BeiGene, Ltd. [BGNE] Filings

10-Q 1 bgne-20240630.htm 10-Q bgne-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________

FORM 10-Q

___________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37686

BEIGENE, LTD.

(Exact name of registrant as specified in its charter)


Cayman Islands			98-1209416
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

c/o Mourant Governance Services (Cayman) Limited
94 Solaris Avenue, Camana Bay
Grand Cayman
Cayman Islands			KY1-1108
(Address of principal executive offices)			(Zip Code)

+1 (345) 949-4123

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

American Depositary Shares, each representing 13 Ordinary Shares, par value $0.0001 per share

BGNE

The Nasdaq Global Select Market

Ordinary Shares, par value $0.0001 per share*

06160

The Stock Exchange of Hong Kong Limited

*Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited.

As of August 2, 2024, 1,379,529,263 ordinary shares, par value $0.0001 per share, were outstanding, of which 890,252,363 ordinary shares were held in the form of 68,480,951 American Depositary Shares, each representing 13 ordinary shares, and 115,055,260 were RMB shares which are ordinary shares issued to permitted investors in China and listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange in Renminbi.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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BeiGene, Ltd.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4.	Controls and Procedures	40

PART II.	OTHER INFORMATION	41

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	93

Item 3.	Defaults Upon Senior Securities	93

Item 4.	Mine Safety Disclosures	93

Item 5.	Other Information	93

Item 6.	Exhibits	93

SIGNATURES		96

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

(Unaudited)


		Three Months Ended		Six Months Ended
		June 30,		June 30,
	Note	2024	2023	2024	2023
		$	$	$	$
Revenues
Product revenue, net	11	921,146	553,745	1,668,064	964,036
Collaboration revenue	3	8,020	41,516	12,754	79,026
Total revenues		929,166	595,261	1,680,818	1,043,062
Cost of sales - product		138,132	95,990	263,067	177,779
Gross profit		791,034	499,271	1,417,751	865,283
Operating expenses
Research and development		454,466	422,764	915,104	831,348
Selling, general and administrative		443,729	395,034	871,156	723,533
Amortization of intangible assets		—	188	—	375
Total operating expenses		898,195	817,986	1,786,260	1,555,256
Loss from operations		(107,161)	(318,715)	(368,509)	(689,973)
Interest income, net		13,225	15,070	29,385	31,086
Other expense, net		(11,984)	(63,818)	(10,222)	(45,515)
Loss before income taxes		(105,920)	(367,463)	(349,346)	(704,402)
Income tax expense	8	14,485	13,674	22,209	25,166
Net loss		(120,405)	(381,137)	(371,555)	(729,568)




Net loss per share, basic and diluted	12	(0.09)	(0.28)	(0.27)	(0.54)

Weighted-average shares outstanding—basic and diluted		1,361,082,567	1,360,224,377	1,358,315,145	1,357,211,308



Net loss per American Depositary Share (“ADS”), basic and diluted	12	(1.15)	(3.64)	(3.56)	(6.99)

Weighted-average ADSs outstanding—basic and diluted		104,698,659	104,632,644	104,485,780	104,400,870

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands of U.S. Dollars (“$”))

(Unaudited)


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$
Net loss	(120,405)	(381,137)	(371,555)	(729,568)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(9,236)	(86,519)	(41,399)	(73,172)
Pension liability adjustments	406	—	406	—
Unrealized holding (loss) income, net	—	1,846	(35)	6,902
Comprehensive loss	(129,235)	(465,810)	(412,583)	(795,838)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BEIGENE, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)


		As of
		June 30,	December 31,
	Note	2024	2023
		$	$
		(unaudited)	(audited)
Assets
Current assets:
Cash and cash equivalents		2,592,655	3,171,800


Accounts receivable, net		529,449	358,027
Inventories, net	5	443,260	416,122
Prepaid expenses and other current assets	9	273,658	257,465
Total current assets		3,839,022	4,203,414

