PHILADELPHIA, May 16, 2022 (GLOBE NEWSWIRE) — 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 annual financial results for the year ended December 31, 2021.

Financial Highlights for Fiscal Year 2021

• Total revenues were RMB18.0 million (US$2.8 million) in fiscal year 2021, a decrease of 12.3% from RMB20.5 million (US$3.1 million) in fiscal year 2020.
  
  
  
• Gross margin was 68.1% in fiscal year 2021, an increase of 5.3% from 62.8% in fiscal year 2020.
• The average selling price (“ASP”) of CDA-based tests was RMB387 (US$61) in fiscal year 2021, a decrease of RMB58, or 13.2% from RMB446 in fiscal year 2020, primarily due to focusing on more conventional cancer detection tests at lower prices.
• Net loss increased to RMB120.1 million (US$18.8 million) in fiscal year 2021 from RMB 80.6 million in fiscal year 2020. The net loss in fiscal year 2021 was mainly attributable to RMB 21.4 million (US$ 3.4 million) selling and marketing expenses and RMB 80.7 million (US$ 12.7 million) general and administrative expenses.
• Non-GAAP net loss¹ was approximately RMB76.8 million (US$12.1 million) in fiscal year 2021, an increase from a non-GAAP net loss of approximately RMB69.4 million in fiscal year 2020. Non-GAAP net loss increased by 10.7% from fiscal year 2020.
• Short-term debt increased significantly (an increase of approximately 310.1%) compared to the end of last fiscal year (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 Fiscal Year 2021

• In December 2021, the Company’s Class III medical device for lung cancer auxiliary diagnosis utility has successfully passed initial tests at a testing laboratory designated by National Medical Product Administration (NMPA) in China. It is expected that clinical trial will start at the end of Q2 or Q3, 2022.
• In August, 2021, the Company filed a second class III medical device license application with 11 types of cancer auxiliary diagnosis utility with NMPA, which includes lung, esophageal, gastric, rectal, colon, liver, breast, cervical, thyroid, pancreatic and brain cancers.
• In 2021, Frost-Sullivan, a leading and well-known US market analysis and research firm, has ranked AnPac Bio as global number one in multi-cancer screening and detection volume with 216,600 tests in a research report (based on data accumulative to the January of 2021), which included next generation cancer screening and detection technologies including circulating tumor cells (CTCs), circulating-DNA (CT-DNA), exosome, cancer differentiation analysis (CDA), mRNA, and other emerging technologies.
• On August 18, 2021, the Company completed an acquisition of a 60% equity interest in Anpai (Shanghai) Health Management Consulting Co., Ltd (“Anpai Shanghai”), consisting of an acquisition of a 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 a 20% equity interest in Anpai Shanghai which the Company has already held prior to August 18, 2021. Anpai Shanghai is engaged in providing medical screening and detection services in China.
• The Company continued to receive validation on the efficacy of CDA testing through clinical study follow-ups. As of December 31, 2021, AnPac Bio had contacted 26,372 individuals tested using CDA packages in China and received substantive feedback regarding health conditions and disease development from 15,691 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 December 31, 2021, the Company filed 260 patent applications globally, among which 152 patents had been granted, including 21 patents granted in the United States, 66 in greater China (including eight in Taiwan), and 65 in other countries and regions.
• The Company continued to build a cancer risk assessment database, which totaled approximately 253,503 samples as of December 31, 2021, including approximately 209,350 samples from commercial CDA-based tests and approximately 44,153 samples from research studies.

Dr. Chris Yu, Co-CEO and Co-Chairman of AnPac Bio commented: “In 2021, we continue to lay a strong foundation in innovation, product development, clinical trial validations, and medical device certifications for growth in the next few years. We built up a strong global lead in multi-cancer screening and detection sample size and data, with the global number one ranking in multi-cancer test volume by US market firm Frost-Sullivan. Our on-going cancer test follow-up study, whose enrollment at 26,372 individuals at the end of 2021, is one of the largest studies in the world for multi- cancer test studies and continues to generate strong clinical validations for our CDA technology at medical institutions and hospitals for confirmed cancer and pre-cancer cases for individuals who had tested initially using our CDA tests during general population cancer screening and risk assessment. Moving forward, we will continue efforts to reduce our costs, including general and administrative costs, and make strong efforts in our marketing and sales.”

