BeOne Medicines Ltd. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Cautionary Note Regarding Forward-Looking Statements You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements (unaudited) and related notes included in the section of this Quarterly Report on Form 10-Q (this “Quarterly Report”), titled “Part I – Item 1 – Financial Statements.” This Quarterly Report contains forward-looking statements t hat involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations and projections about future events and trends that may affect the business, financial condition, and operating results. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Forward-looking statements often include words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, among other things, statements about: our ability to successfully commercialize our approved medicines and to obtain approvals in additional indications and territories for our medicines; the timing, progress and results of our preclinical studies and clinical trials of our drug candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs; our ability to successfully develop and commercialize our in-licensed medicines and drug candidates and any other medicines and drug candidates we may in-license; our ability to further develop sales and marketing capabilities and launch and commercialize new medicines, if approved; our ability to maintain and expand regulatory approvals for our medicines and drug candidates, if approved; the pricing and reimbursement of our medicines and drug candidates, if approved; the initiation, timing, progress and results of our preclinical studies and clinical trials and our research and development programs; our ability to advance our drug candidates into, and successfully complete, clinical trials and obtain regulatory approvals; our reliance on the success of our clinical stage drug candidates; our plans, expected milestones and the timing or likelihood of regulatory filings and approvals; the implementation of our business model, strategic plans for our business, medicines, drug candidates and technology; the scope of protection we (or our licensors) are able to establish and maintain for intellectual property rights covering our medicines, drug candidates and technology; our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary technology of third parties; costs associated with enforcing or defending against intellectual property infringement, misappropriation or violation, product liability and other claims; the regulatory environment and regulatory developments in the United States (“U.S.”), China, the United Kingdom (“UK”), Switzerland, the European Union (“EU”) and other jurisdictions in which we operate; the accuracy of our estimates regarding expenses, revenues, including collaboration revenue, capital requirements and our need for additional financing; the potential benefits of strategic collaboration and licensing agreements and our ability to enter into and maintain strategic arrangements; our construction and operation of independent production facilities for small molecule medicines and large molecule biologics, as well as clinical R&D facilities, to support the global demand for both commercial and clinical supply; our reliance on third parties to conduct drug development, manufacturing and other services; our ability to manufacture and supply, or have manufactured and supplied, drug candidates for clinical development and medicines for commercial sale; the rate and degree of market access and acceptance of our medicines and drug candidates, if approved; developments relating to our competitors and our industry, including competing therapies; the size of the potential markets for our medicines and drug candidates and our ability to serve those markets; our ability to effectively manage our growth; our ability to attract and retain qualified employees and key personnel; statements regarding future revenue, key milestones, expenses, capital expenditures, capital requirements and share performance; and the future trading price of our ADSs, ordinary shares and RMB Shares, and impact of securities analysts’ reports on these prices. These statements involve risks and uncertainties, including those that are described in “Part II—Item 1A—Risk Factors” of this Quarterly Report, that may cause actual future events or results to differ materially from those expected. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We do not assume any obligation to update any forward-looking statements where as a result of new information or otherwise, except as required by law. This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information. Effective May 27, 2025, we changed our jurisdiction of incorporation from the Cayman Islands to Switzerland through a transaction known as a continuation under Section 206 of the Companies Act (as amended) of the Cayman Islands and Article 161 of the Swiss Federal Act on Private International Law (the “Continuation”) and changed our legal English name from BeiGene, Ltd. to BeOne Medicines Ltd. This Quarterly Report includes the results of BeiGene, Ltd. prior to the Continuation and BeOne Medicines Ltd. following the Continuation. 27 Table of Contents Unless the context requires otherwise, in this Quarterly Report, the terms “BeOne,” the “Company,” “we,” “us” and “our” refer to (i) BeOne Medicines Ltd., a Switzerland holding company with operations conducted by its subsidiaries, and its subsidiaries, on a consolidated basis, following the Continuation and (ii) BeiGene, Ltd., a Cayman Islands holding company with operations conducted by its subsidiaries, and its subsidiaries, on a consolidated basis, prior to the Continuation. Non-GAAP Financial Measures We provide certain financial measures that are not defined under accounting principles generally accepted in the United States of America (“GAAP”), commonly referred to as non-GAAP financial measures, including Adjusted Operating Expenses, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Earnings Per Share, Free Cash Flow and certain other non-GAAP measures, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on our operating performance. Adjustments to our GAAP figures exclude, as applicable, non-cash items such as share-based compensation, depreciation and amortization. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. Non-GAAP adjustments are tax effected to the extent there is US GAAP current tax expense. The Company currently records a valuation allowance on its net deferred tax assets, so there is no net impact recorded for deferred tax effects. We maintain an established non-GAAP policy that guides the determination of what items may be excluded in non-GAAP financial measures. We believe that these non-GAAP measures, when considered together with the GAAP figures, can enhance an overall understanding of our operating performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of our historical and expected financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators BeOne’s management uses for planning and forecasting purposes and measuring our performance. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, GAAP financial measures. The non-GAAP financial measures used by BeOne may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies. Overview Our third quarter financial results show topline growth and a strong liquidity position to support ongoing operations and strategic priorities. BRUKINSA is now the global revenue leader in the BTK inhibitor class. Our late-stage hematology portfolio continues to advance with sonrotoclax and the BTK CDAC BGB-16673. With a promising oncology pipeline, we are positioned to deliver multiple data and regulatory milestones. Key highlights for the third quarter of 2025 are as follows: • Third quarter 2025 total revenues increased 41% to $1.4 billion versus third quarter 2024 • Global BRUKINSA ® (zanubrutinib) revenues increased 51% to $1.0 billion versus third quarter 2024 • Diluted GAAP Earnings per American Depositary Share (“ADS”) of $1.09, non-GAAP diluted Earnings per ADS of $2.65 • Nearly 50 abstracts accepted at American Society of Hematology (ASH) Annual Meeting, highlighting late-stage hematology portfolio 28 Table of Contents Recent Developments Recent Business Developments On October 13, 2025, we announced that the U.S. Food and Drug Administration (“FDA”) has granted Breakthrough Therapy Designation for sonrotoclax, a next-generation and potentially best-in-class investigational BCL2 inhibitor, for the treatment of adult patients with relapsed or refractory (R/R) mantle cell lymphoma (MCL). Additionally, the FDA has accepted BeOne’s request for participation in Project Orbis, an initiative that provides a framework for concurrent submission and review of oncology products among participating global health authorities. On August 29, 2025, we announced positive topline results from a Phase 1/2 study (BGB-11417-201) of sonrotoclax, a next-generation and potentially best-in-class investigational BCL2 inhibitor, in adult patients with relapsed/refractory mantle cell lymphoma, following treatment with a Bruton’s tyrosine kinase inhibitor (“BTKi”) and anti-CD20 therapy. On August 27, 2025, we announced that the European Commission (“EC”) has approved TEVIMBRA (tislelizumab), in combination with platinum-containing chemotherapy as neoadjuvant treatment followed by TEVIMBRA monotherapy as adjuvant treatment, for adult patients with resectable non-small cell lung cancer (NSCLC) at high risk of recurrence. On August 25, 2025, we entered into a Royalty Purchase Agreement (the “Royalty Purchase Agreement”) with Royalty Pharma plc (“Royalty Pharma”), pursuant to which we agreed to sell a significant portion of our rights to royalty payments from Amgen Inc. (“Amgen”) based on annual net revenue from sales outside of China of any and all products that consist of Amgen’s IMDELLTRA ® (tarlatamab-dlle). Under the terms of the Royalty Purchase Agreement, we received a non-refundable upfront payment of $885 million, and also have the option, in our sole discretion, to sell to Royalty Pharma an additional portion of our rights to royalty payments within 12 months of the date of the Royalty Purchase Agreement for up to $65 million, subject to proportional adjustments. We will share in a portion of the royalties on annual ex-China net revenue from IMDELLTRA ® above $1.5 billion, and will maintain royalty and all other rights to other assets under the terms of the existing collaboration with Amgen, including xaluritamig, a first-in-class STEAP1 x CD3 XmAb currently being studied in patients with metastatic castration-resistant prostate cancer (mCRPC). The upfront payment received from Royalty Pharma is classified as a financing liability according to ASC 470. The repayment of this obligation to Royalty Pharma will be made upon the receipt of royalties from Amgen throughout the royalty period, which is anticipated to extend at least through 2041. On August 21, 2025, we announced that the EC has approved a new film-coated tablet formulation of BRUKINSA ® (zanubrutinib) for all approved indications. 29 Table of Contents Results of Operations The following table summarizes our results of operations for the three and nine months ended September 30, 2025 and 2024: Three Months Ended Nine Months Ended September 30, Change September 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Revenues Product revenue, net $ 1,395,013 $ 993,447 $ 401,566 40.4 % $ 3,805,619 $ 2,661,511 $ 1,144,108 43.0 % Other revenue 17,271 8,152 9,119 111.9 % 39,244 20,906 18,338 87.7 % Total revenues 1,412,284 1,001,599 410,685 41.0 % 3,844,863 2,682,417 1,162,446 43.3 % Cost of sales - product 196,510 170,462 26,048 15.3 % 526,118 433,529 92,589 21.4 % Gross profit 1,215,774 831,137 384,637 46.3 % 3,318,745 2,248,888 1,069,857 47.6 % Operating expenses Research and development 523,662 496,179 27,483 5.5 % 1,530,445 1,411,283 119,162 8.4 % Selling, general and administrative 528,998 455,223 73,775 16.2 % 1,526,199 1,326,379 199,820 15.1 % Total operating expenses 1,052,660 951,402 101,258 10.6 % 3,056,644 2,737,662 318,982 11.7 % Income (loss) from operations 163,114 (120,265) 283,379 (235.6) % 262,101 (488,774) 750,875 (153.6) % Interest income, net 3,029 10,643 (7,614) (71.5) % 12,374 40,028 (27,654) (69.1) % Other (expense) income, net (18,979) 11,318 (30,297) (267.7) % (6,862) 1,096 (7,958) (726.1) % Income (loss) before income taxes 147,164 (98,304) 245,468 (249.7) % 267,613 (447,650) 715,263 (159.8) % Income tax expense 22,323 23,046 (723) (3.1) % 47,182 45,255 1,927 4.3 % Net income (loss) $ 124,841 $ (121,350) $ 246,191 (202.9) % $ 220,431 $ (492,905) $ 713,336 (144.7) % Comparison of the Three Months Ended September 30, 2025 and 2024 Revenue Total revenue increased to $1,412.3 million for the three months ended September 30, 2025, from $1,001.6 million for the three months ended September 30, 2024, due to increased sales of BRUKINSA, TEVIMBRA, and our in-licensed products from Amgen. Net product revenue consisted of the following: Three Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) BRUKINSA ® $ 1,040,691 $ 690,278 $ 350,413 50.8 % TEVIMBRA ® 190,623 163,351 27,272 16.7 % XGEVA ® 84,243 63,445 20,798 32.8 % BLINCYTO ® 30,476 20,215 10,261 50.8 % KYPROLIS ® 18,369 17,972 397 2.2 % POBEVCY ® 10,499 12,193 (1,694) (13.9) % Other 20,112 25,993 (5,881) (22.6) % Total product revenue $ 1,395,013 $ 993,447 $ 401,566 40.4 % Net product revenue increased 40.4% to $1,395.0 million for the three months ended September 30, 2025, compared to $993.4 million in the prior-year period, primarily due to increased sales of BRUKINSA in the U.S. and Europe. In addition, product revenues in the third quarter of 2025 were positively impacted by sales of TEVIMBRA and in-licensed products from Amgen, primarily XGEVA ® . 30 Table of Contents Global revenue for BRUKINSA totaled $1.0 billion in the third quarter, representing a 50.8% increase compared to the prior-year period; U.S. revenue for BRUKINSA totaled $738.7 million in the third quarter, compared to $503.7 million in the prior-year period, representing growth of 46.6%, driven primarily by robust demand growth across all indications and modest benefit due to net pricing. BRUKINSA continues to maintain its leading new patient share across the BTKi class due to its differentiated, best-in-class clinical profile. BRUKINSA revenue in Europe totaled $163.2 million in the third quarter, compared to $97.3 million in the prior-year period, representing growth of 67.8%, driven by increased market share across all major European markets, including Germany, Italy, Spain, France and the UK. BRUKINSA revenue in China totaled $92.4 million, representing growth of 36.2%. BRUKINSA rest of world revenue totaled $46.4 million in the third quarter, representing growth of 116.6% compared to the prior-year period. Revenue for TEVIMBRA totaled $190.6 million in the third quarter, compared to $163.4 million in the prior-year period, representing a 16.7% increase. Revenue for Amgen products in China totaled $133.1 million in the third quarter, compared to $101.6 million in the prior-year period, representing a 31.0% increase, driven primarily by increased XGEVA ® sales volume. Other revenue totaled $17.3 million and $8.2 million for the three months ended September 30, 2025 and 2024, respectively, primarily related to royalty revenue under the Amgen collaboration and revenue generated under the Novartis broad markets marketing and promotion agreement. Gross Margin Gross margin on global product sales increased to $1,198.5 million for the three months ended September 30, 2025, compared to $823.0 million in the prior-year period, primarily due to increased product sales in the current year period. Gross margin as a percentage of product sales increased to 85.9% for the three months ended September 30, 2025, from 82.8% in the comparable period of the prior year. The gross margin percentage increased due to a proportionally higher sales mix of global BRUKINSA compared to other products in our portfolio. Gross margin also benefited from production productivity improvements for both BRUKINSA and TEVIMBRA. These increases were offset by period costs of $33.9 million related to the re-positioning of our manufacturing capacity. On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 86.3%, from 84.9% in the comparable period of the prior year. Research and Development Expense Research and development expense increased by $27.5 million, or 5.5%, to $523.7 million for the three months ended September 30, 2025 from $496.2 million for the three months ended September 30, 2024. The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended September 30, 2025 and 2024, respectively: Three Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 173,626 $ 149,026 $ 24,600 16.5 % Upfront license and development milestone fees 191 5,000 (4,809) (96.2) % Amgen co-development expense 1 30,050 17,015 13,035 76.6 % Total external research and development expenses 203,867 171,041 32,826 19.2 % Internal research and development expenses 319,795 325,138 (5,343) (1.6) % Total research and development expenses $ 523,662 $ 496,179 $ 27,483 5.5 % Adjusted research and development expenses 2 $ 445,904 $ 405,545 $ 40,359 10.0 % 1. Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended September 30, 2025 totaled $59.4 million, of which $30.1 million was recorded as R&D expense. The remaining $29.3 million was recorded as a reduction of the R&D cost share liability. 2. Adjusted research and development expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. 31 Table of Contents The increase in external research and development expenses in the third quarter was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, including sonrotoclax (BCL2i), offset by lower development upfront and milestone fees. Internal research and development expense decreased by $5.3 million, or 1.6%, to $319.8 million for the three months ended September 30, 2025, from $325.1 million for the three months ended September 30, 2024. Included within internal research and development expense for the three months ended September 30, 2024 is $24.9 million of accelerated depreciation expense related to the move of clinical production to larger, more efficient production lines. Excluding the impact of the prior period accelerated depreciation, internal research and development expenses increased by $19.6 million and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend. Selling, General and Administrative Expense Three Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) Selling, general and administrative expenses $ 528,998 $ 455,223 $ 73,775 16.2 % Adjusted selling, general and administrative expenses 1 $ 434,484 $ 380,737 $ 53,747 14.1 % 1. Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. Selling, general and administrative expense increased by $73.8 million, or 16.2%, to $529.0 million for the three months ended September 30, 2025, from $455.2 million for the three months ended September 30, 2024. The increase was primarily attributable to continued investment in global commercial expansion primarily in the U.S. and Europe. Selling, general and administrative expenses as a percentage of product sales were 37.9% in the third quarter of 2025 compared to 45.8% in the prior-year period. We expect continued investment in selling and marketing activities as our product sales increase. Interest Income, Net Interest income, net decreased by $7.6 million, or 71.5%, to $3.0 million for the three months ended September 30, 2025, from $10.6 million for three months ended September 30, 2024. The decrease in interest income, net, was primarily attributable an increase in interest expense resulting from interest expense recorded under the effective interest method related to the sale of future royalty liability, higher interest rates on debt balances and lower interest capitalized related to completion of certain phases of our manufacturing and clinical R&D facility in Hopewell, New Jersey, slightly offset by an increase in interest income resulting from a higher cash and cash equivalents balance. Other (Expense) Income, Net Other expense, net was $19.0 million for the three months ended September 30, 2025, primarily due to impairment losses recognized on our equity investments and foreign exchange losses. For the three months ended September 30, 2024, other income, net was $11.3 million, primarily due to foreign exchange gains. Income Tax Expense Income tax expense was $22.3 million for the three months ended September 30, 2025 as compared to $23.0 million for the three months ended September 30, 2024. The income tax expense for the three months ended September 30, 2025 was primarily attributable to current Switzerland tax expense based on year to date earnings and current China tax expense due to certain non-deductible expenses. The income tax expense for the three months ended September 30, 2024 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. 32 Table of Contents On July 4, 2025, the reconciliation bill (H.R. 1), commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law and includes a broad range of tax reform provisions that may affect our financial results. The OBBBA allows an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on foreign-derived deduction eligible income. While we have estimated the impact of certain elective provisions of the OBBBA, we do not expect the legislation to have a material impact on our consolidated financial statements. Net Income (Loss) and Earnings Per Share GAAP net income improved for the third quarter of 2025, as compared to the prior-year period loss, primarily attributable to revenue growth and improved operating leverage. For the third quarter of 2025, basic and diluted earnings per share was $0.09 and $0.08 per share and $1.13 and $1.09 per American Depositary Share (“ADS”), respectively, compared to basic loss of $0.09 per share and $1.15 per ADS in the prior-year period. Comparison of the Nine Months Ended September 30, 2025 and 2024 Revenue Total revenue increased to $3,844.9 million, or 43.3%, for the nine months ended September 30, 2025, from $2,682.4 million for the nine months ended September 30, 2024, primarily due to increased sales of our internally developed products, BRUKINSA and TEVIMBRA, as well as increased sales of in-licensed products, most notably from the Amgen products. Net product revenues consisted of the following: Nine Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) BRUKINSA ® 2,782,195 1,816,192 $ 966,003 53.2 % TEVIMBRA ® 555,311 467,038 88,273 18.9 % XGEVA ® 235,984 161,880 74,104 45.8 % BLINCYTO ® 79,969 53,712 26,257 48.9 % KYPROLIS ® 57,513 48,019 9,494 19.8 % POBEVCY ® 35,486 40,398 (4,912) (12.2) % Other 59,161 74,272 (15,111) (20.3) % Total product revenue 3,805,619 2,661,511 1,144,108 43.0 % Net product revenue increased 43.0% to $3,805.6 million for the nine months ended September 30, 2025, compared to $2,661.5 million in the prior-year period, primarily due to increased sales of BRUKINSA globally, driven by continued growth in the U.S. and Europe. In addition, product revenues in the nine months ended September 30, 2025 were positively impacted by sales of TEVIMBRA and in-licensed products from Amgen, primarily XGEVA ® . Global sales of BRUKINSA totaled $2,782.2 million in the nine months ended September 30, 2025, representing a 53.2% increase compared to the prior-year period. U.S. sales of BRUKINSA totaled $1,985.6 million in the nine months ended September 30, 2025, compared to $1,334.6 million in the prior-year period, representing growth of 48.8%, driven primarily by robust demand growth across all indications and modest benefit due to net pricing. BRUKINSA continues to maintain its leading new patient share across the BTKi class due to its differentiated, best-in-class clinical profile. BRUKINSA sales in Europe totaled $429.6 million in the nine months ended September 30, 2025, representing growth of 75.0% driven by increased market share across all major European markets, including Germany, Italy, Spain, France and the UK. BRUKINSA revenue in China totaled $256.7 million, representing growth of 35.9%. BRUKINSA rest of world revenue totaled $110.3 million in the nine months ended September 30, 2025, representing growth of 133.3% compared to the prior-year period. Revenue for TEVIMBRA totaled $555.3 million in the nine months ended September 30, 2025, compared to $467.0 million in the prior-year period, representing a 18.9% increase. Revenue for Amgen products in China totaled $373.5 million in the nine months ended September 30, 2025, compared to $263.6 million in the prior-year period, driven primarily by increased XGEVA ® sales volume. 