Property, plant and equipment, net	6	1,516,491	1,324,154
Operating lease right-of-use assets		103,633	95,207
Intangible assets, net	7	53,715	57,138

Other non-current assets	9	199,318	125,362
Total non-current assets		1,873,157	1,601,861
Total assets		5,712,179	5,805,275
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable		333,022	315,111
Accrued expenses and other payables	9	646,538	693,731
Tax payable	8	5,278	22,951
Operating lease liabilities, current portion		17,658	21,950
Research and development cost share liability, current portion	3	84,615	68,004
Short-term debt	10	851,657	688,366
Total current liabilities		1,938,768	1,810,113
Non-current liabilities:
Long-term bank loans	10	185,271	197,618
Operating lease liabilities, non-current portion		35,398	22,251
Deferred tax liabilities	8	15,942	16,494
Research and development cost share liability, non-current portion	3	119,012	170,662
Other long-term liabilities	9	51,533	50,810
Total non-current liabilities		407,156	457,835
Total liabilities		2,345,924	2,267,948
Commitments and contingencies	17
Shareholders’ equity:
Ordinary shares, $0.0001 par value per share; 9,500,000,000 shares authorized; 1,379,101,901 and 1,359,513,224 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		137	135
Additional paid-in capital		11,840,197	11,598,688
Accumulated other comprehensive loss	14	(140,474)	(99,446)
Accumulated deficit		(8,333,605)	(7,962,050)
Total shareholders’ equity		3,366,255	3,537,327


Total liabilities and shareholders’ equity		5,712,179	5,805,275

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of U.S. Dollars (“$”))

(Unaudited)


		Six Months Ended June 30,
	Note	2024	2023
		$	$
Operating activities:
Net loss		(371,555)	(729,568)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		50,224	42,346
Share-based compensation expenses	13	219,304	178,693


Gain on deconsolidation of a subsidiary		(3,735)	—
Amortization of research and development cost share liability	3	(35,039)	(22,669)



Other items, net		5,413	2,930
Changes in operating assets and liabilities:
Accounts receivable		(173,896)	(131,923)
Inventories		(35,949)	(53,598)
Other assets		(32,233)	(30,627)
Accounts payable		2,192	(32,678)
Accrued expenses and other payables		(28,256)	(8,082)

Deferred revenue		216	(72,577)
Other liabilities		(846)	88

Net cash used in operating activities		(404,160)	(857,665)
Investing activities:
Purchases of property, plant and equipment		(266,528)	(247,055)
Purchase of intangible asset		(4,674)	—


Proceeds from sale or maturity of investments		2,655	567,500
Purchase of in-process research and development		(31,800)	—
Other investing activities		(20,516)	(11,582)
Net cash (used in) provided by investing activities		(320,863)	308,863
Financing activities:



Proceeds from long-term loan	10	9,053	15,771
Repayment of long-term loan	10	(14,020)	—
Proceeds from short-term loans	10	324,412	161,846
Repayment of short-term loans	10	(157,490)	(66,574)

Proceeds from option exercises and employee share purchase plan		20,355	35,169
Other financing activities		3,000	—
Net cash provided by financing activities		185,310	146,212
Effect of foreign exchange rate changes, net		(28,340)	(50,873)
Net decrease in cash, cash equivalents, and restricted cash		(568,053)	(453,463)
Cash, cash equivalents, and restricted cash at beginning of period		3,185,984	3,875,037
Cash, cash equivalents, and restricted cash at end of period		2,617,931	3,421,574
Supplemental cash flow information:
Cash and cash equivalents		2,592,655	3,410,368
Short-term restricted cash		23,155	9,693
Long-term restricted cash		2,121	1,513
Income taxes paid		45,636	32,529
Interest expense paid		24,148	10,015
Supplemental non-cash information:
Capital expenditures included in accounts payable and accrued expenses		115,564	95,404
Increase in equity investment from deconsolidation of a subsidiary		40,798	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares)

(Unaudited)



	Ordinary Shares		Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
	Shares	Amount
		$		$	$	$	$
Balance at December 31, 2023	1,359,513,224	135		11,598,688	(99,446)	(7,962,050)	3,537,327

