BeiGene Ltd
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
ONC$406.96+5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001651308-24-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001651308-24-000098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 125 current paragraphs.
47 unchanged; 38 reworded; 30 added; 14 removed; 1 previous and 10 current paragraphs rearranged.
Tables are not compared: 9 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
BeiGene reduced GAAP operating loss and achieved positive adjusted operating income during the quarter with rapidly increasing global revenues and continued financial discipline. Having now reached this milestone, we will further build on our differentiated, strategic capabilities as a leading, global oncology innovator.
Current report
BRUKINSA is emerging as the BTKi class leader in the U.S. in new patient starts across all approved indications, demonstrating the strength of its clinical efficacy and safety data, and is the only BTKi to demonstrate superior efficacy versus ibrutinib in a head-to-head trial. With our leadership in hematology, we are working to expand into other highly prevalent cancer types, backed by one of the largest oncology research teams in the industry.
Current report
•Reduced GAAP operating loss and achieved non-GAAP operating income;
Current report
•Strengthened hematology leadership with global BRUKINSA revenues of $637 million, an increase of 107% from the prior-year period;
Current report
•Advanced pivotal programs for BCL2 inhibitor sonrotoclax and BTK-targeted degrader BGB-16673; and
Current report
•Advanced innovative solid tumor pipeline of more than 15 investigational molecules, including ADCs, multispecific antibodies, and targeted therapies for lung, breast, and gastrointestinal cancers.
Current report
On July 23, 2024, we announced the opening of our flagship U.S. facility in Hopewell, New Jersey, at the Princeton West Innovation Campus, which houses state-of-the-art biologics manufacturing capabilities and a clinical research and development center that further bolster our differentiated model as an oncology innovator.
Current report
Sales of tislelizumab in China totaled $158.3 million in the second quarter, compared to $149.5 million in the prior-year period, representing a 5.9% increase.
Current report
Sales of Amgen products in China totaled $90.1 million in the second quarter, compared to $49.6 million in the prior-year period, representing a 81.7% increase, driven primarily by increased XGEVA sales volume.
Current report
Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.
Current report
Other Expense, Net
Current report
Other expense, net was $12.0 million for the three months ended June 30, 2024, primarily due to foreign exchange losses. For the three months ended June 30, 2023, other expense, net was $63.8 million, primarily due to foreign exchange losses resulting from the strengthening of the U.S. dollar compared to the RMB in the period and the revaluation impact of foreign currencies held in U.S. functional currency subsidiaries. The decrease in other expense, net, was primarily due to reduced RMB-denominated cash held by U.S. functional currency entities compared to the prior-year period.
Current report
Comparison of the Six Months Ended June 30, 2024 and 2023
Current report
Revenue
Current report
Total revenue increased to $1,680.8 million, or 61.1%, for the six months ended June 30, 2024, from $1,043.1 million for the six months ended June 30, 2023, primarily due to increased sales of our internally developed products, BRUKINSA and tislelizumab, as well as increased sales of in-licensed products, most notably from the Amgen products.
Current report
Net product revenue increased 73.0% to $1,668.1 million for the six months ended June 30, 2024, compared to $964.0 million in the prior-year period, primarily due to increased sales of BRUKINSA in the U.S. and China and increased sales of tislelizumab in China. In addition, there were increased sales of our in-licensed products from Amgen.
Current report
Global sales of BRUKINSA totaled $1,125.9 million in the six months ended June 30, 2024, representing a 116.7% increase compared to the prior-year period. U.S. sales of BRUKINSA totaled $830.8 million in the six months ended June 30, 2024, compared to $362.3 million in the prior-year period, representing growth of 129.3%. U.S. sales continued to accelerate in the period, as BRUKINSA gained share in TN CLL and emerged as the BTKi class leader in new-patient share in CLL. BRUKINSA sales in Europe totaled $148.2 million in the six months ended June 30, 2024, representing growth of 223.5% compared to the prior-year period, driven by continued gains in market share across all major markets.
Current report
Sales of Amgen products in China totaled $162.0 million in the six months ended June 30, 2024, compared to $85.7 million in the prior-year period, driven primarily by increased XGEVA sales volume.
Current report
Cost of Sales
Current report
Cost of sales increased to $263.1 million for the six months ended June 30, 2024 from $177.8 million for the six months ended June 30, 2023, primarily due to increased product sales of BRUKINSA and tislelizumab as well as sales of in-licensed products from Amgen in China.
Current report
Gross Margin
Current report
Research and Development Expense
Current report
Research and development expense increased by $83.8 million, or 10.1%, to $915.1 million for the six months ended June 30, 2024 from $831.3 million for the six months ended June 30, 2023. The following table summarizes external clinical, external non-clinical and internal research and development expense for the six months ended June 30, 2024 and 2023, respectively:
Current report
Selling, General and Administrative Expense
Current report
Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.
