AnPac Bio Reports Record Revenue and Number of Cancer Risk Assessment Tests in 2019  

AnPac Bio Reports Record Revenue and Number of Cancer Risk Assessment Tests in 2019  

  • Continued annual revenue growth
  • Number of commercial CDA (cancer differentiation analysis)-based tests increased 26.0% year-on-year
  • Continued to gain customers and increase the acceptance of our cancer risk assessment tests

San Jose, CA, May 18, 2020 – AnPac Bio-Medical Science Co., Ltd. (Nasdaq: ANPC) (“AnPac Bio,” “we” or the “Company”), a biotechnology company with operations in China and the United States focused on early cancer screening and detection, announced its financial results for the year ended December 31, 2019 in its annual report on Form 20-F (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 15, 2020.

Full Year 2019 Financial Highlights

  • Number of commercial CDA-based tests reached a record high of 52,428 completed in 2019, an increase of 26.0% from 41,607 tests in 2018.
  • Total revenues were RMB10.8 million (US$1.6 million) in 2019, an increase of 5.8% from RMB10.3 million in 2018. Revenue from sales of cancer screening and detection tests was RMB10.4 million (US$1.5 million) in 2019, an increase of 8.6% from RMB9.6 million in 2018. Net revenue from sales of physical checkup packages was RMB464,000 (US$67,000) in 2019, a decrease of 33.0% from RMB693,000 in 2018.
  • Gross margin was 44.2% in 2019, a slight decrease of 0.5 percentage points from 44.7% in 2018.
  • Operating loss was RMB89.1 million (US$12.8 million) in 2019, compared to operating loss of RMB43.6 million in 2018.
  • Net loss was RMB101.6 million (US$14.6 million) in 2019, compared to net loss of RMB42.3 million in 2018.

Business Highlights

  • In 2019, 6,121 CDA-based tests were completed in various research studies with research partners such as hospitals and medical institutions, a 25.6% increase over the previous year.
  • We have continued to receive validations on the value of our CDA test through phone follow-ups. As of March 31, 2020, AnPac Bio contacted over 21,000 tested individuals in China, of which we received substantive feedback regarding health conditions and disease development from 13,030 individuals.
  • As of December 31, 2019, we had filed 210 patent applications globally; among these, 121 patents had been granted, including 55 in greater China (including seven in Taiwan) and 16 in the United States, and 89 patent applications were pending in China , the United States and nearly 20 other countries and regions.
  • We have established a significant cancer risk assessment database totaling 169,800 samples as of March 31, 2020, which included over 127,500 samples from our commercial CDA-based tests and approximately 42,300 samples from our research studies.

Dr. Chris Yu, CEO and Chairman of AnPac Bio commented, “We completed another solid year for AnPac Bio in 2019, as we continued to gain customers and increase the acceptance of our cancer risk assessment tests, evidenced by an increased number of commercial CDA-based tests completed for the year. In January 2020, AnPac Bio successfully completed its IPO on the NASDAQ Global Market, with a continued focus on cancer screening and detection. As a new public company, AnPac Bio is committed to improving our financial and operating performance. While our business is experiencing some turbulence from the COVID-19 outbreak, we are striving to reduce its negative impact on us. Cancer screening at an earlier stage will not only save lives, but will help to contribute to a more efficient healthcare system globally. According to the World Cancer Research Fund and the American Institute for Cancer Research, there were an estimated 18 million cancer cases around the world in 2018. We are confident in the future of this promising industry.”

Dr. Chris Yu continued,” We are confident in the long-term growth and robust nature of our business as we continue to achieve key milestones including receiving accreditation for United States laboratory from the College of American Pathologists and granted an important novel micro medical device patent in the United States. We are now in the process of establishing our second laboratory in Philadelphia as the Company’s new U.S. headquarters to further enhance our in-house R&D capabilities. Looking ahead, we plan to continue to deliver exceptional execution across global and local clinical development, business development and operational expansion for realizing the commercialization of cancer screening and detection tests.”

Impact of COVID-19

As disclosed in the Company’s current report on Form 6-K filed with the SEC on April 29, 2020 and the Annual Report, as a result of the pandemic of COVID-19 in China, the United States and the world, our operations have been, and may continue to be, adversely impacted by disruptions in business activities, commercial transactions and general uncertainties surrounding the duration of the outbreaks and the various governments’ business, travel and other restrictions. These adverse effects could include our ability to market and conduct our tests in China, commercialize our tests in the United States and carry out research studies and activities in China and the United States, temporary closures of our laboratory facilities and offices in China and the United States and our customers’ and suppliers’ facilities, the delay in construction of our new Philadelphia laboratory, delayed supply of products and services from our suppliers, and delayed or cancelled orders from our customers (such as due to temporary decreased demand for disease screening and detection or physical checkup services or generally due to reduced commercial activities). In addition, our business operations could be disrupted if any of our employees is suspected of contracting the coronavirus or any other epidemic disease, since our employees could be quarantined and/or our offices be shut down for disinfection. In particular, the closing of blood sampling points countrywide in China since the Chinese New Year, as a measure by the Chinese government to contain the spread of COVID-19, has significantly reduced the number of samples that we could collect for our CDA tests. Despite partial recovery of the blood sampling points in April this year, the number of blood samples that we can collect is still limited. There have also been delays of orders and cancellation of some orders for planned CDA tests and physical checkups from our customers. As a result, we expect that our revenues in the first half of 2020 will decrease significantly and our revenues for the year of 2020 will also decrease compared to the first half of 2019 and full year of 2019, respectively. While we strive to bring in new customers and launch new tests to mitigate the negative impact of COVID-19, we have no control over the development of the COVID-19 situations in China, the United States or around the world and therefore cannot assure you that we will be able to achieve a revenue growth or maintain our historical revenue level in future periods. Moreover, our plan to commercialize our CDA test in the United States has been delayed (as indicated by the delay in construction of our new Philadelphia laboratory), and will likely continue to be adversely affected, by the COVID-19 outbreak in the United States. Considering the limited manpower and resources that we have to deal with the impact of COVID-19, we have decided to not prepare and announce our unaudited financial statements for the first quarter of 2020. We will, however, prepare and announce our interim unaudited financial statements for the first six months of 2020 in due course.

Please see our Annual Report for more information on our business and financial performance for 2019, including our audited financial statements as of and for the year ended December 31, 2019 contained in it and the impact of COVID-19 on us.

About AnPac Bio

AnPac Bio is a biotechnology company focused on early cancer screening and detection, with 121 issued patents as of December 31, 2019. 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. In a recent market research report by Frost & Sullivan, AnPac Bio ranked second 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 35,000 clinical samples as at June 30, 2019. AnPac Bio’s CDA technology 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.

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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; the duration of COVID-19 and its impact on our business and financial performance; 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; and our relationship with our major business partners and customers. 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.





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