33 Table of Contents Other revenue totaled $39.2 million and $20.9 million for the nine months ended September 30, 2025 and 2024, respectively, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement and royalty revenue under the Amgen collaboration. Gross Margin Gross margin on product sales increased to $3,279.5 million for the nine months ended September 30, 2025, compared to $2,228.0 million in the prior-year period, primarily due to increased product revenue in the current year period. Gross margin as a percentage of product sales increased to 86.2% for the nine months ended September 30, 2025, from 83.7% in the comparable period of the prior year. The gross margin percentage increased due to a proportionally higher sales mix of global BRUKINSA compared to other products in our portfolio. Gross margin also benefited from production productivity improvements for both BRUKINSA and TEVIMBRA. These increases were offset by period costs of $33.9 million related to the re-positioning of our manufacturing capacity. On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 86.7%, from 84.8% in the comparable period of the prior year. Research and Development Expense Research and development expense increased by $119.2 million, or 8.4%, to $1,530.4 million for the nine months ended September 30, 2025 from $1,411.3 million for the nine months ended September 30, 2024. The following table summarizes external clinical, external non-clinical and internal research and development expense for the nine months ended September 30, 2025 and 2024, respectively: Nine Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 526,239 $ 396,659 $ 129,580 32.7 % Upfront license and development milestone fees 691 51,528 (50,837) (98.7) % Amgen co-development expense 1 77,196 52,981 24,215 45.7 % Total external research and development expenses 604,126 501,168 102,958 20.5 % Internal research and development expenses 926,319 910,115 16,204 1.8 % Total research and development expenses $ 1,530,445 $ 1,411,283 $ 119,162 8.4 % Adjusted research and development expenses 2 $ 1,311,156 $ 1,193,494 $ 117,662 9.9 % 1. Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the nine months ended September 30, 2025 totaled $152.0 million, of which $77.2 million was recorded as R&D expense. The remaining $74.8 million was recorded as a reduction of the R&D cost share liability. 2. Adjusted research and development expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. The increase in external research and development expenses in the nine months ended September 30, 2025 was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, including sonrotoclax (BCL2i), offset by lower development upfront and milestone fees. Internal research and development expense increased $16.2 million, or 1.8%, to $926.3 million and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend. Included within internal research and development expenses for the nine months ended September 30, 2024 is $24.9 million of accelerated depreciation expense related to the move of clinical production to larger, more efficient production lines. 34 Table of Contents Selling, General and Administrative Expense Nine Months Ended September 30, Changes 2025 2024 $ % (dollars in thousands) Selling, general and administrative expenses $ 1,526,199 $ 1,326,379 $ 199,820 15.1 % Adjusted selling, general and administrative expenses 1 $ 1,271,650 $ 1,116,805 $ 154,845 13.9 % 1. Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. Selling, general and administrative expense increased by $199.8 million, or 15.1%, to $1,526.2 million, for the nine months ended September 30, 2025, from $1,326.4 million for the nine months ended September 30, 2024. The increase was primarily attributable to continued investment in global commercial expansion primarily in the U.S. and Europe. Selling, general and administrative expenses as a percentage of product sales were 40.1% for the nine months ended September 30, 2025 compared to 49.8% in the prior-year period. We expect continued investment in selling and marketing activities as our product sales increase. Interest Income, Net Interest income, net decreased by $27.7 million, or 69.1%, to $12.4 million for the nine months ended September 30, 2025, from $40.0 million for the nine months ended September 30, 2024. The decrease in interest income was primarily attributable to lower market interest rates earned on our cash and cash equivalents. Interest expense increased resulting from interest expense recorded under the effective interest method related to the sale of future royalty liability, higher interest rates on debt balances and lower interest capitalized related to completion of certain phases of our Hopewell facility. Other (Expense) Income, Net Other expense, net was $6.9 million for the nine months ended September 30, 2025, primarily due to to impairment losses recognized on our equity investments partially offset by government subsidy income and foreign exchange gains. For the nine months ended September 30, 2024, other income, net was $1.1 million, primarily due to foreign exchanges gains. Income Tax Expense Income tax expense increased to $47.2 million for the nine months ended September 30, 2025, from $45.3 million for the nine months ended September 30, 2024. The income tax expense for the nine months ended September 30, 2025 was primarily attributable to current Switzerland tax expense based on year to date earnings, current China tax expense due to certain non-deductible expenses, offset by net discrete adjustments of approximately $9.7 million, primarily related to updated provision estimates for R&D tax credits. The income tax expense for the nine months ended September 30, 2024 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 July 4, 2025, the reconciliation bill (H.R. 1), commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law and includes a broad range of tax reform provisions that may affect our financial results. The OBBBA allows an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on foreign-derived deduction eligible income. While we have estimated the impact of certain elective provisions of the OBBBA, we do not expect the legislation to have a material impact on our consolidated financial statements. Net Income (Loss) and Earnings Per Share GAAP net income improved for the nine months ended September 30, 2025, as compared to the prior-year period loss, primarily attributable to revenue growth and improved operating leverage. For the nine months ended September 30, 2025, basic and diluted earnings per share was $0.16 and $0.15 per share and $2.03 and $1.96 per ADS, respectively, compared to basic loss of $0.36 per share and $4.71 per ADS in the prior-year period. 