What changed in this filing

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Item 1. Financial Statements

2023-08-02 compared with 2023-05-04 · 212 added, 141 removed, 687 unchanged (34% of the section changed)

4 unchanged sentences

Dollars (“$”), except for number of shares and per share data)

March 31, December 31,

June 30, December 31,

Note 2023 2022

37 unchanged sentences

9,500,000,000 shares authorized;

1,362,652,101 and 1,356,140,180 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

1,376,251,336 and 1,356,140,180 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 11,752,019 11,540,979

8 unchanged sentences

Dollars (“$”), except for number of shares and per share data)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

Note 2023 2022 2023 2022

9 unchanged sentences

Interest income, net 15,070 11,431 31,086 21,502

Other income, net 18,303 11,967

Other expense, net ( 63,818 ) ( 129,617 ) ( 45,515 ) ( 117,650 )

Loss before income taxes ( 367,463 ) ( 557,585 ) ( 704,402 ) ( 978,834 )

10 unchanged sentences

Dollars (“$”))

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Net loss ( 381,137 ) ( 565,726 ) ( 729,568 ) ( 1,000,924 )

8 unchanged sentences

Dollars (“$”))

Three Months Ended March 31,

Six Months Ended June 30,

Note 2023 2022

6 unchanged sentences

Amortization of research and development cost share liability 4 ( 22,669 ) ( 45,583 )

Deferred income tax benefits 36 50

Deferred income tax (expense) benefits ( 15 ) 555

Other items, net 767 6,360

10 unchanged sentences

Purchases of property, plant and equipment ( 247,055 ) ( 95,421 )

Purchase of intangible asset — —

Purchases of investments ( 11,582 ) ( 11,504 )

1 unchanged sentence

Purchase of in-process research and development — ( 75,000 )

Other investing activities ( 9,250 ) —

Net cash provided by investing activities 308,863 869,103

Financing activities:

Proceeds from long-term loan 11 15,771 —

Repayment of long-term loan 11 — —

2 unchanged sentences

Proceeds from option exercises and employee share purchase plan 35,169 18,972

Net cash used in financing activities ( 19,868 ) ( 11,267 )

Net cash provided by (used in) financing activities 146,212 ( 28,847 )

Effect of foreign exchange rate changes, net ( 50,873 ) ( 71,212 )

15 unchanged sentences

Dollars (“$”), except for number of shares)

Attributable to BeiGene, Ltd.

Ordinary Shares Additional

10 unchanged sentences

Balance at March 31, 2023 1,362,652,101 136 11,644,957 ( 59,014 ) ( 7,428,773 ) 4,157,306

Use of shares reserved for share option exercises 220,116 — — — — —

Exercise of options, ESPP and release of RSUs 13,379,119 1 3,691 — — 3,692

Share-based compensation — — 103,371 — — 103,371

Other comprehensive loss — — — ( 84,673 ) — ( 84,673 )

Net loss — — — — ( 381,137 ) ( 381,137 )

Balance at June 30, 2023 1,376,251,336 137 11,752,019 ( 143,687 ) ( 7,809,910 ) 3,798,559

Balance at December 31, 2021 1,334,804,281 133 11,191,007 17,950 ( 5,076,527 ) 6,132,563

6 unchanged sentences

Balance at March 31, 2022 1,334,805,269 133 11,268,290 17,454 ( 5,511,725 ) 5,774,152

Use of shares reserved for share option exercises 5,016,232 — — — — —

Exercise of options, ESPP and release of RSUs 9,817,923 1 7,091 — — 7,092

Share-based compensation — — 81,305 — — 81,305

Other comprehensive loss — — — ( 99,904 ) — ( 99,904 )

Net loss — — — — ( 565,726 ) ( 565,726 )

Balance at June 30, 2022 1,349,639,424 134 11,356,686 ( 82,450 ) ( 6,077,451 ) 5,196,919

The accompanying notes are an integral part of these condensed consolidated financial statements.

7 unchanged sentences

(the “Company”, “BeiGene”, “it”, “its”) is a global biotechnology company that is discovering and developing innovative oncology treatments that are more accessible and affordable to cancer patients worldwide.

The Company currently has three approved medicines that were discovered and developed in its own labs, including BRUKINSA ® , a small molecule inhibitor of Bruton’s Tyrosine Kinase for the treatment of various blood cancers;

The Company currently has three approved medicines that were internally discovered and developed, including BRUKINSA ® , a small molecule inhibitor of Bruton’s Tyrosine Kinase for the treatment of various blood cancers;

tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers;

1 unchanged sentence

The Company has obtained approvals to market BRUKINSA in the United States, the People's Republic of China (“China” or the “PRC”), the European Union, the United Kingdom, Canada, Australia and additional international markets, and tislelizumab and pamiparib in China.

By leveraging its China commercial capabilities, the Company has in-licensed the rights to distribute 13 approved medicines for the China market.

By leveraging its strong commercial capabilities, the Company has in-licensed the rights to distribute an additional 14 approved medicines for the China market.

Supported by its global clinical development and commercial capabilities, the Company has entered into collaborations with world-leading biopharmaceutical companies such as Amgen Inc.

1 unchanged sentence

The Company is committed to advancing best and first-in-class clinical candidates internally or with like-minded partners to develop impactful and affordable medicines for patients across the globe.