Use of shares reserved for share option exercises	(3,634,952)	—		—	—	—	—
Exercise of options, ESPP and release of RSUs	3,646,097	1		15,662	—	—	15,663
Share-based compensation	—	—		88,667	—	—	88,667
Deconsolidation of a subsidiary	—	—		2,052	—	—	2,052
Other comprehensive loss	—	—		—	(32,198)	—	(32,198)
Net loss	—	—		—	—	(251,150)	(251,150)
Balance at March 31, 2024	1,359,524,369	136		11,705,069	(131,644)	(8,213,200)	3,360,361
Issuance of shares reserved for share option exercises	2,418,936	—		—	—	—	—
Exercise of options, ESPP and release of RSUs	17,158,596	1		4,491	—	—	4,492

Share-based compensation	—	—		130,637	—	—	130,637
Other comprehensive loss	—	—		—	(8,830)	—	(8,830)
Net loss	—	—		—	—	(120,405)	(120,405)
Balance at June 30, 2024	1,379,101,901	137		11,840,197	(140,474)	(8,333,605)	3,366,255









Balance at December 31, 2022	1,356,140,180	135		11,540,979	(77,417)	(7,080,342)	4,383,355
Use of shares reserved for share option exercises	(98,774)	—		—	—	—	—
Exercise of options, ESPP and release of RSUs	6,610,695	1		28,656	—	—	28,657
Share-based compensation	—	—		75,322	—	—	75,322
Other comprehensive income	—	—		—	18,403	—	18,403
Net loss	—	—		—	—	(348,431)	(348,431)
Balance at March 31, 2023	1,362,652,101	136		11,644,957	(59,014)	(7,428,773)	4,157,306
Issuance of shares reserved for share option exercises	220,116	—		—	—	—	—
Exercise of options, ESPP and release of RSUs	13,379,119	1		3,691	—	—	3,692
Share-based compensation	—	—		103,371	—	—	103,371
Other comprehensive loss	—	—		—	(84,673)	—	(84,673)
Net loss	—	—		—	—	(381,137)	(381,137)
Balance at June 30, 2023	1,376,251,336	137		11,752,019	(143,687)	(7,809,910)	3,798,559

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BEIGENE, LTD.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data)

(Unaudited)

1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies

Description of business

BeiGene, Ltd. (the “Company”, “BeiGene”, “it”, “its”) is a global oncology company discovering and developing innovative treatments that are more accessible and affordable to cancer patients worldwide.

The Company currently has three approved medicines that were internally discovered and developed, including BRUKINSA® (zanubrutinib), a small molecule inhibitor of Bruton’s Tyrosine Kinase (“BTK”) for the treatment of various blood cancers; TEVIMBRA® (tislelizumab), an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers; and PARTRUVIX® (pamiparib), a selective small molecule inhibitor of PARP1 and PARP2. The Company markets BRUKINSA in the United States (“U.S.”), the People’s Republic of China (“China” or the “PRC”), the European Union (“EU”), the United Kingdom (“UK”), Canada, Australia, and additional international markets; TEVIMBRA (tislelizumab) in the U.S., EU and China; and PARTRUVIX in China. By leveraging its strong commercial capabilities, the Company has in-licensed the rights to distribute additional approved medicines for the China market. Supported by its global clinical development and commercial capabilities, the Company has entered into collaborations with world-leading biopharmaceutical companies such as Amgen Inc. (“Amgen”) and Beijing Novartis Pharma Co., Ltd. (“Novartis”) to develop and commercialize innovative medicines.

The Company is committed to advancing best- and first-in-class clinical candidates internally or with like-minded partners to develop impactful and affordable medicines for patients across the globe. Recognizing the importance of clinical trial activities in its industry and the challenges associated with outsourcing to third-party contract research organizations (“CROs”), the Company has built a fully dedicated 3,000+ person clinical team that is largely CRO free, the majority of which are in the Americas, Europe, Australia, Japan and Korea.

