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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, 2022
OR
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
bgne-20220630_g1.jpg
BEIGENE, LTD.
(Exact name of registrant as specified in its charter)

Cayman Islands98-1209416
(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 IslandsKY1-1108
(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 classTrading Symbol(s)Name of each exchange on which registered
American Depositary Shares, each representing 13 Ordinary Shares, par value $0.0001 per shareBGNEThe NASDAQ Global Select Market
Ordinary Shares, par value $0.0001 per share*06160The 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 (HKEX).
As of July 31, 2022, 1,349,639,439 ordinary shares, par value $0.0001 per share, were outstanding, of which 949,028,496 ordinary shares were held in the form of 73,002,192 American Depositary Shares, each representing 13 ordinary shares, and 115,055,260 were RMB shares.
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  


BeiGene, Ltd.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS

2

Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our American Depositary Shares ("ADSs") listed on Nasdaq, our ordinary shares listed on The Stock Exchange of Hong Kong Limited ("HKEX"), and our ordinary shares issued to permitted investors in China and listed and traded on the Science and Technology Innovation Board ("STAR") of the Shanghai Stock Exchange ("SSE") in Renminbi ("RMB Shares") speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, are summarized in “Part II – Item 1A – Risk Factors” and should be carefully considered, together with other information in this Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), before making an investment decision regarding our ADSs, ordinary shares or RMB Shares.
Our medicines may fail to achieve and maintain the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success.
We have limited experience in launching and marketing our internally developed and in-licensed medicines. If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our medicines, we may not be able to generate substantial product sales revenue.
If we are not able to continue to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize our medicines and drug candidates, and our ability to generate revenue will be materially impaired.
We face substantial competition, which may result in others discovering, developing, or commercializing competing medicines before or more successfully than we do.
We have limited manufacturing capability and must rely on third-party manufacturers to manufacture some of our commercial products and clinical supplies, and if they fail to meet their obligations, the development and commercialization of our medicines and drug candidates could be adversely affected.
We depend substantially on the success of the clinical development of our medicines and drug candidates. If we are unable to successfully complete clinical development, obtain regulatory approvals and commercialize our medicines and drug candidates, or experience significant delays in doing so, our business will be materially harmed.
Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.
If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.
All material aspects of the research, development, manufacturing and commercialization of pharmaceutical products are heavily regulated, and we may face difficulties in complying with or be unable to comply with such regulations, which could have a material adverse effect on our business.
The approval processes of regulatory authorities in the United States, China, Europe and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.
Even if we are able to commercialize our medicines and any approved drug candidates, the medicines may become subject to unfavorable pricing regulations or third-party reimbursement practices or healthcare reform initiatives, which could harm our business.
We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future and may not become profitable.
We have limited experience in obtaining regulatory approvals and commercializing pharmaceutical products, which may make it difficult to evaluate our current business and predict our future performance.
We may need to obtain additional financing to fund our operations, and if we are unable to obtain such financing, we may be unable to complete the development of our drug candidates or achieve profitability.
3

If we are unable to obtain and maintain patent protection for our medicines and drug candidates through intellectual property rights, or if the scope of such intellectual property rights is not sufficiently broad, third parties may compete against us.
We rely on third parties to manufacture some of our commercial and clinical drug supplies. Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.
We have entered into licensing and collaboration arrangements and may enter into additional collaborations, licensing arrangements, or strategic alliances in the future, and we may not realize the benefits of such arrangements.
We have significantly increased and expect to continue to increase our research, development, manufacturing, and commercial capabilities, and we may experience difficulties in managing our growth.
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
Our business is subject to complex and evolving industry-specific laws and regulations regarding the collection and transfer of personal data. These laws and regulations can be complex and stringent, and many are subject to change and uncertain interpretation, which could result in claims, changes to our data and other business practices, significant penalties, increased cost of operations, or otherwise adversely impact our business.
We manufacture some of our medicines and intend to manufacture some of our drug candidates, if approved. Delays in completing and receiving regulatory approvals for our manufacturing facilities, or damage to, destruction of or interruption of production at such facilities, could delay our development plans or commercialization efforts.
Changes in the political and economic policies of the PRC government or in relations between China and the United States or other governments may materially and adversely affect our business, financial condition, and results of operations and may result in our inability to sustain our growth and expansion strategies.
The PRC government has significant oversight and discretion over the conduct of the business operations of our PRC subsidiaries or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, and may intervene with or influence our operations, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless, as the government deems appropriate to further regulatory, political and societal goals.
The audit reports included in our Annual Report on Form 10-K filed with the SEC have historically been prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board (the "PCAOB"), and as such, investors have previously been deprived of the benefits of such inspections.
Our ADSs may be delisted and our ADSs and ordinary shares prohibited from trading in the over-the-counter market under the Holding Foreign Companies Accountable Act, or the HFCAA. On December 16, 2021, PCAOB issued the HFCAA Determination Report, according to which our previous auditor is subject to the determinations that the PCAOB is unable to inspect or investigate it completely. Under current law, delisting and prohibition from over-the-counter trading in the U.S. could take place in 2024. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.
The trading prices of our ordinary shares, ADSs and/or RMB Shares can be volatile, which could result in substantial losses to you.
4

