BeOne Medicines Ltd. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. In addition to historical information, this discussion and analysis contains forward‑looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward‑looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this report, including those set forth under “Part I—Item 1A—Risk Factors” and under “Forward‑Looking Statements and Market Data” in this Annual Report. A discussion of the Company’s financial condition and results of operations for the year ended December 31, 2023 and year-to-year comparisons between 2024 and 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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 effect. The Company currently records a valuation allowance on its net deferred tax assets, so there is no net impact recorded for deferred tax effects in our tax expense. 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 fourth quarter and full year results show topline growth and a strong liquidity position to support ongoing operations and strategic priorities. BRUKINSA is the global revenue leader in the BTK inhibitor class and TEVIMBRA continues to gain new indications and expanded reimbursement in multiple markets. Our late-stage hematology assets are approaching commercialization and our solid tumor portfolio continues to deliver encouraging data. Key highlights for the full year 2025 are as follows: • Total global revenues of $1.5 billion and $5.3 billion, respectively, in the fourth quarter and full year, increases of 32.8% and 40.2%, respectively, compared to the prior year periods; • Global BRUKINSA revenues of $1.1 billion and $3.9 billion for the fourth quarter and full year 2025, increases of 38.4% and 48.6%, respectively, compared to the prior year periods; and • GAAP diluted earnings per American Depositary Share (“ADS”) of $0.58 and $2.53 for the fourth quarter and full year, non-GAAP diluted earnings per ADS of $1.95 and $8.09 for the fourth quarter and full year. Recent Business Developments On December 7, 2025, we announced new data on sonrotoclax, a next-generation investigational BCL2 inhibitor, demonstrating meaningful clinical benefit as monotherapy and in combination across B-cell malignancies, and in January 2026, we received the first approval of sonrotoclax for adult patients with relapsed/refractory (“R/R”) mantle cell lymphoma (“MCL”) and R/R chronic lymphocytic leukemia (“CLL”)/small lymphocytic lymphoma (“SLL”). 126 Table of Contents On November 26, 2025, we announced that the U.S. Food and Drug Administration (“FDA”) accepted and granted Priority Review to a New Drug Application (“NDA”) for sonrotoclax for the treatment of adult patients with R/R MCL, following treatment with a Bruton’s tyrosine kinase (“BTK”) inhibitor. On November 17, 2025, we announced positive top-line results from the Phase 3 HERIZON-GEA-01 trial evaluating ZIIHERA ® (zanidatamab), a HER2-targeted bispecific antibody, in combination with chemotherapy, with or without PD-1 inhibitor TEVIMBRA ® (tislelizumab), as first-line treatment for HER2-positive (“HER2+”) locally advanced or metastatic gastroesophageal adenocarcinoma (“GEA”), including cancers of the stomach, gastroesophageal junction, and esophagus. On November 13, 2025, we entered into the Facilities Agreement (the “Facilities Agreement”) with The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) and certain financial institutions listed in the Facilities Agreement as lenders. The Facilities Agreement provides senior secured financing consisting of a U.S. dollar-denominated, B1 revolving loan facility in an aggregate principal amount of $140 million (the “B1 Revolving Loan Facility”), a U.S. dollar-denominated, B2 term loan facility in an aggregate principal amount of $560 million (the “B2 Term Loan Facility” and, together with the B1 Revolving Loan Facility, the “B Loan Facilities”); and a Renminbi-denominated, A term loan facility in an aggregate principal amount of approximately $300 million (the “A Loan Facility”) (collectively, the “Loan Facilities”). The A Loan Facility matures 36 months after the first utilization date of such facility and, unless extended, the B Loan Facilities mature 24 months after the first utilization date of a B Loan Facility. Subject to certain limitations, the Loan Facilities are secured on a first priority basis granted in favor of HSBC by a security interest in the equity interests of a number of our subsidiaries and security interests in, and mortgage on, our manufacturing and clinical R&D facility in New Jersey. The Facilities Agreement contains certain affirmative and negative