Basis of presentation and consolidation

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and the condensed consolidated statements of shareholders’ equity for the three and six months ended June 30, 2024 and 2023, and the related footnote disclosures are unaudited. The accompanying unaudited interim condensed financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including guidance with respect to interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all normal recurring adjustments, necessary to present a fair statement of the results for the interim periods presented. Results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.

The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

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Use of estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, identifying separate accounting units and determining the standalone selling price of each performance obligation in the Company’s revenue arrangements, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions, valuation of inventory, estimating the allowance for credit losses, determining defined benefit pension plan obligations, measurement of right-of-use assets and lease liabilities and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities and reported amounts of revenues and expenses. Actual results could differ from these estimates.

Recent accounting pronouncements

New accounting standards which have not yet been adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Early adoption is permitted. This guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact on its financial statements of adopting this guidance.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires that public entities on an annual basis, (1) in the rate reconciliation, disclose specific categories and provide additional information for reconciling items that meet a quantitative threshold; (2) about income taxes paid, disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and by individual jurisdiction in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received); and (3) disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) disaggregated by federal, state, and foreign. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. This guidance should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact on its financial statements of adopting this guidance.

Significant accounting policies

For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited interim condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2023.

There have been no material changes to the Company’s significant accounting policies as of and for the six months ended June 30, 2024, as compared to the significant accounting policies described in the Annual Report.

2. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

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The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and considers an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

The following tables present the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories as of June 30, 2024 and December 31, 2023:


	Quoted Price in Active Market for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
As of June 30, 2024	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Cash equivalents
Money market funds	897,906	—	—



Prepaid expenses and other current assets:
Convertible debt instrument	—	—	4,968
Other non-current assets (Note 4):
Equity securities with readily determinable fair values	1,440	115	—
Convertible debt instrument	—	—	4,773
Total	899,346	115	9,741


	Quoted Price in Active Market for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
As of December 31, 2023	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Cash equivalents

Money market funds	1,052,149	—	—
Time deposits	42,852	—	—


Prepaid expenses and other current assets:
U.S. Treasury securities	2,600	—	—
Convertible debt instrument	—	—	4,668
Other non-current assets (Note 4):
Equity securities with readily determinable fair values	3,046	542	—
Convertible debt instrument	—	—	4,215
Total	1,100,647	542	8,883

The Company’s cash equivalents are highly liquid investments with original maturities of 3 months or less. The Company’s investments in available-for-sale debt securities include U.S. Treasury securities. The Company determines the fair value of cash equivalents and available-for-sale debt securities using a market approach based on quoted prices in active markets.

The Company’s equity securities carried at fair value consist of holdings in common stock and warrants to purchase additional shares of common stock of Leap Therapeutics, Inc. (“Leap”), a publicly-traded biotechnology company. The common stock investment is measured and carried at fair value and classified as a Level 1 investment. The warrants to purchase additional shares of common stock are measured using the Black-Scholes option-pricing valuation model and classified as a Level 2 investment. Refer to Note 4, Restricted Cash and Investments for details of the determination of the carrying amount of private equity investments without readily determinable fair values and equity method investments.

The Company holds convertible notes issued by private biotech companies. The Company elected the fair value option method of accounting for the convertible notes. Accordingly, the convertible notes are remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value option recorded in other expense, net.

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As of June 30, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and short-term debt approximated their carrying values due to their short-term nature. Long-term bank loans approximate their fair value due to the fact that the related interest rates approximate the rates currently offered by financial institutions for similar debt instrument of comparable maturities.

3. Collaborative and Licensing Arrangements

The Company has entered into collaborative arrangements for the research and development, manufacture and/or commercialization of medicines and drug candidates. To date, these collaborative arrangements have included out-licenses of and options to out-license internally developed products and drug candidates to other parties, in-licenses of products and drug candidates from other parties, and profit- and cost-sharing arrangements. These arrangements may include non-refundable upfront payments, contingent obligations for potential development, regulatory and commercial performance milestone payments, cost-sharing and reimbursement arrangements, royalty payments, and profit sharing. For detailed descriptions of each arrangement, see the Company’s Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission on February 26, 2024.