35 Table of Contents Non-GAAP Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 ( in thousands) Reconciliation of GAAP to adjusted cost of sales - products: GAAP cost of sales - products $ 196,510 $ 170,462 $ 526,118 $ 433,529 Less: Depreciation 4,261 19,589 10,195 24,618 Less: Amortization of intangibles 1,537 1,186 8,459 3,546 Less: Other — — 893 — Adjusted cost of sales - products $ 190,712 $ 149,687 $ 506,571 $ 405,365 Reconciliation of GAAP to adjusted research and development: GAAP research and development $ 523,662 $ 496,179 $ 1,530,445 $ 1,411,283 Less: Share-based compensation expenses 58,839 47,670 164,998 141,121 Less: Depreciation 18,919 42,964 54,291 76,668 Adjusted research and development $ 445,904 $ 405,545 $ 1,311,156 $ 1,193,494 Reconciliation of GAAP to adjusted selling, general and administrative: GAAP selling, general and administrative $ 528,998 $ 455,223 $ 1,526,199 $ 1,326,379 Less: Share-based compensation expenses 81,947 66,933 221,792 192,890 Less: Depreciation 12,550 7,475 32,712 16,606 Less: Amortization of intangibles 17 78 45 78 Adjusted selling, general and administrative $ 434,484 $ 380,737 $ 1,271,650 $ 1,116,805 Reconciliation of GAAP to adjusted operating expenses GAAP operating expenses $ 1,052,660 $ 951,402 $ 3,056,644 $ 2,737,662 Less: Share-based compensation expenses 140,786 114,603 386,790 334,011 Less: Depreciation 31,469 50,439 87,003 93,274 Less: Amortization of intangibles 17 78 45 78 Adjusted operating expenses $ 880,388 $ 786,282 $ 2,582,806 $ 2,310,299 Reconciliation of GAAP to adjusted income (loss) from operations: GAAP income (loss) from operations $ 163,114 $ (120,265) $ 262,101 $ (488,774) Plus: Share-based compensation expenses 140,786 114,603 386,790 334,011 Plus: Depreciation 35,730 70,028 97,198 117,892 Plus: Amortization of intangibles 1,554 1,264 8,504 3,624 Plus: Other — — 893 — Adjusted income (loss) from operations $ 341,184 $ 65,630 $ 755,486 $ (33,247) Reconciliation of GAAP to adjusted net income (loss): GAAP net income (loss) $ 124,841 $ (121,350) $ 220,431 $ (492,905) Plus: Share-based compensation expenses 140,786 114,603 386,790 334,011 Plus: Depreciation 35,730 70,028 97,198 117,892 Plus: Amortization of intangibles 1,554 1,264 8,504 3,624 Plus: Other — — 893 — Plus: Impairment of equity investments 18,722 — 34,216 — Plus: Discrete tax items (926) 962 (9,663) 3,365 Plus: Income tax effect of non-GAAP adjustments (17,044) (13,925) (45,747) (37,007) Adjusted net income (loss) $ 303,663 $ 51,582 $ 692,622 $ (71,020) 36 Table of Contents Reconciliation of GAAP to adjusted EPS - basic GAAP earnings (loss) per share - basic $ 0.09 $ (0.09) $ 0.16 $ (0.36) Plus: Share-based compensation expenses 0.10 0.08 0.27 0.25 Plus: Depreciation 0.02 0.05 0.07 0.09 Plus: Amortization of intangibles 0.00 0.00 0.01 0.00 Plus: Other 0.00 0.00 0.00 0.00 Plus: Impairment of equity investments 0.01 0.00 0.02 0.00 Plus: Discrete tax items (0.00) 0.00 (0.01) 0.00 Plus: Income tax effect of non-GAAP adjustments (0.01) (0.01) (0.03) (0.03) Adjusted earnings (loss) per share - basic $ 0.21 $ 0.04 $ 0.49 $ (0.05) Reconciliation of GAAP to adjusted EPS - diluted GAAP earnings (loss) per share - diluted $ 0.08 $ (0.09) $ 0.15 $ (0.36) Plus: Share-based compensation expenses 0.09 0.08 0.26 0.25 Plus: Depreciation 0.02 0.05 0.07 0.09 Plus: Amortization of intangibles 0.00 0.00 0.01 0.00 Plus: Other 0.00 0.00 0.00 0.00 Plus: Impairment of equity investments 0.01 0.00 0.02 0.00 Plus: Discrete tax items (0.00) 0.00 (0.01) 0.00 Plus: Income tax effect of non-GAAP adjustments (0.01) (0.01) (0.03) (0.03) Adjusted earnings (loss) per share - diluted $ 0.20 $ 0.04 $ 0.47 $ (0.05) Reconciliation of GAAP to adjusted earnings (loss) per ADS - basic GAAP earnings (loss) per ADS - basic $ 1.13 $ (1.15) $ 2.03 $ (4.71) Plus: Share-based compensation expenses 1.28 1.08 3.56 3.19 Plus: Depreciation 0.32 0.66 0.90 1.13 Plus: Amortization of intangibles 0.01 0.01 0.08 0.03 Plus: Other 0.00 0.00 0.01 0.00 Plus: Impairment of equity investments 0.17 0.00 0.32 0.00 Plus: Discrete tax items (0.01) 0.01 (0.09) 0.03 Plus: Income tax effect of non-GAAP adjustments (0.15) (0.13) (0.42) (0.35) Adjusted earnings (loss) per ADS - basic $ 2.76 $ 0.49 $ 6.38 $ (0.68) Reconciliation of GAAP to adjusted earnings (loss) per ADS - diluted GAAP earnings (loss) per ADS - diluted 1 $ 1.09 $ (1.12) $ 1.96 $ (4.71) Plus: Share-based compensation expenses 1.23 1.06 3.43 3.19 Plus: Depreciation 0.31 0.65 0.86 1.13 Plus: Amortization of intangibles 0.01 0.01 0.08 0.03 Plus: Other 0.00 0.00 0.01 0.00 Plus: Impairment of equity investments 0.16 0.00 0.30 0.00 Plus: Discrete tax items (0.01) 0.01 (0.09) 0.03 Plus: Income tax effect of non-GAAP adjustments (0.15) (0.13) (0.41) (0.35) Adjusted earnings (loss) per ADS - diluted $ 2.65 $ 0.48 $ 6.14 $ (0.68) 1. For the third quarter of 2024, GAAP diluted loss per ADS includes $0.03 loss per ADS attributable to the dilutive ADS outstanding for purposes of this reconciliation. As the Company was in a GAAP net loss position no diluted weighted average shares outstanding were calculated for US GAAP purposes. 