covenants, as well as financing covenants applicable to the Loan Facilities. The A Loan Facility is subject to an interest rate equal to the Reference Rate (RMB) (as defined in the Facilities Agreement) plus a margin of 0.65% per annum. The B Loan Facilities are subject to an interest rate equal to the Reference Rate (USD) (as defined in the Facilities Agreement) plus a margin of 2.40% per annum. Subsequently, on December 16, 2025, we utilized a portion of the proceeds from borrowings under the Facilities Agreement to repay in full all outstanding amounts owed under the Company’s Facility Agreement, dated as of December 9, 2024, by and between the Company and China Merchants Bank Co., Ltd. (the “CMB Credit Facility”), and terminated all commitments by the lender to extend further credit under the CMB Credit Facility and all guarantees and security interests granted by the Company to the lender under the CMB Credit Facility. On August 25, 2025, BeOne Medicines Ltd. entered into a Royalty Purchase Agreement (the “Royalty 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 based on annual net revenue from sales outside of China of any and all products that consist of Amgen’s IMDELLTRA ® . Under the terms of the Royalty Agreement, we received a non-refundable upfront payment of $885 million upon the closing of the Royalty Agreement, and subsequently exercised our option to sell to Royalty Pharma an additional portion of our rights to royalty payments for approximately $26 million. 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, Debt . 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. 127 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024: Year Ended December 31, Change 2025 2024 $ % (dollars in thousands) Revenues Product revenue, net $ 5,282,061 $ 3,779,546 $ 1,502,515 39.8 % Other revenue 60,972 30,695 30,277 98.6 % Total revenues 5,343,033 3,810,241 1,532,792 40.2 % Cost of sales - product 668,540 594,089 74,451 12.5 % Gross profit 4,674,493 3,216,152 1,458,341 45.3 % Operating expenses Research and development 2,145,868 1,953,295 192,573 9.9 % Selling, general and administrative 2,081,489 1,831,056 250,433 13.7 % Total operating expenses 4,227,357 3,784,351 443,006 11.7 % Income (loss) from operations 447,136 (568,199) 1,015,335 (178.7) % Interest income 70,505 69,641 864 1.2 % Interest expense (58,234) (21,805) (36,429) 167.1 % Other expense, net (42,553) (12,638) (29,915) 236.7 % Income (loss) before income tax expense 416,854 (533,001) 949,855 (178.2) % Income tax expense 129,921 111,785 18,136 16.2 % Net income (loss) $ 286,933 $ (644,786) $ 931,719 (144.5) % Revenue Total revenue increased by $1.5 billion to $5.3 billion for the year ended December 31, 2025, from $3.8 billion for the year ended December 31, 2024, primarily due to increased sales of BRUKINSA, TEVIMBRA, as well as increased sales of in-licensed products from Amgen. Net product revenue consisted of the following: Year Ended December 31, Changes 2025 2024 $ % (dollars in thousands) BRUKINSA ® $ 3,928,489 $ 2,644,226 $ 1,284,263 48.6 % TEVIMBRA ® 737,304 620,836 116,468 18.8 % XGEVA ® 305,979 224,403 81,576 36.4 % BLINCYTO ® 104,224 74,331 29,893 40.2 % KYPROLIS ® 74,974 66,171 8,803 13.3 % POBEVCY ® 47,400 53,509 (6,109) (11.4) % Other 83,691 96,070 (12,379) (12.9) % Total product revenue $ 5,282,061 $ 3,779,546 $ 1,502,515 39.8 % Net product revenue increased for the year ended December 31, 2025, compared to the prior year, primarily due to increased sales of BRUKINSA globally, driven by significant growth in the U.S. and Europe. In addition, product revenues in 2025 were positively impacted by growth from in-licensed products from Amgen and TEVIMBRA. 128 Table of Contents Global sales of BRUKINSA totaled $3.9 billion for the year ended December 31, 2025, representing a 48.6% increase compared to the prior year. U.S. sales of BRUKINSA totaled $2.8 billion for the year ended December 31, 2025 compared to $2.0 billion in the prior year, representing growth of 45.1%, 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 the EU totaled $596.4 million for the year ended December 31, 2025, representing growth of 66.2% compared to the prior-year period, driven by continued gains in market share across all major markets, including Germany, Italy, Spain, France and the UK. BRUKINSA sales in China totaled $344.1 million for the year ended December 31, 2025, representing growth of 33.3% compared to the prior year. Sales of TEVIMBRA totaled $737.3 million for the year ended December 31, 2025, representing a 18.8% increase compared to the prior year. Other revenue totaled $61.0 million and $30.7 million for the years ended December 31, 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 $4.6 billion, or 87.3% as a percentage of sales, for the year ended December 31, 2025, compared to $3.2 billion, or 84.3% as a percentage of sales, for the year ended December 31, 2024. 