Out-Licensing Arrangements

For the three and six months ended June 30, 2024, the Company’s collaboration revenue consisted primarily of revenue generated under the Novartis broad markets agreement. For the three and six months ended June 30, 2023, the Company’s collaboration revenue primarily consisted of the recognition of previously deferred revenue from its former collaboration agreements with Novartis for tislelizumab and ociperlimab.

The following table summarizes total collaboration revenue recognized for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
Revenue from Collaborators	$	$	$	$

Research and development service revenue	—	13,563	—	20,380
Right to access intellectual property revenue	—	26,248	—	52,497

Other	8,020	1,705	12,754	6,149
Total	8,020	41,516	12,754	79,026

Novartis

Tislelizumab Collaboration and License

In September 2023, the Company and Novartis agreed to mutually terminate the tislelizumab collaboration and license agreement. Pursuant to the termination agreement, the Company regained full, global rights to develop, manufacture and commercialize tislelizumab with no royalty payments due to Novartis. Novartis may continue its ongoing clinical trials and has the ability to conduct future combination trials with tislelizumab subject to BeiGene’s approval. BeiGene agreed to provide Novartis with ongoing clinical supply of tislelizumab to support its clinical trials. Pursuant to the termination agreement, Novartis agreed to provide transition services to the Company to enable key aspects of the tislelizumab development and commercialization plan to proceed without disruption, including manufacturing, regulatory, safety and clinical support. Upon termination of the agreement in September 2023, there were no further performance obligations, and the remaining deferred revenue balance associated with the tislelizumab R&D services was recognized in full.

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No research and development service collaboration revenue was recognized in connection with the tislelizumab collaboration and license agreement during the three and six months ended June 30, 2024 due to termination of the agreement in 2023. The following table summarizes revenue recognized related to the sale of tislelizumab clinical supply to Novartis for the three and six months ended June 30, 2024 and research and development service revenue recognized for the three and six months ended June 30, 2023:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$

Research and development service revenue	—	11,770	—	16,796


Other (1)	2,113	1,344	2,113	5,013
Total	2,113	13,114	2,113	21,809

(1) Represents revenue recognized on final shipment of tislelizumab clinical supply to Novartis in conjunction with the former collaboration.

Ociperlimab Option, Collaboration and License Agreement and China Broad Market Development Agreement

In July 2023, the Company and Novartis mutually agreed to terminate the ociperlimab option, collaboration and license agreement. Pursuant to the termination agreement, the Company regained full, global rights to develop, manufacture and commercialize ociperlimab. Upon termination the Company had no further performance obligations under the collaboration, and all remaining deferred revenue balances were recognized in full. The China broad markets agreement remains in place.

The following table summarizes collaboration revenue recognized in connection with the China broad markets agreement for the three and six months ended June 30, 2024 and the terminated ociperlimab option, collaboration and license agreement for the three and six months ended June 30, 2023:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$

Research and development service revenue	—	1,792	—	3,583
Right to access intellectual property revenue	—	26,248	—	52,497

China broad markets agreement	4,154	1,861	8,501	2,636
Total	4,154	29,901	8,501	58,716

In-Licensing Arrangements - Commercial

Amgen

During the three and six months ended June 30, 2024 and 2023, the Company recorded the following amounts related to its collaboration arrangement with Amgen. For a detailed description of the arrangement and related rights and obligation, see the Company’s Form 10-K for the year ended December 31, 2023 filed on February 26, 2024.

