10-QPeriod: Q1 FY2017

BeOne Medicines Ltd. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 10, 2017For Securities:ONCBEIGF

Summary

BeiGene, Ltd. (ONC) reported its first quarter 2017 financial results, showcasing a significant increase in research and development (R&D) expenses as the company continued to advance its clinical-stage oncology pipeline. Total operating expenses more than doubled year-over-year, driven primarily by R&D investments in key drug candidates like BGB-3111, BGB-A317, BGB-290, and BGB-283. The company reported a net loss of $50.6 million, widening from $22.0 million in the prior year’s quarter, reflecting its ongoing commitment to drug development. Financially, BeiGene ended the quarter with $327.5 million in cash, cash equivalents, and short-term investments, indicating a solid liquidity position to fund operations for at least the next twelve months, following successful IPO and follow-on offerings in 2016. Revenue from collaboration agreements was nil, down from $0.7 million in Q1 2016, as earlier collaborations with Merck KGaA concluded. The company continues to focus on building its manufacturing capabilities and expanding its global operations, with significant capital expenditures noted for its Suzhou and Guangzhou facilities.

Financial Highlights

45 data points
Beta

Revenue

$0.00

Net Income

-$50.62M

EPS (Diluted)

$-0.10

Total Assets

$376.73M

Cash & Equivalents

$97.75M

Free Cash Flow

-$40.78M

Financial Statements
Beta
Revenue$0
R&D Expenses$42.77M
SG&A Expenses$8.77M
Operating Expenses$51.54M
Operating Income-$51.54M
Net Income-$50.62M
EPS (Basic)$-0.10
EPS (Diluted)$-0.10
Shares Outstanding (Basic)516.44M

Key Highlights

  • 1Net loss widened to $50.6 million in Q1 2017 from $22.0 million in Q1 2016, driven by increased operating expenses.
  • 2Research and Development (R&D) expenses increased significantly to $42.8 million from $17.9 million, reflecting investment in clinical pipeline advancement.
  • 3Total revenue was nil for Q1 2017, a decrease from $0.7 million in Q1 2016, due to the conclusion of collaboration revenue recognition.
  • 4Cash, cash equivalents, and short-term investments totaled $327.5 million as of March 31, 2017, providing a strong liquidity position.
  • 5The company's cash burn from operating activities was $35.7 million in Q1 2017.
  • 6Property and equipment, net, increased to $30.7 million, reflecting investments in manufacturing and laboratory facilities.
  • 7Share-based compensation expense increased to $6.0 million from $2.6 million, primarily due to increased headcount in R&D and G&A.

Frequently Asked Questions

BeiGene reported a net loss of $50.6 million for the first quarter of 2017, a significant increase from the $22.0 million loss in the same period of 2016. This widening loss is attributed to a substantial increase in operating expenses, particularly in Research and Development. However, the company ended the quarter with a healthy cash balance of $327.5 million in cash, cash equivalents, and short-term investments, which management believes is sufficient to fund operations for at least the next 12 months. This liquidity was bolstered by its IPO and follow-on public offerings in 2016.

BeiGene's revenue from collaboration agreements was nil in the first quarter of 2017, down from $0.7 million in the first quarter of 2016. This decrease is primarily due to the conclusion of revenue recognition related to its collaboration agreement for BGB-283 with Merck KGaA, Darmstadt Germany. The company does not expect significant revenue from product sales until its drug candidates are approved and commercialized, which is anticipated to take several years.

The primary driver for the increased expenses is the significant investment in Research and Development, which rose to $42.8 million in Q1 2017 from $17.9 million in Q1 2016. This increase is mainly due to the advancement of its clinical-stage drug candidates (BGB-3111, BGB-A317, BGB-290, and BGB-283) and the expansion of its development organization. General and administrative expenses also increased, reflecting higher headcount, professional fees, and operational costs associated with being a public company.

BeiGene is actively investing in its manufacturing capabilities. Property and equipment, net, increased to $30.7 million in Q1 2017 from $26.0 million in Q4 2016, reflecting ongoing construction and development of manufacturing and laboratory facilities, particularly in Suzhou and Guangzhou, China. The company is establishing commercial-scale biologics manufacturing facilities to support its pipeline.