PART I.     FINANCIAL INFORMATION
Item 1.     Financial Statements
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, 
 Note20222021
  $$
  (unaudited)(audited)
Assets   
Current assets:   
Cash and cash equivalents 4,531,137 4,375,678 
Short-term restricted cash4333 328 
Short-term investments41,172,554 2,241,962 
Accounts receivable, net9172,259 483,113 
Inventories5262,210 242,626 
Prepaid expenses and other current assets9207,383 270,173 
Total current assets 6,345,876 7,613,880 
Long-term restricted cash43,939 6,881 
Property, plant and equipment, net6633,100 587,605 
Operating lease right-of-use assets117,583 117,431 
Intangible assets, net743,325 46,679 
Deferred tax assets8103,429 110,424 
Other non-current assets9130,955 163,049 
Total non-current assets 1,032,331 1,032,069 
Total assets 7,378,207 8,645,949 
Liabilities and shareholders' equity 
Current liabilities: 
Accounts payable 234,355 262,400 
Accrued expenses and other payables9454,183 558,055 
Deferred revenue, current portion3163,396 187,414 
Tax payable815,564 21,395 
Operating lease liabilities, current portion24,788 21,925 
Research and development cost share liability, current portion3125,394 120,801 
Short-term debt10380,729 427,565 
Total current liabilities 1,398,409 1,599,555 
Non-current liabilities: 
Long-term bank loans10185,207 202,113 
Deferred revenue, non-current portion3167,570 220,289 
Operating lease liabilities, non-current portion41,921 43,041 
Deferred tax liabilities814,739 14,169 
Research and development cost share liability, non-current portion3219,385 269,561 
Other long-term liabilities948,432 54,234 
Total non-current liabilities 677,254 803,407 
Total liabilities 2,075,663 2,402,962 
Commitments and contingencies18
Equity: 
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,349,639,439 and 1,334,804,281 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
 134 133 
Additional paid-in capital 11,356,686 11,191,007 
Accumulated other comprehensive income (loss)14(82,450)17,950 
Accumulated deficit (5,971,826)(4,966,103)
Total equity5,302,544 6,242,987 
Total liabilities and equity 7,378,207 8,645,949 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

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 EndedSix Months Ended
  June 30,June 30,
 Note2022202120222021
  $$
Revenues   
Product revenue, net11304,511 138,624 566,084 244,741 
Collaboration revenue337,061 11,368 82,114 511,123 
Total revenues 341,572 149,992 648,198 755,864 
Expenses 
Cost of sales - product 71,173 36,263 136,410 68,948 
Research and development 378,207 356,091 768,122 676,817 
Selling, general and administrative 331,403 232,289 625,976 414,395 
Amortization of intangible assets 188 187 376 375 
Total expenses 780,971 624,830 1,530,884 1,160,535 
Loss from operations (439,399)(474,838)(882,686)(404,671)
Interest income (expense), net 11,431 (4,866)21,502 (9,045)
Other expense, net (129,617)(867)(117,650)(4,990)
Loss before income taxes (557,585)(480,571)(978,834)(418,706)
Income tax expense (benefit)813,864 (230)26,889 (4,860)
Net loss (571,449)(480,341)(1,005,723)(413,846)
Net loss per share(0.43)(0.40)(0.75)(0.35)
Weighted-average shares outstanding—basic and diluted1,336,463,026 1,194,071,476 1,334,252,648 1,191,521,766 
Net loss per American Depositary Share ("ADS")(5.56)(5.23)(9.80)(4.52)
Weighted-average ADSs outstanding—basic and diluted102,804,848 91,851,652 102,634,819 91,655,520 
 The accompanying notes are an integral part of these condensed consolidated financial statements.
6

BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
 $$$$
Net loss(571,449)(480,341)(1,005,723)(413,846)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments(97,459)9,626 (88,085)5,864 
Pension liability adjustments (136) 361 
Unrealized holding loss, net(2,445)(599)(12,315)(1,072)
Comprehensive loss(671,353)(471,450)(1,106,123)(408,693)
 The accompanying notes are an integral part of these condensed consolidated financial statements.
7

BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
  Six Months Ended June 30,
 Note20222021
  $$
Operating activities:   
Net loss (1,005,723)(413,846)
Adjustments to reconcile net loss to net cash used in operating activities: 
Depreciation and amortization expense 32,061 21,159 
Share-based compensation expenses13146,860 110,624 
Unrealized losses on equity investments423,529 6,033 
Acquired in-process research and development 53,500 
Amortization of research and development cost share liability3(45,583)(53,902)
Deferred income tax benefits 7,550 (12,311)
Other items, net 6,360 11,212 
Changes in operating assets and liabilities: 
Accounts receivable 307,430 (13,338)
Inventories (31,633)(28,294)
Other assets 32,315 (77,204)
Accounts payable (30,362)(42,558)
Accrued expenses and other payables 19,525 1,688 
Deferred revenue (76,737)138,877 
Other liabilities (2,114)3,189 
Net cash used in operating activities (616,522)(295,171)
Investing activities: 
Purchases of property, plant and equipment (95,421)(80,920)
Purchases of investments (11,504)(1,357,051)
Proceeds from sale or maturity of investments 1,051,028 1,997,515 
Purchase of in-process research and development(75,000)(8,500)
Other investing activities (7,500)
Net cash provided by investing activities 869,103 543,544 
Financing activities: 
Proceeds from long-term loan10 10,819 
Proceeds from short-term loans1067,586 112,589 
Repayment of short-term loans10(115,405)(15,959)
Proceeds from option exercises and employee share purchase plan 18,972 35,601 
Net cash (used in) provided by financing activities (28,847)143,050 
Effect of foreign exchange rate changes, net (71,212)5,257 
Net increase in cash, cash equivalents, and restricted cash 152,522 396,680 
Cash, cash equivalents, and restricted cash at beginning of period 4,382,887 1,390,005 
Cash, cash equivalents, and restricted cash at end of period 4,535,409 1,786,685 
Supplemental cash flow information: 
Cash and cash equivalents 4,531,137 1,776,448 
Short-term restricted cash 333 310 
Long-term restricted cash3,939 9,927 
Income taxes paid 24,436 14,527 
Interest paid 12,899 14,267 
Supplemental non-cash information: 
Acquisitions of equipment included in accounts payable 58,676 28,885 
Acquired in-process research and development included in accrued expenses 45,000 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 Ordinary SharesAdditional
Paid-In
Capital
Accumulated
Other Comprehensive Income (loss)
Accumulated
Deficit
Total
 SharesAmount
$$$$$
Balance at December 31, 20211,334,804,281 133 11,191,007 17,950 (4,966,103)6,242,987 
Cost from issuance of ordinary shares— — (152)— — (152)
Use of shares reserved for share option exercises(2,850,328)— — — — — 
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")2,851,316 — 11,880 — — 11,880 
Share-based compensation— — 65,555 — — 65,555 
Other comprehensive loss— — — (496)— (496)
Net loss— — — — (434,274)(434,274)
Balance at March 31, 20221,334,805,269 133 11,268,290 17,454 (5,400,377)5,885,500 
Use of shares reserved for share option exercises5,016,232 — — — — — 
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")9,817,938 1 7,091 — — 7,092 
Share-based compensation— — 81,305 — — 81,305 
Other comprehensive loss— — — (99,904)— (99,904)
Net loss— — — — (571,449)(571,449)
Balance at June 30, 20221,349,639,439 134 11,356,686 (82,450)(5,971,826)5,302,544 
Balance at December 31, 20201,190,821,941 118 7,414,932 6,942 (3,552,749)3,869,243 
Use of shares reserved for share option exercises(123,097)— — — — — 
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")6,623,773 1 25,753 — — 25,754 
Share-based compensation— — 45,833 — — 45,833 
Other comprehensive loss— — — (3,738)— (3,738)
Net income— — — — 66,495 66,495 
Balance at March 31, 20211,197,322,617 119 7,486,518 3,204 (3,486,254)4,003,587 
Use of shares reserved for share option exercises(1,599,676)— — — — — 
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")8,844,082 1 9,846 — — 9,847 
Share-based compensation— — 64,791 — — 64,791 
Other comprehensive income— — — 8,891 — 8,891 
Net loss— — — — (480,341)(480,341)
Balance at June 30, 20211,204,567,023 120 7,561,155 12,095 (3,966,595)3,606,775 
The accompanying notes are an integral part of these condensed consolidated financial statements.