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 resulting in lower costs for both BRUKINSA and TEVIMBRA. These increases were slightly offset by period costs of $33.9 million related to the re-positioning of our manufacturing capacity during 2025. On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 87.8% for the year ended December 31, 2025, from 85.5% in the prior year. Research and Development Expense Research and development expense increased by $192.6 million, or 9.9%, to $2.1 billion for the year ended December 31, 2025, from $2.0 billion for the year ended December 31, 2024. The following table summarizes the external cost of development programs, upfront license and development milestone fees, and internal research and development expense for the years ended December 31, 2025 and 2024: Year Ended December 31, Changes 2025 2024 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 753,868 $ 539,446 $ 214,422 39.7 % Upfront license and development milestone fees 709 114,049 (113,340) (99.4) % Amgen co-development expenses 1 104,143 75,165 28,978 38.6 % Total external research and development expenses 858,720 728,660 130,060 17.8 % Internal research and development expenses 1,287,148 1,224,635 62,513 5.1 % Total research and development expenses $ 2,145,868 $ 1,953,295 $ 192,573 9.9 % Adjusted research and development expense 2 $ 1,855,979 $ 1,668,368 $ 187,611 11.2 % 1. Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the year ended December 31, 2025 totaled $205.2 million, of which $104.1 million was recorded as R&D expense. The remaining $101.1 million was recorded as a reduction for 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 for the year ended December 31, 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), as well as higher Amgen co-development expenses offset by lower development upfront and milestone fees. 129 Table of Contents Internal research and development expense increased $62.5 million, or 5.1%, to $1.3 billion for the year ended December 31, 2025 from $1.2 billion in the prior year, 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. Selling, General and Administrative Expense Year Ended December 31, Changes 2025 2024 $ % (dollars in thousands) Selling, general and administrative expense $ 2,081,489 $ 1,831,056 $ 250,433 13.7 % Adjusted selling, general and administrative expense 1 $ 1,743,118 $ 1,549,864 $ 193,254 12.5 % 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 $250.4 million, or 13.7%, to $2.1 billion for the year ended December 31, 2025, from $1.8 billion for the year ended December 31, 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 39.4% for the year ended December 31, 2025 compared to 48.4% in the prior-year period. Interest Income Interest income increased by $0.9 million, or 1.2%, to $70.5 million for the year ended December 31, 2025, compared to $69.6 million for the year ended December 31, 2024. Interest income remained materially consistent, due to lower interest rates earned on our cash and cash equivalents offset by a higher cash and cash equivalents balance. Interest Expense Interest expense increased by $36.4 million, or 167.1%, to $58.2 million for the year ended December 31, 2025, compared to $21.8 million for the year ended December 31, 2024. 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, Net Other expense, net for the year ended December 31, 2025 was $42.6 million, due to impairment losses recognized on our equity investments partially offset by government subsidy income and foreign exchange gains. Other expense, net for the year ended December 31, 2024 was $12.6 million, due to foreign exchange losses, primarily from holding net monetary assets denominated in the RMB at certain U.S. dollar functional entities, including BeOne Medicines Ltd. (the “Parent Company”), and unrealized losses on equity investments, partially offset by government subsidy income. Income Tax Expense Our total income tax expense is substantially equal to our current tax expense and thus does not reflect any deferred tax benefits related to our net deferred tax assets due to the ASC 740, Income Taxes requirement to establish a valuation allowance against all such assets in all jurisdictions, thereby negating the tax benefit in the income statement, due to our three-year cumulative loss position. Our discussion of income tax expense below is thus based on a comparison of our current tax expense in 2025 versus 2024. 