Current report
Interest Income, Net
Current report
Interest income, net decreased by $1.7 million, or 5.5%, to $29.4 million for the six months ended June 30, 2024, from $31.1 million for the six months ended June 30, 2023. The decrease in interest income was primarily attributable to lower interest rates earned on our cash and cash equivalents. Interest expense remained flat as the increase in interest expense resulting from a higher debt balance was offset by higher interest capitalized related to Hopewell construction in process.
Current report
Other Expense, Net
Current report
Other expense, net decreased to $10.2 million for the six months ended June 30, 2024, from $45.5 million for the six months ended June 30, 2023. The decrease in expense was primarily related to foreign exchanges losses resulting from the strengthening of the U.S. dollar compared to the RMB and the revaluation impact of RMB-denominated deposits held in U.S. functional currency subsidiaries being greater in the prior-year period.
Current report
Income Tax Expense
Removed paragraphs (14)
Previous report
BeiGene had another quarter of strong financial results. Supported by our tremendous global growth in revenue, we have now ascended into the top 15 of global oncology innovators based on total oncology sales. We also continue to make significant improvement in our operating leverage as we progress to sustainable profitability. We strengthened our hematology leadership with BRUKINSA, now the BTK inhibitor with the broadest label in the class, as we advance our innovative pipeline of therapies for hematologic malignancies. With TEVIMBRA now approved for use in the U.S. and Europe, we look forward to rapidly advancing our deep pipeline of solid tumor therapies to match our leadership in hematology and continue to solidify our reputation as a global oncology innovator.
Previous report
•BRUKINSA revenue of $489 million, driven by growth in the U.S. and Europe of 153% and 243%, respectively, from the prior-year period; with recent fifth FDA approval, BRUKINSA now has the broadest label in the BTKi class;
Previous report
•Rapidly advancing late-stage hematology pipeline; sonrotoclax in development both as a monotherapy and in combination with backbone therapy BRUKINSA; pivotal program initiated for BTK CDAC;
Previous report
•Progressing potentially differentiated solid tumor programs with ADC, degrader platforms and targeted therapies in priority cancer types; and
Previous report
•Significantly improved operating leverage and progress on path to sustainable profitability.
Previous report
On April 23, 2024, we announced that the European Commission approved tislelizumab as a treatment for non-small cell lung cancer (“NSCLC”) across three indications, including first- and second-line use.
Previous report
On March 14, 2024, we announced that the U.S. Food and Drug Administration (“FDA”) approved TEVIMBRA (tislelizumab-jsgr) as monotherapy for the treatment of adult patients with unresectable or metastatic esophageal squamous cell carcinoma (“ESCC”) after prior systemic chemotherapy that did not include a PD-(L)1 inhibitor. TEVIMBRA will be available in the U.S. in the second half of 2024.
Previous report
On March 13, 2024, together with The Max Foundation and the BeiGene Foundation, we announced that the first doses of BRUKINSA was administered for the treatment of adult patients with chronic lymphocytic leukemia (“CLL”) to patients in Armenia and Nepal, as part of a three-year collaboration to provide access to the medicine in 29 low- and middle-income countries.
Previous report
On March 7, 2024, we announced that the FDA granted accelerated approval to BRUKINSA (zanubrutinib) for the treatment of adult patients with relapsed or refractory (“R/R”) follicular lymphoma (“FL”), in combination with the anti-CD20 monoclonal antibody obinutuzumab, after two or more lines of systemic therapy. The indication was approved under accelerated approval based on response rate and durability of response, marking BRUKINSA’s fifth indication in B-cell malignancies in the U.S.
Previous report
On February 29, 2024, we announced a new matching adjusted indirect comparison of the efficacy of BRUKINSA versus acalabrutinib in R/R CLL based on data from the Phase 3 ALPINE and Phase 3 ASCEND trials. The analysis suggests a progression-free survival and complete response advantage for BRUKINSA versus acalabrutinib, as well as potentially improved overall survival.
Previous report
On February 27, 2024, we announced that the FDA accepted a Biologics License Application (“BLA”) for TEVIMBRA (tislelizumab), in combination with fluoropyrimidine- and platinum-containing chemotherapy, for the treatment of patients with locally advanced unresectable or metastatic gastric or gastroesophageal junction (“G/GEJ”) adenocarcinoma. The FDA’s action date on the BLA is expected in December 2024.
Previous report
Other Income, Net
Previous report
Other income, net was $1.8 million for the three months ended March 31, 2024, primarily due to the gain recognized on the divestiture of Pi Health, Inc. and government subsidy income in China, slightly offset by foreign exchange losses.
Previous report
For the three months ended March 31, 2023, other income, net was $18.3 million, primarily due to government subsidy income in China.