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Amounts recorded related to the Company’s portion of the co-development funding on the pipeline assets for the three and six months ended June 30, 2024 and 2023 were as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$
Research and development expense	22,482	5,457	35,966	23,274
Amortization of research and development cost share liability	21,903	5,271	35,039	22,669
Total amount due to Amgen for BeiGene’s portion of the development funding	44,385	10,728	71,005	45,943

				As of
				June 30, 2024
				$
Remaining portion of development funding cap				412,647

As of June 30, 2024 and December 31, 2023, the research and development cost share liability recorded in the Company’s balance sheet was as follows:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Research and development cost share liability, current portion	84,615	68,004
Research and development cost share liability, non-current portion	119,012	170,662
Total research and development cost share liability	203,627	238,666

The total reimbursement paid under the commercial profit-sharing agreement for product sales is classified in the income statement for the three and six months ended June 30, 2024 and 2023 as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$
Cost of sales - product	9,590	4,011	18,159	1,184
Research and development	(439)	(1,769)	(1,144)	1,311
Selling, general and administrative	(21,100)	(17,552)	(39,253)	(29,388)
Total	(11,949)	(15,310)	(22,238)	(26,893)

The Company purchases commercial inventory from Amgen to distribute in China. Inventory purchases amounted to $47,653 and $109,879 during the three and six months ended June 30, 2024, respectively, and $20,146 and $39,277 during the three and six months ended June 30, 2023, respectively. Net amounts payable to Amgen was $66,824 and $55,474 as of June 30, 2024 and December 31, 2023, respectively.

In-Licensing Arrangements - Development

The Company has in-licensed the rights to develop, manufacture and, if approved, commercialize multiple development stage drug candidates globally or in specific territories. These arrangements typically include non-refundable upfront payments, contingent obligations for potential development, regulatory and commercial performance milestone payments, cost-sharing arrangements, royalty payments, and profit sharing.

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Upfront and milestone payments incurred under these arrangements for the three and six months ended June 30, 2024 and 2023 are set forth below. All upfront and development milestones were expensed to research and development expense.


		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2024	2023	2024	2023
Payments due to collaboration partners	Classification	$	$	$	$
Upfront payments	Research and development expense	—	—	27	—
Development milestones incurred	Research and development expense	11,500	—	46,500	—

Total		11,500	—	46,527	—

4. Restricted Cash and Investments

Restricted Cash

The Company’s restricted cash primarily consists of RMB-denominated cash deposits held in designated bank accounts for collateral for letters of credit. The Company classifies restricted cash as current or non-current based on the term of the restriction. Restricted cash as of June 30, 2024 and December 31, 2023 was as follows:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Short-term restricted cash	23,155	11,473
Long-term restricted cash	2,121	2,711
Total	25,276	14,184

In addition to the restricted cash balances above, the Company is required by the PRC securities law to use the proceeds from its offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”) in strict compliance with the planned uses as disclosed in the PRC prospectus as well as those disclosed in the Company’s proceeds management policy approved by the board of directors. As of June 30, 2024, the Company had cash remaining related to the STAR Offering proceeds of $856,722.

Investments in Equity Securities

The following table summarizes the Company’s investments in equity securities:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Equity securities with readily determinable fair values (1)
Fair value of Leap common stock	1,440	3,046
Fair value of Leap warrants	115	542
Equity securities without readily determinable fair values
Pi Health, Inc. (2)	40,798	—
Other	54,865	55,860
Equity-method investments	37,780	25,981
Total	134,998	85,429

(1) Represents common stock and warrants to purchase additional shares of common stock of Leap Therapeutics, Inc. (“Leap”). The Company measures the investment in the common stock and warrants at fair value, with changes in fair value recorded to other expense, net.

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(2) In the first quarter of 2024, the Company divested the net assets comprising substantially all of its Pi Health business with a carrying value of $38,063. The consideration received for the divestiture consisted of preferred stock in a newly formed entity, Pi Health, Inc., with a fair value of $40,798 and cash consideration of $1,000. The transaction resulted in a pre-tax gain of $3,735 recorded within other expense, net during the six months ended June 30, 2024. The Company will account for its investment prospectively as a private equity security without a readily determinable fair value and the divestiture is not treated as a discontinued operation in the Statement of Operations and therefore the historical results of operations of the Pi Health business will remain in the Company’s continuing operations.

