BeOne Medicines Ltd. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Based on their evaluation, required by paragraph (b) of Rules 13a-15 or 15d-15, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act are effective, at a reasonable assurance level, as of December 31, 2020, to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in U.S. Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment and those criteria, management concluded that we maintained effective internal control over financial reporting as of December 31, 2020. 132 Table of Contents The effectiveness of our internal control over financial reporting as of December 31, 2020, has been tested by Ernst & Young Hua Ming LLP, our independent registered public accounting firm, as stated in their report which is included in “Item 8—Financial Statements and Other Supplementary Data” in this Annual Report. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a‑15(d) and 15d‑15(d) of the Exchange Act that occurred during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Consulting Agreement On February 24, 2021, the Company entered into a consulting agreement (the “2021 Consulting Agreement”) with Dr. Xiaodong Wang, co-founder, director and Chairman of the Scientific Advisory Board, to renew the consulting arrangement between the Company and Dr. Wang on substantially the same terms and conditions as his existing consulting agreement, which expired on December 31, 2020. Pursuant to the 2021 Consulting Agreement, Dr. Wang will continue to provide certain scientific and strategic advisory services to the Company as requested by the Company from time to time and will continue to receive an annual fixed consulting fee of $100,000 for such services and such additional compensation, if any, that will be determined in the sole discretion of the Company, subject to compliance with the requirements of the applicable stock exchange listing rules. The 2021 Consulting Agreement is effective from January 1, 2021 and will expire on December 31, 2023. The Company may terminate the 2021 Consulting Agreement upon 30 days’ prior notice to Dr. Wang, provided that Dr. Wang will be entitled to payment for services performed prior to such date. The foregoing description of the 2021 Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the 2021 Consulting Agreement, a copy of which is filed as Exhibit 10.20 to this Annual Report on Form 10-K. 133 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. Item 11. Executive Compensation The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. Item 14. Principal Accounting Fees and Services The information required under this item is incorporated herein by reference to our definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2020. 134 Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules The financial statements listed in the Index to Consolidated Financial Statements beginning on page F-1 are filed as part of this Annual Report. No financial statement schedules have been filed as part of this Annual Report because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. The exhibits filed as part of this Annual Report are set forth on the Exhibit Index immediately following our consolidated financial statements. The Exhibit Index is incorporated herein by reference. Item 16. Form 10‑K Summary Not applicable. 135 Table of Contents BEIGENE, LTD. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm 2 Consolidated balance sheets as of December 31, 20 20 and 20 19 6 Consolidated statements of operations for the years ended December 31, 20 20 , 20 19 and 20 1 8 7 Consolidated statements of comprehensive loss for the years ended December 31, 20 20 , 20 19 and 20 18 8 Consolidated statements of cash flows for the years ended December 31, 20 20 , 20 19 and 20 18 9 Consolidated statements of shareholders’ equity for the years ended December 31, 20 20 , 201 9 and 2018 11 Notes to consolidated financial statements 12 1 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of BeiGene, Ltd. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of BeiGene, Ltd. (the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, cash flows and shareholders' equity for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2021 expressed an unqualified opinion thereon. Adoption of New Accounting Standard As discussed in Note 2 to the consolidated financial statements, the Company changed its method for accounting for leases in the year ended December 31, 2019. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 2 Table of Contents Accrual of research and development expenses Description of the Matter During the year ended December 31, 2020, the Company recognized $1,294.9 million in research and development (“R&D”) expenses. The balance of accrued external R&D activities related expenses as of December 31, 2020 amounted to approximately $143.3 million. As described in Note 2 to the consolidated financial statements, R&D expenses include costs related to clinical trials paid to third-party contract research organizations and contract manufacturing organizations (collectively referred as “Outsourced Service Providers”). Auditing the accrual of R&D expenses related to Outsourced Service Providers is complex because the clinical trial activities with the Outsourced Service Providers are typically performed over an extended period with several milestones for the services in each agreement. As a result, R&D expenses are allocated to each financial reporting period based upon the progress of the clinical trial activities. Determining the progress of the clinical trial activities requires significant estimates and judgment. These estimates are based on several factors, including management’s knowledge of the clinical trial activities associated with timelines, invoicing to date and the provisions in the contracts. Changes in these estimates can have a material effect on the amount of R&D expenses recognized during the reporting period. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the accrual of the R&D expenses. For example, we tested controls over management's review of the R&D accrual method and the estimates of the actual services performed by the Outsourced Service Providers. To test the accrual of R&D expenses, our audit procedures included, among others, reading the contracts with Outsourced Service Providers on a sample basis and understanding and testing the estimates on the progress of clinical trial activities developed by management. Testing management’s estimates involved evaluating management's assumptions used in the calculation related to the clinical trial activities and associated timelines, invoicing to date and the provisions in the contracts. We then evaluated the accrual of R&D expenses by comparing it to the subsequent progress billings issued by the Outsourced Service Providers. We also assessed the accrual methodology used by the Company, including the adequacy of related disclosures in the consolidated financial statements. Allocation of proceeds received in relation to the Amgen Collaboration and Share Purchase Agreements Description of the Matter As discussed in Notes 3 and 19 to the consolidated financial statements, the Company entered into a collaboration arrangement and a share purchase agreement with Amgen Inc. (collectively, the “Amgen Agreements”) and pursuant to which, the Company received cash proceeds of $2,779.2 million for a 20.5% ownership stake in the Company. The Company determined that the proceeds paid by Amgen also represents a cost share liability due to the Company's co-development obligations (“R&D cost share liability”) in accordance with ASC 808 - Collaborative Arrangements (“ASC 808”), as the Company and Amgen are both active participants and are exposed to the risks and rewards dependent on the commercial success of the activities performed under the collaboration agreement. The Company allocated the cash proceeds between the equity issued and the R&D cost share liability based on a relative fair value method. On January 2, 2020, the closing date of the Amgen Agreements, the Company recognized $2,162.4 million in equity and $616.8 million in R&D cost share liability based on the allocation. Auditing the allocation of cash proceeds received in relation to the Amgen Agreements is complex due to the significant estimates and judgments involved in determining the fair values of the equity component and liability component, including assessing the lack of marketability discount and the estimated future cashflows related to R&D activities, respectively. The estimate of future cashflows related to R&D activities involved key assumptions such as revenue growth rates and probability of technical and regulatory success. These significant assumptions are forward looking and could be affected by future economic, regulatory, and market conditions, which in turn led to significant auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence for these estimates. 3 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the allocation of cash proceeds received in relation to the Amgen Agreements. For example, we tested controls over management's review of the significant assumptions used in determining estimated future cashflows and the fair values of the equity issued and the R&D cost share liability. To test the allocation of the cash proceeds received in relation to the Amgen Agreements, our audit procedures included, among others, evaluating the valuation methodologies, comparable companies and discount rate used by management to determine the fair values of equity issued and the R&D cost share liability, with the assistance of our internal valuation specialist. We tested the significant underlying assumptions and the completeness and accuracy of the underlying data used by the Company in developing its estimated future cashflows, including revenue growth rates and probability of technical and regulatory success. We compared these significant assumptions to current market trends, industry data, and current clinical stages of the pipeline assets. We also performed sensitivity analysis by assessing the changes to the fair value of the equity and liability components resulting from changes in the lack of marketability discount and probability of technical and regulatory success. In addition, we assessed the related disclosures in the consolidated financial statements. /s/ Ernst & Young Hua Ming LLP We have served as the Company’s auditor since 2014 Beijing, People’s Republic of China February 25, 2021 4 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of BeiGene, Ltd. Opinion on Internal Control Over Financial Reporting We have audited BeiGene, Ltd.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, BeiGene, Ltd. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, cash flows and shareholders' equity for each of the three years in the period ended December 31, 2020, and the related notes and our report dated February 25, 2021 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young Hua Ming LLP Beijing, People’s Republic of China February 25, 2021 5 Table of Contents BEIGENE, LTD. CONSOLIDATED BALANCE SHEETS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) As of December 31, Note 2020 2019 $ $ Assets Current assets: Cash and cash equivalents 1,381,950 618,011 Short-term restricted cash 5 307 288 Short-term investments 6 3,268,725 364,728 Accounts receivable, net 60,403 70,878 Inventories 7 89,293 28,553 Prepaid expenses and other current assets 13 160,012 90,238 Total current assets 4,960,690 1,172,696 Long-term restricted cash 5 7,748 2,476 Property, plant and equipment, net 10 357,686 242,402 Operating lease right-of-use assets 9 90,581 82,520 Intangible assets, net 11 5,000 5,846 Deferred tax assets 12 65,962 37,894 Other non-current assets 13 113,090 68,455 Total non-current assets 640,067 439,593 Total assets 5,600,757 1,612,289 Liabilities and shareholders' equity Current liabilities: Accounts payable 231,957 122,488 Accrued expenses and other payables 13 346,144 163,556 Tax payable 12 20,380 13,454 Operating lease liabilities, current portion 9 13,895 10,814 Research and development cost share liability, current portion 3 127,808 — Short-term debt 14 335,015 — Total current liabilities 1,075,199 310,312 Non-current liabilities: Long-term bank loans 14 183,637 83,311 Shareholder loan 14 — 157,384 Operating lease liabilities, non-current portion 9 29,417 25,833 Deferred tax liabilities 12 10,792 10,532 Research and development cost share liability, non-current portion 3 375,040 — Other long-term liabilities 13 57,429 46,562 Total non-current liabilities 656,315 323,622 Total liabilities 1,731,514 633,934 Commitments and contingencies 22 Equity: Ordinary shares, 0.0001 par value per share; 9,500,000,000 shares authorized; 1,190,821,941 and 801,340,698 shares issued and outstanding as of December 31, 2020 and 2019, respectively 118 79 Additional paid-in capital 7,414,932 2,925,970 Accumulated other comprehensive income (loss) 18 6,942 ( 8,001 ) Accumulated deficit ( 3,552,749 ) ( 1,955,843 ) Total BeiGene, Ltd. shareholders’ equity 3,869,243 962,205 Noncontrolling interest 8 — 16,150 Total equity 3,869,243 978,355 Total liabilities and equity 5,600,757 1,612,289 The accompanying notes are an integral part of these consolidated financial statements. 6 Table of Contents BEIGENE, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) Year Ended December 31, Note 2020 2019 2018 $ $ $ Revenues Product revenue, net 15 308,874 222,596 130,885 Collaboration revenue 3 — 205,616 67,335 Total revenues 308,874 428,212 198,220 Expenses Cost of sales - product 70,657 71,190 28,705 Research and development 1,294,877 927,338 679,005 Selling, general and administrative 600,176 388,249 195,385 Amortization of intangible assets 11 846 1,326 894 Total expenses 1,966,556 1,388,103 903,989 Loss from operations ( 1,657,682 ) ( 959,891 ) ( 705,769 ) Interest income, net 1,998 9,131 13,947 Other income, net 6 37,490 7,174 1,993 Loss before income taxes ( 1,618,194 ) ( 943,586 ) ( 689,829 ) Income tax (benefit) expense 12 ( 17,671 ) 6,992 ( 15,796 ) Net loss ( 1,600,523 ) ( 950,578 ) ( 674,033 ) Less: net loss attributable to noncontrolling interests ( 3,617 ) ( 1,950 ) ( 264 ) Net loss attributable to BeiGene, Ltd. ( 1,596,906 ) ( 948,628 ) ( 673,769 ) Net loss per share attributable to BeiGene, Ltd., basic and diluted 16 ( 1.47 ) ( 1.22 ) ( 0.93 ) Weighted-average shares outstanding, basic and diluted 16 1,085,131,783 780,701,283 720,753,819 Net loss per American Depositary Share (“ADS”), basic and diluted ( 19.13 ) ( 15.80 ) ( 12.15 ) Weighted-average ADSs outstanding, basic and diluted 83,471,676 60,053,945 55,442,601 The accompanying notes are an integral part of these consolidated financial statements. 7 Table of Contents BEIGENE, LTD. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) Year Ended December 31, Note 2020 2019 2018 $ $ $ Net loss ( 1,600,523 ) ( 950,578 ) ( 674,033 ) Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments 18 23,603 ( 9,424 ) ( 478 ) Pension liability adjustments 21 ( 8,113 ) — — Unrealized holding (loss) gain, net 18 ( 419 ) ( 448 ) 2,133 Comprehensive loss ( 1,585,452 ) ( 960,450 ) ( 672,378 ) Less: comprehensive loss attributable to noncontrolling interests ( 3,489 ) ( 2,295 ) ( 352 ) Comprehensive loss attributable to BeiGene, Ltd. ( 1,581,963 ) ( 958,155 ) ( 672,026 ) The accompanying notes are an integral part of these consolidated financial statements. 8 Table of Contents BEIGENE, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) Year Ended December 31, Note 2020 2019 2018 $ $ $ Cash flows from operating activities: Net loss ( 1,600,523 ) ( 950,578 ) ( 674,033 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 31,789 18,617 10,388 Share-based compensation expense 17 183,481 134,154 87,127 Acquired in-process research and development 109,500 69,000 70,000 Amortization of research and development cost share liability 3 ( 113,986 ) — — Unrealized gains on equity investments 6 ( 11,826 ) — — Gain on deconsolidation of a subsidiary 6 ( 11,307 ) — — Deferred income tax benefits ( 27,807 ) ( 9,232 ) ( 21,949 ) Other items, net 6,634 ( 1,397 ) ( 2,036 ) Changes in operating assets and liabilities: Accounts receivable 10,363 ( 29,822 ) ( 11,628 ) Inventories ( 58,906 ) ( 12,311 ) ( 5,312 ) Prepaid expenses and other current assets ( 65,528 ) 45 ( 38,607 ) Other non-current assets 9,311 ( 20,782 ) ( 40,228 ) Accounts payable 95,835 2,224 23,470 Accrued expenses and other payables 182,693 64,030 50,543 Tax payable 2,319 7,566 ( 3,355 ) Deferred revenue — ( 27,982 ) ( 9,059 ) Operating lease liabilities ( 102 ) ( 2,283 ) — Other long-term liabilities ( 25,401 ) 8,482 16,962 Net cash used in operating activities ( 1,283,461 ) ( 750,269 ) ( 547,717 ) Cash flows from investing activities: Purchases of property and equipment ( 117,508 ) ( 89,612 ) ( 70,283 ) Deconsolidation of a subsidiary ( 2,025 ) — — Purchase of intangible assets — — ( 553 ) Payment for asset acquisition, net of cash acquired 4 — — ( 38,298 ) Purchases of investments ( 5,690,408 ) ( 1,169,300 ) ( 2,635,686 ) Proceeds from sale or maturity of investments 2,751,075 1,882,075 2,177,207 Purchase of in-process research and development ( 109,500 ) ( 69,000 ) ( 70,000 ) Net cash (used in) provided by investing activities ( 3,168,366 ) 554,163 ( 637,613 ) Cash flows from financing activities: Proceeds from public offering, net 19 — — 757,587 Proceeds from public offering and HK IPO, net 19 — — 869,709 Proceeds from sale of ordinary shares, net of cost 19 4,232,017 — — Proceeds from research and development cost share liability 3 616,834 — — Payment to acquire joint venture ("JV") minority interest 8 ( 28,723 ) — — Proceeds from loans 14 433,905 67,489 42,315 Repayment of loans 14 ( 144,308 ) ( 32,813 ) ( 8,736 ) Capital contribution from noncontrolling interest — 4,000 — Proceeds from option exercises and employee share purchase plan 93,101 47,004 29,662 Net cash provided by financing activities 5,202,826 85,680 1,690,537 Effect of foreign exchange rate changes, net 18,231 ( 9,512 ) ( 4,096 ) Net increase (decrease) in cash, cash equivalents, and restricted cash 769,230 ( 119,938 ) 501,111 Cash, cash equivalents, and restricted cash, beginning of year 620,775 740,713 239,602 Cash, cash equivalents, and restricted cash, end of year 1,390,005 620,775 740,713 9 Table of Contents Year Ended December 31, Note 2020 2019 2018 $ $ $ Supplemental cash flow disclosures: Cash and cash equivalents 1,381,950 618,011 712,937 Short-term restricted cash 307 288 14,544 Long-term restricted cash 7,748 2,476 13,232 Income taxes paid 10,596 8,984 12,361 Interest paid 44,130 4,315 2,209 Supplemental non-cash activities: Acquisitions of equipment included in accounts payable 42,762 29,086 22,105 Purchase of in-process research and development included in accounts payable — — 19,000 Changes in operating assets and liabilities adjusted through accumulated deficit — — 2,291 The accompanying notes are an integral part of these consolidated financial statem ent s. 10 Table of Contents BEIGENE, LTD. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) Attributable to BeiGene, Ltd. Ordinary Shares Additional Paid-In Capital Accumulated Other Comprehensive Income/(Loss) Accumulated Deficit Total Non- Controlling Interests Shares Amount Total $ $ $ $ $ $ $ Balance at December 31, 2017 592,072,330 59 1,000,747 ( 480 ) ( 330,517 ) 669,809 14,422 684,231 Adjustment to opening balance of equity — — — 263 ( 2,929 ) ( 2,666 ) 375 ( 2,291 ) Balance at January 1, 2018 592,072,330 59 1,000,747 ( 217 ) ( 333,446 ) 667,143 14,797 681,940 Issuance of ordinary shares in connection with follow-on public offering 102,970,400 10 757,577 — — 757,587 — 757,587 Issuance of ordinary shares in connection with HK IPO 65,600,000 7 869,702 — — 869,709 — 869,709 Issuance of shares reserved for share option exercises 1,299,186 — — — — — — — Share-based compensation — — 87,127 — — 87,127 — 87,127 Exercise of options and release of RSUs 14,321,268 1 29,661 — — 29,662 — 29,662 Other comprehensive income/(loss) — — — 1,743 — 1,743 ( 88 ) 1,655 Net loss — — — — ( 673,769 ) ( 673,769 ) ( 264 ) ( 674,033 ) Balance at December 31, 2018 776,263,184 77 2,744,814 1,526 ( 1,007,215 ) 1,739,202 14,445 1,753,647 Contributions from shareholders — — — — — — 4,000 4,000 Exercise of options, ESPP and release of RSUs 20,571,675 2 47,002 — — 47,004 — 47,004 Issuance of shares reserved for share option exercises 4,505,839 — — — — — — — Share-based compensation — — 134,154 — — 134,154 — 134,154 Other comprehensive loss — — — ( 9,527 ) — ( 9,527 ) ( 345 ) ( 9,872 ) Net loss — — — — ( 948,628 ) ( 948,628 ) ( 1,950 ) ( 950,578 ) Balance at December 31, 2019 801,340,698 79 2,925,970 ( 8,001 ) ( 1,955,843 ) 962,205 16,150 978,355 Proceeds from issuance of ordinary shares, net of cost 145,838,979 14 2,069,596 — — 2,069,610 — 2,069,610 Issuance of ordinary shares in connection with collaboration 206,635,013 21 2,162,386 — — 2,162,407 — 2,162,407 Exercise of options, ESPP and release of RSUs 38,020,892 3 93,098 — — 93,101 — 93,101 Use of shares reserved for share option exercises and RSU releases ( 1,013,641 ) 1 — — — 1 — 1 Share-based compensation — — 183,481 — — 183,481 — 183,481 Deconsolidation of a subsidiary — — — — — — ( 3,545 ) ( 3,545 ) Acquisition of joint venture ("JV") minority interest — — ( 19,599 ) — — ( 19,599 ) ( 9,116 ) ( 28,715 ) Other comprehensive income — — — 14,943 — 14,943 128 15,071 Net loss — — — — ( 1,596,906 ) ( 1,596,906 ) ( 3,617 ) ( 1,600,523 ) Balance at December 31, 2020 1,190,821,941 118 7,414,932 6,942 ( 3,552,749 ) 3,869,243 — 3,869,243 The accompanying notes are an integral part of these consolidated financial statements. 