Work report of the board of directors in 2021
Berry Genomics Co.Ltd(000710) (hereinafter referred to as "the company" and " Berry Genomics Co.Ltd(000710) ") the board of directors has carried out various work diligently and conscientiously in strict accordance with the company law of the people's Republic of China, the guidelines for the standardized operation of companies listed on the main board of Shenzhen Stock Exchange, the articles of association, the rules of procedure of the board of directors and other relevant laws, regulations and normative documents. Now the work of the board of directors in 2021 is reported as follows: I Overall development
The company's gene sequencing industry is a frontier field of biotechnology. Since the release of the 13th five year plan for the development of biological industry in 2017, China's gene sequencing market has entered a high-speed development track. The continuous spread of covid-19 epidemic has further deepened the whole society's understanding of the importance of gene sequencing, early screening and accurate diagnosis and treatment, and the importance of gene sequencing for accurate diagnosis and treatment of diseases, It presents a trend of focusing on clinical medical application and extending to a wider field of health.
During the reporting period, the national "14th five year plan for universal medical security" and "14th five year plan for the construction of high-quality and efficient medical and health service system" and other heavy policies were issued, which further strengthened the dominant position of public medical institutions, and put forward guidance on increasing the supply of high-quality medical resources in obstetrics and Gynecology and pediatrics, focusing on strengthening prenatal screening and diagnosis and birth defect prevention and control, It has played a positive role in promoting the gene testing business in the field of genetics. At the same time, with the liberalization of China's "three child" fertility policy, the revision of the regulations on the supervision and administration of medical devices, the launch of industrial consensus such as the consensus of experts on neonatal disease tandem mass spectrometry screening technology, and the inclusion of "prenatal screening of fetal free DNA in maternal peripheral blood" into the payment catalogue of class a medical insurance in Beijing, the gene sequencing industry has witnessed the continuous standardization of product application and the continuous improvement of market penetration, The comprehensive prevention and control system of birth defects has been continuously improved. As a whole, it has entered the stage of product model and data accumulation from technology research and development. The industry has obvious weak cyclical characteristics.
With the innovative technology independently developed as the core, the company has developed gene sequencing products and services suitable for genetics and oncology, and developed a sequencing platform suitable for hospitals to independently carry out testing services (including sequencer, supporting reagents and analysis software). The tumor early screening product "lesning" of Fujian Herui Gene Technology Co., Ltd., a joint-stock subsidiary of the company, has entered the stage of commercial layout. At the same time, the company uses a comprehensive sequencing platform to provide high-quality scientific and technological services for scientific research institutions, colleges and universities and medical institutions at home and abroad. The company is actively expanding its business to include the analysis and application of gene big data and the transformation of data, constantly reserving testing services, constantly enriching the product line, actively arranging the genome database, continuing to establish a digital life science park and building a new gene industry ecosystem covering the four sectors of industry, science, research and capital under the background of the accelerated development of big data.
2、 Financial position during the reporting period
1. Operating results
During the reporting period, affected by the repeated outbreaks outside China and the fluctuation of outpatient volume of medical institutions, the company's business income decreased slightly. While ensuring the orderly development of clinical business, the company increased market expansion and internal incentive investment, resulting in the overall pressure on the short-term growth of the company's performance. During the reporting period, the company achieved an overall operating revenue of 1.422 billion yuan, a decrease of 7.67% over the same period of last year; The net profit attributable to shareholders of listed companies was -111 million yuan, a year-on-year decrease of 152.60%. Among them, the main business segments are as follows:
(1) The revenue from clinical business (medical testing services and Reagent Sales) was about 938 million yuan, a decrease of 6.90% over the same period last year. The company has formed product echelons at different stages of development in the clinical field. Among them, the mature products are NIPT, the products still in the expansion stage are NIPT plus, CNV SEQ, Wes, etc., and the products still in the incubation stage are third-generation thalassemia, SMA testing, pre implantation testing, etc. Up to now, the company's non-invasive prenatal screening (NIPT) and other related products have provided testing services for more than 5 million people in total. The new products in the expansion period and incubation period have achieved organic growth in revenue during the reporting period, but the overall proportion of revenue is relatively small. During the reporting period, the main reasons for the decline of the company's clinical revenue business are as follows: 1) the price of product testing services in the mature stage of the company showed a downward trend, and the repeated covid-19 epidemic caused the number of hospital diagnosis and treatment to return to instability; 2) The company's covid-19 testing service business income in the current period decreased compared with the same period last year.