9

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 biotechnology company focused on developing and commercializing innovative affordable oncology medicines to improve treatment outcomes and expand access for patients worldwide.
The Company currently has three approved medicines that were discovered and developed in its own labs, including BRUKINSA®, a small molecule inhibitor of Bruton’s Tyrosine Kinase (BTK) for the treatment of various blood cancers, tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers, and pamiparib, a selective small molecule inhibitor of PARP1 and PARP2. The Company has obtained approvals to market BRUKINSA® in the United States, the People's Republic of China (China or the PRC), the European Union (EU), the United Kingdom ("UK"), Canada, Australia and additional international markets, and tislelizumab and pamiparib in China. By leveraging its China commercial capabilities, the Company has in-licensed the rights to distribute 13 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 Novartis Pharma AG ("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. Its internal clinical development capabilities are deep, including a more than 2,500-person global clinical development and medical affairs team that is running close to 80 ongoing or planned clinical trials in over 40 medicines and drug candidates. This includes more than 30 pivotal or potentially registration-enabling trials across its portfolio, including three internally discovered, approved medicines. The Company has enrolled in its clinical trials more than 16,000 subjects, of which approximately one-half have been outside of China.
The Company has built, and is expanding, its internal manufacturing capabilities, through its state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of its medicines, and is building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey. The Company also works with high quality contract manufacturing organizations ("CMOs") to manufacture its internally developed clinical and commercial products.
Since its inception in 2010, the Company has become a fully integrated global organization of over 8,600 employees in 29 countries and regions, including the United States, China, Europe and Australia.
Basis of presentation and consolidation
The accompanying condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021, and the condensed consolidated statements of shareholders' equity for the three and six months ended June 30, 2022 and 2021, 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, 2021 (the "Annual Report").
The unaudited interim condensed consolidated interim 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, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.
10

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.
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 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This update is effective for annual periods beginning after December 15, 2021, and early application is permitted. This guidance should be applied either prospectively to all transactions that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or retrospectively to those transactions. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
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, 2021.
There have been no material changes to the Company’s significant accounting policies as of and for the six months ended June 30, 2022, 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.
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.
11

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, 2022 and December 31, 2021:
 Quoted Price in Active Market for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
As of June 30, 2022(Level 1)(Level 2)(Level 3)
 $$$
Cash equivalents   
U.S. Treasury securities384,121   
Money market funds257,614   
Short-term investments (Note 4):
U.S. Treasury securities1,172,554   
Other non-current assets (Note 4):
Equity securities with readily determinable fair values8,451 3,003  
Convertible debt instrument  5,000 
Total1,822,740 3,003 5,000 
 
 Quoted Price in Active Market for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
As of December 31, 2021(Level 1)(Level 2)(Level 3)
 $$$
Cash equivalents   
U.S. Treasury securities107,855   
Money market funds315,564   
Short-term investments (Note 4):
U.S. Treasury securities2,241,962   
Other non-current assets (Note 4):
Equity securities with readily determinable fair values23,809 10,306  
Total2,689,190 10,306  
The Company's cash equivalents are highly liquid investments with original maturities of 3 months or less. Short-term investments represent the Company's investments in available-for-sale debt 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"), which were acquired in connection with a collaboration and license agreement entered into in January 2020 and in Leap's underwritten public offering in September 2021. The common stock investment in Leap, a publicly-traded biotechnology company, is measured and carried at fair value and classified as Level 1. The warrants to purchase additional shares of common stock in Leap are classified as a Level 2 investment and are measured using the Black-Scholes option-pricing valuation model, which utilizes a constant maturity risk-free rate and reflects the term of the warrants, dividend yield and stock price volatility, that is based on the historical volatility of similar companies. 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 a convertible note of a private biotech company. The Company has elected the fair value option method of accounting for the convertible note. Accordingly, the convertible note is remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value option recorded in other income (loss).