11 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 1. Organization BeiGene, Ltd. (the "Company", "BeiGene", "it", "its") is a global, commercial-stage biotechnology company focused on discovering, developing, manufacturing, and commercializing innovative medicines to improve treatment outcomes and expand access for patients worldwide. The Company has delivered ten molecules into the clinic in its first ten years, including its two lead commercial medicines, BRUKINSA ® , a small molecule inhibitor of Bruton’s Tyrosine Kinase (“BTK”) for the treatment of various blood cancers, and tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers. The Company is marketing BRUKINSA ® in the world’s two largest pharmaceutical markets, the United States and China, and tislelizumab in China, with an established, science-based commercial organization. The Company has built state-of-the-art biologic and small molecule manufacturing facilities in China to support the potential future demand of its products, and it also works with high quality contract manufacturing organizations (“CMOs”) to manufacture its internally developed clinical and commercial products. The Company is a leader in China-inclusive global clinical development, which it believes can facilitate faster and more cost-effective development of innovative medicines. Its internal clinical development capabilities are deep, including a more than 1,600 -person global clinical development team that is running more than 60 ongoing or planned clinical trials. This includes more than 25 pivotal or registration-enabling trials for three product candidates that have enrolled more than 12,000 patients and healthy volunteers, of which approximately one-half have been outside of China, as of January 2021. The Company has over 45 products and product candidates in commercial stage or clinical development, including 7 approved medicines, 5 pending approval, and over 30 in clinical development. Supported by its development and commercial capabilities, the Company has entered into collaborations with world-leading biopharmaceutical companies such as Amgen and Novartis to develop and commercialize innovative medicines globally. Since its inception in 2010 in Beijing, the Company has become a fully integrated global organization of approximately 5,300 employees in 14 countries and regions, including China, the United States, Europe and Australia. 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its wholly-owned subsidiaries are eliminated upon consolidation. Noncontrolling interests are recognized to reflect the portion of the equity of subsidiaries which are not attributable, directly or indirectly, to the controlling shareholders. Prior to 2020, the Company consolidated its interests in its joint ventures, BeiGene Biologics Co., Ltd. ("BeiGene Biologics") and MapKure, LLC ("MapKure"), under the voting model and recognized the minority shareholders' equity interest as a noncontrolling interest in its consolidated financial statements. In June 2020, the Company deconsolidated MapKure and recorded an equity method investment for its remaining ownership interest in the joint venture (see Note 6). In November 2020, the Company acquired the remaining equity interest in BeiGene Biologics. Subsequent to the share purchase, BeiGene Biologics is a wholly owned subsidiary of the Company (see Note 8). Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, identifying separate accounting units and the standalone selling price of each performance obligation in the Company’s revenue arrangements, estimating the fair value of net assets acquired in business combinations, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions, valuation of inventory, 12 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) estimating the allowance for credit losses, determining defined benefit pension plan obligations, measurement of right-of-use assets and lease liabilities and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. Functional Currency and Foreign Currency Translation Functional currency The Company uses the United States dollar ("$" or "U.S. dollar") as its reporting currency. Operations in subsidiaries are recorded in the functional currency of the respective subsidiary. The determination of functional currency is based on the criteria of Accounting Standard Codification (“ASC”) 830, Foreign Currency Matters . Foreign currency translation For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive loss, a component of shareholders’ equity. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the consolidated statements of comprehensive loss. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be cash equivalents. Cash equivalents which consist primarily of money market funds are stated at fair value. Restricted cash Restricted cash primarily consists of RMB-denominated cash deposits pledged in designated bank accounts as collateral for bank loans and letters of credit. The Company classifies restricted cash as current or non-current based on the term of the restriction. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at their invoiced amounts, net of trade discounts and allowances as well as an allowance for credit losses. The allowance for credit losses reflects the Company's current estimate of credit losses expected to be incurred over the life of the receivables. The Company considers various factors in establishing, monitoring, and adjusting its allowance for credit losses including the aging of receivables and aging trends, customer creditworthiness and specific exposures related to particular customers. The Company also monitors other risk factors and forward-looking information, such as country specific risks and economic factors that may affect a customer's ability to pay in establishing and adjusting its allowance for credit losses. Accounts receivable are written off after all collection efforts have ceased. Inventory Prior to the regulatory approval of product candidates, the Company may incur expenses for the manufacture of drug product to support the commercial launch of those products. Until the date at which regulatory approval has been received or is otherwise considered probable, all such costs are recorded as research and development expenses as incurred. Inventories are stated at the lower of cost and net realizable value, with cost determined in a manner that approximates the first-in, first-out method. The Company periodically analyzes its inventory levels, and writes down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by 13 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded in the consolidated statements of operations. Investments The Company's investments consist of available-for-sale debt securities, public equity securities with readily determinable fair values, private equity securities without readily determinable fair values, and equity-method investments. The classification of an investment is determined based on the nature of the investment, the Company's ability and intent to hold the investment, and the degree to which the Company may exercise influence over the investee. • Available-for-sale debt securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive loss. The net carrying value of debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is computed using the effective interest method and included in interest income. Interest and dividends are included in interest income. Available-for-sale debt securities with original maturities greater than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term. Available-for-sale debt securities with maturities beyond one year may be classified as short-term marketable securities due to their highly liquid nature and because they represent the Company’s investments that are available for current operations. • Public equity securities with readily determinable fair values are recorded at fair value. Subsequent changes in fair value are recorded in other income, net. Derivative financial instruments to purchase public equity securities are recorded at fair value. The estimated fair value of derivative financial instruments is determined based on the Black-Scholes valuation model. Changes in fair value of derivative instruments are recorded in other income, net. • Private equity securities without readily determinable fair values and where the Company does not have significant influence are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Adjustments to private equity securities are recorded in other income, net. • Equity investments in common stock or in-substance common stock where the Company has significant influence over the financial and operating policies of the investee are accounted for as equity-method investments. Equity-method investments are initially recorded at cost and subsequently adjusted based on the Company's percentage ownership in the investee's income and expenses, as well as dividends, if any. The Company records its share of the investee's results of operations in other income, net. The Company records impairment losses on our equity method investments if it deems the impairment to be other-than-temporary. The Company deems an impairment to be other-than-temporary based on various factors, including but not limited to, the length of time the fair value is below the carrying value and ability to retain the investment to allow for a recovery in fair value. Realized gains or losses on sales of investments are determined based on the specific identification method. The Company regularly evaluates its investments in debt and equity for impairment. The Company recognizes an allowance on available-for-sale debt securities when a portion of the unrealized loss is attributable to a credit loss and a corresponding credit loss in net income. No impairment losses or allowance for credit losses on investments were recorded for any periods presented. Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets as follows: Useful Lives Building 20 years Manufacturing equipment 3 to 10 years Laboratory Equipment 3 to 5 years Software, Electronic and Office Equipment 3 to 5 years Leasehold Improvements Lesser of useful life or lease term 14 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Leases Effective January 1, 2019, the Company adopted ASC, Topic 842, Leases ("ASC 842") using the effective date method. The Company determines if an arrangement is a lease at inception. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component based on the Company’s policy election to combine lease and non-lease components for its leases. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s lease portfolio consists entirely of operating leases as of December 31, 2020. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a right-of-use ("ROU") asset and lease liability. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. Variable lease payments not dependent on an index or rate are excluded from the ROU asset and lease liability calculations and are recognized in expense in the period which the obligation for those payments is incurred. As the rate implicit in the Company’s leases is not typically readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Company will exercise that option. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheet. Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities. Leases with an initial lease term of 12 months or less are not recorded on the consolidated balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. Land Use Right, Net All land in the PRC is owned by the PRC government. The PRC government may sell land use rights for a specified period of time. Land use rights represent operating leases in accordance with ASC 842. The purchase price of land use rights represents lease prepayments to the PRC government and is recorded as an operating lease ROU asset on the balance sheet. The ROU asset is amortized over the remaining lease term. In 2017, the Company acquired a land use right from the local Bureau of Land and Resources in Guangzhou for the purpose of constructing and operating the biologics manufacturing facility in Guangzhou. In 2019, the Company acquired a second Guangzhou land use right from the local Bureau of Land and Resources in Guangzhou. Both Guangzhou land use rights are being amortized over the respective terms of the land use rights, which are each 50 years. In 2018, the Company acquired a land use right in conjunction with the Innerway asset acquisition (see Note 4). The land use right is being amortized over the term of the land use right, which is 36 years. In 2020, the Company acquired a land use right from the local Bureau of Land and Resources in Suzhou to expand its research, development and manufacturing facility in Suzhou. The land use right is being amortized over the term of the land use right, which is 30 years. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC topic 805 (“ASC 805”): Business Combinations . The acquisition method of accounting requires all of the following steps: (i) identifying the acquirer, (ii) determining the acquisition date, (iii) recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, and (iv) recognizing and measuring goodwill or a gain from a bargain purchase. The consideration transferred in a business combination is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. 15 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) acquisition consideration, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations as a gain. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows from acquired assets, timing and probability of success of clinical events and regulatory approvals, and assumptions on useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Additional information, such as that related to income tax and other contingencies, existing as of the acquisition date but unknown to us may become known during the remainder of the measurement period, not to exceed one year from the acquisition date, which may result in changes to the amounts and allocations recorded. Acquisitions that do not meet the accounting definition of a business combination are accounted for as asset acquisitions. For transactions determined to be asset acquisitions, the Company allocates the total cost of the acquisition, including transaction costs, to the net assets acquired based on their relative fair values. Goodwill and Other Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company allocates the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events or changes in circumstances would indicate a potential impairment. The Company has elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company's reporting unit is less than its carrying amount, including goodwill. The qualitative assessment includes the Company's evaluation of relevant events and circumstances affecting the Company's single reporting unit, including macroeconomic, industry, and market conditions, the Company's overall financial performance, and trends in the market price of the Company's ADSs. If qualitative factors indicate that it is more likely than not that the Company's reporting unit’s fair value is less than its carrying amount, then the Company will perform the quantitative impairment test by comparing the reporting unit’s carrying amount, including goodwill, to its fair value. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess. For the years ended December 31, 2020, 2019 and 2018 the Company determined that there were no indicators of impairment of goodwill. Intangible assets acquired through business combinations are recognized as assets separate from goodwill and are measured at fair value upon acquisition. Intangible assets acquired in transactions that are not business combinations are recorded at the allocated portion of total consideration transferred based on their relative fair value in relation to net assets acquired. Acquired identifiable intangible assets consist of distribution rights for approved cancer therapies licensed from BMS, and are amortized on a straight-line basis over the estimated useful lives of the assets, which is 10 years, and the trading license which represents the Guangzhou drug distribution license acquired in September 2018 (see Note 4). The Company amortized the trading license over the remainder of the initial license term through February 2020. Intangible assets with finite useful lives are tested for impairment when events or circumstances occur that could indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Company evaluates the recoverability of the intangible assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be 16 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) generated by the assets, when the market prices are not readily available. For the years ended December 31, 2020, 2019 and 2018, the Company determined that there were no indicators of impairment of its other intangible assets. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the years ended December 31, 2020, 2019 and 2018, there was no impairment of the value of the Company’s long-lived assets. Fair Value Measurements Fair value of financial instruments The Company applies ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial instruments measured at fair value on a recurring basis The following tables set forth assets measured at fair value on a recurring basis as of December 31, 2020 and 2019: As of December 31, 2020 Quoted Price in Active Market for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) $ $ $ Cash equivalents U.S. treasury securities 286,072 — — Money market funds 80,838 — — Short-term investments (Note 6): U.S. treasury securities 3,268,725 — — Other non-current assets (Note 6): Equity securities with readily determinable fair values 10,810 6,669 — Total 3,646,445 6,669 — 17 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) As of December 31, 2019 Quoted Price in Active Market for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) $ $ $ Cash equivalents U.S. treasury securities 16,442 — — Money market funds 50,461 — — Short-term investments (Note 6): U.S. treasury securities 364,728 — — Total 431,631 — — The Company's cash equivalents are highly liquid investments with original maturities of 3 months or less. Short-term investments represent the Company's investments in available-for-sale debt securities. The Company determines the fair value of cash equivalents and available-for-sale debt securities using a market approach based on quoted prices in active markets. The Company's equity securities carried at fair value consist of holdings in common stock and warrants to purchase additional shares of common stock of Leap Therapeutics, Inc. ("Leap"), which were acquired in connection with a collaboration and license agreement entered into in January 2020. The common stock investment in Leap, a publicly-traded biotechnology company, is measured and carried at fair value and classified as Level 1. The warrants to purchase additional shares of common stock in Leap are classified as a Level 2 investment and are measured using the Black-Scholes option-pricing valuation model, which utilizes a constant maturity risk-free rate and reflects the term of the warrants, dividend yield and stock price volatility, that is based on the historical volatility of similar companies. Refer to Note 2, Investments for details of the determination of the carrying amount of private equity investments without readily determinable fair values and equity method investments. As of December 31, 2020 and 2019, the fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and short-term debt approximated their carrying values due to their short-term nature. Long-term bank loans and the Shareholder Loan approximate their fair value due to the fact that the related interest rates approximate the rates currently offered by financial institutions for similar debt instrument of comparable maturities. Revenue Recognition Effective January 1, 2018, the Company adopted ASC, Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective method. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. Product Revenue The Company generates product revenues in China through the sale of its internally developed drugs tislelizumab and BRUKINSA ® , and the sale of in-licensed products in China through its agreements with Amgen and BMS. Under the commercial profit share arrangement with Amgen, the Company is the principal for in-licensed product sales to customers in China during the commercialization period and recognizes 100% of net product revenue on these sales. Amounts due to Amgen 18 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) for its portion of net product sales are recorded as cost of sales. In the United States, the Company generates product revenues from the sale of BRUKINSA ® . In China, the Company sells its internally developed products to multiple distributors, who in turn sells the product to hospitals or pharmacies within their authorized territories to be sold ultimately to patients. In-licensed products are sold to a first tier distributor who subsequently resells the products to second tier distributors who ultimately sell the products to health care providers and patients. In the United States, the Company distributes BRUKINSA ® through specialty pharmacies and specialty distributors. The specialty pharmacies and specialty distributors subsequently resell the product to health care providers and patients. The Company is the principal under the product sales as the Company controls the products with the ability to direct the use of, and obtain substantially all the remaining benefits from the products before they are sold to the customer. For product sales transactions, the Company has a single performance obligation which is to sell the products to its customer. The Company includes variable consideration in the transaction price to the extent it is probable that a significant reversal will not occur and estimates variable consideration from rebates, chargebacks, trade discounts and allowances, sales returns allowances and other incentives using the expected value method. Revenues for product sales are recognized at a point in time when the single performance obligation is satisfied upon delivery to the customer. The Company's payment terms are approximately 45-90 days. Actual amounts of consideration ultimately received may differ from the Company’s estimates. The Company will reassess estimates for variable consideration periodically. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. In China, rebates are offered to distributors. The Company records a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions used to establish the provision include the level of distributor inventories, sales volumes and contract pricing and estimated acceptance of government pricing or reimbursement amounts (such as provincial acceptance of the National Reimbursement Drug List pricing in the PRC). The Company regularly reviews the information related to these estimates and adjusts the provision accordingly. In the United States, estimates for variable consideration for which reserves are established at the time of sale include government rebates, chargebacks, trade discounts and allowances, sales returns allowances and other incentives that are offered within contracts between the Company and its US 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, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The Company bases its 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. For newly launched products where actual returns history is not yet available, the sales returns allowance is initially calculated based on benchmarking data from similar products and industry experience. If the historical or benchmarking data the Company uses to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. Any changes from the historical trend rates are considered in determining the current sales return allowance. To date, sales returns have not been significant. Collaboration Revenue At contract inception, the Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the five-step model under ASC 606 noted above. 19 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The Company’s collaborative arrangements may contain more than one unit of account, or performance obligation, including grants of licenses to intellectual property rights, agreement to provide research and development services and other deliverables. The collaborative arrangements do not include a right of return for any deliverable. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. In developing the stand-alone selling price for a performance obligation, the Company considers competitor pricing for a similar or identical product, market awareness of and perception of the product, expected product life and current market trends. In general, the consideration allocated to each performance obligation is recognized when the respective obligation is satisfied either by delivering a good or providing a service, limited to the consideration that is not constrained. Non-refundable payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as advances from customers. Licenses of Intellectual Property: Upfront non-refundable payments for licensing the Company’s intellectual property are evaluated to determine if the license is distinct from the other performance obligations identified in the arrangement. For licenses determined to be distinct, the Company recognizes revenues from non-refundable up-front fees allocated to the license at a point in time, when the license is transferred to the licensee and the licensee is able to use and benefit from the license. Research and Development Services: The portion of the transaction price allocated to research and development services performance obligations is deferred and recognized as collaboration revenue over time as delivery or performance of such services occurs. R&D reimbursement revenue for revenue attributable to the clinical trials that BMS had opted into is recognized as delivery or performance of such services occurs. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestones related to the Company’s development-based activities may include initiation of various phases of clinical trials. Due to the uncertainty involved in meeting these development-based targets, they are generally fully constrained at contract inception. The Company will assess whether the variable consideration is fully constrained each reporting period based on the facts and circumstances surrounding the clinical trials. Upon changes to constraint associated with the developmental milestones, variable consideration will be included in the transaction price when a significant reversal of revenue recognized is not expected to occur and allocated to the separate performance obligations. Regulatory milestones are fully constrained until the period in which those regulatory approvals are achieved due to the inherent uncertainty with the approval process. Regulatory milestones are included in the transaction price in the period regulatory approval is obtained. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Research and Development Expenses Research and development expenses represent costs associated with the collaborative arrangements, which primarily include (i) payroll and related costs (including share-based compensation) associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of the Company’s technologies under development, (iii) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to the Company’s research and development services and have no alternative future uses. Clinical trial costs are a significant component of the Company’s research and development expenses. The Company has a history of contracting with third parties that perform various clinical trial activities on behalf of the Company in the ongoing development of the Company’s product candidates. Expenses related to clinical trials are accrued based on the Company’s 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), the Company 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 reasonably certain. 20 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The process of estimating the Company's research and development expenses involves reviewing open contracts and purchase orders, communicating with its personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated costs incurred for the services when the Company has not yet been invoiced or otherwise notified of the actual costs. The majority of the Company's service providers invoice it in arrears for services performed, on a pre‑determined schedule or when contractual milestones are met; however, some require advanced payments. The Company makes estimates of the expenses as of each balance sheet date in its financial statements based on facts and circumstances known to the Company at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, the 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 the Company reporting expenses that are too high or too low in any particular period. There were no material adjustments for a change in estimate to research and development expenses in the accompanying consolidated financial statements for the years ended December 31, 2020, 2019 and 2018. Acquired In-Process Research and Development Expense The Company has acquired rights to develop and commercialize product candidates. Upfront payments that relate to the acquisition of a new drug compound, as well as pre-commercial milestone payments, are immediately expensed as acquired in-process research and development in the period in which they are incurred, provided that the new drug compound did not also include processes or activities that would constitute a “business” as defined under GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use. Milestone payments made to third parties subsequent to regulatory approval are capitalized as intangible assets and amortized over the estimated remaining useful life of the related product. Royalties owed on sales of the products licensed pursuant to the agreements are expensed in the period the related revenues are recognized. Government Grants Government financial incentives that involve no conditions or continuing performance obligations of the Company are recognized as other non-operating income upon receipt. In the event government grants or incentives involve continuing performance obligations, the Company will capitalize the payment as a liability and recognize the same financial statement caption as the performance obligation relates over the performance period. Comprehensive Loss Comprehensive loss is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income , requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss includes net loss, foreign currency translation adjustments, pension liability adjustments and unrealized holding gains/losses associated with the available-for-sale debt securities, and is presented in the consolidated statements of comprehensive loss. Share-Based Compensation Awards granted to employees The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s grants of share-based awards to employees were classified as equity awards and are recognized in the financial statements based on their grant date fair values. Specifically, the grant date fair value of share options is calculated using an option pricing model. The fair value of restricted shares and restricted share units are based on the closing market price of our ADSs on the NASDAQ Global Select Market on the date of grant. The Company has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting based on service conditions provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date. The Company uses the accelerated method for all awards granted with graded vesting based on performance conditions. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. 21 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Forfeiture rates are estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those share-based awards that are expected to vest. To the extent the Company revises these estimates in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent third-party valuation firm, determined the estimated fair value of the stock options granted to employees using the binomial option pricing model. Awards granted to non-employees The Company has accounted for equity instruments issued to non-employees in accordance with the provisions of ASC 718 and ASC 505, Equity . All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The grant date is the measurement date of the fair value of the equity instrument issued. The expense is recognized in the same manner as if the Company had paid cash for the services provided by the non-employees in accordance with ASC 505-50, Equity-based payments to non-employees . The Company estimated the fair value of share options granted to non-employees using the same method as employees. Modification of awards A change in any of the terms or conditions of the awards is accounted for as a modification of the award. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards and other pertinent factors at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Company recognizes over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Company recognizes is the cost of the original award. Income Taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using enacted tax rates that will be in effect when the differences are expected to reverse. 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. The Company evaluates its uncertain tax positions using the provisions of ASC 740, Income Taxes, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company recognizes in the financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. Loss Per Share Loss per share is calculated in accordance with ASC 260, Earnings per Share . Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s restricted shares are participating securities because they have contractual rights to share in the profits of the Company. However, the restricted shares do not have contractual rights and obligations to share in the losses of the Company. For the periods presented herein, the computation of basic loss per share using the two-class method is not applicable as the Company is in a net loss position. 22 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the Company’s convertible preferred shares using the if-converted method, and ordinary shares issuable upon the conversion of the share options and unvested restricted shares, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Basic and diluted loss per ordinary share is presented in the Company’s consolidated statements of operations. Segment Information In accordance with ASC 280, Segment Reporting , the Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment: pharmaceutical products. Concentration of Risks Concentration of credit risk Financial instruments that are potentially subject to credit risk consist of cash and cash equivalents and short-term investments. The carrying amounts of cash and cash equivalents and short-term investments represent the maximum amount of loss due to credit risk. As of December 31, 2020 and 2019, $ 1,381,950 and $ 618,011 were deposited with various major reputable financial institutions located in the PRC and international financial institutions outside of the PRC. The deposits placed with financial institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions, the Company may be unable to claim its deposits back in full. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. As of December 31, 2020 and 2019, the Company had short-term investments amounting to $ 3,268,725 and $ 364,728 , respectively. At December 31, 2020, the Company’s short-term investments were comprised of U.S. treasury securities. The Company believes that U.S. treasury securities are of high credit quality and continually monitors the credit worthiness of these institutions. Customer concentration risk For the year ended December 31, 2020, sales to the Company's two largest product distributors, China Resources and Sinopharm, represented approximately 38.7 % and 25.4 % of product revenue, respectively, and collectively, represented approximately 59.6 % of total accounts receivable as of December 31, 2020. For the years ended December 31, 2019 and 2018, substantially all of the Company's revenue was from BMS and the Company's product distributor, China Resources, in China. Business, customer, political, social and economic risks The Company participates in a dynamic biopharmaceutical industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: changes in the overall demand for services and products; competitive pressures due to existing competitors and new entrants; advances and new trends in new drugs and industry standards; changes in clinical research organizations, contract manufacturers and other key vendors; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Company’s ability to attract and retain employees necessary to support its growth. The Company’s operations could be also adversely affected by significant political, economic and social uncertainties in the PRC and in relations between the PRC and United States. Currency convertibility risk A significant portion of the Company’s expenses, assets and liabilities are denominated in RMB. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily 23 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) convertible into U.S. dollar or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approvals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. Foreign currency exchange rate risk Since July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was appreciation of approximately 6.3 %, depreciation of approximately 1.3 % and depreciation of approximately 5.7 %, in the years ended December 31, 2020, 2019 and 2018. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. To the extent that the Company needs to convert U.S. dollar into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. In addition, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company’s earnings or losses. Recent Accounting Pronouncements New accounting standards which have been adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses . Subsequently, the FASB issued ASU 2019-05, Financial Instruments- Credit Losses (Topic 326): Targeted Transition Relief and ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments- Credit Losses (collectively, the "Credit Loss ASUs"). The Credit Loss ASUs change the methodology to be used to measure credit losses for certain financial instruments and financial assets, including trade receivables. The new methodology requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The Company adopted the standard on January 1, 2020. Based on the composition of the Company's trade receivables and investment portfolio, the adoption of this standard did not have a material impact on the Company’s financial position or results of operations upon adoption. The Company has updated its accounting policy for trade accounts receivable and is providing additional disclosure about its allowance for credit losses, as required by the standard, upon adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement. The update eliminates, modifies, and adds certain disclosure requirements for fair value measurements. The added disclosure requirements and the modified disclosure on the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented. All other changes to disclosure requirements in this update should be applied retrospectively to all periods presented upon their effective date. The Company adopted this standard on January 1, 2020. There was no material impact to the Company's financial position or results of operations upon adoption. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to defer and recognize as an asset. This guidance should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted this standard on January 1, 2020. There was no material impact to the Company's financial position or results of operations upon adoption. 24 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) : Clarifying the Interaction between Topic 808 and Topic 606. This update clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This guidance should be applied retrospectively to the date of initial application of Topic 606. The Company adopted this standard on January 1, 2020. There was no material impact to the Company's financial position or results of operations upon adoption. New accounting standards which have not yet been adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes as part of the FASB's overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes , and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Company is currently evaluating the impact on its financial statements of adopting this guidance. 