130 Table of Contents Year Ended December 31, 2025 2024 2023 $ $ $ Current tax expense 120,452 85,778 55,185 Net deferred tax benefit (149,347) (131,279) (845,124) Increase in valuation allowance 158,816 157,286 845,811 Total income tax expense 129,921 111,785 55,872 Income tax expense was $129.9 million ($120.5 million current tax) for the year ended December 31, 2025 compared with $111.8 million ($85.8 million current tax) for the year ended December 31, 2024. The current income tax expense for the year ended December 31, 2025 was primarily attributable to higher currently taxable income primarily in China, Australia, and Italy, that resulted in an increase of $52.6 million offset with lower current tax in the U.S. of $17.9 million. The decrease in the U.S. was driven by positive impacts of OBBBA, while the increase in other jurisdictions’ higher current taxable income was driven by (a) the increase in current year valuation allowances on short-term deferred tax assets that are triggered by our three-year cumulative loss position at a consolidated level, (b) increase in uncertain tax liabilities and (c) return to provision adjustments. Given the Company’s recent history of earnings, management believes that there is a reasonable possibility that, within the next twelve months, sufficient positive evidence may become available to allow management to reach a conclusion that a significant portion of the valuation allowance recorded against the deferred tax assets held will be reversed. The reversal would result in an income tax benefit for the quarterly and annual fiscal period in which the Company releases the valuation allowance. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company actually achieves. Prior to reversal, income tax expense should trend with earnings per historical relationship. On July 4, 2025, the reconciliation bill (H.R. 1), commonly referred to as the OBBBA, was signed into law and includes a broad range of tax reform provisions. The OBBBA allows an elective deduction for domestic research and development expenses and, a reinstatement of elective 100% first-year bonus depreciation effective in tax year 2025, and a more favorable tax rate on foreign-derived deduction eligible income effective in tax year 2026. The impact of certain elective provisions of the OBBBA has been included in the 2025 tax provision, resulting in a reduction of U.S. income tax expense within our consolidated financial statements. 131 Table of Contents Non-GAAP Reconciliation Year Ended December 31, 2025 2024 ( in thousands, except for per share data) Reconciliation of GAAP to adjusted cost of sales - products: GAAP cost of sales - products $ 668,540 $ 594,089 Less: Depreciation 13,669 42,707 Less: Amortization of intangibles 10,004 4,729 Less: Other 893 — Adjusted cost of sales - products $ 643,974 $ 546,653 Reconciliation of GAAP to adjusted research and development: GAAP research and development $ 2,145,868 $ 1,953,295 Less: Share-based compensation expenses 217,440 186,113 Less: Depreciation 72,449 98,814 Adjusted research and development $ 1,855,979 $ 1,668,368 Reconciliation of GAAP to adjusted selling, general and administrative: GAAP selling, general and administrative $ 2,081,489 $ 1,831,056 Less: Share-based compensation expenses 292,807 255,680 Less: Depreciation 45,497 25,417 Less: Amortization of intangibles 67 95 Adjusted selling, general and administrative $ 1,743,118 $ 1,549,864 Reconciliation of GAAP to adjusted operating expenses GAAP operating expenses $ 4,227,357 $ 3,784,351 Less: Share-based compensation expenses 510,247 441,793 Less: Depreciation 117,946 124,231 Less: Amortization of intangibles 67 95 Adjusted operating expenses $ 3,599,097 $ 3,218,232 Reconciliation of GAAP to adjusted income (loss) from operations: GAAP income (loss) from operations $ 447,136 $ (568,199) Plus: Share-based compensation expenses 510,247 441,793 Plus: Depreciation 131,615 166,938 Plus: Amortization of intangibles 10,071 4,824 Plus: Other 893 — Adjusted income from operations $ 1,099,962 $ 45,356 Reconciliation of GAAP to adjusted net income (loss): GAAP net income (loss) $ 286,933 $ (644,786) Plus: Share-based compensation expenses 510,247 441,793 Plus: Depreciation 131,615 166,938 Plus: Amortization of intangibles 10,071 4,824 Plus: Other 893 — Plus: Impairment of equity investments 75,626 6,838 Plus: Discrete tax items 24,778 18,597 Plus: Income tax effect of non-GAAP adjustments (122,562) (49,123) Adjusted net income (loss) $ 917,601 $ (54,919) 132 Table of Contents Year Ended December 