Reworded paragraphs (38)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements (unaudited) and related notes included in the section of this Quarterly Report on Form 10-Q (this “Quarterly Report”), titled “Part I – Item 1 – Financial Statements.” This Quarterly Report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations and projections about future events and trends that may affect the business, financial condition, and operating results. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Forward-looking statements often include words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, among other things, statements about: our ability to successfully commercialize our approved medicines and to obtain approvals in additional indications and territories for our medicines; our ability to successfully develop and commercialize our in-licensed medicines and drug candidates and any other medicines and drug candidates we may in-license; our ability to further develop sales and marketing capabilities and launch and commercialize new medicines, if approved; our ability to maintain and expand regulatory approvals for our medicines and drug candidates, if approved; the pricing and reimbursement of our medicines and drug candidates, if approved; the initiation, timing, progress and results of our preclinical studies and clinical trials and our research and development programs; our ability to advance our drug candidates into, and successfully complete, clinical trials and obtain regulatory approvals; our reliance on the success of our clinical stage drug candidates; our plans, expected milestones and the timing or likelihood of regulatory filings and approvals; the implementation of our business model, strategic plans for our business, medicines, drug candidates and technology; the scope of protection we (or our licensors) are able to establish and maintain for intellectual property rights covering our medicines, drug candidates and technology; our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary technology of third parties; costs associated with enforcing or defending against intellectual property infringement, misappropriation or violation, product liability and other claims; the regulatory environment and regulatory developments in the United States, China, the United Kingdom (“UK”), Switzerland, the European Union (“EU”) and ot…
Excerpt shortened here; the source contains the full paragraph.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements (unaudited) and related notes included in the section of this Quarterly Report on Form 10-Q (this “Quarterly Report”), titled “Part I – Item 1 – Financial Statements.” This Quarterly Report contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations and projections about future events and trends that may affect the business, financial condition, and operating results. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Forward-looking statements often include words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, among other things, statements about: our ability to successfully commercialize our approved medicines and to obtain approvals in additional indications and territories for our medicines; our ability to successfully develop and commercialize our in-licensed medicines and drug candidates and any other medicines and drug candidates we may in-license; our ability to further develop sales and marketing capabilities and launch and commercialize new medicines, if approved; our ability to maintain and expand regulatory approvals for our medicines and drug candidates, if approved; the pricing and reimbursement of our medicines and drug candidates, if approved; the initiation, timing, progress and results of our preclinical studies and clinical trials and our research and development programs; our ability to advance our drug candidates into, and successfully complete, clinical trials and obtain regulatory approvals; our reliance on the success of our clinical stage drug candidates; our plans, expected milestones and the timing or likelihood of regulatory filings and approvals; the implementation of our business model, strategic plans for our business, medicines, drug candidates and technology; the scope of protection we (or our licensors) are able to establish and maintain for intellectual property rights covering our medicines, drug candidates and technology; our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary technology of third parties; costs associated with enforcing or defending against intellectual property infringement, misappropriation or violation, product liability and other claims; the regulatory environment and regulatory developments in the United States (“U.S.”), China, the United Kingdom (“UK”), Switzerland, the European Union (“EU…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Key highlights for the first quarter of 2024 are as follows:
Current wording
Key highlights for the second quarter of 2024 are as follows:
Previous wording
•Total revenues of $752 million in the first quarter, including product revenue of $747 million, an 82% increase from the prior-year period;
Current wording
•Generated total revenues of $929 million in the second quarter, an increase of 56% from the prior-year period;
Previous wording
The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023:
Previous wording
Total revenue increased to $751.7 million for the three months ended March 31, 2024, from $447.8 million for the three months ended March 31, 2023, due to an increase in sales of BRUKINSA, tislelizumab, as well as our in-licensed products from Amgen, partially offset by a decrease in collaboration revenue. Collaboration revenue decreased due to termination of the Novartis collaborations in the prior year.
Current wording
Total revenue increased to $929.2 million for the three months ended June 30, 2024, from $595.3 million for the three months ended June 30, 2023, due to an increase in sales of BRUKINSA, tislelizumab, and our in-licensed products from Amgen, partially offset by a decrease in collaboration revenue. Collaboration revenue decreased due to termination of the Novartis collaborations in the prior year.
Previous wording
Net product revenue increased 82.0% to $746.9 million for the three months ended March 31, 2024, compared to $410.3 million in the prior-year period, primarily due to continued increases in sales of BRUKINSA globally, driven by significant growth in the U.S. and Europe. In addition, product revenues in the first quarter of 2024 were positively impacted by sales of tislelizumab and in-licensed products from Amgen in China.
Current wording
Net product revenue increased 66.3% to $921.1 million for the three months ended June 30, 2024, compared to $553.7 million in the prior-year period, primarily due to continued increases in sales of BRUKINSA globally, driven by significant growth in the U.S. and Europe. In addition, product revenues in the second quarter of 2024 were positively impacted by sales of in-licensed products from Amgen in China and tislelizumab.
