10-QPeriod: Q2 FY2019

BeOne Medicines Ltd. Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 8, 2019For Securities:ONCBEIGF

Summary

BeiGene, Ltd.'s Q2 2019 report shows a significant increase in total revenues, driven primarily by a substantial collaboration payment of $150 million related to the termination of its tislelizumab agreement with Celgene. While product revenue from in-licensed drugs in China also saw strong year-over-year growth, the company's significant investments in research and development continue to drive substantial operating losses. R&D expenses increased by 39% for the quarter and 49% year-to-date, reflecting pipeline advancement. The company ended the quarter with a solid cash position, but the ongoing high R&D spend indicates a continued need for capital in the future. Investors should monitor the progress of their key drug candidates and the company's ability to manage its significant R&D investments effectively.

Financial Highlights

52 data points
Beta

Revenue

$243.35M

92.7% Gross Margin

Net Income

-$85.95M

-35.3% Net Margin

EPS (Diluted)

$-0.11

Total Assets

$2.15B

Cash & Equivalents

$942.68M

Free Cash Flow

-$67.55M

Financial Statements
Beta
Revenue$243.35M
Cost of Revenue$17.84M
Gross Profit$225.51M
R&D Expenses$228.76M
SG&A Expenses$82.25M
Operating Expenses$329.18M
Operating Income-$85.83M
Net Income-$85.95M
EPS (Basic)$-0.11
Shares Outstanding (Basic)777.51M

Key Highlights

  • 1Total revenues surged by 361% to $243.3 million for the three months ended June 30, 2019, largely due to a $150 million termination payment from Celgene.
  • 2Product revenue increased by 85% to $58.1 million for the three months ended June 30, 2019, indicating strong sales growth for in-licensed drugs in China.
  • 3Research and development expenses rose by 39% to $228.8 million for the quarter, reflecting continued investment in pipeline advancement.
  • 4Net loss attributable to BeiGene, Ltd. decreased by 45% to $85.6 million for the three months ended June 30, 2019, primarily due to the significant collaboration revenue.
  • 5Cash, cash equivalents, and short-term investments stood at $1.6 billion as of June 30, 2019, providing a robust liquidity position.
  • 6The company regained global rights to its PD-1 inhibitor, tislelizumab, from Celgene following the termination of their collaboration agreement, receiving a $150 million payment in return.
  • 7Operating lease accounting standards were adopted, resulting in the recognition of operating lease right-of-use assets and liabilities on the balance sheet.

Frequently Asked Questions

The primary driver of BeiGene's revenue increase was a $150 million payment received from Celgene in connection with the termination of their collaboration agreement for tislelizumab. This significantly boosted collaboration revenue for the quarter.

BeiGene's R&D expenses continue to increase significantly, growing by 39% to $228.8 million in Q2 2019 compared to the same period last year. This reflects ongoing investment in the development of their drug candidates.

As of June 30, 2019, BeiGene had $1.6 billion in cash, cash equivalents, and short-term investments. This provides a strong liquidity position, but the company expects continued high R&D spend, suggesting a potential need for future capital raises.

BeiGene mutually terminated its collaboration agreement with Celgene for tislelizumab, regaining full global development and commercialization rights. This resulted in a $150 million payment from Celgene and recognized deferred revenue upon termination. The company's license to distribute Celgene's approved cancer therapies in China remains unaffected.