The following table summarizes unrealized (losses) gains related to investments in equity securities recorded in other expense, net for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$

Equity securities with readily determinable fair values	(621)	470	(2,033)	(636)
Equity securities without readily determinable fair values	—	—	(797)	1,081
Equity-method investments	(4,017)	(2,480)	(4,873)	(2,624)

5. Inventories, Net

The Company’s inventories, net consisted of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Raw materials	143,655	148,772
Work in process	59,499	39,098
Finished goods	240,106	228,252
Total inventories, net	443,260	416,122

6. Property, Plant and Equipment, Net

Property, plant and equipment, net are recorded at cost and consisted of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Land	65,485	65,485
Building	304,854	231,656
Manufacturing equipment	227,146	186,856
Laboratory equipment	216,673	205,349
Leasehold improvement	60,382	60,124
Software, electronics and office equipment	67,649	83,281
Property, plant and equipment, at cost	942,189	832,751
Less: accumulated depreciation	(289,114)	(249,212)
Construction in progress	863,416	740,615
Property, plant and equipment, net	1,516,491	1,324,154

The Company has made a significant investment in its newly opened manufacturing and R&D center in Hopewell, New Jersey. As of June 30, 2024, the Company had land and construction in progress of $677,126 related to the Hopewell facility, the majority of which will be put into service in the second half of 2024.

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In March 2024, the Company acquired a land use right and the facility currently being constructed on the land for $73,373. The Company plans to complete the construction of the facility and build a research and development center on the land. Based on the relative fair values of the land use right and construction in progress, $28,699 of the total purchase price was allocated to the land use right and $44,674 was allocated to the construction in progress. In May 2024, the Company acquired additional construction in progress in connection with the properties for $22,637. As of June 30, 2024, title of the land use right was being transitioned to the Company. As such, the purchase price allocated to the land use right was recorded as a long-term prepaid as of June 30, 2024 and will be transferred to operating lease right-of-use asset upon the closing of the transaction.

Depreciation expense was $23,754 and $47,864 for the three and six months ended June 30, 2024, respectively, and $21,307 and $40,332 for the three and six months ended June 30, 2023, respectively.

7. Intangible Assets

Intangible assets as of June 30, 2024 and December 31, 2023 are summarized as follows:


	As of
	June 30, 2024			December 31, 2023
	Gross			Gross
	carrying	Accumulated	Intangible	carrying	Accumulated	Intangible
	amount	amortization	assets, net	amount	amortization	assets, net
	$	$	$	$	$	$
Finite-lived intangible assets:
Developed products	63,098	(10,054)	53,044	64,274	(7,807)	56,467
Other	8,987	(8,316)	671	8,987	(8,316)	671
Total finite-lived intangible assets	72,085	(18,370)	53,715	73,261	(16,123)	57,138

Developed products represent post-approval milestone payments under license and commercialization agreements. The Company is amortizing the developed products over the remainder of the respective product patent or the term of the commercialization agreements.

Amortization expense for developed products is included in cost of sales - product in the accompanying consolidated statements of operations. Amortization expense for other intangible assets is included in operating expenses in the accompanying consolidated statements of operations.

The weighted-average life for each finite-lived intangible assets is approximately 12 years. Amortization expense was as follows:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2024	2023	2024	2023
	$	$	$	$
Amortization expense - Cost of sales - product	1,177	840	2,360	1,639
Amortization expense - Operating expense	—	188	—	375
Total	1,177	1,028	2,360	2,014

Estimated amortization expense for each of the five succeeding years and thereafter, as of June 30, 2024 is as follows:


Year Ending December 31,	Cost of Sales - Product	Operating Expenses	Total
	$	$	$
2024 (remainder of year)	2,348	67	2,415
2025	4,696	67	4,763
2026	4,696	67	4,763
2027	4,696	67	4,763
2028	4,696	67	4,763
2029 and thereafter	31,912	336	32,248
Total	53,044	671	53,715

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8. Income Taxes

Income tax expense was $14,485 and $22,209 for the three and six months ended June 30, 2024, respectively, and $13,674 and $25,166 for the three and six months ended June 30, 2023, respectively. The income tax expense for the three and six 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.