Previous wording
Global sales of BRUKINSA totaled $488.5 million in the first quarter, representing a 131.1% increase compared to the prior-year period; U.S. sales of BRUKINSA totaled $351.5 million in the first quarter, compared to $138.8 million in the prior-year period, representing growth of 153.3%, as BRUKINSA gained share in treatment-naïve (TN) chronic lymphocytic leukemia (CLL), and emerged as the BTKi class leader in new-patient share in relapsed or refractory (R/R) CLL. BRUKINSA sales in Europe totaled $66.8 million in the first quarter, compared to $19.5 million in the prior-year period, representing growth of 242.8%, driven by continued gains in market share and additional reimbursements including France, which implemented reimbursement for BRUKINSA within CLL, Waldenström’s macroglobulinemia (WM) and marginal zone lymphoma for the first time. BRUKINSA sales in China totaled $57.4 million, representing growth of 19.4%. BRUKINSA rest of world sales totaled $12.8 million in the first quarter, representing growth of 153.7% compared to the prior-year period.
Current wording
Global sales of BRUKINSA totaled $637.4 million in the second quarter, representing a 106.8% increase compared to the prior-year period; U.S. sales of BRUKINSA totaled $479.4 million in the second quarter, compared to $223.5 million in the prior-year period, representing growth of 114.4%, as BRUKINSA gained share in treatment-naïve (“TN”) CLL, and is now the BTKi class leader in new-patient share in CLL. In addition U.S. sales were also positively impacted by timing of customer order patterns of approximately $15.0 million. BRUKINSA sales in Europe totaled $81.4 million in the second quarter, compared to $26.3 million in the prior-year period, representing growth of 209.2%, driven by increased market share across all major markets, primarily in Germany, Italy, Spain, France and the UK. BRUKINSA sales in China totaled $63.6 million, representing growth of 31.2%. BRUKINSA rest of world sales totaled $13.0 million in the second quarter, representing growth of 31.0% compared to the prior-year period.
Previous wording
Collaboration revenue totaled $4.7 million for the three months ended March 31, 2024, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement. Collaboration revenue totaled $37.5 million for the three months ended March 31, 2023, of which $6.8 million was recognized from deferred revenue for R&D services performed during the three months ended March 31, 2023 under both the tislelizumab and ociperlimab collaborations, $26.2 million was recognized from deferred revenue for Novartis’ right to access ociperlimab over the option period and $4.4 million was recognized related to the sale of tislelizumab and ociperlimab clinical supply to Novartis (see Note 3 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q).
Current wording
Collaboration revenue totaled $8.0 million for the three months ended June 30, 2024, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement. Collaboration revenue totaled $41.5 million for the three months ended June 30, 2023, recognized from deferred revenue associated with the former Novartis tislelizumab and ociperlimab collaborations.
Previous wording
Cost of sales increased to $124.9 million for the three months ended March 31, 2024 from $81.8 million for the three months ended March 31, 2023, primarily due to increased product sales of BRUKINSA and tislelizumab, as well as sales of in-licensed products from Amgen in China.
Current wording
Cost of sales increased to $138.1 million for the three months ended June 30, 2024 from $96.0 million for the three months ended June 30, 2023, primarily due to increased product sales of BRUKINSA and tislelizumab, as well as sales of in-licensed products from Amgen in China.
Previous wording
Gross margin on global product sales increased to $622.0 million for the three months ended March 31, 2024, compared to $328.5 million in the prior-year period, primarily due to increased product sales in the current year period. Gross margin as a percentage of product sales increased to 83.3% for the three months ended March 31, 2024, from 80.1% in the comparable period of the prior year. The increase is primarily due to proportionally higher sales mix of global BRUKINSA compared to other products in the portfolio.
Current wording
Gross margin on global product sales increased to $783.0 million for the three months ended June 30, 2024, compared to $457.8 million in the prior-year period, primarily due to increased product sales in the current year period. Gross margin as a percentage of product sales increased to 85.0% for the three months ended June 30, 2024, from 82.7% in the comparable period of the prior year. The increase is primarily due to proportionally higher sales mix of global BRUKINSA compared to other products in the portfolio.
Previous wording
Research and development expense increased by $52.1 million, or 12.7%, to $460.6 million for the three months ended March 31, 2024 from $408.6 million for the three months ended March 31, 2023. The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended March 31, 2024 and 2023, respectively:
Current wording
Research and development expense increased by $31.7 million, or 7.5%, to $454.5 million for the three months ended June 30, 2024 from $422.8 million for the three months ended June 30, 2023. The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended June 30, 2024 and 2023, respectively:
Previous wording
1 Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended March 31, 2024 totaled $26.6 million, of which $13.5 million was recorded as R&D expense. The remaining $13.1 million was recorded as a reduction of the R&D cost share liability.
Current wording
Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended June 30, 2024 totaled $44.4 million, of which $22.5 million was recorded as R&D expense. The remaining $21.9 million was recorded as a reduction of the R&D cost share liability.
Previous wording
Selling, general and administrative expense increased by $98.9 million, or 30.1%, to $427.4 million for the three months ended March 31, 2024, from $328.5 million for the three months ended March 31, 2023. The increase was primarily attributable to investing in the expansion of our commercial activities to support our product launches, primarily BRUKINSA in the U.S. and Europe to drive continued revenue and margin expansion. Selling, general and administrative expenses as a percentage of product sales were 57.2% in the first quarter of 2024 compared to 80.1% in the prior year period. We expect selling and marketing expenses to increase in 2024 as product sales increase and we expect selling, general and administrative expenses as a percentage of revenue to improve gradually throughout 2024.