Financial Results for Fiscal Year 2021

Revenue

Total revenues decreased by 12.3% to RMB18.0 million (US$2.8 million) in fiscal year 2021 from RMB20.5 million (US$3.1 million) in fiscal year 2020, primarily due to a significant decrease in our revenue from cancer screening and detection tests.

Cost of Revenues

Cost of revenues decreased by 24.9% to RMB5.7 million (US$0.9 million) in fiscal year 2021 from RMB7.6 million in fiscal year 2020. The decrease was in line with a decrease of our revenue from CDA-based tests.

Gross Profit and Gross Margin

Gross profit decreased by 4.9% to RMB12.3 million (US$1.9 million) in fiscal year 2021 from RMB12.9 million in fiscal year 2020. Gross margin was 68.1% in fiscal year 2021, an increase of 5.3 percentage points from 62.8% in fiscal year 2020.

Selling and Marketing Expenses

Selling and marketing expenses increased by 8.9% to RMB21.4 million (US$3.4 million) in fiscal year 2021 from RMB19.7 million in fiscal year 2020, primarily due to higher share-based compensation as we granted more options to our marketing and sales personnel.

Research and Development Expenses

Research and development expenses increased by 40.0% to RMB16.2 million (US$2.5 million) in fiscal year 2021 from RMB11.6 million in fiscal year 2020, This increase was also attributable to an increase in our research and development related materials and higher staff costs and share-based compensation for our research and development personnel.

General and Administrative Expenses

General and administrative expenses increased by 7.9% to RMB80.7 million (US$12.7 million) in fiscal year 2021 from RMB74.8 million in fiscal year 2020, primarily due to increased staff compensation incurred in 2021.

Change in fair value of convertible debt

The Company recognized the convertible debt at fair value. The Company recognized an aggregated unrealized loss of approximately RMB9.1 million (US$1.4 million) and unrealized gain of approximately RMB6.6 million in fiscal year 2021 and 2020, respectively, due to changes in fair value of convertible debt.

Gain from fair value change in equity investment

In fiscal year 2021, the Company recorded a gain from fair value change in equity investment of approximately RMB3.2 million (US0.5 million) due to the acquisition of Anpai Shanghai.

Net Loss

Net loss increased to RMB120.1 million (US$18.8 million) in fiscal year 2021, compared to RMB80.6 million in fiscal year 2020. Basic and diluted loss per share was RMB8.72 (US$1.37) in fiscal year 2021, compared to that of RMB7.19 in fiscal year 2020.

Balance Sheet

As of December 31, 2021, the Company had cash and cash equivalents of RMB9.3 million (US$1.5 million), compared to RMB3.0 million as of December 31, 2020.

Cash Flow

Net cash used in operating activities was RMB71.7 million (US$11.3 million) in fiscal year 2021, compared to RMB58.9 million in fiscal year 2020.

Net cash used in investing activities was RMB3.9 million (US$0.6 million) in fiscal year 2021, compared to RMB2.5 million in fiscal year 2020.

Net cash provided by financing activities was RMB83.4 million (US$13.1 million) in fiscal year 2021, compared to RMB60.9 million in fiscal year 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 a report by Frost & Sullivan, AnPac Bio ranked first globally in multi-cancer screening and detection test sample volume (accumulative to January 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 Relations

Phone: +1-267-810-6776 (US)

Email:

[email protected]

For more information, please visit:

https://www.Anpacbio.com

.

For investor and media inquiries, please contact:

Company:


Phil Case, Marketing and Investor Relations

Phone: +1-267-810-6776 (US)

Email:

[email protected]

Investor Relations:


Ascent Investor Relations LLC

Tina Xiao, President

Phone: +1-917-609-0333 (US)

Email:

[email protected]