37 Table of Contents Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Free Cash Flow (Non-GAAP): Net cash provided by (used in) operating activities (GAAP) $ 402,553 $ 188,369 $ 710,233 $ (215,791) Less: Purchases of property, plant and equipment (48,084) (133,655) (148,317) (400,183) Free Cash Flow (Non-GAAP) $ 354,469 $ 54,714 $ 561,916 $ (615,974) Liquidity and Capital Resources The following table represents our cash and debt balances as of September 30, 2025 and December 31, 2024: As of September 30, December 31, 2025 2024 (dollars in thousands) Cash, cash equivalents and restricted cash $ 4,110,542 $ 2,638,747 Total debt $ 952,867 $ 1,018,013 To date, we have financed our operations and investments in long-term assets principally through proceeds from public and private offerings of our securities, proceeds from debt and our collaborations, proceeds from the sale of future royalties and, since the third quarter of 2024, cash flow from operations. Based on our current operating plan, we expect that our operating cash flows and existing cash and cash equivalents will enable us to fund our operating expenses and planned long-term investments for at least the next 12 months after the date that the financial statements included in this report are issued. We have also financed our operations and investments with proceeds from debt primarily incurred through various banks by both our subsidiaries and the Parent Company of $952.9 million as of September 30, 2025. We paid down $75.3 million of the debt in the nine months ended September 30, 2025 using existing cash. The majority of those debt obligations, or approximately $673.2 million, owed by BeOne Medicines Ltd. mature within the next 12 months. We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations on a consolidated basis. The upfront payment from Royalty Pharma of $885 million in the third quarter of 2025 increased our cash and cash equivalents through financing cash inflows. However, the repayment of this obligation to Royalty Pharma will be made upon the receipt of royalties from Amgen throughout the royalty period; therefore, it has not been included in the total debt balance above, as there is no claim on unrestricted cash. Our classification of the liability between current and non-current is based on our expectations of royalty revenue from Amgen over the next 12 months, which will be partially paid to Royalty Pharma in accordance with the terms of the Royalty Purchase Agreement. Cash inflows from Amgen will be classified as operating cash inflows, while the corresponding payments to Royalty Pharma will be allocated between interest cash outflows within operating cash flows and a portion to reduce the liability, classified as a financing cash outflow. In the third quarter of 2025, there was no impact on operating cash flows resulting from the royalty revenue inflows from Amgen following the completion of the Royalty Purchase Agreement, nor were there any interest payments associated with the liability to Royalty Pharma. Additionally, we did not repay any cash to Royalty Pharma during this period, which would have impacted our financing cash flows. Any cash received from Amgen but not yet remitted to Royalty Pharma as of the balance sheet date will be reflected as restricted cash in the Consolidated Balance Sheet. There was no such restricted cash as of September 30, 2025. On December 15, 2021, we completed our initial public offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”). As required by the PRC securities laws, the net proceeds from the STAR Offering must be used in compliance with the planned uses as disclosed in the PRC prospectus as well as our proceeds management policy for the STAR Offering approved by our board of directors. As of September 30, 2025, we had cash remaining related to the STAR Offering proceeds of $249.0 million. 38 Table of Contents The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024: Nine Months Ended September 30, 2025 2024 (dollars in thousands) Cash, cash equivalents and restricted cash at beginning of period $ 2,638,747 $ 3,185,984 Net cash provided by (used in) operating activities 710,233 (215,791) Net cash used in investing activities (237,820) (454,745) Net cash provided by financing activities 962,520 197,972 Net effect of foreign exchange rate changes 36,862 8 Net increase (decrease) in cash, cash equivalents, and restricted cash 1,471,795 (472,556) Cash, cash equivalents and restricted cash at end of period $ 4,110,542 $ 2,713,428 Operating Activities Cash provided by operating activities improved $926.0 million in the nine months ended September 30, 2025, versus the prior year period due to our significantly improved revenue and $1,069.9 million of increase in gross margin in the current year period, offset by continued funding of our development pipeline and commercial operations, and increasing working capital to support our global expansion. Investing Activities Investing activities used $237.8 million of cash in the nine months ended September 30, 2025, compared to $454.7 million in the prior year period due primarily to a decrease in capital expenditures, partially offset by an increase in acquired in-process research and development and regulatory milestone payments. Financing Activities Financing activities provided $962.5 million of cash in the nine months ended September 30, 2025, compared to $198.0 million in the prior year period due primarily to $885.0 million of proceeds from sale of future royalties and higher proceeds from option exercises and employee share purchase plan, partially offset by a net reduction in debt borrowings in the current year period and higher payroll tax payments upon vesting of share-based compensation awards. Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings, if necessary, is dependent on interest rates, credit spreads, bank lending capacity and other factors. We expect to repay approximately $813.3 million of loans in the next 12 months and expect to be able to re-finance those on a consistent basis with our historical experience, with the cost of those borrowings depending on prevailing interest rates and credit spreads. Effects of Exchange Rates on Cash As noted above, we hold RMB denominated cash in our Parent Company (largely arising from the STAR Offering) and incur foreign currency gains or losses when remeasuring such cash to the U.S. dollar. In the nine months ended September 30, 2025, we incurred realized gains on cash of $4.0 million that is included in the reconciling items between net income and net cash provided by operating activities on the consolidated statements of cash flows, primarily related to the remeasurement of RMB denominated cash to USD. The RMB denominated cash in our Parent Company, however, is required to be used to fund RMB denominated expenditures and thus foreign currency gains or losses on such cash does not affect our ability to fund those expenditures. We also have substantial operations in China and Europe, where the functional currency is the RMB and Euro, and as such the net cash flows are translated to the U.S. dollar for financial reporting. This process generates translation gains and losses primarily on RMB-denominated cash held in China and Euro-denominated cash held in Europe that are included in the effects of foreign exchange rate changes on the consolidated statements of cash flows, as such translation gains and losses are excluded from cash flows from operating, investing and financing activities. 