3. Collaborative and Licensing Arrangements The Company enters into collaborative arrangements for the research and development, manufacture and/or commercialization of drug products and drug candidates. To date, these collaborative arrangements have included out-licenses of internally developed products and drug candidates to other parties, in-licenses of products and drug candidates from other parties, and profit- and cost-sharing arrangements. These arrangements may include non-refundable upfront payments, contingent obligations for potential development, regulatory and commercial performance milestone payments, cost-sharing and reimbursement arrangements, royalty payments, and profit sharing. Out-Licensing Arrangements To date, the Company’s collaboration revenue related to its out-licensing collaborative agreements has consisted of (1) upfront license fees, research and development reimbursement revenue, and research and development services revenue from its collaboration agreement with BMS for tislelizumab, and (2) upfront license fees and milestone payments from its collaboration agreement with Merck KGaA, Darmstadt Germany for pamiparib and lifirafenib. The following table summarizes total collaboration revenue recognized for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 Revenue from Collaborators $ $ $ Reimbursement of research and development costs — 27,634 56,776 Research and development service revenue — 27,982 10,559 Other — 150,000 — Total — 205,616 67,335 25 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Celgene Corporation, a Bristol Myers Squibb company ("BMS") On July 5, 2017, the Company entered into a license agreement with Celgene Corporation, now a BMS company, pursuant to which the Company granted to the BMS parties an exclusive right to develop and commercialize the Company’s investigational PD-1 inhibitor, tislelizumab, in all fields of treatment, other than hematology, in the United States, Europe, Japan and the rest of world other than Asia (the “PD-1 License Agreement”). In connection with the closing of the transactions on August 31, 2017, the Company and BMS amended and restated the PD-1 License Agreement (the “A&R PD-1 License Agreement”) to, among other things, clarify the parties’ responsibilities relating to the conducting and funding of certain global registration clinical trials and clarify the scope of the regulatory materials transferred by BeiGene to BMS. The Company entered into a mutual agreement with BMS to terminate the A&R PD-1 License Agreement effective June 14, 2019 in advance of the acquisition of Celgene by BMS. Under the terms of the A&R PD-1 License Agreement, BMS paid the Company $ 263,000 in upfront non-refundable fees, of which $ 92,050 was paid in the third quarter of 2017 and the remaining $ 170,950 was paid in December 2017. The Company allocated $ 13,000 of upfront fees to the fair value of assets related to the Company’s acquisition of Celgene Shanghai, a wholly-owned subsidiary of Celgene Holdings East Corporation established under the laws of China, which was completed contemporaneously with the A&R PD-1 License Agreement. The Company was also eligible to receive product development and commercial milestone payments based on the successful achievement of development and regulatory and commercialization goals, respectively, and potential royalty payments. In addition to the exclusive right to develop and commercialize tislelizumab, the terms of the A&R PD-1 License Agreement provided BMS with the right to collaborate with the Company on the development of tislelizumab for specified indications, including required participation on a joint development committee and a joint steering committee as well as a joint commercialization committee upon achievement of commercialization. BMS reimbursed the Company for certain research and development costs at a cost plus agreed upon markup for the development of tislelizumab related to the clinical trials that BMS opted into, as outlined in the development plan. Under ASC 606, the Company identified the following deliverables of the collaboration agreement as distinct performance obligations: (a) the license provided to BMS for the exclusive right to develop and commercialize tislelizumab, in all fields of treatment, other than hematology, in the United States, Europe, Japan and the rest of world other than Asia (“the license”); and (b) the research and development services provided to BMS to develop tislelizumab within specified indications (“R&D services”). For each deliverable, the Company determined the stand-alone selling price and allocated the non-constrained consideration of $ 250,000 to the units of accounting using the relative selling price method. The consideration allocated to the license was recognized upon transfer of the license to BMS at contract inception and the consideration allocated to the R&D services was deferred and recognized over the term of the respective clinical studies for the specified indications. The payments associated with the defined developmental, regulatory, and commercialization goals were considered variable consideration and were fully constrained at contract inception through the date of termination. In connection with the termination in June 2019, the Company regained full global rights to tislelizumab and received a $ 150,000 payment from BMS. The payment was recognized as other collaboration revenue upon termination as the Company had no further performance obligations under the collaboration. Upon termination, the Company also recognized the remainder of the deferred revenue balance related to the upfront consideration allocated to research and development services at the time of the original collaboration. The Company's license from BMS to distribute the approved cancer therapies ABRAXANE ® , REVLIMID ® , and VIDAZA ® in China was not affected by the termination of the tislelizumab collaboration. For the year ended December 31, 2019, the Company recognized collaboration revenue of $ 205,616 related to the BMS collaboration, which consisted of $ 27,634 of research and development reimbursement revenue for the trials that BMS had opted into through the termination of the collaboration agreement; $ 27,982 of research and development services revenue, which reflects the recognition of the remaining upfront consideration that was allocated to research and development services at the time of the collaboration and was recognized over the term of the respective clinical studies for the specified indications; and $ 150,000 of other collaboration revenue related to the payment received from BMS in connection with the termination of the collaboration agreement. For the year ended December 31, 2018, the Company recognized collaboration revenue of $ 65,835 related to the BMS collaboration, which consisted of $ 56,776 of research and development reimbursement revenue for the trials that BMS had opted into and research and development services revenue of $ 9,059 from deferred revenue. 26 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Merck KGaA, Darmstadt Germany In 2013, the Company entered into a license agreement with Merck KGaA, Darmstadt Germany for lifirafenib, which was amended and restated in 2013 and 2015, in which it granted to Merck KGaA, Darmstadt Germany an exclusive license to develop, manufacture, and, in certain circumstances, commercialize lifirafenib outside of the PRC, and Merck KGaA Darmstadt Germany granted the Company an exclusive license to develop, manufacture and commercialize lifirafenib in the PRC (the “PRC Territory”). In March 2017, the Company regained the worldwide rights to lifirafenib after Merck KGaA, Darmstadt Germany informed the Company that it would not exercise a continuation option, and thus, the ex-PRC portion of the agreements terminated in their entirety, except for certain provisions that survived the termination. In December 2018, the Company received notice from Merck KGaA, Darmstadt Germany that Merck KGaA, Darmstadt Germany was terminating the PRC portion of the agreement. As a result of the termination, Merck KGaA, Darmstadt Germany's exclusive right of first negotiation to acquire exclusive commercialization rights under the lifirafenib RAF dimer program in the PRC was terminated and the Company is no longer required to pay Merck KGaA, Darmstadt Germany royalties on sales of lifirafenib in the PRC or entitled to receive future milestone payments from Merck KGaA, Darmstadt Germany for lifirafenib. In 2013, the Company also entered into a license agreement with Merck KGaA, Darmstadt Germany for pamiparib, in which it granted to Merck KGaA, Darmstadt Germany an exclusive license to develop, manufacture, and, in certain circumstances, commercialize pamiparib outside of the PRC, and Merck KGaA, Darmstadt Germany granted the Company an exclusive license to develop, manufacture and commercialize pamiparib in the PRC Territory. On October 1, 2015, the Company entered into a purchase of rights agreement with Merck KGaA, Darmstadt Germany, pursuant to which the Company purchased from Merck KGaA, Darmstadt Germany all of its exclusive rights to pamiparib in the ex-PRC territories for consideration of $ 10,000 , and reduced the future milestone payments the Company was eligible to receive under the PRC license agreement. In December 2017, the Company achieved the milestone for dosing a patient in the first Phase 2 clinical trial of pamiparib in the PRC Territory, and the related $ 1,000 milestone payment received in January 2018, was recognized as research and development services revenue in year ended December 31, 2017. In May 2018, the Company achieved the milestone for dosing patients in the first Phase 3 clinical trial of pamiparib in the PRC Territory, and the related $ 1,500 milestone payment was recognized as research and development services revenue for the year ended December 31, 2018. No other milestones were achieved prior to the termination of the agreement. In December 2018, the Company entered into a letter agreement for the Company to buy back the PRC commercialization option for pamiparib that it had granted to Merck KGaA, Darmstadt Germany under the license agreement for initial consideration of $ 19,000 , which was paid in January 2019. The payment was charged to research and development expense for the year ended December 31, 2018, as the PRC commercialization option has no alternative future use. Merck KGaA, Darmstadt Germany was relieved of any future milestone obligations as a result of the termination. In accordance with the letter agreement, the Company is required to pay a one-time milestone of $ 7,500 upon approval of pamiparib in the PRC. All other future obligations were terminated. As a result of the foregoing termination agreements and notices, the Company’s license agreements with Merck KGaA, Darmstadt Germany for lifirafenib and pamiparib were terminated in their entirety as of December 31, 2018. In-Licensing Arrangements - Commercial Amgen On October 31, 2019, the Company entered into a global strategic oncology collaboration with Amgen (the "Amgen Collaboration Agreement") for the commercialization and development in China, excluding Hong Kong, Taiwan and Macao, of Amgen’s XGEVA ® , KYPROLIS ® , and BLINCYTO ® , and the joint global development of a portfolio of oncology assets in Amgen’s pipeline, with BeiGene responsible for development and commercialization in China. On January 2, 2020, following approval by the Company's shareholders and satisfaction of other closing conditions, the agreement became effective. Under the agreement, the Company is responsible for the commercialization of XGEVA ® , KYPROLIS ® and BLINCYTO ® in China for five or seven years . Amgen is responsible for manufacturing of the products globally and will supply the products to the Company at an agreed upon price. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. Following the commercialization period, the Company has the right to retain one 27 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) product and is entitled to receive royalties on sales in China for an additional five years on the products not retained. XGEVA ® was approved in China in 2019 for patients with giant cell tumor of the bone and a supplemental new drug application has been filed for prevention of skeletal-related events in cancer patients with bone metastases. In July 2020, the Company began commercializing XGEVA ® in China. In December 2020, BLINCYTO ® was approved in China for injection for the treatment of adult patients with relapsed or refractory (R/R) B-cell precursor acute lymphoblastic leukemia (ALL). Additionally, a new drug application has been filed in China for KYPROLIS ® as a treatment for patients with multiple myeloma. Amgen and the Company are also jointly developing a portfolio of Amgen oncology pipeline assets under the collaboration. The Company is responsible for conducting clinical development activities in China and co-funding global development costs by contributing cash and development services up to a total cap of $ 1,250,000 . Amgen is responsible for all development, regulatory and commercial activities outside of China. For each pipeline asset that is approved in China, the Company will receive commercial rights for seven years from approval. The Company has the right to retain approximately one out of every three approved pipeline assets, other than sotorasib (AMG 510), Amgen's investigational KRAS G12C inhibitor, for commercialization in China. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. The Company is entitled to receive royalties from sales in China for pipeline assets returned to Amgen for five years after the seven-year commercialization period. The Company is also entitled to receive royalties from global sales of each product outside of China (with the exception of sotorasib). The Amgen Collaboration Agreement is within the scope of ASC 808, as both parties are active participants and are exposed to the risks and rewards dependent on the commercial success of the activities performed under the agreement. The Company is the principal for product sales to customers in China during the commercialization period and will recognize 100 % of net product revenue on these sales. Amounts due to Amgen for its portion of net product sales will be recorded as cost of sales. Cost reimbursements due to or from Amgen under the profit share will be recognized as incurred and recorded to cost of sales; selling, general and administrative expense; or research and development expense, based on the underlying nature of the related activity subject to reimbursement. Costs incurred for the Company's portion of the global co-development funding are recorded to research and development expense as incurred. In connection with the Amgen Collaboration Agreement, a Share Purchase Agreement ("SPA") was entered into by the parties on October 31, 2019. On January 2, 2020, the closing date of the transaction, Amgen purchased 15,895,001 of the Company's ADSs for $ 174.85 per ADS, representing a 20.5 % ownership stake in the Company. Per the SPA, the cash proceeds shall be used as necessary to fund the Company's development obligations under the Amgen Collaboration Agreement. Pursuant to the SPA, Amgen also received the right to designate one member of the Company's board of directors, and Anthony Hooper joined the Company's board of directors as the Amgen designee in January 2020. In determining the fair value of the common stock at closing, the Company considered the closing price of the common stock on the closing date of the transaction and included a lack of marketability discount because the shares are subject to certain restrictions. The fair value of the shares on the closing date was determined to be $ 132.74 per ADS, or $ 2,109,902 in the aggregate. The Company determined that the premium paid by Amgen on the share purchase represents a cost share liability due to the Company's co-development obligations. The fair value of the cost share liability on the closing date was determined to be $ 601,857 based on the Company's discounted estimated future cash flows related to the pipeline assets. The estimation of future cash flows involved management assumptions of revenue growth rates and probability of technical and regulatory success of the pipeline assets. The total cash proceeds of $ 2,779,241 were allocated based on the relative fair value method, with $ 2,162,407 recorded to equity and $ 616,834 recorded as a research and development cost share liability. The cost share liability is being amortized proportionately as the Company contributes cash and development services to its total co-development funding cap. Amounts recorded related to the cash proceeds received from the Amgen collaboration for the year ended December 31, 2020 were as follows: Year Ended December 31, 2020 $ Fair value of equity issued to Amgen 2,162,407 Fair value of research and development cost share liability 616,834 Total cash proceeds 2,779,241 28 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Amounts recorded related to the Company's portion of the co-development funding on the pipeline assets for the year ended December 31, 2020 were as follows: Year Ended December 31, 2020 $ Research and development expense 117,005 Amortization of research and development cost share liability 113,986 Total amount due to Amgen for BeiGene's portion of the development funding 230,991 Total amount of development funding paid or payable in cash 224,396 Total amount of development funding paid with development services 6,595 As of December 31, 2020 Remaining portion of development funding cap 1,019,009 As of December 31, 2020, the research and development cost share liability recorded in the Company's balance sheet was as follows: As of December 31, 2020 $ Research and development cost share liability, current portion 127,808 Research and development cost share liability, non-current portion 375,040 Total research and development cost share liability 502,848 The total reimbursement due under the commercial profit-sharing agreement for in-line product sales is classified in the income statement for the year ended December 31, 2020 as follows: Year Ended December 31, 2020 $ Cost of sales - product ( 1,210 ) Selling, general and administrative ( 9,750 ) Research and development ( 660 ) Total ( 11,620 ) Celgene Logistics Sàrl, a BMS company On July 5, 2017, BeiGene and Celgene Logistics Sàrl, now a BMS company, entered into a license and supply agreement pursuant to which BeiGene was granted the right to exclusively distribute and promote BMS's approved cancer therapies, ABRAXANE ® , REVLIMID ® , and VIDAZA ® in China, excluding Hong Kong, Macau and Taiwan (the “China License Agreement”). The China License Agreement became effective on August 31, 2017, contemporaneously with the closing of the acquisition of Celgene Shanghai and the A&R PD-1 License Agreement. The Company began distributing these in-licensed products in China in September 2017. The Company subsequently assigned the agreement to its wholly-owned subsidiary, BeiGene Switzerland. In-Licensing Arrangements - Development The Company has in-licensed the rights to develop, manufacture and, if approved, commercialize multiple development stage drug candidates globally or in specific territories. These arrangements typically include non-refundable upfront payments, contingent obligations for potential development, regulatory and commercial performance milestone payments, cost-sharing arrangements, royalty payments, and profit sharing. 29 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Our significant license agreements are described below: EUSA Pharma In January 2020, the Company entered into an exclusive development and commercialization agreement with EUSA Pharma ("EUSA") for the orphan biologic products SYLVANT ® (siltuximab) and QARZIBA ® (dinutuximab beta) in China. Under the terms of the agreement, EUSA granted the Company exclusive rights to SYLVANT ® in greater China and to QARZIBA ® in mainland China. Under the agreement, the Company will fund and undertake all clinical development and regulatory submissions in the territories, and will commercialize both products once approved. EUSA received a $ 40,000 upfront payment and will be eligible to receive payments upon the achievement of regulatory and commercial milestones up to a total of $ 160,000 . EUSA will also be eligible to receive tiered royalties on future product sales. The upfront payment was expensed to research and development expense during the year ended December 31, 2020 in accordance with the Company's acquired in-process research and development expense policy. Assembly Biosciences, Inc. In July 2020, the Company entered into a collaboration agreement with Assembly Biosciences, Inc. ("Assembly") for Assembly's portfolio of three clinical-stage core inhibitor candidates for the treatment of patients with chronic hepatitis B virus ("HBV") infection in China. Under the terms of the agreement, Assembly granted BeiGene exclusive rights to develop and commercialize ABI-H0731, ABI-H2158 and ABI-H3733 in China, including Hong Kong, Macau, and Taiwan. BeiGene is responsible for development, regulatory submissions, and commercialization in China. Assembly retains full worldwide rights outside of the partnered territory for its HBV portfolio. Assembly received an upfront payment of $ 40,000 and is eligible to receive payments upon achievement of development, regulatory and commercial milestones up to a total of $ 503,750 . Assembly is also eligible to receive tiered royalties on net sales. The upfront payment was expensed to research and development expense during the year ended December 31, 2020 in accordance with the Company's acquired in-process research and development expense policy. Bio-Thera Solutions, Ltd. In August 2020, the Company entered into a license, distribution and supply agreement with Bio-Thera Solutions, Ltd. ("Bio-Thera") for Bio-Thera's BAT1706, an investigational biosimilar to Avastin ® (bevacizumab) in China. The agreement became effective on September 10, 2020 upon approval of Bio-Thera's shareholders, and was subsequently assigned by the Company to its affiliate BeiGene (Guangzhou) Co., Ltd. ("BeiGene Guangzhou") on September 18, 2020, as permitted by the agreement. Under the terms of the agreement, Bio-Thera agreed to grant BeiGene the right to develop, manufacture, and commercialize BAT1706 in China, including Hong Kong, Macau, and Taiwan. Bio-Thera will retain rights outside of the partnered territory. Bio-Thera received an upfront payment of $ 20,000 in October 2020 and is eligible to receive payments upon the achievement of regulatory and commercial milestones up to a total of $ 145,000 . Bio-Thera will also be eligible to receive tiered double digit royalties on future net product sales. The upfront payment was expensed to research and development expense during the year ended December 31, 2020 in accordance with the Company's acquired in-process research and development expense policy. Seagen, Inc. In November 2019, the Company entered into a l icense agreement with Seagen, Inc. (formerly known as "Seattle Genetics, Inc.") for an advanced pre-clinical product candidate for treating cancer. The agent utilizes a proprietary Seagen antibody-based technology. Under the terms of the agreement, Seagen retained rights to the product candidate in the Americas (United States, Canada and Latin American countries), Europe and Japan. The Company was granted exclusive rights to develop and commercialize the product candidate in Asia (except Japan) and the rest of the world. Seagen will lead global development and BeiGene will fund and operationalize the portion of global clinical trials attributable to its territories. BeiGene will also be responsible for all clinical development and regulatory submissions specific to its territories. Seagen received an upfront payment of $ 20,000 and is eligible to receive progress-dependent milestones and tiered royalties on any product sales. Seagen is a related party due to a common shareholder, and that shareholder has different representatives serving on each companies' respective board of directors. The upfront payment was expensed to research and development expense during the year ended December 31, 2019 in accordance with the Company's acquired in-process research and development expense policy. 