Current wording
Selling, general and administrative expense increased by $48.7 million, or 12.3%, to $443.7 million for the three months ended June 30, 2024, from $395.0 million for the three months ended June 30, 2023. The increase was primarily attributable to investing in the expansion of our commercial activities to support our product launches, primarily BRUKINSA in the U.S. and Europe to drive continued revenue and margin expansion. Selling, general and administrative expenses as a percentage of product sales were 48.2% in the second quarter of 2024 compared to 71.3% in the prior-year period. We expect selling and marketing expenses to increase in 2024 as product sales increase and we expect selling, general and administrative expenses as a percentage of revenue to decrease gradually throughout 2024.
Previous wording
Interest income, net increased by $0.1 million, or 0.9%, to $16.2 million of net interest income for the three months ended March 31, 2024, from $16.0 million of net interest income for three months ended March 31, 2023. The increase in interest income, net, was primarily attributable to increased interest income resulting from higher interest rates on our cash balance and a decrease in interest expense as a result of higher interest capitalized related to Hopewell construction in process.
Current wording
Interest income, net decreased by $1.8 million, or 12.2%, to $13.2 million for the three months ended June 30, 2024, from $15.1 million for three months ended June 30, 2023. The decrease in interest income, net, was primarily attributable to decreased interest income resulting from lower interest rates on our cash balance. Interest expense remained flat as the increase in interest expense resulting from a higher debt balance was offset by higher interest capitalized related to Hopewell construction in process.
Previous wording
Income tax expense was $7.7 million for the three months ended March 31, 2024 as compared to $11.5 million for the three months ended March 31, 2023. We are anticipating a lower annual effective tax rate in 2024 due to the forecasted jurisdictional mix of consolidated pre-tax earnings, which is expected to increase in jurisdictions where we have tax attributes to offset current tax expense. The income tax expense for the three months ended March 31, 2024 and 2023 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits and current China tax expense due to certain non-deductible expenses.
Current wording
Income tax expense was $14.5 million for the three months ended June 30, 2024 as compared to $13.7 million for the three months ended June 30, 2023. The income tax expense for the three months ended June 30, 2024 and 2023 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits, current Switzerland tax expense based on year to date earnings, and current China tax expense due to certain non-deductible expenses.
Previous wording
Sales of tislelizumab in China totaled $145.2 million in the first quarter, compared to $114.9 million in the prior-year period, representing a 26.4% increase. In the first quarter, new patient demand from broader reimbursement and hospital listings continued to drive increased market penetration and market share for tislelizumab.
Current wording
Sales of tislelizumab in China totaled $303.5 million in the six months ended June 30, 2024, compared to $264.3 million representing a 14.8% increase compared to the prior-year period. In the six months ended June 30, 2024, new patient demand from broader reimbursement and further expansion of our salesforce and hospital listings continued to drive increased market penetration and market share for tislelizumab.
Previous wording
The increase in external research and development expenses in the first quarter was primarily attributable to higher development milestone fees, partially offset by a decrease in Amgen co-development expense and external clinical trial costs as we continue to internalize clinical trials.
Current wording
The increase in external research and development expenses in the six months ended June 30, 2024 was primarily attributable to higher development milestone fees and increases in Amgen co-development expense, partially offset by lower external clinical trial costs as certain programs wind down and we continue efforts to internalize research and clinical trial activities.
Previous wording
Internal research and development expense increased $27.1 million, or 10.3%, to $289.3 million, and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities.
Current wording
Internal research and development expense increased $35.1 million, or 6.4%, to $585.0 million and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities.
Previous wording
The following table represents our cash, short-term investments, and debt balances as of March 31, 2024 and December 31, 2023:
Current wording
The following table represents our cash and debt balances as of June 30, 2024 and December 31, 2023:
Previous wording
With the exception of the periods in which we received upfront payments from out-licensing rights to tislelizumab to Novartis, and prior to that BMS, and the third quarter of 2023 where we recorded a large noncash gain from the BMS settlement and accelerated deferred revenue recognition from the Novartis terminations, we have incurred net losses and negative cash flows from operations since inception, resulting from the funding of our research and development programs and selling, general and administrative expenses to support the commercialization of our products and our global operations. We recognized a net loss of $251.2 million and $348.4 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $8.2 billion.
Current wording
With the exception of the periods in which we received upfront payments from out-licensing rights to tislelizumab to Novartis, and prior to that BMS, and the third quarter of 2023 where we recorded a large noncash gain from the BMS settlement and accelerated deferred revenue recognition from the Novartis terminations, we have incurred GAAP net losses and negative cash flows from operations since inception, resulting from the funding of our research and development programs and selling, general and administrative expenses to support the commercialization of our products and our global operations. We recognized a net loss of $120.4 million and $371.6 million for the three and six months ended June 30, 2024, respectively, and net losses of $381.1 million and $729.6 million for three and six months ended June 30, 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $8.3 billion.