As of June 30, 2022 and December 31, 2021, 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.
12

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.
Out-Licensing Arrangements
For the three and six months ended June 30, 2022 and 2021, the Company’s collaboration revenue consisted entirely of upfront license fees, research and development services revenue and right to access intellectual property revenue from its 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, 2022 and 2021:
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Revenue from Collaborators$$$$
License revenue  484,646 
Research and development service revenue10,81311,368 24,240 26,477 
Right to access intellectual property revenue26,248 52,497  
Other 5,377  
Total37,06111,368 82,114 511,123 
Novartis
Tislelizumab Collaboration and License
In January 2021, the Company entered into a collaboration and license agreement with Novartis, granting Novartis rights to develop, manufacture and commercialize tislelizumab in North America, Europe, and Japan ("Novartis Territory"). The Company and Novartis have agreed to jointly develop tislelizumab in these licensed countries, with Novartis responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals. In addition, both companies may conduct clinical trials globally to explore combinations of tislelizumab with other cancer treatments, and the Company has an option to co-detail the product in North America, funded in part by Novartis.
Under the agreement the Company received an upfront cash payment of $650,000 from Novartis. The Company is eligible to receive up to $1,300,000 upon the achievement of regulatory milestones, $250,000 upon the achievement of sales milestones, and royalties on future sales of tislelizumab in the licensed territory. Under the terms of the agreement, the Company is responsible for funding ongoing clinical trials of tislelizumab, Novartis has agreed to fund new registrational, bridging, or post-marketing studies in its territory, and each party will be responsible for funding clinical trials evaluating tislelizumab in combination with its own or third party products. Each party retains the worldwide right to commercialize its propriety products in combination with tislelizumab.
The Company evaluated the Novartis agreement under ASC 606 as all the material units of account within the agreement represented transactions with a customer. The Company identified the following material components under the agreement: (1) exclusive license for Novartis to develop, manufacture, and commercialize tislelizumab in the Novartis Territory, transfer of know-how and use of the tislelizumab trademark; (2) conducting and completing ongoing trials of tislelizumab (“tislelizumab R&D services”); and (3) supplying Novartis with required quantities of the tislelizumab drug product, or drug substance, upon receipt of an order from Novartis.
The Company determined that the license, transfer of know-how and use of trademarks are not distinct from each other and represent a single performance obligation. The tislelizumab R&D services represent a material promise and were determined to be a separate performance obligation at the outset of the agreement as the promise is distinct and has standalone value to Novartis. The Company evaluated the supply component of the contract and noted the supply will not be provided at a significant incremental discount to Novartis. The Company concluded that, for the purpose of ASC 606, the provision related to providing clinical and commercial supply of tislelizumab in the Novartis Territory was an option but not a performance
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obligation of the Company at the outset of the Novartis collaboration agreement. A performance obligation for the clinical and commercial supply will be established as quantities of drug product or drug substance are ordered by Novartis.
The Company determined that the transaction price as of the outset of the arrangement was the upfront payment of $650,000. The potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained due to uncertainty of achievement. The transaction price was allocated to the two identified performance obligations based on a relative fair value basis. The standalone selling price of the license, transfer of know-how and use of trademarks performance obligation was determined using the adjusted market assessment approach. Based on the valuation performed by the Company, the standalone selling price of the license, transfer of know-how and use of trademarks was valued at $1,231,000. The standalone selling price of the tislelizumab R&D services was valued at $420,000 using a cost plus margin valuation approach. Based on the relative standalone selling prices of the two performance obligations, $484,646 of the total transaction price was allocated to the license and $165,354 was allocated to the tislelizumab R&D services.