30 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) BioAtla, Inc. In April 2019, the Company entered into a global co-development and collaboration agreement with BioAtla, Inc. ("BioAtla") for the development, manufacturing and commercialization of BioAtla's investigational CAB-CTLA-4 antibody (BA3071), whereby BioAtla had agreed to co-develop the CAB-CTLA-4 antibody to defined early clinical objectives and the Company had agreed to then lead the parties' joint efforts to develop the product candidate and be responsible for global regulatory filings and commercialization. Subject to the terms of the agreement, the Company held a co-exclusive license with BioAtla to develop and manufacture the product candidate globally and an exclusive license to commercialize the product candidate globally. The Company had agreed to be responsible for all costs of development, manufacturing and commercialization in Asia (excluding Japan), Australia and New Zealand (the "Company Territory"), and the parties had agreed to share development and manufacturing costs and commercial profits and losses upon specified terms in the rest of the world. The Company paid BioAtla an upfront payment of $ 20,000 and BioAtla was eligible to receive a milestone payment upon reaching the defined early clinical objectives. BioAtla was also eligible to receive additional payments in subsequent development and regulatory milestones globally and commercial milestones in the Company Territory, together with tiered royalties on sales in the Company Territory. The upfront payment was expensed to research and development expense during the year ended December 31, 2019 in accordance with the Company's acquired in-process research and development expense policy. In October 2020, the Company and BioAtla amended the global co-development and collaboration agreement. Under the amended terms of the agreement, BeiGene holds an exclusive global license to BA3071 and is solely responsible for its global clinical development and commercialization and has the right to receive all profits on any future sales, net of royalty payments to BioAtla. In addition to the upfront payment BioAtla received upon execution of the original agreement, BioAtla is eligible to receive development and regulatory milestone payments together with increased tiered royalties on worldwide sales. Zymeworks, Inc. In November 2018, the Company and Zymeworks entered into collaboration and license agreements whereby the Company acquired licenses to develop and commercialize Zymeworks’ clinical-stage bispecific antibody candidate ZW25 and its preclinical-stage bispecific antibody drug conjugate ("ADC") ZW49 in Asia (excluding Japan), Australia, and New Zealand. In addition, Zymeworks granted BeiGene a license to Zymeworks' proprietary Azymetric and EFECT platforms to develop and commercialize globally up to three other bispecific antibodies using the platforms. Under the collaboration agreements, BeiGene will be responsible for all clinical development and regulatory submissions in the licensed territories. BeiGene and Zymeworks have also agreed to collaborate on global development of ZW25 and ZW49 in HER2‑expressing solid tumors, including gastric and breast cancer, with BeiGene enrolling patients and contributing clinical trial data from the licensed territories. Zymeworks retains full rights to both ZW25 and ZW49 outside of the specified countries and will continue to lead global development of these drug candidates. Under the terms of the license and collaboration agreements for ZW49 and ZW25, Zymeworks received total upfront payments of $ 40,000 and is eligible to receive additional payments upon the achievement of development and commercial milestones for both product candidates. In addition, Zymeworks will be eligible to receive tiered royalties on future sales of ZW25 and ZW49 in the licensed territory. Under the terms of the research and license agreement for the Azymetric and EFECT platforms, Zymeworks received an upfront payment of $ 20,000 and is eligible to receive additional payments upon the achievement of development and commercial milestones for up to three bispecific product candidates developed under the agreement. In addition, Zymeworks will be eligible to receive tiered royalties on future global sales of bispecific products developed by BeiGene under the agreement. The upfront payments were expensed to research and development expense during the year ended December 31, 2018 in accordance with the Company's acquired in-process research and development expense policy. The Company recognized $ 15,000 of Zymeworks development milestone payments within research and development expense during the years ended December 31, 2020. 31 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Other In addition to the collaborations discussed above, the Company has entered into additional collaborative arrangements during the years ending December 31, 2020 and 2019. The Company may be required to pay additional amounts upon the achievement of various development and commercial milestones under these agreements. The Company may also incur significant research and development costs if the related product candidate were to advance to late-stage clinical trials. In addition, if any products related to these collaborations are approved for sale, the Company may be required to pay significant milestones upon approval and milestones and/or royalties on future sales. The payment of these amounts, however, is contingent upon the occurrence of various future events, which have a high degree of uncertainty of occurrence. 4. Asset Acquisitions BeiGene Pharmaceuticals (Guangzhou) Co., Ltd. In September 2018, BeiGene (Guangzhou) Co., Ltd. ("BeiGene Guangzhou") acquired 100 % of the equity interests of Baiji Shenzhou (Guangzhou) Pharmaceuticals Co., Ltd. (formerly known as Huajian Pharmaceuticals Co., Ltd.), which subsequently changed its name to BeiGene Pharmaceuticals (Guangzhou) Co., Ltd., a pharmaceutical distribution company, for total cash consideration of $ 612 , including transaction costs of $ 59 . The acquisition was concentrated in a single identifiable asset, a drug distribution license, and thus the Company has concluded that the transaction is an asset acquisition as it does not meet the accounting definition of a business combination. The total cost was allocated to the drug distribution license and corresponding deferred tax liability, resulting in a $ 816 intangible asset for the license and a deferred tax liability of $ 204 . Beijing Innerway Bio-tech Co., Ltd. In October 2018, BeiGene HK completed the acquisition of 100 % of the equity interests of Beijing Innerway Bio-tech Co., Ltd., the owner of the Company's research, development and office facility in Changping, Beijing, China, for total cash consideration of $ 38,654 . The acquisition was concentrated in a single identifiable asset or group of assets, the building and associated land use right, and thus the Company has concluded that the transaction is an asset acquisition as it does not meet the accounting definition of a business combination. The total cost of the transaction of $ 38,865 , which includes transaction costs of $ 211 , was allocated based on the relative fair values of the net assets acquired, as follows: Amount $ Land use right 33,783 Building 15,874 Deferred tax liability ( 11,221 ) Other 429 Total cost 38,865 5. Restricted Cash The Company’s restricted cash balance of $ 8,055 and $ 2,764 as of December 31, 2020 and 2019, respectively, primarily consist of RMB-denominated cash deposits held in designated bank accounts for collateral for letters of credit. The Company classifies restricted cash as current or non-current based on term of restriction. 32 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 6. Investments Short-Term Investments Short-term investments as of December 31, 2020 consisted of the following available-for-sale debt securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Net Carrying Amount) $ $ $ $ U.S. treasury securities 3,267,875 850 — 3,268,725 Total 3,267,875 850 — 3,268,725 Short-term investments as of December 31, 2019 consisted of the following available-for-sale debt securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Net Carrying Amount) $ $ $ $ U.S. treasury securities 363,440 1,288 — 364,728 Total 363,440 1,288 — 364,728 The Company does not consider the investments in U.S. treasury securities to be other-than-temporarily impaired at December 31, 2020. As of December 31, 2020, the Company's available-for-sale debt securities consisted entirely of short-term U.S. treasury securities, which were determined to have zero risk of expected credit loss. Accordingly, no allowance for credit loss was recorded as of December 31, 2020. Equity Securities with Readily Determinable Fair Values Leap In January 2020, the Company purchased $ 5,000 of Series B mandatorily convertible, non-voting preferred stock of Leap in connection with a strategic collaboration and license agreement the Company entered into with Leap. The Series B shares were subsequently converted into shares of Leap common stock and warrants to purchase additional shares of common stock upon approval of Leap's shareholders in March 2020. As of December 31, 2020, the Company's ownership interest in the outstanding common stock of Leap was 8.1 % based on information from Leap. Inclusive of the shares of common stock issuable upon the exercise of the currently exercisable warrants, the Company's interest is approximately 14.9 % based on information from Leap. The Company measures the investment in the common stock and warrants at fair value, with changes in fair value recorded to other income, net. The fair value of the common stock and warrants was $ 10,810 and $ 6,669 , respectively, as of December 31, 2020. During the year ended December 31, 2020, the Company recorded an unrealized gain of $ 12,479 in the consolidated statement of operations. Private Equity Securities without Readily Determinable Fair Values The Company invests in equity securities of certain companies whose securities are not publicly traded and fair value is not readily determinable and where the Company has concluded it does not have significant influence based on its ownership percentage and other factors. These investments are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company held investments of $ 9,705 and nil in equity securities without readily determinable fair values as of December 31, 2020 and December 31, 2019, respectively. There were no adjustments to the carrying values of these securities for the year ended December 31, 2020. Equity-Method Investments MapKure In June 2019, the Company announced the formation of MapKure, an entity jointly owned by the Company and SpringWorks Therapeutics, Inc. ("SpringWorks"). The Company out-licensed to MapKure the Company's product candidate 33 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) BGB-3245, an investigational oral, selective small molecule inhibitor of monomer and dimer forms of activating B-RAF mutations including V600 BRAF mutations, non-V600 B-RAF mutations, and RAF fusions. The Company received 10,000,000 Series A preferred units of MapKure, or a 71.4 % ownership interest in exchange for its contribution of the intellectual property. SpringWorks purchased 3,500,000 Series A preferred units, or a 25 % ownership interest, and other investors purchased 250,000 Series A preferred units or 1.8 % ownership each. Following the initial closing, the Company consolidated its interests in MapKure under the voting model due to its controlling financial interest. In June 2020, MapKure held a second closing under the existing terms of the SPA in which it issued additional Series A preferred units to SpringWorks and the other investors that purchased units in the first closing (the "Second Closing"), and the Company's ownership interest decreased to 55.6 %. As the requisite Series A voting requirements in MapKure's governing documents require 70 % combined voting power for certain actions, the Company determined that it lost its controlling financial interest after the Second Closing. Therefore, the Company deconsolidated MapKure and recognized a gain of $ 11,307 for the excess of the fair value of its 55.6 % ownership interest in MapKure and carrying amount of the prior non-controlling interest over the carrying amount of MapKure's net assets within other income during the year ended December 31, 2020. Upon deconsolidation, the Company recorded an equity investment of $ 10,000 , which represents the estimated fair value of its 55.6 % ownership interest in MapKure. Effective June 8, 2020, the Company is accounting for the investment as an equity-method investment and records its portion of MapKure's earnings or losses within other income, net. The Company recognized losses of $ 491 for its portion of MapKure's net loss for the year ended December 31, 2020. As of December 31, 2020, the carrying amount of the Company's investment in MapKure was $ 9,509 . Guangzhou GET Phase I Biomedical Industry Investment Fund Partnership (Limited Partnership) In July 2020, BeiGene (Guangzhou) invested $ 11,782 (RMB 80,000 ) in an existing investment fund, Guangzhou GET Phase I Biomedical Industry Investment Fund Partnership (Limited Partnership) (“GET Bio-fund”). The stated purpose of GET Bio-fund is to promote and upgrade the local industrial transformation in Guangzhou and it is committed to invest at least 60 % of the total fund in the biotechnology, medical device, and medical information industries. GET Bio-fund has four limited partners and one general partner, Guangzhou GET Biomedical Industry Investment Fund Management Co., Ltd. (“GET Bio-fund Management”). GET Bio-fund has an agreed duration for seven years , with the first five years as the investment period and the following two years as the projected payback period. The agreed upon duration may be extended for two additional years with the approval of all of the partners. BeiGene Guangzhou, as a limited partner, holds an ownership interest in the fund of 26.3 %. The investment committee for the fund has seven members, and requires resolutions to be approved by at least five of the seven members. BeiGene Guangzhou holds one position on the investment committee and GET Bio-fund Management holds three positions. The Company determined that it has the ability to exercise significant influence over the fund due to the Company's ownership interest and involvement on the investment committee, and the investment represents an equity method investment. The Company recognized losses of $ 68 for its portion of the fund's net loss for the year ended December 31, 2020. As of December 31, 2020, the carrying amount of the Company's investment in the fund was $ 12,189 . Other Equity-Method Investment In addition to the equity-method investments mentioned above, the Company made an additional equity-method investment during the year ended December 31, 2020 that it does not consider to be individually significant to its financial statements. The Company recognized the equity-method investment at cost and subsequently adjusted the basis based on the Company's share of the results of operations. The Company records its share of the investee's results of operations within other income, net. 34 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 7. Inventories The Company’s inventory balance consisted of the following: As of December 31, 2020 2019 $ $ Raw materials 19,330 — Work in process 1,378 — Finished goods 68,585 28,553 Total inventories 89,293 28,553 8. Manufacturing Facility in Guangzhou, China Manufacturing legal entity structure BeiGene Shanghai, originally established as a wholly-owned subsidiary of BeiGene HK, and currently a wholly-owned subsidiary of BeiGene Biologics, as described below, provides clinical development services for BeiGene affiliates and is the clinical trial authorization ("CTA") holder and marketing authorization application ("MAA") holder for tislelizumab in China. In March 2017, BeiGene HK, a wholly owned subsidiary of the Company, and Guangzhou GET Technology Development Co., Ltd. (now Guangzhou High-tech Zone Technology Holding Group Co., Ltd.) ("GET"), entered into a definitive agreement to establish a commercial scale biologics manufacturing facility in Guangzhou, Guangdong Province, PRC. BeiGene HK and GET entered into an Equity Joint Venture Contract (the “JV Agreement”). Under the terms of the JV Agreement, BeiGene HK made an initial cash capital contribution of RMB 200,000 and a subsequent contribution of one or more biologics assets in exchange for a 95 % equity interest in BeiGene Biologics. GET made a cash capital contribution of RMB 100,000 to BeiGene Biologics, representing a 5 % equity interest in BeiGene Biologics. In addition, on March 7, 2017, BeiGene Biologics entered into a contract with GET, under which GET agreed to provide a RMB 900,000 loan (the “Shareholder Loan”) to BeiGene Biologics (see Note 14). In September 2019, BeiGene Biologics completed the first phase of construction of a biologics manufacturing facility in Guangzhou, through a wholly owned subsidiary, the BeiGene Guangzhou Biologics Manufacturing Co., Ltd. ("BeiGene Guangzhou Factory"), to manufacture biologics for the Company and its subsidiaries. BeiGene HK and BeiGene Biologics subsequently entered into an Equity Transfer Agreement to transfer 100 % of the equity interest of BeiGene Shanghai to BeiGene Biologics, as required by the JV agreement, such that the CTA holder and MAA holder for tislelizumab in China was controlled by BeiGene Biologics. Upon the transfer of equity in BeiGene Shanghai, BeiGene HK's equity interest in BeiGene Shanghai became 95 %. In September 2020, BeiGene HK entered into a share purchase agreement (“JV Share Purchase Agreement”) with GET to acquire GET’s 5 % equity interest in BeiGene Biologics for a total purchase price of $ 28,723 (RMB 195,262 ). The transaction was finalized in November 2020 upon completion of the business registration filing. The share purchase was recorded as an equity transaction. The carrying amount of the noncontrolling interest balance of $ 9,116 was adjusted to nil to reflect the increase in BeiGene HK’s ownership interest to 100 %, and the difference in the fair value of the consideration paid and the carrying amount of the noncontrolling interest of $ 19,599 was recorded to additional paid in capital. In connection with the JV Share Purchase Agreement, BeiGene Biologics repaid the outstanding principal of the Shareholder Loan of $ 132,061 (RMB 900,000 ) and accrued interest of $ 36,558 (RMB 249,140 ) (see Note 14). In connection with the JV share purchase, the Company entered into a loan agreement with China Minsheng Bank for a total loan facility of up to $ 200,000 ("Senior Loan"), of which $ 120,000 was used to fund the JV share repurchase and repayment of the shareholder loan and $ 80,000 could be used for general working capital