10-KPeriod: FY2018

BeOne Medicines Ltd. Annual Report, Year Ended Dec 31, 2018

Filed February 28, 2019For Securities:ONCBEIGF

Summary

BeiGene, Ltd. (now known as BeiGene, Ltd. and operating under the ticker ONC for this filing) is a commercial-stage biotechnology company focused on developing and commercializing innovative oncology drugs. As of their February 28, 2019 10-K filing, the company had advanced three lead internally-developed drug candidates—zanubrutinib (BTK inhibitor), tislelizumab (anti-PD-1 antibody), and pamiparib (PARP inhibitor)—into late-stage clinical trials across multiple cancer indications globally and in China. Additionally, BeiGene was marketing three in-licensed cancer drugs in China, generating product revenue since September 2017. The company highlighted its strong global clinical development team and its strategic positioning to capitalize on China's evolving regulatory environment and growing pharmaceutical market. Significant investment in research and development was evident, with a substantial increase in R&D expenses year-over-year, reflecting the progression of their pipeline. Financially, BeiGene reported substantial increases in product revenue, driven by sales of its in-licensed drugs in China, but also significant operating losses and research and development expenses. The company secured significant financing during 2018, raising over $1.6 billion in net proceeds from equity offerings to support its extensive development programs. Looking ahead, BeiGene anticipated continued growth in R&D and SG&A expenses to advance its pipeline and prepare for potential launches of its internally developed drug candidates.

Financial Highlights

55 data points
Beta

Revenue

$198.22M

85.5% Gross Margin

Net Income

-$674.03M

-340.0% Net Margin

EPS (Diluted)

$-0.93

Total Assets

$2.25B

Cash & Equivalents

$712.94M

Free Cash Flow

-$618.00M

Financial Statements
Beta
Revenue$198.22M
Cost of Revenue$28.70M
Gross Profit$169.51M
R&D Expenses$679.00M
SG&A Expenses$195.38M
Operating Expenses$903.99M
Operating Income-$705.77M
Interest Expense$13.15M
Net Income-$674.03M
EPS (Basic)$-0.93
Shares Outstanding (Basic)720.75M

Key Highlights

  • 1BeiGene has a robust pipeline with three lead drug candidates (zanubrutinib, tislelizumab, pamiparib) in late-stage clinical development for various cancer indications.
  • 2The company filed three New Drug Applications (NDAs) in China for its internally developed drug candidates and planned additional submissions in China and the US in 2019-2020.
  • 3BeiGene generated product revenue from three in-licensed cancer drugs marketed in China since September 2017.
  • 4Significant investment in R&D drove a substantial increase in research and development expenses to $679.0 million in 2018.
  • 5Total revenues were $198.2 million in 2018, a decrease from $238.4 million in 2017, primarily due to lower collaboration revenue.
  • 6The company raised approximately $1.6 billion in net proceeds from follow-on public offerings in 2018 to fund operations and development.
  • 7Zanubrutinib received Breakthrough Therapy designation from the FDA in January 2019 for mantle cell lymphoma.

Frequently Asked Questions

BeiGene's three lead internally-developed drug candidates are zanubrutinib (BTK inhibitor), tislelizumab (anti-PD-1 antibody), and pamiparib (PARP inhibitor). As of the filing date, all three were in late-stage clinical trials (Phase 2 or 3) globally and/or in China for various cancer indications. Zanubrutinib had NDAs filed in China for mantle cell lymphoma (MCL) and chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL), and tislelizumab had an NDA filed in China for classical Hodgkin’s lymphoma (cHL).

BeiGene's revenue is derived from product sales of in-licensed drugs in China (ABRAXANE®, REVLIMID®, VIDAZA®) and collaboration revenue from licensing and research agreements, notably with Celgene. In 2018, product revenue was $130.9 million, while collaboration revenue was $67.3 million. The company incurred significant net losses ($674.0 million in 2018) due to substantial R&D investments. BeiGene raised substantial capital in 2018 and anticipated continued increases in R&D and SG&A expenses, requiring ongoing funding for pipeline development and potential commercialization.

Key risks include the substantial uncertainty and expense of clinical development and regulatory approval for its drug candidates, dependence on the success of these candidates, potential delays in clinical trials, competition from other companies, reliance on third-party manufacturers, and the complex and evolving regulatory landscape in China and globally. The company also faces financial risks related to its significant net losses and the need for future financing, as well as risks associated with its intellectual property protection and its operations in China.

BeiGene entered a significant collaboration with Celgene in 2017, granting Celgene rights for tislelizumab in solid tumors outside Asia and licensing Celgene's approved cancer therapies (ABRAXANE®, REVLIMID®, VIDAZA®) for China. The filing notes the proposed acquisition of Celgene by Bristol-Myers Squibb (BMS) and the potential termination of the tislelizumab agreement, which could result in BeiGene regaining full rights to tislelizumab, contingent on a termination fee. BeiGene stated it was operationally and financially capable of advancing tislelizumab independently if the agreement terminates.