Previous wording
To date, we have financed our operations principally through proceeds from public and private offerings of our securities, proceeds from debt, sales of marketable securities and proceeds from our collaborations, together with product sales since September 2017. Based on our current operating plan, we expect that our existing cash and cash equivalents as of March 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months after the date that the financial statements included in this report are issued. We have also financed our operations and investments with proceeds from debt incurred primarily from various banks both through our subsidiaries and BeiGene, Ltd. of $1.0 billion at March 31, 2024. The majority of those debt obligations, or approximately $827.0 million, owed by BeiGene, Ltd., have due dates within the next 12 months. We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations.
Current wording
To date, we have financed our operations principally through proceeds from public and private offerings of our common stock (including ADSs), proceeds from debt, and our collaborations, together with product sales since September 2017. Based on our current operating plan, we expect that our existing cash and cash equivalents as of June 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months after the date that the financial statements included in this report are issued. We have also financed our operations and investments with proceeds from debt incurred primarily from various banks both through our subsidiaries and BeiGene, Ltd. of $1.0 billion at June 30, 2024. The majority of those debt obligations, or approximately $851.7 million, owed by BeiGene, Ltd., have due dates within the next 12 months. We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations.
Previous wording
On December 15, 2021, we completed our initial public offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”). The shares offered in the STAR Offering were issued to and subscribed for by permitted investors in the People’s Republic of China (“PRC”) in Renminbi (“RMB Shares”). The public offering price of the RMB Shares was RMB192.60 per ordinary share, or $391.68 per ADS. In this offering, we sold 115,055,260 ordinary shares. Net proceeds after deducting underwriting commissions and offering expenses were $3.4 billion (RMB 21.7 billion). As required by the PRC securities laws, the net proceeds from the STAR Offering must be used in compliance with the planned uses as disclosed in the PRC prospectus as well as our proceeds management policy for the STAR Offering approved by our board of directors. As of March 31, 2024, the Company had cash remaining related to the STAR Offering proceeds of $1.0 billion.
Current wording
On December 15, 2021, we completed our initial public offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”). The shares offered in the STAR Offering were issued to and subscribed for by permitted investors in the People’s Republic of China (“PRC”) in Renminbi (“RMB Shares”). The public offering price of the RMB Shares was RMB 192.60 per ordinary share, or $391.68 per ADS. In this offering, we sold 115,055,260 ordinary shares. Net proceeds after deducting underwriting commissions and offering expenses were $3.4 billion (RMB 21.7 billion). As required by the PRC securities laws, the net proceeds from the STAR Offering must be used in compliance with the planned uses as disclosed in the PRC prospectus as well as our proceeds management policy for the STAR Offering approved by our board of directors. As of June 30, 2024, the Company had cash remaining related to the STAR Offering proceeds of $0.9 billion.
Previous wording
The following table provides information regarding our cash flows for the three months ended March 31, 2024 and 2023:
Current wording
The following table provides information regarding our cash flows for the six months ended June 30, 2024 and 2023:
Previous wording
Operating activities used $308.6 million of cash in the three months ended March 31, 2024, principally from our net loss of $251.2 million and an increase in our net operating assets and liabilities of $155.4 million, partially offset by non-cash charges of $97.9 million.
Current wording
Operating activities used $404.2 million of cash in the six months ended June 30, 2024, principally from our net loss of $371.6 million and an increase in our net operating assets and liabilities of $268.8 million, partially offset by non-cash charges of $236.2 million.
Previous wording
The increase in net operating assets and liabilities was primarily driven by increased working capital associated with our growth in product sales and compensation-related payments. The non-cash charges were primarily driven by share-based compensation expense, depreciation and amortization expense, offset by amortization of the research and development cost share liability.
Current wording
The increase in net operating assets and liabilities was primarily driven by increased working capital associated with our growth in product sales. The non-cash charges were primarily driven by share-based compensation expense, depreciation and amortization expense, offset by amortization of the research and development cost share liability.
Previous wording
Operating activities used $563.8 million of cash in the three months ended March 31, 2023, principally from our net loss of $348.4 million and an increase in our net operating assets and liabilities of $294.1 million, partially offset by non-cash charges of $78.7 million.
Current wording
Operating activities used $857.7 million of cash in the six months ended June 30, 2023, principally from our net loss of $729.6 million and an increase in our net operating assets and liabilities of $329.4 million, partially offset by non-cash charges of $201.3 million.
Previous wording
Investing activities used $209.8 million of cash in the three months ended March 31, 2024, consisting of capital expenditures of $156.6 million, purchase of IPR&D assets of $31.8 million, purchase of intangible assets of $4.7 million, $19.4 million in purchases of long-term investments and other investing activities, partially offset by sales and maturities of investment securities of $2.7 million.