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. CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number of shares and per share data)
		As of December 31,
		2020			2021			2021
		RMB			RMB			US$
ASSETS
Current assets:
Cash and cash equivalents		3,016			9,251			1,452
Advances to suppliers		5,588			4,704			738
Accounts receivable, net		7,792			5,554			872
Amounts due from related parties, net		1,277			200			31
Inventories, net		312			490			77
Other current assets, net		3,303			3,350			526
Total current assets		21,288			23,549			3,696
Property and equipment, net		19,267			20,264			3,180
Land use rights, net		1,166			1,138			179
Intangible assets, net		4,596			8,857			1,390
Goodwill		2,223			12,758			2,002
Long-term investments, net		883			923			145
Other assets		464			–			–
TOTAL ASSETS .		49,887			67,489			10,592
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Short-term debts		8,232			33,759			5,298
Accounts payable		2,127			2,732			429
Advance from customers		3,682			4,174			655
Amounts due to related parties		4,130			2,471			388
Accrued expenses and other current liabilities		25,353			19,770			3,102
Total current liabilities		43,524			62,906			9,872
Deferred tax liabilities		1,045			2,158			339
Other long-term liabilities		2,041			1,107			174
TOTAL LIABILITIES .		46,610			66,171			10,385
Commitments and contingencies
Shareholders’ (deficit) equity:
Class A Ordinary shares (US$0.01 par value per share; 70,000,000 shares authorized, 9,192,660 and 16,604,402 shares issued and outstanding as of December 31, 2020 and December 31 2021, respectively)		618			1,096			172
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 December 31, 2021)		191			185			29
Additional paid-in capital		354,295			465,334			73,021
Accumulated deficit		(356,951	)		(475,646	)		(74,639	)
Accumulated other comprehensive income		4,795			4,532			711
Total AnPac Bio-Medical Science Co., Ltd. shareholders’ (deficit) equity		2,948			(4,499	)		(706	)
Non-controlling interests		329			5,817			913
Total shareholders’ equity		3,277			1,318			207
TOTAL LIABILITIES AND EQUITY		49,887			67,489			10,592

ANPAC BIO-MEDICAL SCIENCE CO., LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands of RMB and US$, except for number of shares and per share data)
		Year Ended December 31
		2020			2021			2021
		RMB			RMB			US$
Revenues:
Cancer screening and detection tests		18,445			14,947			2,345
Physical checkup packages, net		2,064			1,654			260
Technology service		–			1,284			201
Retail revenue		–			101			16
Total revenues		20,509			17,986			2,822
Cost of revenues		(7,628	)		(5,732	)		(899	)
Gross Profit		12,881			12,254			1,923
Operating expenses:
Selling and marketing		(19,674	)		(21,420	)		(3,361	)
Research and development		(11,576	)		(16,204	)		(2,543	)
General and administrative		(74,757	)		(80,676	)		(12,660	)
Impairment of long-term investments		(1,430	)		–			–
Impairment of Intangible assets		–			(3,828	)		(601	)
Impairment of goodwill		–			(2,223	)		(349	)
Loss from operations		(94,556	)		(112,097	)		(17,591	)
Non-operating income and expenses:
Interest expense, net		(1,143	)		(4,257	)		(668	)
Foreign exchange loss, net		(667	)		(202	)		(32	)
Share of net (loss) gain in equity method investments		(13	)		132			21
Other income (expense), net		9,096			990			155
Change in fair value of convertible debt and settlement gain		6,630			(9,073	)		(1,424	)
Gain from fair value change in equity investment		–			3,240			508
Loss before income taxes		(80,653	)		(121,267	)		(19,031	)
Income tax benefit		88			1,180			185
Net loss		(80,565	)		(120,087	)		(18,846	)
Net loss attributable to non-controlling interests		(90	)		(1,392	)		(218	)
Net loss attributable to ordinary shareholders		(80,475	)		(118,695	)		(18,628	)
Loss per share
Class A and B Ordinary shares – basic and diluted		(7.19	)		(8.72	)		(1.37	)
Weighted average shares outstanding used in calculating basic and diluted loss per share
Ordinary shares – basic and diluted		11,190,079			13,605,515			13,605,515
Other comprehensive (loss) income, net of tax :
Fair value change relating to Company’s own credit risk on convertible loan		(108	)		–			–
Foreign currency translation adjustment		2,793			(263	)		(41	)
Total comprehensive loss		(77,880	)		(120,350	)		(18,887	)
Total comprehensive loss attributable to non-controlling interests		(90	)		(1,392	)		(218	)
Total comprehensive loss attributable to ordinary shareholders		(77,790	)		(118,958	)		(18,669	)

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)
		Year Ended December 31
		2020			2021			2021
		RMB			RMB			US$
Net loss		(80,565	)		(120,087	)		(18,846	)
Less:
Change in fair value of convertible debts		(6,630	)		9,073			1,424
Stock based compensation expense		17,762			34,167			5,362
Non-GAAP net loss		(69,433	)		(76,847	)		(12,060	)