretty important remain unclear to me.

One, do you believe studies like THUNDER, PREDICT and PRESCIENT will be sufficient to allow for product launch from a regulatory standpoint and reimbursement? Second, if not, how big a study will be required to allow for regulatory approval and reimbursement? And third, what is the acceptable target from this perspective when it comes to sensitivity and specificity? I want to go back to these questions because you referenced CTGA and Pathfinder [ph] in your prepared remarks as good precedents, or at least comparable studies.

Neither of these studies are sufficient in the United States to support FDA approval for CMS reimbursement. Most companies, in fact, that are based in the West have indicated FDA approval and reimbursement would require large randomized prospective studies. And by large, I mean over 100,000 patients.

So I understand your programs are not targeted at the US or Western markets, they're targeted at China. So it just would be helpful to understand, again, what the answers are to my three questions, as it relates to asymptomatic screening, given the market is different..

Okay. Hi, Doug. Thanks for your question. I'll take your question. I will try.

So first of all, a very straightforward answer for your first question, no, we don't think the PREDICT or PRESCIENT will be enough for testing the asymptomatic population, because they are apparently not powered enough to have a precise enough assessment on the sensitivity, especially the sensitivity for the asymptomatic population.

And also the recruitment strategy actually, naturally complex with prospective asymptomatic validation study, because in these studies, the participants, the control arm actually, we define them as the “healthy”, because they need to go through a health check up or physical examination once - you know at the other recuerdo [ph] point, but actually, for a purely asymptomatic study they don't necessarily have to go through that, it's just symptom free and, you know, relying on whatever health check up habits they're going through in their real life.

So PREDICT and PRESCIENT are not designed. They're not designed to give us answers for the asymptomatic population performances. They are, on the other hand, powers, or designed to give us answers for the case-control cohorts, which will help us to be design - or to design the future asymptomatic prospective or even interventional studies.

However, for the 6-cancer test, the study that we just mentioned, that's under planning, that one will be designed and powered to give us a different answer for the asymptomatic population for the 6-cancer test. So that one we do think or we are designing for the purpose, potentially down the road for registration.

Of course, the registration pathway for early detection products in China is not crystal clear or anywhere near crystal clear. At this point, we're having a conversation with an MPA so we don't have 100% answers, that is going to be enough.

But at least its powered to answer the question about an individual level whether the benefits would be enough to pass the product through the registration, at least, as a pay out of pocket product. However, for reimbursement, I agree with you that it's a completely different story.

Because for a reimbursement you don't have - you not only have to establish an individual level benefit, you have to establish a population level benefit. So, in order to do that, there are a lot more you need to evaluate beyond just sensitivity, specificity on that individual level, for different cancer types, et cetera.

You also have to establish, you know, benefits in terms of health economics, et cetera. So, in China, I think we also talked about this a few times before, in China, the market is an out-of-pay – out-of-pocket market. So we do believe that in China it's possible to have the registration and reimbursement.

There is sort of two things, and we will be able to have the registration by just showing the individual level of benefits. But of course, again, this is preliminary result, and, you know, things might change, and we might have more information as time goes on..

Thanks so much for that, Shannon, that was really helpful. I think my other topics are probably more for Leo. So Leo, just in terms of the quarter, and specific to the central lab, volume dropped relative to Q4, maybe that wouldn't have been shocking, regardless of how January and March went given Lunar New Year was in the quarter, and wasn't in Q4.

That being said, volume was also lower than Q3. Additionally, you know, revenue dropped back to levels not seen since the second quarter of last year in this channel. And that was largely a function of both the volume dynamics, and maybe just as if not more importantly ASPs dropping a bit.

So on the topic of ASPs, because it sounds like you don't think there's any competitive pressure on volume, it sounds like you think that's just the market.

So when it comes to ASPs, were there market pricing pressures in the quarter? Or was that a function of product mix? And then, you know, kind of building off of that, how are you thinking about volume and pricing in the central lab channel over the balance of the year, you know, essentially what's built into guidance?.

Yeah. So, for the central lab channels, we did see ASP fluctuations quarter-over-quarter, and that was more to do with product mix. So, we have not made any pricing changes for that channel during the first quarter and so, pretty much driven by product mix shifts and some seasonality. So, that was for the first quarter.

For the remainder of the year, for the central lab, we think there are structural challenges that we'll we do need to work through. Then if we look at, as we mentioned earlier, if we look at building NGS penetration, we are putting efforts into the in-hospital channel.