purposes. The Company may extend the original maturity date for up to two additional twelve month periods. In October 2020, the Company drew down $ 80,000 of the working capital facility and $ 118,320 of the acquisition facility to be used for the JV share repurchase. In addition, the Company entered into a loan agreement with Zhuhai Hillhouse Zhaohui Equity Investment Partnership ("Zhuhai Hillhouse") for a total loan facility of $ 73,640 (RMB 500,000 ) ("Related Party Loan"), of which $ 14,728 (RMB 100,000 ) could be used for general corporate purposes and $ 58,912 (RMB 400,000 ) can only be applied towards the repayment of the Senior Loan facility, 35 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) including principal, interest and fees. The Company has drawn down $ 14,728 (RMB 100,000 ) of the Related Party Loan as of December 31, 2020. See Note 14 for further discussion of the loans. Commercial distribution legal entity structure BeiGene (Guangzhou) Co., Ltd. (“BGC”), a wholly-owned subsidiary of BeiGene HK, was organized in July 2017. In September 2018, BGC acquired 100 % of the equity interests of Baiji Shenzhou (Guangzhou) Pharmaceuticals Co., Ltd. (formerly known as Huajian Pharmaceuticals Co., Ltd.), which subsequently changed its name to BeiGene Pharmaceuticals (Guangzhou) Co., Ltd. (“BPG”). BPG owns drug distribution licenses necessary to distribute pharmaceutical products in China. The Company acquired these drug distribution licenses through the acquisition of BPG, as it is difficult to obtain a newly issued domestic drug distribution license in China. The transaction was accounted for as an asset acquisition (see Note 4). Commercial supply agreement and facility expansion In January 2018, the Company entered into a commercial supply agreement with Boehringer Ingelheim Biopharmaceuticals (China) Ltd. (“Boehringer Ingelheim”) for tislelizumab, which is being manufactured at Boehringer Ingelheim’s facility in Shanghai, China as part of a Marketing Authorization Holder (“MAH”) trial project pioneered by the Company and Boehringer Ingelheim. Under the terms of the commercial supply agreement, Boehringer Ingelheim has agreed to manufacture tislelizumab in China under an exclusive multi-year arrangement, with contract extension possible. In addition, the Company obtained certain preferred rights for future capacity expansion by Boehringer Ingelheim in China. In October 2018, the Company entered into a binding letter of intent ("LOI") with Boehringer Ingelheim to increase the amount of tislelizumab supplied under the agreement through the expansion of Boehringer Ingelheim's facility to add a second bioreactor production line. Under the terms of the binding LOI, the Company provided initial funding for the facility expansion and made an additional payment for contingency costs in 2020. These payments will be credited against future purchases of tislelizumab over the term of the supply agreement. The payment was recorded as a noncurrent asset since it is considered a long-term prepayment for future product costs that will provide future benefit to the Company through credits on purchases of tislelizumab from Boehringer Ingelheim over the term of the supply agreement. 9. Leases The Company has operating leases for office and manufacturing facilities in the United States, Switzerland, and China. The leases have remaining lease terms of up to five years , some of which include options to extend the leases that have not been included in the calculation of the Company’s lease liabilities and ROU assets. The Company has land use rights, which represent land acquired for the biologics manufacturing facility in Guangzhou, and the land acquired for the Company's research, development and office facility in Changping, Beijing. A second Guangzhou land use right was acquired in May 2019 for potential expansion of the Company's research and development activities. The Company acquired a land use right in Suzhou in April 2020 to expand its research, development and manufacturing facility. The land use rights represent lease prepayments and are expensed over the remaining term of the rights, which is 50 years for the initial Guangzhou land use right, 50 years for the second Guangzhou land use right, 36 years for the Changping land use right, and 30 years for the Suzhou land use right. The Company also has certain leases with terms of 12 months or less for certain equipment, office and lab space, which are not recorded on the balance sheet. The components of lease expense were as follows: Year Ended December 31, 2020 2019 $ $ Operating lease cost 18,271 13,980 Variable lease cost 2,465 1,784 Short-term lease cost 1,018 1,001 Total lease cost 21,754 16,765 Total expenses under operating leases were $ 8,930 for the year ended December 31, 2018. 36 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Supplemental balance sheet information related to leases was as follows: As of December 31, 2020 2019 $ $ Operating lease right-of-use assets 41,850 35,555 Land use rights, net 48,731 46,965 Total operating lease right-of-use assets 90,581 82,520 Current portion of operating lease liabilities 13,895 10,814 Operating lease liabilities, non-current portion 29,417 25,833 Total lease liabilities 43,312 36,647 Maturities of operating lease liabilities are as follows: $ Year ending December 31, 2021 16,108 Year ending December 31, 2022 13,626 Year ending December 31, 2023 9,894 Year ending December 31, 2024 7,234 Year ending December 31, 2025 668 Thereafter 255 Total lease payments 47,785 Less imputed interest ( 4,473 ) Present value of lease liabilities 43,312 Other supplemental information related to leases is summarized below: Year ended December 31, 2020 2019 $ $ Operating cash flows used in operating leases 17,571 12,405 ROU assets obtained in exchange for new operating lease liabilities 17,634 20,108 As of December 31, 2020 2019 Weighted-average remaining lease term (years) 3 3 Weighted-average discount rate 6.26 % 7.07 % 37 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 10. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation and consisted of the following: As of December 31, 2020 2019 $ $ Laboratory equipment 78,640 47,154 Leasehold improvements 37,643 24,008 Building 111,527 109,514 Manufacturing equipment 96,669 62,775 Software, electronics and office equipment 20,782 14,705 Property and equipment, at cost 345,261 258,156 Less: Accumulated depreciation ( 73,354 ) ( 36,709 ) Construction in progress 85,779 20,955 Property, plant and equipment, net 357,686 242,402 Construction in progress ("CIP") as of December 31, 2020 and 2019 primarily related to the buildout of additional capacity at the Guangzhou manufacturing facility. CIP by fixed asset class are summarized as follows: As of December 31, 2020 2019 $ $ Building 48,824 6,014 Manufacturing equipment 29,858 8,046 Laboratory equipment 4,507 4,496 Other 2,590 2,399 Total 85,779 20,955 Depreciation expense for the years ended December 31, 2020, 2019 and 2018 were $ 30,943 , $ 17,291 and $ 9,000 , respectively. 11. Intangible Assets Intangible assets as of December 31, 2020 and December 31, 2019 are summarized as follows: December 31, 2020 December 31, 2019 Gross carrying amount Accumulated amortization Intangible assets, net Gross carrying amount Accumulated amortization Intangible assets, net $ $ $ $ $ $ Finite-lived intangible assets: Product distribution rights 7,500 ( 2,500 ) 5,000 7,500 ( 1,750 ) 5,750 Trading license 816 ( 816 ) — 816 ( 720 ) 96 Total finite-lived intangible assets 8,316 ( 3,316 ) 5,000 8,316 ( 2,470 ) 5,846 Product distribution rights consist of distribution rights for the approved cancer therapies licensed from BMS acquired as part of the BMS collaboration. The Company is amortizing the product distribution rights over a period of 10 years from the date of acquisition. The trading license represents the Guangzhou drug distribution license acquired in September 2018. The Company amortized the drug distribution trading license over the remainder of the initial license term through February 2020. The trading license has been renewed through February 2024. 38 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Amortization expense of intangible assets for the years ended December 31, 2020, 2019 and 2018 was $ 846 , $ 1,326 and $ 894 , respectively. As of December 31, 2020, expected amortization expense for the unamortized finite-lived intangible assets is approximately $ 750 in 2021, $ 750 in 2022, $ 750 in 2023, $ 750 in 2024, $ 750 in 2025, and $ 1,250 in 2026 and thereafter. 12. Income Taxes The components of income ( loss) before income taxes are as follows: Year Ended December 31, 2020 2019 2018 $ $ $ PRC ( 369,066 ) ( 231,997 ) ( 130,552 ) U.S. 33,608 24,478 15,036 Other ( 1,282,736 ) ( 736,067 ) ( 574,313 ) Total ( 1,618,194 ) ( 943,586 ) ( 689,829 ) The current and deferred components of the income tax expense (benefit) from continuing operations are as follows: Year Ended December 31, 2020 2019 2018 $ $ $ Current Tax Expense (Benefit): PRC 16,121 16,368 6,890 U.S. ( 5,678 ) 65 ( 377 ) Other 68 12 — Total 10,511 16,445 6,513 Deferred Tax Expense (Benefit): PRC ( 1,152 ) ( 4,738 ) ( 2,682 ) U.S. ( 27,030 ) ( 4,715 ) ( 19,627 ) Other — — — Total ( 28,182 ) ( 9,453 ) ( 22,309 ) Income Tax (Benefit) Expense ( 17,671 ) 6,992 ( 15,796 ) 39 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The reconciliation of the statutory tax rate to our effective income tax rate is as follow: Year Ended December 31, 2020 2019 2018 $ $ $ Loss before tax ( 1,618,194 ) ( 943,586 ) ( 689,829 ) China statutory tax rate 25 % 25 % 25 % Expected taxation at China statutory tax rate ( 404,549 ) ( 235,897 ) ( 172,457 ) Foreign and preferential tax rate differential 218,473 191,820 134,673 Non-deductible expenses 8,436 ( 273 ) 3,166 Stock compensation expenses ( 22,032 ) ( 5,698 ) ( 5,371 ) Effect of tax rate change ( 3,827 ) ( 63,395 ) 1,538 Change in valuation allowance 209,085 146,118 34,009 Research tax credits and incentives ( 23,257 ) ( 25,683 ) ( 11,354 ) Taxation for the year ( 17,671 ) 6,992 ( 15,796 ) Effective tax rate 1.1 % ( 0.7 ) % 2.3 % Significant components of deferred tax assets (liabilities) are as follows: Year Ended December 31, 2020 2019 2018 $ $ $ Deferred Tax Assets: Accruals and reserves 33,512 27,304 19,193 Net operating losses carryforward 358,425 155,499 61,266 Stock-based compensation 13,981 12,651 8,642 Research tax credits 58,835 33,979 13,608 Depreciable and amortizable assets 724,779 575,128 158,639 Lease liability obligation 9,066 7,864 — Gross deferred tax assets 1,198,598 812,425 261,348 Less valuation allowance ( 1,134,585 ) ( 777,583 ) ( 242,945 ) Total deferred tax assets 64,013 34,842 18,403 Deferred tax liabilities: Right of use lease asset ( 8,843 ) ( 7,480 ) — Total deferred tax liabilities ( 8,843 ) ( 7,480 ) — Net deferred tax asset 55,170 27,362 18,403 Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, the Company believes that as of December 31, 2020 it is more likely than not that certain deferred tax assets will not be realized for our subsidiaries in Australia, Switzerland, the United States, and for certain subsidiaries in China. For the years ended December 31, 2020 and 2019 , there were increases in the valuation allowance of $ 209,085 and $ 146,118 , respectively. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded. As of December 31, 2020 and 2019 , the Company had net operating losses of approximately $ 2,230,857 and $ 810,505 , respectively, of which net operating losses as of December 31, 2020 included $ 20,773 from the Company's Australian 40 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) subsidiary, BeiGene AUS Pty Ltd., that has indefinite carryforward, $ 419,080 derived from certain of the Company's subsidiaries in the PRC which expire in years 2023 through 2030, $ 1,628,753 derived from BeiGene Switzerland GmbH that expires in years 2025 through 2027, and $ 162,251 derived from BeiGene USA, Inc. that has indefinite carryforward. The Company has approximately $ 63,597 of U.S. research tax credits which will expire between 2035 and 2040 if not utilized. The gross unrecognized tax benefits for the years ended December 31, 2020, 2019 and 2018 were as follows: Year Ended December 31, 2020 2019 2018 $ $ $ Beginning balance, as of January 1 4,633 2,295 918 Additions based on tax positions related to prior tax years — 46 11 Reductions based on tax positions related to prior tax years — ( 17 ) ( 44 ) Additions based on tax positions related to the current tax year 2,497 2,435 1,410 Reductions based on lapse of statute of limitations ( 7 ) ( 126 ) — Ending balance, as of December 31 7,123 4,633 2,295 Current and prior year additions include assessment of U.S. federal and state tax credits and incentives. None of the unrecognized tax benefits as of December 31, 2020 would impact the consolidated income tax rate if ultimately recognized due to valuation allowances. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months. The Company has elected to record interest and penalties related to income taxes as a component of income tax expense. For the years ended December 31, 2020, 2019 and 2018, the Company's accrued interest and penalties, where applicable, related to uncertain tax positions were not material. The Company conducts business in a number of tax jurisdictions and, as such, is required to file income tax returns in multiple jurisdictions globally. As of December 31, 2020, Australia tax matters are open to examination for the years 2013 through 2020, China tax matters are open to examination for the years 2014 through 2020, and U.S. federal tax matters are open to examination for years 2015 through 2020. Various U.S. states and other non-US tax jurisdictions in which the Company files tax returns remain open to examination for 2010 through 2020. The Company qualifies for the Technology Advanced Service Enterprises (“TASE”) and High and New Technology Enterprise (“HNTE”) status for certain subsidiaries in China, which expire at the end of 2021. The income tax benefits attributable to this status for the year ended December 31, 2020 was approximately $ 1,614 , or less than $ 0.01 per share outstanding. During the years ended December 31, 2020 and 2019, the Company completed intra-group transfers of certain intangible assets in anticipation of potential commercialization, which resulted in the establishment of deferred tax assets that were fully offset by valuation allowances. As of December 31, 2020, the Company continues to assert indefinite reinvestment on the excess of the financial reporting bases over tax bases in the Company's investments in foreign subsidiaries. A deferred tax liability has not been established for the approximately $ 7,980 of cumulative undistributed foreign earnings. Determination of the unrecognized deferred tax liability is not practicable due to uncertainty regarding the remittance structure and overall complexity of the hypothetical calculation. 41 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 13. Supplemental Balance Sheet Information Changes in the allowance for credit losses related to trade accounts receivable consist of the following: Allowance for Credit Losses $ Balance as of December 31, 2019 — Provision charged to selling, general and administrative expenses 109 Amounts written-off, net of recoveries of amounts previously reserved — Exchange rate changes 3 Balance as of December 31, 2020 112 Prepaid expenses and other current assets consist of the following: As of December 31, 2020 2019 $ $ Prepaid research and development costs 71,341 65,886 Prepaid taxes 30,392 9,498 Payroll tax receivable 3,580 5,365 Non-trade receivable 4,464 — Interest receivable 6,619 1,932 Prepaid insurance 1,347 711 Prepaid manufacturing cost 25,996 3,829 Income tax receivable 4,607 — Other 11,666 3,017 Total 160,012 90,238 Other non-current assets consist of the following: As of December 31, 2020 2019 $ $ Goodwill 109 109 Prepayment of property and equipment 16,984 10,289 Payment of facility capacity expansion activities (1) 29,778 24,881 Prepaid VAT 10,913 29,967 Rental deposits and other 5,962 3,209 Long-term investments 49,344 — Total 113,090 68,455 (1) Represents payments for a facility expansion under a commercial supply agreement. The payment will provide future benefit to the Company through credits on future supply purchases as further described in Note 8. 42 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Accrued expenses and other payables consisted of the following: As of December 31, 2020 2019 $ $ Compensation related 106,765 54,156 External research and development activities related 143,302 62,794 Commercial activities 66,131 25,645 Individual income tax and other taxes 14,373 9,648 Sales rebates and returns related 11,874 3,198 Other 3,699 8,115 Total accrued expenses and other payables 346,144 163,556 Other long-term liabilities consist of the following: As of December 31, 2020 2019 $ $ Deferred government grant income 49,139 46,391 Pension liability 8,113 — Other 177 171 Total other long-term liabilities 57,429 46,562 14. Debt The following table summarizes the Company's short-term and long-term debt obligations as of December 31, 2020 and 2019: Lender Agreement Date Line of Credit Term Maturity Date Interest Rate December 31, 2020 December 31, 2019 $ RMB $ RMB China Construction Bank April 4, 2018 RMB 580,000 9 -year April 4, 2027 (1) 307 2,000 — — China Minsheng Bank (the "Senior Loan") September 24, 2020 $ 200,000 (2) 5.8 % 198,320 1,294,010 — — Zhuhai Hillhouse (the "Related Party Loan") September 24, 2020 RMB 500,000 (3) 5.8 % 15,326 100,000 — — Other short-term debt (4) 121,062 789,918 — — Total short-term debt 335,015 2,185,928 — — China Construction Bank April 4, 2018 RMB 580,000 9 -year April 4, 2027 (1) 88,584 578,000 83,311 580,000 Industrial Bank Co. Ltd. September 3, 2019 RMB 348,000 3 -year (5) 4.9 % — — — — China Merchants Bank January 22, 2020 (6) 9 -year January 20, 2029 (6) 53,641 350,000 — — China Merchants Bank November 9, 2020 RMB 378,000 9 -year November 8, 2029 (7) 41,412 270,206 — — Total long-term bank loans 183,637 1,198,206 83,311 580,000 GET (the "Shareholder Loan") March 7, 2017 RMB 900,000 (8) September 28, 2020 8.0 % — — 157,384 900,000 Shareholder loan — — 157,384 900,000 1. The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 4.9 % as of December 31, 2020. The loan is secured by BeiGene Guangzhou Factory's land use right and certain Guangzhou Factory fixed assets in the first phase of the Guangzhou manufacturing facility's build out. 2. $ 120,000 of the Senior Loan was designated to fund the JV share purchase and repayment of the shareholder loan and $ 80,000 was designated for general working capital purposes. The Senior Loan has an original maturity date of October 8, 2021, which is the first anniversary of the first date of utilization of 43 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) the loan. The Company may extend the original maturity date for up to two additional twelve month periods. On October 9, 2020, the Company drew down $ 80,000 of the working capital facility and $ 118,320 of the acquisition facility to fund the JV share repurchase. 3. RMB 100,000 of the Related Party Loan was designated for general corporate purposes and RMB 400,000 was designated for repayment of the Senior Loan, including principal, interest and fees. The loan matures at the earlier of: (i) November 9, 2021, which is one month after the Senior Loan maturity date, if not extended, or (ii) 10 business days after the Senior Loan is fully repaid. On September 30, 2020, the Company drew down the first tranche of $ 14,728 (RMB 100,000 ). Zhuhai Hillhouse is a related party of the Company, as it is an affiliate of Hillhouse Capital. Hillhouse Capital is a shareholder of the Company, and a Hillhouse Capital employee is a member of the Company's board of directors. 4. During the year ended December 31, 2020, the Company entered into additional short-term working capital loans with China Industrial Bank and China Merchants Bank to borrow up to RMB 1,480,000 in aggregate, with maturity dates ranging from April 19, 2021 to December 16, 2021. The Company drew down $ 129,937 (RMB 869,918 ) during the year ended December 31, 2020. The weighted average interest rate for the short-term working capital loans was approximately 4.4 % as of December 31, 2020. One of the short-term working capital loans in the amount of $ 26,510 (RMB 180,000 ) is secured by the Company's research and development facility in Beijing and the associated land use right owned by its subsidiary, Beijing Innerway Bio-tech Co., Ltd. 5. The loan facility was secured with RMB deposited at Industrial Bank. In December 2019, the Company repaid the outstanding principal of $ 24,419 (RMB 170,000 ). 6. On January 22, 2020, BeiGene Guangzhou Factory entered into a nine-year bank loan with China Merchants Bank to borrow up to RMB 1,100,000 at a floating interest rate benchmarked against prevailing interest rates of certain PRC financial institutions. The loan is secured by Guangzhou Factory's second land use right and fixed assets that will be placed into service upon completion of the second phase of the Guangzhou manufacturing facility's build out. In connection with the Company's short-term loan agreements with China Merchants Bank entered into during the year ended December 31, 2020, the borrowing capacity was reduced from RMB 1,100,000 to RMB 350,000 . The loan interest rate was 4.4 % as of December 31, 2020. 