31, 2025 2024 ( in thousands, except for per share data) Reconciliation of GAAP to adjusted EPS - basic GAAP earnings (loss) per share - basic $ 0.20 $ (0.47) Plus: Share-based compensation expenses 0.36 0.32 Plus: Depreciation 0.09 0.12 Plus: Amortization of intangibles 0.01 0.00 Plus: Other 0.00 0.00 Plus: Impairment of equity investments 0.05 0.00 Plus: Discrete tax items 0.02 0.01 Plus: Income tax effect of non-GAAP adjustments (0.09) (0.04) Adjusted earnings (loss) per share - basic $ 0.65 $ (0.04) Reconciliation of GAAP to adjusted EPS - diluted GAAP earnings (loss) per share - diluted $ 0.19 $ (0.47) Plus: Share-based compensation expenses 0.35 0.32 Plus: Depreciation 0.09 0.12 Plus: Amortization of intangibles 0.01 0.00 Plus: Other 0.00 0.00 Plus: Impairment of equity investments 0.05 0.00 Plus: Discrete tax items 0.02 0.01 Plus: Income tax effect of non-GAAP adjustments (0.08) (0.04) Adjusted earnings (loss) per share - diluted $ 0.62 $ (0.04) Reconciliation of GAAP to adjusted earnings (loss) per ADS - basic GAAP earnings (loss) per ADS - basic $ 2.63 $ (6.12) Plus: Share-based compensation expenses 4.68 4.20 Plus: Depreciation 1.21 1.59 Plus: Amortization of intangibles 0.09 0.05 Plus: Other 0.01 0.00 Plus: Impairment of equity investments 0.69 0.06 Plus: Discrete tax items 0.23 0.18 Plus: Income tax effect of non-GAAP adjustments (1.12) (0.47) Adjusted earnings (loss) per ADS - basic $ 8.41 $ (0.52) Reconciliation of GAAP to adjusted earnings (loss) per ADS - diluted GAAP earnings (loss) per ADS - diluted 1 $ 2.53 $ (6.12) Plus: Share-based compensation expenses 4.50 4.20 Plus: Depreciation 1.16 1.59 Plus: Amortization of intangibles 0.09 0.05 Plus: Other 0.01 0.00 Plus: Impairment of equity investments 0.67 0.06 Plus: Discrete tax items 0.22 0.18 Plus: Income tax effect of non-GAAP adjustments (1.08) (0.47) Adjusted earnings (loss) per ADS - diluted $ 8.09 $ (0.52) 133 Table of Contents Year Ended December 31, 2025 2024 Free Cash Flow (Non-GAAP): (in thousands) Net cash provided by (used in) operating activities (GAAP) $ 1,127,580 $ (140,631) Less: Purchases of property, plant and equipment (185,839) (492,663) Free Cash Flow (Non-GAAP) $ 941,741 $ (633,294) Liquidity and Capital Resources The following table represents our cash and debt balances as of December 31, 2025 and 2024: Year Ended December 31, 2025 2024 (in thousands) Cash, cash equivalents and restricted cash $ 4,609,647 $ 2,638,747 Total debt $ 1,019,206 $ 1,018,013 We have generated positive cash flow from operations since the third quarter of 2024. We generated cash flows from operations of $1.1 billion for the year ended December 31, 2025, which is $1.3 billion higher than the year ended December 31, 2024. Based on our recent and expected performance, we expect that our operating cash flows and existing cash and cash equivalents as of December 31, 2025 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. In 2025 we generated proceeds from long-term debt of $855.0 million which was used to pay off all existing short-term working capital loans, and include certain restrictive covenants as laid out further below with respect to certain coverage ratios and maximum investment amounts. 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 as they become due principally in 2027 and 2028. Facilities Agreement In November 2025, we entered into a Facilities Agreement (the “Facilities Agreement”) with a syndicate of banks. The Facilities Agreement provides for a $140 million U.S. dollar-denominated, 2-year, B1 revolving credit facility (the “B1 Revolving Loan Facility”), a $560 million U.S. dollar-denominated, 2-year, B2 term loan facility (the “B2 Term Loan Facility” and, together with the B1 Revolving Loan Facility, the “B Loan Facilities”), and a RMB 2.15 billion Renminbi-denominated, or approximately $300 million, 3-year, A term loan facility (the “A Loan Facility”) (collectively, the “Loan Facilities”). Subsequently, we consummated the refinancing of our short-term (1 year tenor) working capital loans of approximately $768 million in aggregate through the proceeds from the B2 Term Loan Facility and A Loan Facility. We paid $23 million in debt issuance costs for the Facilities Agreement from available cash and cash equivalents. The refinancing extended the maturity of our working capital loans. The A Loan Facility requires repayment of 4% of the aggregate amount outstanding every six months beginning on November 24, 2026, with all remaining principal outstanding due on November 24, 2028. The B2 Term Loan Facility requires repayment of 10% of the aggregate amount outstanding every three months beginning on June 15, 2027, with all remaining principal outstanding due on December 15, 2027, unless the final repayment date is extended. The A Loan Facility is subject to an interest rate equal to the Reference Rate (RMB) (as defined in the Facilities Agreement) plus a margin of 0.65% per annum. The B Loan Facilities are subject to an interest rate equal to the Reference Rate (USD) (as defined in the Facilities Agreement) plus a margin of 2.40% per annum. In addition to paying interest on the outstanding principal, we are also required to pay a commitment fee of 0.85% on the undrawn and uncancelled amounts under the Loan Facilities. 