We think this will be very important for the future growth of NGS penetration, as the most typical formats of testing.

The central lab channel is a more fragmented channel with lower entry barriers, whereas the in-hospital channel is a more institutionalized channel, where our product strength will be able to compete better we believe versus other non-products and some aggressive commercial factors in the central lab channel.

So we think looking for the rest of the year, in-hospital channel will be important in terms of driving growth. For the in-hospital, or the central lab channel, we have been building our sales team and headcounts. So we have seen sales and marketing expenses increasing over time and that's mostly due to headcount increases.

So we are putting more manpower on the grounds, speaking to more physicians to build up this channel, but we think that this will take time..

So Leo, you know, also keeping in mind that you know, in-hospital revenue dropped below levels generated in both the third and fourth quarter of last.

Would you attribute the performance in Q1 largely to normal seasonality, and thus, you feel pretty confident about a more pronounced ramp in the in-hospital channel versus the central lab over the coming quarters?.

The first Q drop of the in-hospital channel was expected as we were expecting Chinese New Year. And typically there was not a lot of ordering during that month. Then the January COVID resurgence was unexpected. So that did hit us. Without that, we would have been better.

Looking at volume trends, we were happy about being hospital volumes for the month of March, which grew double digits. And we are keeping a watch on the second quarter, as we have not closed the second quarter yet..

Okay. And that's a perfect segue to my last question, which again, is on guidance. You know, obviously, you knew Lunar New Year, was in Q1, as it always is. It sounds like what surprised you was the COVID impact on January, and probably more of the central lab performance in March versus the in-hospital performance in March.

What is it that you saw coming out of the quarter and over the early part of Q2, which made you confident in reaffirming guidance in spite of the fact that it does seem like there were more headwinds in the first quarter than you might have anticipated?.

Yeah, as we were building the guidance, we were expecting a second half heavy versus first half lights of the year. And it played out that way. And we did leave some butter [ph] for COVID fluctuations. And we did get hit by that in January, so lot of surprises in terms of looking at our guidance.

Looking forwards for the rest of the year, we do need to ramp up our monthly revenue run rates, which we haven't hit the run rate yet to be able to achieve that full year guidance. So we need to go back and work hard. And we look forward to update you guys in the next earnings call..

Okay. Thanks to all of you. I appreciate all the details..

Thanks, Doug..

Thank you. Our next question comes from Ethan Terry [ph] from Bank of America. Please ask your question..

Thank you for taking my question. I'm Ethan from Bank of America. And I'll ask two questions on behalf of our analyst David Lee.

The first is that, can we have some update information about our 6-cancer test? Is there any changes for the timetable guidance?.

You mean for early detection, commercialization?.

Yes, and approval and like discussion with NMPA, is there any update?.

You know, last time we talked about we're going to be doing the EIT [ph] and also the prospective clinical trial. And in terms of the commercialization timeline, now, we are executing our team for commercial and operation. So we think that the key point for the early pan-cancer early detection is for the consumer side.

So we recently are recruiting team from consumer - consumer industry and also the Internet industry. And we believe that that we have already found the right way to commercialize that. And - but at the same time, you know, that's a totally new thing in the market. So how to build up an SLPS next time and when it's time to optimize the whole process.

So, so far, we're seeing that everything is on the right track, as we said that the commercialization will start early next year.

And in terms of the clinical trial, Shannon will talk about that?.

Right. I don't think we ever gave any guidance or registration because we honestly are ongoing - having an ongoing conversation with a NMPA, so as I said, there's nothing sure at this point and also, we are, of course, for the whole feud [ph] the early detection products, the registration pathway for that is not clear yet.

So I think it's a dynamic process or discussion with the NMPA. So we don't have a specific timetable that we could give out yet.

But as you [indiscernible] for other – the progresses or efforts on getting everything as - see going as what we planned or expected, including the study that we are planning for among the asymptomatic population, that still - that's the ongoing successes, and also what we have released the last time..

Thank you. Very clear. And so second question is about the participants in our PREDICT and PRESCIENT study. Do you think that for the PREDICT study there are around 14,000 participants, while for the PRESCIENT they are around 12,000 and can help us to illustrate more about how this number has been confirmed.

And why there's a difference and why PRESCIENT has fewer number of participants? Thank you..

Thanks. It's a very good question. Thank you for noticing that. Actually for PREDICT, because we have quite rich preliminaries out for those 9-cancer, at least 6 out of the 9-cancers. And there's still a little bit data on the other 3-cancer type.