7. The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 4.3 % as of December 31, 2020. The loan is secured by fixed assets that will be placed into service upon completion of the third phase of the Guangzhou manufacturing facility's build out. 8. The Shareholder Loan had a conversion feature, settled in a variable number of shares of common stock upon conversion (the “debt-to-equity conversion”). On April 14, 2017, BeiGene Biologics drew down the entire Shareholder Loan of RMB 900,000 from GET. On September 28, 2020, BeiGene HK entered into the JV Share Purchase Agreement with GET to acquire GET’s 5 % equity interest in BeiGene Biologics (see Note 8). In connection with the JV Share Purchase Agreement, BeiGene Biologics repaid the outstanding principal amount of the Shareholder Loan of $ 132,061 (RMB 900,000 ) and accrued interest of $ 36,558 (RMB 249,140 ) on September 28, 2020. Contractual Maturities of Debt Obligations The aggregate contractual maturities of all borrowings due subsequent to December 31, 2020 are as follows: Maturity dates Amounts $ Year ending December 31, 2021 335,015 Year ending December 31, 2022 2,759 Year ending December 31, 2023 12,260 Year ending December 31, 2024 28,025 Year ending December 31, 2025 35,081 Thereafter 105,512 Total 518,652 Interest Expense Interest on bank loans and the Related Party Loan is paid quarterly until the respective loans are fully settled. Interest expense recognized for the years ended December 31, 2020, 2019 and 2018 amounted to $ 18,309 , $ 15,155 and $ 13,147 , respectively, among which, $ 338 , $ 4,857 and $ 3,687 was capitalized, respectively. 15. Product Revenue The Company’s product revenue is derived from the sale of its internally developed products BRUKINSA ® in the United States and China and tislelizumab in China, as well as the sale of REVLIMID ® , VIDAZA ® and ABRAXANE ® in China under a license from BMS and XGEVA ® in China under a license from Amgen. On March 25, 2020, the Company announced that the 44 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) NMPA suspended the importation, sales and use of ABRAXANE ® in China supplied to BeiGene by Celgene, a BMS company, and the drug was subsequently recalled by BMS and is not currently available for sale in China. The table below presents the Company’s net product sales for the years ended December 31, 2020, 2019 and 2018. Year Ended December 31, 2020 2019 2018 $ $ $ Product revenue - gross 324,672 228,760 138,046 Less: Rebates and sales returns ( 15,798 ) ( 6,164 ) ( 7,161 ) Product revenue - net 308,874 222,596 130,885 The following table disaggregates net product revenue by product for the years ended December 31, 2020, 2019 and 2018. Year Ended December 31, 2020 2019 2018 $ $ $ Tislelizumab 163,358 — — BRUKINSA ® 41,702 1,039 — REVLIMID ® 47,372 78,044 55,412 VIDAZA ® 29,975 32,234 4,234 ABRAXANE ® 17,770 111,279 71,239 XGEVA ® 8,496 — — Other 201 — — Total product revenue - net 308,874 222,596 130,885 The following table presents the roll-forward of accrued sales rebates and returns for the years ended December 31, 2020 and December 31, 2019. Sales Rebates and Returns $ Balance as of December 31, 2018 4,749 Accrual 6,164 Payment ( 7,715 ) Balance as of December 31, 2019 3,198 Accrual 15,798 Payment ( 7,122 ) Balance as of December 31, 2020 11,874 45 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 16. Loss Per Share Loss per share was calculated as follows: Year Ended December 31, 2020 2019 2018 $ $ $ Numerator: Net loss attributable to BeiGene, Ltd. ( 1,596,906 ) ( 948,628 ) ( 673,769 ) Denominator: Weighted average shares outstanding for computing basic and diluted loss per share 1,085,131,783 780,701,283 720,753,819 Net loss per share attributable to BeiGene, Ltd., basic and diluted ( 1.47 ) ( 1.22 ) ( 0.93 ) For the years ended December 31, 2020, 2019 and 2018, the computation of basic loss per share using the two-class method was not applicable, as the Company was in a net loss position. The effects of all share options and restricted share units were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive during the years ended December 31, 2020, 2019 and 2018. 17. Share-Based Compensation Expense 2016 Share Option and Incentive Plan In January 2016, in connection with its U.S. IPO, the board of directors and shareholders of the Company approved the 2016 Share Option and Incentive Plan (the “2016 Plan”), which became effective in February 2016. The Company initially reserved 65,029,595 ordinary shares for the issuance of awards under the 2016 Plan, plus any shares available under the 2011 Option Plan (the “2011 Plan”), and not subject to any outstanding options as of the effective date of the 2016 Plan, along with underlying share awards under the 2011 Plan that are cancelled or forfeited without issuance of ordinary shares. As of December 31, 2020, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 1,832,415 . The 2016 Plan provided for an annual increase in the shares available for issuance, to be added on the first day of each fiscal year, beginning on January 1, 2017, equal to the lesser of (i) five percent ( 5 )% of the outstanding shares of the Company's ordinary shares on the last day of the immediately preceding fiscal year or (ii) such number of shares determined by the Company’s board of directors or the compensation committee. On January 1, 2018, 29,603,616 ordinary shares were added to the 2016 Plan under this provision. However, in August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated 2016 Plan to remove this "evergreen" provision and implement other changes required by the Hong Kong Stock Exchange ("HKEx") rules. In December 2018, the board of directors approved a second amended and restated 2016 Plan to increase the number of shares authorized for issuance by 38,553,159 ordinary shares, as well as amend the cap on annual compensation to independent directors and make other changes. In June 2020, the shareholders approved an Amendment No. 1 to the 2016 Plan to increase the number of shares authorized for issuance by 57,200,000 ordinary shares and to extend the term of the plan through April 13, 2030. The number of shares available for issuance under the 2016 Plan is subject to adjustment in the event of a share split, share dividend or other change in the Company’s capitalization. As of December 31, 2020, share-based awards to acquire 67,484,221 ordinary shares were available for future grant under the 2016 Plan. 2018 Inducement Equity Plan In June 2018, the board of directors of the Company approved the 2018 Inducement Equity Plan (the “2018 Plan”) and reserved 12,000,000 ordinary shares to be used exclusively for grants of awards to individuals who were not previously employees of the Company or its subsidiaries, as a material inducement to the individual’s entry into employment with the Company or its subsidiaries, within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. The 2018 Plan was approved by the board of directors upon recommendation of the compensation committee, without shareholder approval pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules. The terms and conditions of the 2018 Plan, and the forms of award agreements to be used thereunder, are substantially similar to the 2016 Plan and the forms of award agreements thereunder. In 46 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) August 2018, in connection with the listing of the Company’s ordinary shares on the HKEx, the board of directors of the Company approved an amended and restated 2018 Plan to implement changes required by the HKEx rules. As of December 31, 2020, share-based awards to acquire 9,103,756 ordinary shares were available for future grant under the 2018 Plan. 2018 Employee Share Purchase Plan In June 2018, the shareholders of the Company approved the 2018 Employee Share Purchase Plan (the “ESPP”). Initially, 3,500,000 ordinary shares of the Company were reserved for issuance under the ESPP. In August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated ESPP to remove an “evergreen” share replenishment provision originally included in the plan and implement other changes required by the HKEx rules. In December 2018, the board of directors approved a second amended and restated ESPP to increase the number of shares authorized for issuance by 3,855,315 ordinary shares to 7,355,315 ordinary shares. The ESPP allows eligible employees to purchase the Company’s ordinary shares (including in the form of ADSs) at the end of each offering period, which will generally be six months , at a 15 % discount to the market price of the Company’s ADSs at the beginning or the end of each offering period, whichever is lower, using funds deducted from their payroll during the offering period. Eligible employees are able to authorize payroll deductions of up to 10 % of their eligible earnings, subject to applicable limitations. The following tables summarizes the shares issued under the ESPP: Market Price 1 Purchase Price 2 Issuance Date Number of Ordinary Shares Issued ADS Ordinary ADS Ordinary Proceeds August 31, 2020 485,069 $ 164.06 $ 12.62 $ 139.45 $ 10.73 $ 5,203 February 28, 2020 425,425 $ 145.54 $ 11.20 $ 123.71 $ 9.52 $ 4,048 August 30, 2019 233,194 $ 143.75 $ 11.06 $ 122.19 $ 9.40 $ 2,192 February 28, 2019 154,505 $ 137.05 $ 10.54 $ 116.49 $ 8.96 $ 1,385 1 The market price is the lower of the closing price on the NASDAQ Stock Market on the issuance date or the offering date, in accordance with the terms of the ESPP. 2 The purchase price is the price which was discounted from the applicable market price, in accordance with the terms of the ESPP. As of December 31, 2020, 6,056,056 ordinary shares were available for future issuance under the ESPP. Share options Generally, share options have a contractual term of 10 years and vest over a three - to five-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a monthly basis thereafter. Restricted shares and restricted share units generally vest over a four-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a yearly basis thereafter, or sometimes vest upon the achievement of pre-specified performance conditions. 47 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The following table summarizes the Company’s share option activities under the 2011, 2016 and 2018 Plans: Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value $ $ Years $ Outstanding at December 31, 2017 127,002,897 2.45 Granted 9,387,885 12.32 7.08 Exercised ( 13,841,036 ) 2.23 132,687 Forfeited ( 6,467,099 ) 3.59 Outstanding at December 31, 2018 116,082,647 3.21 Granted 12,641,590 9.38 5.06 Exercised ( 16,730,441 ) 2.60 171,429 Forfeited ( 3,576,542 ) 5.09 Outstanding at December 31, 2019 108,417,254 3.96 Granted 8,999,536 13.54 7.15 Exercised ( 29,707,587 ) 2.82 416,509 Forfeited ( 2,717,488 ) 7.22 Outstanding at December 31, 2020 84,991,715 5.27 6.45 1,242,276 Exercisable as of December 31, 2020 58,701,454 3.37 5.72 968,680 Vested and expected to vest at December 31, 2020 82,099,824 5.12 6.39 1,212,180 As of December 31, 2020, the unrecognized compensation cost related to 23,398,370 unvested share options expected to vest was $ 117,154 . This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.0 years. The total fair value of employee share option awards vested during the years ended December 31, 2020, 2019 and 2018 was $ 55,127 , $ 58,670 and $ 55,642 , respectively. Fair value of options The Company uses the binomial option-pricing model in determining the estimated fair value of the options granted. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility and, the exercise multiple for which employees are likely to exercise share options. For expected volatilities, the trading history and observation period of the Company’s own share price movement has not been long enough to match the life of the share option. Therefore, the Company has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Company. For the exercise multiple, the Company was not able to develop an exercise pattern as reference, thus the exercise multiple is based on management’s estimation, which the Company believes is representative of the future exercise pattern of the options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield curve in effect at the time of grant. The following table presents the range of fair values and the assumptions used to estimate those fair values of the share options granted in the years presented: Year Ended December 31, 2020 2019 2018 Fair value of ordinary share $ 4.95 ~ $ 11.89 $ 4.64 ~ $ 8.28 $ 4.30 ~ $ 8.85 Risk-free interest rate 0.6 % ~ 1.1 % 1.5 % ~ 2.8 % 2.5 % ~ 3.1 % Expected exercise multiple 2.8 2.2 ~ 2.8 2.2 ~ 2.8 Expected volatility 58 % ~ 59 % 58 % ~ 60 % 60 % ~ 64 % Expected dividend yield 0 % 0 % 0 % Contractual life 10 years 10 years 10 years 48 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Restricted shares The following table summarizes the Company’s restricted share activities under the 2016 Plan: Numbers of Shares Weighted-Average Grant Date Fair Value $ Outstanding at December 31, 2017 806,250 2.16 Granted — — Vested ( 387,500 ) 2.12 Forfeited ( 118,750 ) 2.04 Outstanding at December 31, 2018 300,000 2.25 Granted — — Vested ( 75,000 ) 2.27 Forfeited ( 150,000 ) 2.24 Outstanding at December 31, 2019 75,000 2.27 Granted — — Vested ( 75,000 ) 2.27 Forfeited — — Outstanding at December 31, 2020 — — Expected to vest at December 31, 2020 — — The Company had no non-employee restricted share activities during the year ended December 31, 2020. As of December 31, 2020, all compensation cost related to restricted shares was fully recognized. Restricted share units The following table summarizes the Company's restricted share unit activities under the 2016 and 2018 Plans: Numbers of Shares Weighted-Average Grant Date Fair Value $ Outstanding at December 31, 2017 1,469,442 7.55 Granted 14,079,598 12.07 Vested ( 689,130 ) 8.33 Forfeited ( 757,458 ) 10.89 Outstanding at December 31, 2018 14,102,452 11.85 Granted 18,637,333 10.10 Vested ( 3,474,068 ) 11.75 Forfeited ( 2,413,450 ) 11.07 Outstanding at December 31, 2019 26,852,267 10.72 Granted 18,820,581 14.20 Vested ( 7,302,828 ) 10.88 Forfeited ( 3,493,048 ) 11.36 Outstanding at December 31, 2020 34,876,972 12.50 Expected to vest at December 31, 2020 31,040,505 12.50 As of December 31, 2020, the unrecognized compensation cost related to unvested restricted share units expected to vest was $ 334,716 . This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.2 years. 49 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) The following table summarizes total share-based compensation cost recognized for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 2019 2018 $ $ $ Research and development 92,999 76,293 54,384 Selling, general and administrative 90,482 57,861 32,743 Total 183,481 134,154 87,127 18. Accumulated Other Comprehensive Income (Loss) The movement of accumulated other comprehensive income (loss) was as follows: Foreign Currency Translation Adjustments Unrealized Gains/Losses on Available-for-Sale Securities Pension Liability Adjustments Total $ $ $ $ December 31, 2018 ( 212 ) 1,738 — 1,526 Other comprehensive income (loss) before reclassifications ( 9,079 ) 5,596 — ( 3,483 ) Amounts reclassified from accumulated other comprehensive income (loss) (1) — ( 6,044 ) — ( 6,044 ) Net-current period other comprehensive loss ( 9,079 ) ( 448 ) — ( 9,527 ) December 31, 2019 ( 9,291 ) 1,290 — ( 8,001 ) Other comprehensive income (loss) before reclassifications 23,475 1,073 ( 8,113 ) 16,435 Amounts reclassified from accumulated other comprehensive income (loss) (1) — ( 1,492 ) — ( 1,492 ) Net-current period other comprehensive (loss) income 23,475 ( 419 ) ( 8,113 ) 14,943 December 31, 2020 14,184 871 ( 8,113 ) 6,942 (1) The amounts reclassified from accumulated other comprehensive (loss) income were included in other income, net in the consolidated statements of operations. 19. Shareholders’ Equity During the years ended December 31, 2020, 2019 and 2018, the Company completed the following equity offerings: In January 2018, the Company completed a follow-on public offering under the Company’s effective registration statement on Form S-3 at a price of $ 101.00 per ADS, or $ 7.77 per ordinary share. In this offering, the Company sold 7,425,750 ADSs representing 96,534,750 ordinary shares. Additionally, the underwriters exercised their option to purchase an additional 495,050 ADSs representing 6,435,650 ordinary shares from the Company. Net proceeds from this offering, including the underwriter option, after deducting the underwriting discounts and offering expenses of $ 42,413 , were $ 757,587 . In August 2018, the Company completed an initial public offering of its ordinary shares on The Hong Kong Stock Exchange Limited and a follow-on public offering of its ADS on the NASDAQ Global Select Market under the Company's effective registration statement on Form S-3 at a price of $ 13.76 per ordinary share, or $ 178.90 per ADS. In this offering, the Company sold 65,600,000 ordinary shares. Net proceeds, after deducting underwriting discounts and commissions and offering expenses of $ 32,947 , were $ 869,709 . In January 2020, the Company sold 15,895,001 ADSs, representing a 20.5 % ownership stake in the Company, to Amgen for aggregate cash proceeds of $ 2,779,241 , or $ 174.85 per ADS, pursuant to the SPA executed in connection with the Amgen Collaboration Agreement. On March 17, 2020, BeiGene, Ltd. and Amgen entered into an Amendment No. 2 (the “Second Amendment”) to the Share Purchase Agreement in order to account for periodic dilution from the issuance of shares by the 50 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) Company, which was restated in its entirety on September 24, 2020 (the “Restated Second Amendment”). Pursuant to the Restated Second Amendment, Amgen will have an option (the “Direct Purchase Option”) to subscribe for additional ordinary shares of the Company in the form of ADSs (the “Additional Shares”) in an amount necessary to enable it to increase (and subsequently maintain) its ownership at approximately 20.6 % of the Company's outstanding shares. The Direct Purchase Option is exercisable on a monthly basis, but only if Amgen’s interest in the outstanding shares of the Company at the monthly reference date is less than 20.4 %. The Direct Purchase Option (i) will be exercisable by Amgen solely as a result of dilution arising from issuance of new shares under the Company's equity incentive plans from time to time, and (ii) is subject to annual approval by the Company's independent shareholders each year during the term of the Restated Second Amendment. The exercise period of the Direct Purchase Option commenced on December 1, 2020 and will terminate on the earliest of: (a) the date on which Amgen and its affiliates collectively own less than 20% of the outstanding share capital of the Company as a result of Amgen’s sale of shares; (b) at least 60-day advance written notice from either Amgen or the Company that such party wishes to terminate the Direct Purchase Option; or (c) December 1, 2023. The Direct Purchase Option has no vesting period In July 2020, the Company issued 145,838,979 ordinary shares, par value $ 0.0001 , to eight existing investors, including entities associated with Hillhouse Capital and Baker Bros. Advisors LP, as well as Amgen, in a registered direct offering under the Company's effective Registration Statement on Form S-3 (File No. 333-238181). Each ordinary share was sold for a purchase price of $ 14.2308 per share ($ 185.00 per ADS), resulting in net proceeds, after offering expenses, of $ 2,069,610 . Amgen purchased 29,614,832 ordinary shares for $ 421,443 as part of this offering. The offering was made without an underwriter or a placement agent, and as a result the Company did not pay any underwriting discounts or commissions in connection with the offering. 20. Restricted Net Assets The Company’s ability to pay dividends may depend on the Company receiving distributions of funds from its PRC subsidiaries. Relevant PRC laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. In accordance with the company law of the PRC, a domestic enterprise is required to provide statutory reserves of at least 10 % of its annual after-tax profit until such reserve has reached 50 % of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the Board of Directors, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Company’s PRC subsidiaries were established as domestic invested enterprises and therefore were subject to the above-mentioned restrictions on distributable profits. During the years ended December 31, 2020, 2019 and 2018, no appropriation to statutory reserves was made, because the PRC subsidiaries had substantial losses during such periods. As a result of these PRC laws and regulations, including the requirement to make annual appropriations of at least 10 % of after-tax income and set aside as general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. Foreign exchange and other regulations in the PRC may further restrict the Company’s PRC subsidiaries from transferring funds to the Company in the form of dividends, loans, and advances. As of December 31, 2020 and 2019, amounts restricted were the net assets of the Company’s PRC subsidiaries, which amounted to $ 119,776 and $ 109,633 , respectively. 