The Company satisfied the license performance obligation at a point in time when the license was delivered and the transfer of know-how completed which occurred during the six months ended June 30, 2021. As such, the Company recognized the entire amount of the transaction price allocated to the license as collaboration revenue during the six months ended June 30, 2021. The portion of the transaction price allocated to the tislelizumab R&D services was deferred and is being recognized as collaboration revenue as the tislelizumab R&D services are performed using a percentage-of-completion method. Estimated costs to complete are reassessed on a periodic basis and any updates to the revenue earned are recognized on a prospective basis. The Company recognized R&D service revenue of $9,021 and $20,656 during the three and six months ended June 30, 2022, respectively, and $11,368 and $26,477 during the three and six months ended June 30, 2021, respectively. The Company also recognized other collaboration revenue of nil and $5,377 related to the sale of tislelizumab clinical supply to Novartis in conjunction with the collaboration during the three and six months ended June 30, 2022, respectively.
Ociperlimab Option, Collaboration and License Agreement and China Broad Market Development Agreement
In December 2021, the Company expanded its collaboration with Novartis by entering into an option, collaboration and license agreement with Novartis to develop, manufacture and commercialize the Company's investigational TIGIT inhibitor ociperlimab in the Novartis Territory. In addition, the Company and Novartis entered into an agreement granting the Company rights to market, promote and detail five approved Novartis oncology products, TAFINLAR® (dabrafenib), MEKINIST® (trametinib), VOTRIENT® (pazopanib), AFINITOR® (everolimus), and ZYKADIA® (ceritinib), across designated regions of China referred to as “broad markets.” In the first quarter of 2022, the Company initiated marketing and promotion of these five products.
Under the terms of the option, collaboration and license agreement, the Company received an upfront cash payment of $300,000 in January 2022 from Novartis and will receive an additional payment of $600,000 or $700,000 in the event Novartis exercises its exclusive time-based option prior to mid-2023 or between then and late-2023, respectively. Following option exercise, the Company is eligible to receive up to $745,000 upon the achievement of regulatory approval milestones, $1,150,000 upon the achievement of sales milestones, and royalties on future sales of ociperlimab in the Novartis Territory. Subject to the terms of the option, collaboration and license agreement, during the option period, Novartis has agreed to initiate and fund additional global clinical trials with ociperlimab and the Company has agreed to expand enrollment in two ongoing trials. Following the option exercise, Novartis has agreed to share development costs of global trials. Following approval, the Company has agreed to provide 50 percent of the co-detailing and co-field medical efforts in the United States, and has an option to co-detail up to 25 percent in Canada and Mexico, funded in part by Novartis. Each party retains the worldwide right to commercialize its propriety products in combination with ociperlimab, as is the case with tislelizumab under the tislelizumab collaboration and license agreement. The existing tislelizumab collaboration and license agreement was not modified as a result of the ociperlimab option, collaboration and license agreement.
The Company evaluated the Novartis agreements under ASC 606 as the units of account within the agreement represented transactions with a customer. The Company identified the following material promises under the agreement: (1) exclusive option for Novartis to license the rights to develop, manufacture, and commercialize ociperlimab in the Novartis Territory; (2) Novartis' right to access ociperlimab in its own clinical trials during the option period; (3) initial transfer of BeiGene know-how; and (4) conducting and completing ongoing trials of ociperlimab during the option period ("ociperlimab R&D Services", together with "tislelizumab R&D services", "R&D services"). The market development activities are considered immaterial in the context of the contracts.
The Company concluded that, at the inception of the agreement, the option for the exclusive product license constitutes a material right as it represents a significant and incremental discount to the fair value of the exclusive product license that Novartis would not have received without entering into the agreement and is therefore considered a distinct performance
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obligation. The Company determined that Novartis' right to access ociperlimab in its own trials over the option period and the initial transfer of know-how were not distinct from each other, as the right to access ociperlimab has limited value without the corresponding know-how transfer, and therefore should be combined into one distinct performance obligation. The ociperlimab R&D Services represent a material promise and were determined to be a separate performance obligation at the outset of the agreement as the promise is distinct and has standalone value to Novartis.