Current wording
Investing activities used $320.9 million of cash in the six months ended June 30, 2024, consisting of capital expenditures of $266.5 million, purchase of IPR&D assets of $31.8 million, purchase of intangible assets of $4.7 million, $20.5 million in purchases of long-term investments and other investing activities, partially offset by sales and maturities of investment securities of $2.7 million.
Previous wording
Investing activities provided $241.1 million of cash in the three months ended March 31, 2023, consisting of sales and maturities of investment securities of $377.0 million, partially offset by capital expenditures of $125.6 million, $10.3 million in purchases of long-term investments and other investing activities.
Current wording
Investing activities provided $308.9 million of cash in the six months ended June 30, 2023, consisting of sales and maturities of investment securities of $567.5 million, partially offset by capital expenditures of $247.1 million, and $11.6 million in purchases of investment securities.
Previous wording
Financing activities provided $162.3 million of cash in the three months ended March 31, 2024, consisting primarily of $9.1 million of net proceeds from long-term loans, $142.0 million of proceeds from short-term loans and $14.8 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan, which were partially offset by $3.6 million in repayments of long-term loans. Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings is dependent on interest rates, credit spreads, bank lending capacity and other factors. We expect to repay approximately $827.0 million of loans in the next 12 months and expect to be able to re-finance those on a consistent basis with our historical experience, with the cost of those borrowings depending on prevailing interest rates and credit spreads.
Current wording
Financing activities provided $185.3 million of cash in the six months ended June 30, 2024, consisting primarily of $9.1 million of net proceeds from long-term loans, $324.4 million of proceeds from short-term loans and $20.4 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan, which were partially offset by $14.0 million in repayments of long-term loans and $157.5 million in repayments of short-term bank loans. Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings is dependent on interest rates, credit spreads, bank lending capacity and other factors. We expect to repay approximately $851.7 million of loans in the next 12 months and expect to be able to re-finance those on a consistent basis with our historical experience, with the cost of those borrowings depending on prevailing interest rates and credit spreads.
Previous wording
Financing activities used $19.9 million of cash in the three months ended March 31, 2023, consisting primarily of $1.5 million in repayment of long-term bank loans and $50.0 million in repayment of short-term bank loans, which were partially offset by $31.6 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan.
Current wording
Financing activities provided $146.2 million of cash in the six months ended June 30, 2023, consisting primarily of $15.8 million of net proceeds from long-term bank loans, $161.8 million of proceeds from short-term bank loans and $35.2 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan, which were partially offset by $66.6 million in repayment of short-term bank loans.
Previous wording
We have substantial operations in the PRC, which generate a significant amount of RMB-denominated cash from product sales and require a significant amount of RMB-denominated cash to pay our obligations. We hold a significant amount of RMB-denominated deposits at our China subsidiaries. Since the reporting currency of the Company is the U.S. dollar, periods of volatility in exchange rates may have a significant impact on our consolidated cash balances as they are translated into U.S. dollars. The impact of foreign currency deposits being translated into the U.S. dollar negatively impacted ending cash by $22.4 million in the three months ended March 31, 2024, compared to a positive impact of $11.3 million in the prior-year period.
Current wording
We have substantial operations in the PRC, which generate a significant amount of RMB-denominated cash from product sales and require a significant amount of RMB-denominated cash to pay our obligations. We hold a significant amount of RMB-denominated deposits at our China subsidiaries. Since the reporting currency of the Company is the U.S. dollar, periods of volatility in exchange rates may have a significant impact on our consolidated cash balances as they are translated into U.S. dollars. The impact of foreign currency deposits being translated into the U.S. dollar negatively impacted ending cash by $28.3 million in the six months ended June 30, 2024, compared to a negative impact of $50.9 million in the prior-year period.
Previous wording
As of March 31, 2024, non-cancellable purchase commitments amounted to $93.5 million, of which $35.4 million related to minimum purchase requirements for supply purchased from contract manufacturers and $58.1 million related to binding purchase obligations of inventory from Amgen. We do not have any minimum purchase requirements for inventory from Amgen.
Current wording
As of June 30, 2024, non-cancellable purchase commitments amounted to $120.4 million, of which $28.8 million related to minimum purchase requirements for supply purchased from contract manufacturers and $91.5 million related to binding purchase obligations of inventory from Amgen. We do not have any minimum purchase requirements for inventory from Amgen.
Previous wording
Total debt obligations coming due in the next twelve months is $827.0 million. Total long-term debt obligations are $199.0 million. See Note 10 in the Notes to the Financial Statements for further detail of our debt obligations.
Current wording
Total debt obligations coming due in the next twelve months is $851.7 million. Total long-term debt obligations are $185.3 million. See Note 10 in the Notes to the Financial Statements for further detail of our debt obligations.
Previous wording
Under the Amgen collaboration, we are responsible for co-funding global development costs for the licensed Amgen oncology pipeline assets up to a total cap of $1.25 billion. We are funding our portion of the co-development costs by contributing cash and development services. As of March 31, 2024, our remaining co-development funding commitment was $457.0 million.