(2) The income from basic scientific research services was about 314 million yuan, a decrease of 24.08% over the same period last year. Based on the "personalized customized service", the company provides solutions for basic scientific research customers (including but not limited to universities, research institutes and clinical institutions). In order to improve the detection competitiveness of basic scientific research services, the company has introduced new sequencing platforms, including illumi nanovaseq6000 and pacbio sequence II, to meet the requirements of various application directions and data scales. During the reporting period, with the conclusion of customers' early research projects, the procurement of phased scientific research services decreased and the income decreased.
(3) The equipment sales revenue was about 116 million yuan, an increase of 42.48% over the same period last year. Under the influence of the epidemic, in order to explore the phased growth direction of the business and improve the terminal share of the company's sequencing platform, the company nextseqcn500 (second-generation gene sequencing platform), as an ngs universal platform suitable for large-scale clinical gene testing, has achieved strategic sales results of biotechnology companies in the field of microbiology in this period. By the end of 2021, the cumulative delivery of nextseqcn500 was about 500 units, and the sales revenue of equipment in this period increased significantly.
2. Assets and liabilities
1) The increased investment in the construction of Fujian Digital Life Industrial Park (phase I) (North District) led to a 33.60% decrease in monetary funds at the end of the period compared with the beginning of the year.
2) The company moderately increased the flow of loans and increased the efficiency of capital utilization. The short-term loans at the end of the period increased by 54.78% compared with the beginning of the year.
3) By the end of the period, the asset liability ratio of the company was 28.30%, and the overall asset liability level was low.
At present, the coverage rate of monetary funds to short-term loans is 219.32%. In the future, the company will gradually improve the efficiency of fund utilization and ensure the safety of funds.
3. Cash flow
The net cash flow from operating activities was 94 million yuan, a decrease of 41.71% over the same period of the previous year, mainly due to the increase in the sales of sequencer and supporting reagent and the increase in goods preparation and procurement.
To sum up, the company's current financial situation reflects that in the post epidemic stage, the company has carried out reasonable expansion based on cash safety, steadily improved its business on the premise of ensuring operational safety, and the company's underlying assets are relatively thick. In the future, the company will timely adjust its business strategy and actively improve its performance level.
3、 Development during the reporting period
1. During the reporting period, the new general manager of the company was taken over by Mr. Gao Yang, chairman of the company. Mr. Gao Yang has long-term experience in operation and in-depth management of the company.
Mr. Zhou Daixing, the former general manager of the company, continues to serve as the chief scientist of the company, fully responsible for the planning, design and R & D of the company's products and providing strategic guidance and support for the development of the company.
2. During the reporting period, the company's thalassemia gene detection kit (single molecule sequencing method) passed the registration test. The kit is based on the third generation high-throughput sequencing platform to detect thalassemia related gene mutations, which can be applied to the screening and auxiliary diagnosis of thalassemia gene carriers. During the reporting period, the multi center clinical prospective research results of the third generation thalassemia (i.e. using the third generation sequencing technology for thalassemia gene detection) provided by the company were published in the Journal of molecular diagnostics. The study proves that the three generations of poverty have comprehensive coverage, high accuracy and wide applicability, which helps to improve the efficiency and accuracy of global poverty carrier screening. This time, the kit will help the company realize the commercial transformation of third-generation thalassemia gene detection and accelerate the clinical transformation application of third-generation sequencing. The company will continue to complete the medical device registration and application process of the kit. In the future, if the product is approved for listing, it will further improve the company's three-level prevention product pipeline and strengthen the company's market competitiveness in the field of gene sequencing, which is expected to have a positive impact on the company's future operation.
