Capturing the Final Milestone Before Profitability, How Can Burning Rock Diagnostics (BNR.US), With a 30% Stock Plunge, Achieve a Rebound?

Before the U.S. stock market opened on March 13, Burnstone Medical (BNR.US) announced its Q4 and full-year 2025 financial reports. In the report, Burnstone Medical revealed a surprising data point for the domestic NGS industry: the company’s adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q4 2025 turned positive for the first time, with a quarterly profit of 370,000 RMB.

It’s important to note that the domestic NGS industry has long faced the awkward situation of being well-liked but not well-sold, with profitability being one of the main reasons for the industry’s lack of appeal. Now, with Burnstone Medical achieving positive adjusted EBITDA, it marks the final milestone before turning losses into profits.

From the secondary market perspective, the entire 2025 market has shown positive expectations for Burnstone Medical’s profitability. Coupled with steady company performance and large-scale purchases by CRCM LP, the stock price of Burnstone Medical has increased by nearly 200% in 2025.

However, when the company officially announced it was about to turn profitable, the stock price experienced a nearly 30cm decline.

Turning losses into profits but stock price plunges

Jin Tong Finance APP observed that after releasing its Q4 2025 financial report before the market opened on March 13, Burnstone Medical’s stock price quickly declined, then sharply dropped within half an hour, falling below the daily average line by over 10%. Although there were two rebounds afterward, the bullish forces were continuously suppressed, and from late morning to the close, the stock was mostly controlled by the bears, remaining far from the daily average line, ending the day down 29.93%.

Looking at a longer timeline, since reaching a high of $41.72 during intraday trading on January 22, Burnstone Medical’s stock entered a technical correction phase. Notably, on January 14, 15, and 22, the stock saw significant increases, with single-day gains of 18.49%, 16.83%, and 32.20%, respectively.

During this period, the stock price ran along the upper band of the BOLL indicator for nearly two weeks. The RSI (Relative Strength Index) on January 15 and 22 both exceeded 80 twice, forming an M-shape pattern above the overbought threshold, signaling a downward reversal.

Starting January 23, with the RSI showing a death cross, Burnstone Medical’s stock began a technical downward correction. On January 24, despite a sharp decline of 14.59%, trading volume was only 31,000 shares. Over the next half month, daily trading volume even dropped below 10,000 shares, indicating a volume-less decline.

During this decline, there was no “pile-up” of volume, suggesting that the main funds remained in the market but chose to continue the correction to shake out weak hands. From the chip distribution, after the big surge on January 22, the distribution showed a bimodal pattern with peaks below $10 and around $20, with an average cost of $17.90. This indicates that besides the main funds that entered in November and December last year, there are also many low-cost chips accumulated earlier. The goal of this shakeout was to force low-cost holders to take profits and exit.

As a result, after the sharp 30cm drop on March 13, the low-position chip peak was greatly weakened, with the support level rising to $12, and the average chip cost increased to $20.8. The single-peak concentration around the $20 cost line is becoming more apparent, possibly indicating that this correction is nearing its end.

Can short-term profit drive long-term value?

Looking at Burnstone Medical’s core financial indicators for 2025, the company’s revenue steadily grew while operational efficiency significantly improved: full-year revenue reached 540 million RMB, up 4.6% year-over-year, with overseas revenue of 101 million RMB. During the reporting period, net loss was 55.35 million RMB, a substantial reduction of 84.0% compared to 347 million RMB in 2024.

In Q4 2025, Burnstone Medical’s adjusted EBITDA turned positive for the first time, with a quarterly profit of 370,000 RMB, and operating cash flow reached 23.04 million RMB, turning positive for two consecutive quarters. As of December 31, 2025, the company held 481 million RMB in cash, cash equivalents, and restricted cash.

In fact, in Q4 2025, the net loss was still 15.39 million RMB, but after excluding non-cash factors such as capital structure, tax, depreciation, amortization, and some non-operational items, the positive adjusted EBITDA indicates the company achieved operational profitability in that period. The two consecutive quarters of positive cash flow further enhance the credibility of this profitability milestone.

However, from the revenue perspective, looking at the full year, Burnstone Medical’s core testing business—center laboratory and in-hospital services—grew at rates of -9% and 0%, respectively. The zero growth in in-hospital services suggests that the company’s efforts to shift testing from outside to inside hospitals have begun to face obstacles, possibly due to the highly competitive, saturated lung cancer testing market in China.

Despite sluggish growth in these areas, the company’s partnership business has taken on a key role, generating 156 million RMB in revenue, a 34% increase year-over-year, accounting for 30% of total revenue. This could be crucial for future growth and profitability.

Once the adjusted EBITDA and current cash flow turn positive, the next potential catalyst may be a rebound in Burnstone Medical’s stock price.

Jin Tong Finance APP learned that on September 24 last year, Burnstone Medical and Riken Genesis jointly announced that Burnstone’s OncoGuide OncoScreen Plus CDx system received manufacturing and sales approval from Japan’s Ministry of Health, Labour and Welfare (MHLW), as a companion diagnostic for AstraZeneca’s AKT inhibitor Truqap (capivasertib).

This test aims to guide treatment decisions for adult HR-positive, HER2-negative advanced breast cancer patients who, after endocrine therapy, experience disease progression and harbor one or more PIK3CA, AKT1, or PTEN gene mutations. Burnstone’s CDx system includes the OncoGuide OncoScreen Plus CDx kit and supporting analysis software, designed to work with next-generation sequencers to detect mutations in PIK3CA, AKT1, and PTEN genes.

Following product approval, Burnstone Japan promptly began local insurance coverage negotiations, successfully entering the local insurance system, becoming the first NGS companion diagnostic approved for precision oncology in breast cancer in China. The performance of this business in Japan in 2026 could become one of the catalysts for Burnstone’s future stock price growth.

Additionally, earlier this year, Burnstone’s first domestic breast cancer NGS companion diagnostic kit entered the CMDE priority review pathway. If approved within this year, it could serve as an important catalyst in the secondary market, potentially leading Burnstone to a “Davis double play” similar to Guardant Health.