Current wording
Under the Amgen collaboration, we are responsible for co-funding global development costs for the licensed Amgen oncology pipeline assets up to a total cap of $1.25 billion. We are funding our portion of the co-development costs by contributing cash and development services. As of June 30, 2024, our remaining co-development funding commitment was $412.6 million.
Previous wording
Funding commitment represents our committed capital related to two equity method investments. As of March 31, 2024, our remaining capital commitment was $8.9 million and is expected to be paid from time to time over the investment period.
Current wording
Funding commitment represents our committed capital related to two equity method investments. As of June 30, 2024, our remaining capital commitment was $8.2 million and is expected to be paid from time to time over the investment period.
Previous wording
We had capital commitments amounting to $61.6 million for the acquisition of property, plant and equipment as of March 31, 2024, which were mainly for our manufacturing and clinical R&D campus in Hopewell, New Jersey, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and a new building for Beijing Innerway Bio-tech Co., Ltd.
Current wording
We had capital commitments amounting to $62.6 million for the acquisition of property, plant and equipment as of June 30, 2024, related to various facilities across the globe, including the manufacturing and clinical R&D campus in Hopewell, New Jersey.
Previous wording
There have been no material changes to our critical accounting policies as of and for the three months ended March 31, 2024, as compared to those described in the section titled “Part I—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There have been no material changes to our critical accounting policies as of and for the three and six months ended June 30, 2024, as compared to those described in the section titled “Part I—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
For new accounting policies adopted during the three months ended March 31, 2024, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies—Significant accounting policies” in this Quarterly Report on Form 10-Q.
Current wording
For new accounting policies adopted during the three and six months ended June 30, 2024, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies—Significant accounting policies” in this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
The increase in external research and development expenses in the second quarter was primarily attributable to an increase in Amgen co-development expense related to timing of study costs and higher development milestone fees.
Current report — wording carried from elsewhere
Internal research and development expense increased modestly by $8.0 million, or 2.8%, to $295.7 million, and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend.
Current report — wording carried from elsewhere
The following table summarizes the components of revenue for the six months ended June 30, 2024 and 2023, respectively:
Current report — wording carried from elsewhere
Net product revenues consisted of the following:
Current report — wording carried from elsewhere
Collaboration revenue totaled $12.8 million for the six months ended June 30, 2024, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement. Collaboration revenue totaled $79.0 million for the six months ended June 30, 2023, recognized from deferred revenue associated with the former Novartis tislelizumab and ociperlimab collaborations.
Current report — wording carried from elsewhere
Gross margin on product sales increased to $1,405.0 million for the six months ended June 30, 2024, compared to $786.3 million in the prior-year period, primarily due to increased product revenue in the current year period. Gross margin as a percentage of product sales increased to 84.2% for the six months ended June 30, 2024, from 81.6% in the comparable period of the prior year. The increase is primarily due to a proportionally higher sales mix of global BRUKINSA compared to other products in the portfolio.
Current report — wording carried from elsewhere
Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the six months ended June 30, 2024 totaled $71.0 million, of which $36.0 million was recorded as R&D expense. The remaining $35.0 million was recorded as a reduction of the R&D cost share liability.
Current report — wording carried from elsewhere
Selling, general and administrative expense increased by $147.6 million, or 20.4%, to $871.2 million, for the six months ended June 30, 2024, from $723.5 million for the six months ended June 30, 2023. The increase was primarily attributable to investing in the expansion of our commercial activities to support our product launches, primarily BRUKINSA in the U.S. and Europe to drive continued revenue and margin expansion. Selling, general and administrative expenses as a percentage of product sales were 52.2% for the six months ended June 30, 2024 compared to 75.1% in the prior-year period. We expect selling and marketing expenses to increase in 2024 as product sales increase and we expect selling, general and administrative expenses as a percentage of revenue to decrease gradually throughout 2024.
Current report — wording carried from elsewhere
Income tax expense decreased to $22.2 million for the six months ended June 30, 2024, from $25.2 million for the six months ended June 30, 2023. The income tax expense for the six months ended June 30, 2024 and June 30, 2023 was primarily attributable to current U.S. tax expense determined after other special deductions and research and development tax credits, current Switzerland tax expense based on year to date earnings, and current China tax expense due to certain non-deductible expenses.
Current report — wording carried from elsewhere
The increase in net operating assets and liabilities was primarily driven by increased working capital associated with our growth in product sales. The non-cash charges were primarily the result of share-based compensation expense, depreciation and amortization expense, offset by amortization of the research and development cost share liability. Net loss for the three months ended June 30, 2023 includes $63.8 million of other losses due primarily to the strengthening of the U.S. dollar and the related revaluation of RMB-denominated deposits held by U.S. functional currency subsidiaries.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The increase in working capital was driven largely by the seasonality of receivables and compensation-related payments. The non-cash charges were primarily driven by share-based compensation expense, depreciation and amortization expense, offset by amortization of the research and development cost share liability.