The Company determined the transaction price at the outset of the arrangement as the upfront payment of $300,000. The option exercise fee is contingent upon Novartis exercising its right and is considered fully constrained until the option is exercised. Additionally, the milestone and royalty payments are not applicable until after the option is exercised, at which point the likelihood of meeting milestones, regulatory approval and meeting certain sales thresholds will be assessed. The transaction price was allocated to the three identified performance obligations based on a relative fair value basis. The standalone selling price of the material right for the option to the exclusive product license was calculated as the incremental discount between (i) the value of the license determined using a discounted cash flow method adjusted for probability of the option being exercised and (ii) the expected option exercise fee using the most-likely-amount method at option exercise. The standalone selling price of the combined performance obligation for Novartis' right to access ociperlimab for its own clinical trials during the option period and the initial transfer of BeiGene know-how was determined using a discounted cash flow method. The standalone selling price of the ociperlimab R&D Services was determined using an expected cost plus margin approach. Based on the relative standalone selling prices of the three performance obligations, $71,980 of the total transaction price was allocated to the material right, $213,450 was allocated to Novartis' right to use ociperlimab in its own clinical trials during the option period and the transfer of BeiGene know-how, and $14,570 was allocated to the ociperlimab R&D Services.
The Company will satisfy the material right performance obligation at a point in time at the earlier of when Novartis exercises the option and the license is delivered or the expiration of the option period. As such, the entire amount of the transaction price allocated to the material right was deferred. The portion of the transaction price allocated to Novartis' right to access ociperlimab in its own clinical trials during the option period and the initial transfer of BeiGene know-how was deferred and is being recognized over the expected option period. The portion of the transaction price allocated to the ociperlimab R&D Services was deferred and is being recognized as collaboration revenue as the ociperlimab R&D Services are performed over the expected option period. The Company recognized collaboration revenue of $26,248 and $52,497 related to Novartis right to access ociperlimab in clinical trials and the transfer of know how performance obligation during the three and six months ended June 30, 2022, respectively, and R&D service revenue of $1,792 and $3,584 during the three and six months ended June 30, 2022, respectively.
In-Licensing Arrangements
Amgen
In October 2019, the Company entered into a global strategic oncology collaboration with Amgen ("Amgen Collaboration Agreement") for the commercialization and development in China, excluding Hong Kong, Taiwan and Macau, of Amgen’s XGEVA®, KYPROLIS®, and BLINCYTO®, and the joint global development of a portfolio of oncology assets in Amgen’s pipeline, with BeiGene responsible for development and commercialization in China. The agreement became effective on January 2, 2020, following approval by the Company's shareholders and satisfaction of other closing conditions.
Under the agreement, the Company is responsible for the commercialization of XGEVA®, KYPROLIS® and BLINCYTO® in China for five or seven years. Amgen is responsible for manufacturing the products globally and will supply the products to the Company at an agreed upon price. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. Following the commercialization period, the Company has the right to retain one product and is entitled to receive royalties on sales in China for an additional five years on the products not retained. XGEVA® was approved in China in 2019 for patients with giant cell tumor of the bone and in November 2020 for the prevention of skeletal-related events in cancer patients with bone metastases. In July 2020, the Company began commercializing XGEVA® in China. In December 2020, BLINCYTO® was approved in China for injection for the treatment of adult patients with relapsed or refractory (R/R) B-cell precursor acute lymphoblastic leukemia (ALL). In July 2021, KYPROLIS® was conditionally approved in China for injection in combination with dexamethasone for the treatment of adult patients with relapsed or refractory (R/R) multiple myeloma. In April 2022, BLINCYTO® was conditionally approved for injection for the treatment of pediatric patients with R/R CD19-positive B-cell precursor ALL.
Amgen and the Company are also jointly developing a portfolio of Amgen oncology pipeline assets under the collaboration. The Company is responsible for conducting clinical development activities in China and co-funding global development costs by contributing cash and development services up to a total cap of $1,250,000. Amgen is responsible for all development, regulatory and commercial activities outside of China. For each pipeline asset that is approved in China, the Company will receive commercial rights for seven years from approval. The Company has the right to retain approximately one
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out of every three approved pipeline assets, other than LUMAKRAS (sotorasib), Amgen's KRAS G12C inhibitor, for commercialization in China. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. The Company is entitled to receive royalties from sales in China for pipeline assets returned to Amgen for five years after the seven-year commercialization period. The Company is also entitled to receive royalties from global sales of each product outside of China (with the exception of LUMAKRAS™).