On a quarterly basis, the Company evaluates the realizability of deferred tax assets by jurisdiction and assesses the need for a valuation allowance. In assessing the realizability of deferred tax assets, the Company considers historical profitability, evaluation of scheduled reversals of deferred tax liabilities, projected future taxable income and tax-planning strategies. Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, as of June 30, 2024, the Company will maintain a full valuation allowance against its net deferred tax assets.

As of June 30, 2024, the Company had gross unrecognized tax benefits of $15,804. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months. The Company’s reserve for uncertain tax positions increased by $880 and $1,540 in the three and six months ended June 30, 2024 primarily due to U.S. federal and state tax credits and incentives.

9. Supplemental Balance Sheet Information

Prepaid expenses and other current assets consist of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Prepaid research and development costs	68,234	60,476
Prepaid manufacturing cost	32,986	42,066
Prepaid taxes	32,193	37,320
Other receivables	58,776	37,859
Short-term restricted cash	23,155	11,473
Prepaid insurance	10,158	8,872
Other current assets	48,156	59,399
Total	273,658	257,465

Other non-current assets consist of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$

Prepayment of property and equipment (1)	34,335	4,144
Prepaid supply cost	12,487	18,122
Prepaid VAT	2,602	2,546
Rental deposits and other	8,002	8,195
Long-term restricted cash	2,121	2,711
Long-term investments (Note 4)	139,771	89,644
Total	199,318	125,362

(1) Includes payment for acquired land use right in Shanghai, China that was in the process of being transitioned to the Company as of June 30, 2024 (See Note 6).

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Accrued expenses and other payables consist of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Compensation related	167,960	217,803
External research and development activities related	133,412	162,969
Commercial activities	70,641	87,572
Individual income tax and other taxes	48,466	30,083
Sales rebates and returns related	173,263	139,936
Other	52,796	55,368
Total	646,538	693,731

Other long-term liabilities consist of the following:


	As of
	June 30,	December 31,
	2024	2023
	$	$
Deferred government grant income	32,021	34,204
Pension liability	14,639	14,995
Asset retirement obligation	1,101	1,127
Other	3,772	484
Total	51,533	50,810

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10. Debt

The following table summarizes the Company’s short-term and long-term debt obligations as of June 30, 2024 and December 31, 2023:


Lender	Line of Credit	Term	Maturity Date	Interest Rate	As of
					June 30, 2024		December 31, 2023
					$	RMB	$	RMB
China Construction Bank	RMB580,000	9-year	April 4, 2027	(1)	15,136	110,000	14,089	100,000
China Merchants Bank	RMB350,000	9-year	January 20, 2029	(2)	8,649	62,857	8,856	62,857
China Merchants Bank	RMB378,000	9-year	November 8, 2029	(3)	6,848	49,765	5,636	40,000
China Merchants Bank	$380,000	1-year	(4)		380,000	2,761,628	300,000	2,129,321
China Minsheng Bank	$150,000

BeiGene, Ltd. [BGNE] Filings
BeiGene, Ltd. [BEIGF] Filings
10-Q	[2024-08-07]
10-Q	[2024-05-08]
10-K	[2024-02-26]
10-Q	[2023-11-09]
10-Q	[2023-08-02]
10-Q	[2023-05-04]
10-K	[2023-02-27]
10-Q	[2022-11-09]
10-Q	[2022-08-08]
10-Q	[2022-05-09]
10-K	[2022-02-28]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-11]
10-K	[2020-03-02]
10-Q	[2019-11-12]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-28]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-09]
10-K	[2018-02-28]
10-Q	[2017-11-13]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-03-22]
S-1	[2016-11-10]
10-Q	[2016-11-10]
10-Q	[2016-08-10]
10-Q	[2016-05-12]
10-K	[2016-03-30]
S-1	[2015-10-16]

BeiGene, Ltd. [BGNE] Filings

BeiGene, Ltd. [BEIGF] Filings