134 Table of Contents The Facilities Agreement contains certain affirmative and negative covenants customary for financings of this type. In addition, the Facilities Agreement contains financial covenants applicable to the Loan Facilities, including covenants requiring the maintenance of: (i) a minimum cash interest coverage ratio of not less than 5.00 to 1.00; (ii) a net leverage ratio of not greater than 2.50 to 1.00; (iii) a minimum total consolidated shareholders’ equity of the Group of not less than $2.7 billion; (iv) a minimum cash balance held outside the PRC by the Company and the Guarantors of $500.0 million; (v) a maximum financial indebtedness of the Company and its subsidiaries not to exceed $2.0 billion; and (vi) a maximum financial indebtedness of the Company’s subsidiaries that are incorporated or registered in the PRC not to exceed $500.0 million. We were compliant with the required covenants as of December 31, 2025. Sale of Future Royalties The upfront payment from Royalty Pharma of $885 million in the third quarter of 2025 and the subsequent payment of $26 million in the fourth 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 paid to Royalty Pharma in accordance with the terms of the Royalty Agreement. Cash inflows from Amgen are classified as operating cash inflows, while the corresponding payments to Royalty Pharma are allocated between interest cash outflows within operating cash flows and a portion to reduce the liability, classified as a financing cash outflow. Pursuant to the Royalty Agreement, in 2025, we paid to Royalty Pharma an aggregate of $9.6 million, of which $5.6 million was allocated as interest expense and recognized within operating cash flows, and $4.0 million was recorded as a reduction to the liability recorded within financing activities. An additional $14.2 million of interest expense was accrued as of December 31, 2025. 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 December 31, 2025. The following table summarizes our cash and cash equivalent balances, cash flows and unused borrowing capacity available under our Facilities Agreement for the years indicated: Year Ended December 31, 2025 2024 (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 1,127,580 (140,631) Net cash used in investing activities (276,155) (548,350) Net cash provided by financing activities 1,059,451 193,449 Net effect of foreign exchange rate changes 60,024 (51,705) Net increase (decrease) in cash, cash equivalents and restricted cash 1,970,900 (547,237) Cash, cash equivalents and restricted cash at end of period $ 4,609,647 $ 2,638,747 Unused borrowing capacity available under the Facilities Agreement, at end of year $ 140,000 $ — Operating Activities Cash provided by operating activities increased by $1.3 billion versus the prior year due to our significantly improved revenue and $1.5 billion of increase in gross margin in the current year, offset by continued funding of our development pipeline and commercial operations, and positive cash flows from changes in working capital due to timing of accounts receivable collections and payments on accrued expenses. Investing Activities Investing activities used $276.2 million of cash for the year ended December 31, 2025, compared to $548.4 million of cash used in the prior year due primarily to a decrease in capital expenditures, partially offset by an increase in acquired in-process research and development and regulatory milestone payments. 135 Table of Contents Financing Activities Financing activities provided $1.1 billion of cash for the year ended December 31, 2025, compared to $193.4 million of cash provided in the prior year period due primarily to $911.0 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. In 2026, we expect to repay approximately $60.5 million of outstanding bank loans. Effects of Exchange Rates on Cash As noted above, we hold RMB denominated cash in our Parent Company and incur foreign currency gains or losses when remeasuring such cash to the U.S. dollar. In the year ended December 31, 2025, we incurred realized gains on cash of $4.2 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 have substantial operations in China and Europe, where the functional currency is the RMB and EUR and as such the net cash flows are translated to the U.S. dollar for financial reporting. This process generates translation gains and losses on non-USD denominated cash held in those currency markets 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. 