The Amgen Collaboration Agreement is within the scope of ASC 808, as both parties are active participants and are exposed to the risks and rewards dependent on the commercial success of the activities performed under the agreement. The Company is the principal for product sales to customers in China during the commercialization period and recognizes 100% of net product revenue on these sales. Amounts due to Amgen for its portion of net product sales will be recorded as cost of sales. Cost reimbursements due to or from Amgen under the profit share will be recognized as incurred and recorded to cost of sales; selling, general and administrative expense; or research and development expense, based on the underlying nature of the related activity subject to reimbursement. Costs incurred for the Company's portion of the global co-development funding are recorded to research and development expense as incurred.
On April 20, 2022, the parties entered into the First Amendment to Amgen Collaboration Agreement, which amends certain terms and conditions relating to the financial responsibilities of the parties in connections with the development and commercialization of certain Amgen proprietary products for the treatment of oncology-related diseases and conditions.
In connection with the Amgen Collaboration Agreement, a Share Purchase Agreement ("SPA") was entered into by the parties in October 2019. On January 2, 2020, the closing date of the transaction, Amgen purchased 15,895,001 of the Company's ADSs for $174.85 per ADS, representing a 20.5% ownership stake in the Company. Per the SPA, the cash proceeds shall be used as necessary to fund the Company's development obligations under the Amgen Collaboration Agreement. Pursuant to the SPA, Amgen also received the right to designate one member of the Company's board of directors, and Anthony Hooper joined the Company's board of directors as the Amgen designee in January 2020.
In determining the fair value of the common stock at closing, the Company considered the closing price of the common stock on the closing date of the transaction and included a lack of marketability discount because the shares are subject to certain restrictions. The fair value of the shares on the closing date was determined to be $132.74 per ADS, or $2,109,902 in the aggregate. The Company determined that the premium paid by Amgen on the share purchase represents a cost share liability due to the Company's co-development obligations. The fair value of the cost share liability on the closing date was determined to be $601,857 based on the Company's discounted estimated future cash flows related to the pipeline assets. The total cash proceeds of $2,779,241 were allocated based on the relative fair value method, with $2,162,407 recorded to equity and $616,834 recorded as a research and development cost share liability. The cost share liability is being amortized proportionately as the Company contributes cash and development services to its total co-development funding cap.
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, 2022 and 2021 were as follows:
 Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
 $$$$
Research and development expense24,393 27,687 46,789 55,330 
Amortization of research and development cost share liability23,764 26,973 45,583 53,903 
Total amount due to Amgen for BeiGene's portion of the development funding48,157 54,660 92,372 109,233 
As of
June 30,
2022
Remaining portion of development funding cap 698,687 
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As of June 30, 2022 and December 31, 2021, the research and development cost share liability recorded in the Company's balance sheet was as follows:
 As of
 June 30,December 31,
 20222021
 $$
Research and development cost share liability, current portion125,394 120,801 
Research and development cost share liability, non-current portion219,385 269,561 
Total research and development cost share liability344,779 390,362 
The total reimbursement due under the commercial profit-sharing agreement for product sales is classified in the income statement for the three and six months ended June 30, 2022 and 2021 as follows:
 Three Months EndedSix Months Ended
 June 30,June 30,
 2022202120222021
 $$$$
Cost of sales - product2,449 (32)3,478 678 
Research and development657 898 898 63 
Selling, general and administrative(13,661)(9,218)(26,642)(15,917)
Total(10,555)(8,352)(22,266)(15,176)
The Company purchases commercial inventory from Amgen to distribute in China. Inventory purchases amounted to $22,462 and $30,061 during the three and six months ended June 30, 2022, respectively. Inventory purchases amounted to $12,138 and $18,854 during the three and six months ended June 30, 2021, respectively. Net amounts payable to Amgen as of June 30, 2022 and December 31, 2021 were $101,580 and $106,790, respectively.
4. Restricted Cash and Investments
Restricted Cash
The Company’s restricted cash balance of $4,272 and $7,209 as of June 30, 2022 and December 31, 2021, respectively, primarily consists of RMB-denominated cash deposits held in designated bank accounts for collateral for letters of credit. The Company classifies restricted cash as current or non-current based on the term of the restriction.
Short-Term Investments
Short-term investments as of June 30, 2022 consisted of the following available-for-sale debt securities:
  GrossGrossFair Value
 AmortizedUnrealizedUnrealized(Net Carrying
 CostGainsLossesAmount)
 $$$$
U.S. Treasury securities1,184,869