21. Employee Benefit Plans Defined Contribution Plans Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Company’s PRC subsidiaries make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company has no legal obligation for the benefits beyond the 51 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $ 23,717 , $ 23,282 and $ 12,713 for the years ended December 31, 2020, 2019 and 2018, respectively. The Company maintains a defined contribution 401(k) savings plan (the "401(k) Plan") for U.S. employees. The 401(k) Plan covers all U.S. employees, and allows participants to defer a portion of their annual compensation on a pretax basis. In addition, the Company has a matching contribution to the 401(k) Plan, which, in the 2020 plan year, matched dollar for dollar of eligible contributions up to 4 %. Company contributions to the 401(k) plan totaled $ 4,840 , $ 2,389 and $ 1,275 in the years ended December 31, 2020, 2019 and 2018, respectively. The Company maintains a government mandated program to cover its employees in Switzerland for pension, death, or disability. The program is considered a defined contribution plan. Employer and employee contributions are made based on various percentages of salaries and wages that vary based on employee age and other factors. Company contributions into the program amounted to $ 2,960 , $ 528 , and $ 55 in the years ended December 31, 2020, 2019 and 2018, respectively. Employee benefit expenses for the remaining subsidiaries were immaterial. Defined Benefit Plan The Company also maintains a defined benefit pension plan covering its employees in Switzerland (the "Swiss Plan"). This plan is a government mandated fund that provides benefits to employees upon retirement, death, or disability. Contributions are made based on various percentages of participants' salaries and wages determined based on participants' age and other factors. As of December 31, 2020, the projected benefit obligation and plan assets under the Swiss Plan were approximately $ 23,566 and $ 15,453 , respectively. The funded status of the Swiss Plan is included in other long-term liabilities in the accompanying consolidated balance sheets. The initial determination of the pension liability was recorded as other comprehensive loss during the year ended December 31, 2020 (see Note 18). The Company's annual contribution to the Swiss Plan is estimated to be approximately $ 1,357 in 2021 and is expected to evolve thereafter proportionally with changes in staffing and compensation levels, actuarial assumptions and actual investment returns on plan assets. The following table reflects the total expected benefit payments to Swiss Plan participants and have been estimated based on the same assumptions used to measure the Company's benefit obligations as of December 31, 2020: Amounts $ 2021 139 2022 171 2023 203 2024 382 2025 238 2026 - 2030 1,919 Total 3,052 22. Commitments and Contingencies Purchase Commitments As of December 31, 2020, the Company had purchase commitments amounting to $ 123,383 , of which $ 101,236 related to minimum purchase requirements for supply purchased from contract manufacturing organizations and $ 22,147 related to binding purchase order obligations of inventory from BMS and Amgen. The Company does not have any minimum purchase requirements for inventory from BMS or Amgen. Capital commitments The Company had capital commitments amounting to $ 44,972 for the acquisition of property, plant and equipment as of December 31, 2020, which were mainly for BeiGene Guangzhou Factory’s manufacturing facility, expansion of BGC's research 52 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) and development activities in Guangzhou, China, and research and development operations at the Changping facility in Beijing, China. Co-development funding commitment Under the Amgen Collaboration Agreement, the Company is responsible for co-funding global development costs for the Amgen oncology pipeline assets up to a total cap of $ 1,250,000 . The Company is funding its portion of the co-development costs by contributing cash and/or development services. As of December 31, 2020, the Company's remaining co-development funding commitment was $ 1,019,009 . Other Business Agreements The Company enters into agreements in the ordinary course of business with contract research organizations ("CROs") to provide research and development services. These contracts are generally cancelable at any time by the Company with prior written notice. The Company also enters into collaboration agreements with institutions and companies to license intellectual property. The Company may be obligated to make future development, regulatory and commercial milestone payments and royalty payments on future sales of specified products associated with its collaboration agreements. Payments under these agreements generally become due and payable upon achievement of such milestones or sales. These commitments are not recorded on the consolidated balance sheet because the achievement and timing of these milestones are not fixed and determinable. When the achievement of these milestones or sales have occurred, the corresponding amounts are recognized in the consolidated financial statements. 23. Selected Quarterly Financial Data (Unaudited) The following table summarizes the unaudited statements of operations for each quarter of 2020 and 2019 (in thousands, except share and per share amounts). The unaudited quarterly information has been prepared on a basis consistent with the audited financial statements and includes all adjustments that the Company considers necessary for a fair presentation of the information shown. The operating results for any fiscal quarter are not necessarily indicative of the operating results for a full fiscal year or for any future period and there can be no assurances that any trend reflected in such results will continue in the future. Quarter Ended March 31, June 30, September 30, December 31, 2020 $ $ $ $ Revenue 52,059 65,635 91,080 100,100 Loss from operations ( 373,756 ) ( 358,877 ) ( 440,137 ) ( 484,912 ) Net loss ( 364,939 ) ( 336,318 ) ( 426,617 ) ( 472,649 ) Net loss attributable to ordinary shareholders ( 363,735 ) ( 335,202 ) ( 425,224 ) ( 472,745 ) Basic and diluted net loss per share (1) ( 0.36 ) ( 0.33 ) ( 0.37 ) ( 0.40 ) Quarter Ended March 31, June 30, September 30, December 31, 2019 $ $ $ $ Revenue 77,833 243,346 50,141 56,892 Loss from operations ( 173,755 ) ( 85,833 ) ( 312,266 ) ( 388,037 ) Net loss ( 168,069 ) ( 85,954 ) ( 308,660 ) ( 387,895 ) Net loss attributable to ordinary shareholders ( 167,640 ) ( 85,570 ) ( 307,357 ) ( 388,061 ) Basic and diluted net loss per share (1) ( 0.22 ) ( 0.11 ) ( 0.39 ) ( 0.49 ) (1) Per ordinary share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average ordinary shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. 53 Table of Contents BEIGENE, LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018 (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) 24. Segment and Geographic Information The Company operates in one segment: pharmaceutical products. Its chief operating decision maker is the Chief Executive Officer, who makes operating decisions, assesses performance, and allocates resources on a consolidated basis. The Company’s long-lived assets are substantially located in the PRC. Net product revenues by geographic area are based upon the location of the customer, and net collaboration revenue is recorded in the jurisdiction in which the related income is expected to be sourced from. Total net revenues by geographic area are presented as follows: Year Ended December 31, 2020 2019 2018 $ $ $ PRC 290,646 221,557 132,385 U.S. 18,228 134,689 42,793 Other — 71,966 23,042 Total 308,874 428,212 198,220 25. Subsequent Events On January 11, 2021, the Company entered into a collaboration and license agreement with Novartis Pharma AG (Novartis) to develop, manufacture and commercialize tislelizumab in the United States, Canada, Mexico, member countries of the European Union, United Kingdom, Norway, Switzerland, Iceland, Liechtenstein, Russia, and Japan. The Company has agreed to jointly develop tislelizumab with Novartis in these licensed countries, with Novartis responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals. In addition, both companies may conduct clinical trials globally to explore combinations of tislelizumab with other cancer treatments, and the Company has an option to co-detail the product in North America, funded in part by Novartis. Under the agreement the Company will receive an upfront cash payment of $ 650,000 from Novartis and is eligible to receive up to $ 1,300,000 upon the achievement of regulatory milestones, $ 250,000 upon the achievement of sales milestones, and royalties on future sales of tislelizumab in the licensed territory. Closing of the transaction is subject to the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. On January 29, 2021, the Shanghai Stock Exchange (the "SSE") accepted a listing application submitted by the Company for a proposed public offering of the Company’s ordinary shares and listing of such shares on the Science and Technology Innovation Board (the “STAR Market”) of the SSE (the “STAR Offering”). The STAR Offering will be conducted within the PRC, and such shares will be issued to and subscribed for by investors in Renminbi (“RMB”) in the PRC and listed and traded on the STAR Market in RMB (the “RMB Shares”). The RMB Shares will not be fungible with the Company's ordinary shares listed on the Hong Kong Stock Exchange or with the Company's ADSs listed on the NASDAQ Global Select Market. The number of RMB Shares (including the over-allotment option) to be issued will not exceed 132,313,549 ordinary shares, representing no more than 10% of the sum of the total number of issued ordinary shares of the Company as of January 7, 2021 and the total number of RMB Shares to be issued in the STAR Offering. The consummation of the STAR Offering is subject to, among other things, market conditions, the approval of the shareholders of the Company, and applicable regulatory approvals. 54 Table of Contents Exhibit Index Exhibit No. Exhibit Description Filed/ Furnished Herewith Incorporated by Reference Herein from Form or Schedule Filing Date SEC File/ Reg. Number 3.1 Fifth Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect 8-K (Exhibit 3.1) 12/12/2018 001-37686 4.1 .1 Deposit Agreement dated February 5, 2016 by and among the Company, the Depositary and holders of the American Depositary Receipts 8-K (Exhibit 4.1) 2/11/2016 001-37686 .2 Amendment No. 1 to Deposit Agreement, dated April 11, 2016, by and among the Registrant, Citibank, N.A. and holders of the American Depositary Receipts 8-K (Exhibit 4.1) 4/11/2016 001-37686 .3 Letter Agreement, dated as of July 11, 2016, between the Registrant and Citibank, N.A. 10-Q (Exhibit 4.7) 8/10/2016 001-37686 .4 Form of Letter Agreement between the Registrant and Citibank, N.A. 10-Q (Exhibit 4.9) 5/10/2017 001-37686 4.2 Form of American Depositary Receipt (included in Exhibit 4.1.1) 4.3 Specimen Certificate for Ordinary Shares S-1 (Exhibit 4.3) 12/9/2015 333-207459 4.4 .1 Second Amended and Restated Investors’ Rights Agreement, dated as of April 21, 2015, by and among the Registrant and certain shareholders named therein S-1 (Exhibit 4.4) 10/16/2015 333-207459 .2 Amendment No. 1 to Second Amended and Restated Investors’ Rights Agreement, dated January 26, 2016, by and among the Registrant and certain shareholders named therein S-1 (Exhibit 10.21) 1/27/2016 333-207459 4.5 .1 Registration Rights Agreement, dated as of November 16, 2016, by and among BeiGene, Ltd. and the investors named therein 8-K (Exhibit 4.1) 11/17/2016 001-37686 .2 Amendment No. 1 to Registration Rights Agreement, dated December 1, 2020, between the Company and the Investors 8-K (Exhibit 10.1) 12/2/2020 001-37686 4.6 Description of BeiGene, Ltd.'s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 X Lease Agreements 10.1 Lease Agreement, dated as of April 10, 2016, between BeiGene (Suzhou) Co., Ltd. and Suzhou Industrial Park Biotech Development Co., Ltd. (English Translation) 10-Q (Exhibit 10.5) 5/12/2016 001-37686 Table of Contents Exhibit No. Exhibit Description Filed/ Furnished Herewith Incorporated by Reference Herein from Form or Schedule Filing Date SEC File/ Reg. Number Collaboration, License and Commercial Agreements 10.2# .1 License and Supply Agreement, dated July 5, 2017, by and between the Registrant and Celgene Logistics Sàrl 10-Q (Exhibit 10.3) 11/13/2017 001-37686 .2 Assignment and Assumption Agreement, dated December 29, 2017, by and between the Registrant and BeiGene Switzerland GmbH 10-K (Exhibit 10.6.1) 3/2/2020 001-37686 10.3 Share Subscription Agreement, dated July 5, 2017, by and between Celgene Switzerland LLC and the Registrant 8-K (Exhibit 10.1) 7/6/2017 001-37686 10.4## Letter Agreement, dated June 14, 2019, by and among the Registrant, BeiGene Switzerland GmbH, Celgene Corporation and Celgene Switzerland LLC, to terminate the Amended and Restated Exclusive License and Collaboration Agreement, dated August 31, 2017 10-Q (Exhibit 10.1) 8/8/2019 001-37686 10.5## .1 Share Purchase Agreement, dated October 31, 2019, by and between the Registrant and Amgen Inc. 10-K (Exhibit 10.9) 3/2/2020 001-37686 .2 Amendment No. 1 to Share Purchase Agreement, dated December 6, 2019, by and between the Registrant and Amgen Inc. 10-K (Exhibit 10.10) 3/2/2020 001-37686 Table of Contents Exhibit No. Exhibit Description Filed/ Furnished Herewith Incorporated by Reference Herein from Form or Schedule Filing Date SEC File/ Reg. Number .3 Restated Amendment No. 2 to Share Purchase Agreement, dated September 24, 2020, by and between the Registrant and Amgen Inc. 8-K (Exhibit 10.1) 9/24/2020 001-37686 10.6## Collaboration Agreement, dated October 31, 2019, by and among the Registrant, BeiGene Switzerland GmbH and Amgen Inc. 10-K (Exhibit 10.11) 3/2/2020 001-37686 10.7 Guarantee, dated October 31, 2019, by and between the Registrant and Amgen Inc. 10-K (Exhibit 10.12) 3/2/2020 001-37686 10.8 Form of Share Purchase Agreement dated July 12, 2020 by and among the Registrant and Purchasers named therein 8-K (Exhibit 10.1) 7/13/2020 001-37686 Equity and Other Compensation Plans 10.9† 2011 Option Plan, as amended and form of option agreements thereunder S-1 (Exhibit 10.1) 10/16/2015 333-207459 10.10 .1† Second Amended and Restated 2016 Share Option and Incentive Plan 8-K (Exhibit 10.1) 12/12/2018 001-37686 .2† Amendment No. 1 to the Second Amended and Restated 2016 Share Option and Equity Plan 8-K (Exhibit 10.1) 6/17/2020 001-37686 .3† Forms of Restricted Share Unit Award Agreement for Non-Employee Directors under the 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.7) 8/9/2018 001-37686 .4† Form of Global Restricted Share Unit Award Agreement for Employees under the Second Amended and Restated 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.2) 8/6/2020 001-37686 .5† Form of Global Restricted Share Unit Award Agreement for Consultants under the Second Amended and Restated 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.3) 8/6/2020 001-37686 .6† Form of Global Non-Qualified Share Option Agreement for Employees under the Second Amended and Restated 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.4) 8/6/2020 001-37686 .7† Form of Global Non-Qualified Share Option Agreement for Non-Employee Directors under the Second Amended and Restated 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.5) 8/6/2020 001-37686 .8† Form of Global Non-Qualified Share Option Agreement for Non-Employee Consultants under the Second Amended and Restated 2016 Share Option and Incentive Plan 10-Q (Exhibit 10.6) 8/6/2020 001-37686 10.11 .1† Amended and Restated 2018 Inducement Equity Plan 8-K (Exhibit 10.1) 8/13/2018 001-37686 .2† Form of Non-Qualified Share Option Agreement under the 2018 Inducement Equity Plan 8-K (Exhibit 10.3) 6/8/2018 001-37686 .3† Form of Restricted Share Unit Award Agreement under the 2018 Inducement Equity Plan 10-Q (Exhibit 10.5) 8/9/2018 001-37686 10.12† .1† Second Amended and Restated 2018 Employee Share Purchase Plan 8-K (Exhibit 10.2) 12/12/2018 001-37686 Table of Contents Exhibit No. Exhibit Description Filed/ Furnished Herewith Incorporated by Reference Herein from Form or Schedule Filing Date SEC File/ Reg. Number .2† Amendment No. 1 to the Second Amended and Restated 2018 Employee Share Purchase Plan 8-K (Exhibit 10.2) 6/5/2019 001-37686 10.13† Senior Executive Cash Incentive Bonus Plan S-1 (Exhibit 10.19) 1/19/2016 333-207459 10.14† Independent Director Compensation Policy, as amended 10-Q (Exhibit 10.3) 5/11/2020 001-37686 Agreements with Executive Officers and Directors 10.15† Form of Indemnification Agreement, entered into between the Registrant and its directors and officers S-1 (Exhibit 10.3) 1/19/2016 333-207459 10.16† Employment Agreement, dated April 25, 2017, by and between the Registrant and John V. Oyler 8-K (Exhibit 10.1) 4/26/2017 001-37686 10.17† .1† Executive Employment Agreement, dated April 28, 2018, by and between BeiGene (Beijing) Co., Ltd. and Xiaobin Wu 10-Q (Exhibit 10.1) 8/9/2018 001-37686 .2† Employment Apportionment Agreement, dated March 1, 2020, by and between BeiGene (Beijing) Co., Ltd., BeiGene Guangzhou Biologics Manufacturing Co., Ltd. and Xiaobin Wu 10-Q (Exhibit 10.2) 5/11/2020 001-37686 10.18† Employment Agreement, dated July 13, 2015, by and between BeiGene USA, Inc. and Howard Liang S-1 (Exhibit 10.9) 10/16/2015 333-207459 10.19† Employment Agreement, dated as of August 19, 2016, by and between BeiGene USA, Inc. and Jane Huang 10-Q (Exhibit 10.2) 11/10/2016 001-37686 10.20† Consulting Agreement, dated February 24, 2021, by and between the Registrant and Xiaodong Wang X Table of Contents Exhibit No. Exhibit Description Filed/ Furnished Herewith Incorporated by Reference Herein from Form or Schedule Filing Date SEC File/ Reg. Number 21.1 List of Subsidiaries of the Registrant X 23.1 Consent of Ernst & Young Hua Ming LLP X 31.1 Certification of Principal Executive Officer pursuant to Rule 13a‑14(a) and Rule 15d‑14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 X 31.2 Certification of Princ i p a l Financial Officer pursuant to Rule 13a‑14(a) and Rule 15d‑14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002 X 32.1* Certification of Principal Executive Officer and Principle Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 X 101.INS Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) X † Indicates a management contract or any compensatory plan, contract or arrangement. # Confidential treatment has been granted by the U.S. Securities and Exchange Commission as to certain portions of this exhibit omitted and filed separately. ## Certain portions of the exhibit have been omitted by means of redacting a portion of the text and replacing it with "[...***...]". BeiGene, Ltd. (the Registrant) has determined that the omitted information (i) is not material and (ii) would be competitively harmful if publicly disclosed. * Furnished herewith. Table of Contents SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10‑K to be signed on its behalf by the undersigned, thereunto duly authorized. BEIGENE, LTD. Date: February 25, 2021 By: /s/ JOHN V. OYLER John V. Oyler Chief Executive Officer and Chairman (Principal Executive Officer) Table of Contents POWER OF ATTORNEY Each person whose individual signature appears below hereby authorizes and appoints John V. Oyler, Howard Liang, and Scott A. Samuels, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney‑in‑fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this Annual Report on Form 10‑K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys‑in‑fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10‑K has been signed by the following persons in the capacities indicated below and on the dates indicated: Signature Title Date /s/ JOHN V. OYLER Chief Executive Officer and Chairman February 25, 2021 John V. Oyler (Principal Executive Officer) /s/ HOWARD LIANG Chief Financial Officer and Chief Strategy Officer February 25, 2021 Howard Liang (Principal Financial and Accounting Officer) /s/ TIMOTHY CHEN Director February 25, 2021 Timothy Chen /s/ DONALD W. GLAZER Director February 25, 2021 Donald W. Glazer /s/ MICHAEL GOLLER Director February 25, 2021 Michael Goller /s/ ANTHONY C. HOOPER Director February 25, 2021 Anthony C. Hooper /s/ RANJEEV KRISHANA Director February 25, 2021 Ranjeev Krishana /s/ THOMAS MALLEY Director February 25, 2021 Thomas Malley /s/ XIAODONG WANG Director February 25, 2021 Xiaodong Wang /s/ CORAZON (CORSEE) D. SANDERS Director February 25, 2021 Corazon (Corsee) D. Sanders /s/ JING-SHYH (SAM) SU Director February 25, 2021 Jing-Shyh (Sam) Su /s/ QINGQING YI Director February 25, 2021 Qingqing Yi