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 December 31, 2025: Payments Due by Period Total Short-term Long-term (in thousands) Contractual obligations: Operating lease commitments $ 80,569 $ 23,653 $ 56,916 Purchase commitments 205,175 202,833 2,342 Debt obligations 1,041,224 60,528 980,696 Interest on debt 110,322 50,722 59,600 Co-development funding commitment 130,393 130,393 — Funding commitments 5,241 5,186 55 Capital commitments 46,431 46,431 — Total $ 1,619,355 $ 519,746 $ 1,099,609 Operating Lease Commitments We lease office facilities in California and Massachusetts in the U.S.; Basel, Switzerland; and office or manufacturing facilities in Beijing, Shanghai, Suzhou and Guangzhou 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. 136 Table of Contents Purchase Commitments As of December 31, 2025, purchase commitments amounted to $205.2 million, of which $24.9 million related to non-utilization fees and minimum purchase requirements for supply purchased from CMOs and $180.3 million related to binding purchase order 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 $60.5 million. Total long-term debt obligations are $980.7 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 our loans in the event of default. As of December 31, 2025, we are in compliance with all covenants of our material debt agreements. See above regarding Liquidity and Capital Resources and Note 12 in the Notes to the 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 and the option exercise 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 and option exercise payment could be demanded for refund. Co-Development Funding Commitments Under our collaboration with Amgen, we are responsible for co-funding global clinical development costs for the licensed 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/or development services. As of December 31, 2025, our remaining co-development funding commitment was $130.4 million. Funding Commitments Funding commitments represent our committed capital related to equity investments. As of December 31, 2025, our remaining capital commitment was $5.2 million and is expected to be paid from time to time over the investment period. Capital Commitments We had capital commitments amounting to $46.4 million for the acquisition of property, plant and equipment as of December 31, 2025, related to various facilities across the globe. Critical Accounting 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 accounting principles generally accepted in the United States of America. 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. 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. Certain of these estimates are considered critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements. Our critical accounting estimates are summarized below. See Note 2 to our consolidated financial statements included in this Annual Report for a description of our significant accounting policies. 137 Table of Contents Revenue Recognition We recognize revenue when we transfer control of goods or services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services. We generate revenue from product sales and revenue transactions with our collaboration partners. Product Revenue To determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we estimate any rebates, chargebacks or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts. Significant judgments are required in making these estimates. We include variable consideration in the transaction price to the extent it is probable that a significant reversal will not occur and estimate variable consideration from rebates, chargebacks, trade discounts and allowances, sales returns allowances, and other incentives using the expected value method. Estimates for variable consideration for which reserves are established at the time of sale include government and commercial rebates, provisions for acceptance of NRDL pricing, chargebacks, trade discounts and allowances, sales returns allowances and other incentives that are offered within contracts between the Company and our customers, health care providers and other indirect customers. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, channel inventory levels, specific known market events and trends, industry data and forecasted customer buying and payment patterns. We base our sales returns allowance on estimated distributor inventories, customer demand as reported by third-party sources, and actual returns history, as well as other factors, as appropriate. To date, sales returns have not been significant. Actual amounts of consideration ultimately received may differ from our estimates. We will reassess estimates for variable consideration periodically. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Collaboration Revenue Our collaborative arrangements may contain more than one unit of account, or performance obligation, including grants of licenses to intellectual property rights, agreements to provide research and development services and other deliverables. As part of the accounting for these arrangements, we must develop assumptions that require significant judgments to determine the standalone selling price for each performance obligation identified in the contract. Standalone selling prices for licenses of intellectual property and the right to access and use intellectual property during an option period performance obligations are determined based on the probability-weighted present value of forecasted cash flows associated with the intellectual property. Stand-alone selling prices for research and development services performance obligations are based on the present value of estimated clinical trial costs plus a reasonable margin. The estimates of standalone selling prices involve management’s key assumptions such as revenue growth rate, estimated clinical trial costs, mark-up rate, probability of technical and regulatory success, and discount rates. These significant assumptions are forward looking and could be affected by future economic, regulatory and market conditions. At December 31, 2025, our existing deferred revenue balance related to collaborative arrangements was less than $1.0 million, and collaboration revenue is not expected to be a significant driver of our financial results until if and when additional agreements are entered into. Measurement of Accrued Research and Development Expenses Clinical trial costs are a significant component of our research and development expenses and are recognized as the related services are incurred and measured at the cost expected to be paid for those services. As such, certain of our research and development expenses in any one period are an estimate by us as to the amount incurred for that period but not yet invoiced to us by the service provider. We have a history of contracting with third parties that perform various clinical trial activities on behalf of us in the ongoing development of our product candidates. Expenses related to clinical trials not yet invoiced are accrued based on our estimates of the actual services performed by the third parties for the respective period. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we will modify the related accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become probable. 138 Table of Contents Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting expenses that differ from amounts ultimately paid in any one period. To date, we have not made any material adjustments to our prior estimates of research and development expenses. Measurement of Deferred Tax Assets Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as from net operating losses and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Currently, we are in a three-year cumulative book loss position and as required by ASC 740, we provided a valuation allowance on all of our deferred tax assets. If and when we are no longer in a three-year cumulative loss position, the subsequent measurement of our deferred tax assets will subject to the estimation process noted above. Subsequent Measurement of Long-Lived Assets We test long-lived assets, which include property, plant and equipment and intangible assets with finite useful lives, for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in our expected future cash flows; a sustained, significant decline in the trading prices of our ADSs, our ordinary shares, and/or our RMB Shares and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. For the years ended December 31, 2025, 2024 and 2023, we determined there was no impairment of the value of our long-lived assets. Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included in this Annual Report for information regarding recent accounting pronouncements.