39 Table of Contents Future Liquidity and Material Cash Requirements Our material cash requirements in the short- and long-term consist of the following operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations. We plan to fund our material cash requirements with cash on hand. Contractual and Other Obligations The following table summarizes our significant contractual obligations as of the payment due date by period as of September 30, 2025: Payments Due by Period Total Short Term Long Term (dollars in thousands) Contractual obligations Operating lease commitments $ 74,486 $ 4,540 $ 69,946 Purchase commitments 175,115 172,773 2,342 Debt obligations 952,867 813,296 139,571 Interest on debt 57,482 47,699 9,783 Co-development funding commitment 183,592 183,592 — Funding commitment 5,991 2,111 3,880 Capital commitments 52,061 52,061 — Total $ 1,501,594 $ 1,276,072 $ 225,522 Operating Lease Commitments We lease office facilities in the U.S. and Switzerland, and office and manufacturing facilities in China under non-cancelable operating leases expiring on various dates. Payments under operating leases are expensed on a straight-line basis over the respective lease terms. The aggregate future minimum payments under these non-cancelable operating leases are summarized in the table above. Purchase Commitments As of September 30, 2025, non-cancellable purchase commitments amounted to $175.1 million, of which $24.9 million related to non-utilization fees and minimum purchase requirements for supply purchased from contract manufacturers and $150.2 million related to binding purchase obligations of inventory from Amgen. We do not have any minimum purchase requirements for inventory from Amgen. Debt Obligations and Interest Total debt obligations coming due in the next twelve months are $813.3 million. Total long-term debt obligations are $139.6 million. We have numerous financial and non-financial covenants on our debt obligations with various banks and other lenders. Some of these covenants include default and/or cross-default provisions that could require acceleration of repayment of loans in the event of default. However, our debt is primarily short-term in nature. Any acceleration would be a matter of months but may impact our ability to refinance debt obligations if an event of default occurs. As of September 30, 2025, we were in compliance with all covenants of our material debt agreements. See above regarding Liquidity and Capital Resources and Note 11 in the Notes to the Condensed Consolidated Financial Statements for further detail of our debt obligations. Interest on bank loans is paid quarterly until the respective loans are fully settled. For the purpose of contractual obligations calculation, current interest rates on floating rate obligations were used for the remainder contractual life of the outstanding borrowings. Royalty Sale Liability As described above, we have a contractual commitment to pay Royalty Pharma amounts received from Amgen related to Amgen’s sales of IMDELLTRA ® in certain markets outside of China. While we have classified the upfront payment received from Royalty Pharma as a liability, the repayment of this obligation to Royalty Pharma will be made upon the receipt of royalties from Amgen throughout the royalty period, which is anticipated to extend at least through 2041. We have not included this liability in the table above because it does not constitute a fixed contractual obligation or a cancellable commitment from which the upfront payment could be demanded for refund. 40 Table of Contents Co-Development Funding Commitment Under the Amgen collaboration, we are responsible for co-funding global development costs for the licensed Amgen oncology pipeline assets up to a total cap of $1.25 billion. We are funding our portion of the co-development costs by contributing cash and development services. As of September 30, 2025, our remaining co-development funding commitment was $183.6 million. Funding Commitment Funding commitment represents our committed capital related to equity investments. As of September 30, 2025, our remaining capital commitment was $6.0 million and is expected to be paid from time to time over the investment period. Capital Commitments We had capital commitments amounting to $52.1 million for the acquisition of property, plant and equipment as of September 30, 2025, related to various facilities across the globe, including our Hopewell facility. Critical Accounting Policies and Significant Judgments and Estimates Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates. These include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, estimating the incremental borrowing rate for operating lease liabilities, identifying separate accounting units and 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, estimates related to the sale of future royalty liability and the fair value of financial instruments. We base our estimates on historical experience, known trends and events, contractual milestones and other various factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. There have been no material changes to our critical accounting policies as of and for the three and nine months ended September 30, 2025, as compared to those described in the section titled “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. For new accounting policies adopted during the three and nine months ended September 30, 2025, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies—Significant accounting policies” in this Quarterly Report on Form 10-Q, other than the accounting for the sale of future royalty liability disclosed in Note 4.