So we were able to design the study and planning for the sample size, a stage-specific estimate for the sensitivity, sensitivity and to accuracy.

So that's why for PREDICT even with fewer cancer types, we will - we are planning for a larger sample size because the sample size was calculated so that each stage, each cancer type, each stage, we will have a precise enough estimate for the sensitivity.

However, when we are planning for PRESCIENT study, because its is longer down the road, and also because apparently we don't have as much preliminary data or knowledge about the other 13-cancer types as for the these nine.

So that's why when we designed the PRESCIENT study its more cancer specific estimate for the sensitivity instead of cancer and stage specific estimate.

So that's why for PRESCIENT for each cancer type, we actually have a smaller sample size and also even amount PREDICT and PRESCIENT each cancer type actually has different sample size plant in terms of or depending on our estimated sensitivity that we will be able to reach or achieve.

So especially for the PRESCIENT study, we actually have fewer samples planned for the 9-cancer types that were already covered in PREDICT. And we allocated more samples for the other 13-cancer types. But all in all the design, the sample size calculation was based on different objectives. That's why you see different sample sizes for each cancer type..

Okay, thank you. Very clear. That's all my questions..

Thank you. Our next question comes from Sean Wu from Morgan Stanley. Please ask your question..

Okay. Thank you for taking my question. And I actually - I'm also kind of curious about that [indiscernible] used for the core study.

You have exactly 40,026 [ph] of PREDICT, and 11,879, how did you come out with those kind of numbers? Let's just say, for my curiosity, so for one study you were doing 9-cancer type, and the other 22, I mean, in some sense, so why don't you just combine them together? Those two sides clearly are designed for different purposes for nine, one, do you expect that you will get more conclusive results from the nine, one.

And also the two combined [ph] And also your competitors, some of them have come out with prospective well designed product and for one type of cancer detection or liver cancer or prostate cancer.

What's the difference, the advantage of more times versus single one? And for liver cancer clearly people getting a lot by [indiscernible] this one type basically - possibly intended for them? And then finally, I think you have found some very good oncologist and especially in top hospitals and how does it improve your clinical trials? How you’ve been successful with getting so much - so many of key PIs, like Biogen and PA [ph] as part of your program.

Thank you very much..

Okay. Well, first of all, for the study sample size, as I just previously explained, Predict and PRESCIENT are designed based on different objectives, one for PREDICT, we are aiming to estimate stage and cancer type specific sensitivity. So, for each cancer types we allocated more simplified.

But for PRESCIENT, because we didn't have as much previous knowledge to support stage, and cancer type specificity design that's why we actually will only assess the cancer type or cancer - yeah, cancer specific on sensitivity. So roughly that's why for PRESCIENT we have a little bit fewer sample size plans for the PRESCIENT study.

And also for your question, why don't we just combine the two, because they are for two different products because for the PREDICT study, we're using our 9-cancer test product, and then for PRESCIENT study, we will use our next generation of 22-cancer test product. They're not just - it's not an add-on relationship between the two products.

Actually, the chemistry and also the molecule selection, and the model will all change. And, you know, hopefully will all improve between the two generations. So that's why for the new generation, we will have to retest its performance to see whether it holds or even improve on the existing 9-cancer cancers that were already tested in PREDICT.

And for your last question about the principal investigators, thank you for your comments. We are also very proud and as I said, it reflects actually, the strong interest and attention that early detection has strong amount of oncologist community.

I would say about three years ago, not often really believed in, you know, the new technology is getting close to real app group [ph] application or to make real contribution to cancer, early detection.

But nowadays, a lot of them believe in that and they think the new technology, especially epigenetics based biomarkers, plus machine learning and next generation sequencing is finally is bringing into reality that early detection can be realized, in a large scale, especially on a multi cancer application. That's the one.

And for two, there are actually very few hospitals in China that has the capability and capacity to be able to host studies like PREDICT or PRESCIENT or lead studies like these, and it actually requires a lot of organization powers and also the impact from the principal investigators.

So that's why actually only the top clinicians or oncologists in China have the capability and impact to be able to operate these really large cohort studies. I think that's also why they have the passion and the ambition as well to fulfill these very innovative studies.

Did that answer your question?.

All right, thank you. So ladies and gentlemen, we have reached the end of the question-and-answer session. So with that, we conclude our conference for today. Thank you for participating. You may all disconnect..