3. During the reporting period, the company's fetal chromosome copy number variation detection kit (reversible terminal termination sequencing method) passed the registration test. The kit is the classic bebian of the company ® The upgraded version of noninvasive DNA prenatal testing products extends the detection range from prenatal fetal chromosome aneuploidy to fetal chromosome microdeletion syndrome, which can further effectively reduce the birth defect rate of neonatal population. At present, the kit only passes the registration inspection, and the company will continue to complete the registration and declaration process of medical devices. In the future, if the product is approved for listing, it will further enrich the company's product pipeline in the field of reproductive health, strengthen the company's market competitiveness in the field of gene sequencing, and is expected to have a positive impact on the company's future operation.
4. During the reporting period, the company sequel ® II cndx gene sequencer passed the registration test. Sequel ® Iicndx gene sequencer (third generation gene sequencing platform) is jointly developed by the company and Pacific Biosciences of California based on pacbio SMRT ® (single molecule, real-time; single molecule real-time) gene detection platform of sequencing technology. SMRT ® Sequencing technology can provide high-precision, ultra long reading, uniform coverage and direct detection of base modification through SMRT ® Sequencing technology can screen some major diseases that are not within the detection scope of high-throughput sequencing technology (NGS). Sequel ® II cndx gene sequencer has only passed the inspection of technical requirements, and the company will apply for the registration of medical devices for this product. In the future, if the product is approved for listing, it will help the company realize the full coverage of the hardware platform of medium and high-throughput second-generation gene sequencer and third-generation gene sequencer, and strengthen the strategic layout of the company in the upstream field of gene sequencing.
5. During the reporting period, the company completed the non trading transfer of the first phase of the employee stock ownership plan. The 2823000 shares subscribed by the plan have been transferred from the company's special securities repurchase account to the employee stock ownership plan account, accounting for about 0.7961% of the company's total share capital. The implementation of the plan is linked to the performance evaluation of the company. At the same time, as an effective supplement to the salary system structure of the company, it will provide endogenous power for the improvement of the company's performance. In the future, the company will timely adjust the details of relevant measures according to the implementation effect of the plan, and actively help the long-term and efficient development of the company with the help of capital market channels.
6. During the reporting period, the company terminated the non-public offering of shares to raise funds. The funds raised from the non-public offering are mainly used for the construction of Fujian Big Data Center Industrial Park project. After comprehensive consideration of the actual situation and development planning of the company, in order to better implement the follow-up strategic planning of the company, the company decided to terminate the non-public offering after careful decision and full communication with relevant parties. This non-public offering of shares is the company's attempt to diversify financing with the help of the capital market. In the future, the company will actively use relevant channels to help the development of the company. 7. During the reporting period, Beijing incorporated the "prenatal screening of fetal free DNA in maternal peripheral blood" into the catalogue of medical service price adjustment, which will accelerate the application of high-throughput gene sequencing in clinical genetic screening, reflecting Beijing's support for the clinical application of new technologies and products and the implementation of the comprehensive prevention and control strategy of birth defects. In the future, the company will actively promote the "prenatal screening of maternal peripheral blood fetal free DNA" into the procurement catalogue of local medical institutions, and actively cooperate with the construction of the government's birth defect prevention and control system. With the project of "prenatal screening of maternal peripheral blood fetal free DNA" entering the medical insurance, it will promote the overall penetration of the industry, have a positive impact on the increment of the company's NIPT testing project, improve the company's business performance and ensure the sustainable and steady development of the company.
4、 Work of the board of directors in 2021
(I) convening of board meetings
In 2021, the company held a total of 9 meetings of the board of directors, deliberated and passed 24 proposals, and all resolutions of the board of directors were effectively implemented. The specific matters deliberated and passed are as follows:
Meeting session date disclosure date meeting resolution
The sixth session of the ninth board of directors February 2021 February 2021 "on the termination of the non-public Development Bank A-share meeting on February 25 and 27 and the withdrawal of application documents"
Proposal on providing guarantee for wholly-owned subsidiaries, proposal on Amending the first phase of employee stock ownership plan (Draft) and summary, proposal on Amending the management measures for the first phase of employee stock ownership plan on March 15 and 16 of the seventh session of the ninth board of directors on March 2021 and March 2021 Proposal on requesting the general meeting of shareholders to authorize the board of directors to fully handle matters related to the employee stock ownership plan and proposal on the notice of convening the first extraordinary general meeting of shareholders in 2021
《2020