Its internal clinical development capabilities are deep, including a more than 2,700 -person global clinical development and medical affairs team that is running more than 80 ongoing or planned clinical trials in over 50 medicines and drug candidates.

The Company has conducted more than 120 clinical trials in-house, with over 21,000 subjects enrolled in approximately 45 regions.

This includes more than 35 pivotal or potentially registration-enabling trials across its portfolio, including three internally discovered, approved medicines.

The Company has enrolled in its clinical trials more than 18,000 subjects, of which approximately one-half have been outside of China.

The Company has built, and is expanding, its internal manufacturing capabilities, through its state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of its medicines, and is building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey.

The Company also works with high quality contract manufacturing organizations (“CMOs”) to manufacture its internally developed clinical and commercial products.

Since its inception in 2010, the Company has become a fully integrated global organization of over 9,400 employees in 30 countries and regions, including the United States, China, Europe and Australia.

The Company has built, and is expanding, its internal manufacturing capabilities.

The Company is building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey, in addition to its state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of its medicines.

The Company also works with high quality global contract manufacturing organizations (“CMOs”) to manufacture its internally developed clinical and commercial products.

Since its inception in 2010, the Company has become a fully integrated global organization of over 10,000 employees worldwide, including the United States, China, Europe and Australia.

Basis of presentation and consolidation

The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022, and the condensed consolidated statements of shareholders' equity for the three months ended March 31, 2023 and 2022, and the related footnote disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, and the condensed consolidated statements of shareholders' equity for the three and six months ended June 30, 2023 and 2022, and the related footnote disclosures are unaudited.

The accompanying unaudited interim condensed financial statements were prepared in accordance with U.S.

3 unchanged sentences

The unaudited interim condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all normal recurring adjustments, necessary to present a fair statement of the results for the interim periods presented.

Results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.

Results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.

The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries.

16 unchanged sentences

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and determined that the related impact was not material to any of its previously issued financial statements, but that correcting the cumulative impact of the error would be significant to its statements of operations for the three and nine months ended September 30, 2022.

Accordingly, the Company has revised the first quarter of 2022 condensed consolidated financial statements and related notes included herein to record a valuation allowance against the Company’s net deferred tax asset balance for all periods presented.

Accordingly, the Company has revised the three and six months ended June 30, 2022 condensed consolidated financial statements and related notes included herein to record a valuation allowance against the Company’s net deferred tax asset balance for all periods presented.

A summary of revisions to previously reported financial statements is presented in Note 2, Revision of Prior Period Financial Statements.

12 unchanged sentences

(ii) prospectively to all new and existing leasehold improvements recognized on or after the date of initial application, with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date;

retrospectively to the beginning of the period in which the entity first applied Topic 842, with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening balance of retained earnings at the beginning of the earliest period presented in accordance with Topic 842.

or (iii) retrospectively to the beginning of the period in which the entity first applied Topic 842, with any leasehold improvements that otherwise would not have been amortized or impaired recognized through a cumulative-effect adjustment to the opening

balance of retained earnings at the beginning of the earliest period presented in accordance with Topic 842.

The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

1 unchanged sentence

For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited interim condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2022.

There have been no material changes to the Company’s significant accounting policies as of and for the three months ended March 31, 2023, as compared to the significant accounting policies described in the Annual Report.

There have been no material changes to the Company’s significant accounting policies as of and for the six months ended June 30, 2023, as compared to the significant accounting policies described in the Annual Report.

Revision of Prior Period Financial Statements

As discussed in Note 1, the Company revised certain prior period financial statements to correct an error related to the valuation of net deferred tax assets, the impact of which was immaterial to its previously filed financial statements in the first quarter of 2022 (See Note 1).

Specifically, a valuation allowance should have been recorded on all net deferred tax assets and such a valuation allowance was not previously recorded.

1 unchanged sentence

Condensed Consolidated Statements of Operations (unaudited)

Three Months Ended

March 31, 2022

As Reported Adjustments As Revised

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2022

As Reported Adjustments As Revised As Reported Adjustments As Revised

Income tax expense 13,864 ( 5,723 ) 8,141 26,889 ( 4,799 ) 22,090

3 unchanged sentences

Condensed Consolidated Statements of Comprehensive Loss (unaudited)

Three Months Ended

March 31, 2022

As Reported Adjustments As Revised

Three Months Ended Six Months Ended

June 30, 2022 June 30, 2022

As Reported Adjustments As Revised As Reported Adjustments As Revised

Net loss ( 571,449 ) 5,723 ( 565,726 ) ( 1,005,723 ) 4,799 ( 1,000,924 )

1 unchanged sentence

Condensed Consolidated Statement of Cash Flows (unaudited)

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2022

As Reported Adjustments As Revised

14 unchanged sentences

Balance at March 31, 2022 ( 5,400,377 ) ( 111,348 ) ( 5,511,725 ) 5,885,500 ( 111,348 ) 5,774,152

Net loss ( 571,449 ) 5,723 ( 565,726 ) ( 571,449 ) 5,723 ( 565,726 )

Balance at June 30, 2022 ( 5,971,826 ) ( 105,625 ) ( 6,077,451 ) 5,302,544 ( 105,625 ) 5,196,919

Fair Value Measurements

8 unchanged sentences

The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and considers an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

The following tables present the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories as of March 31, 2023 and December 31, 2022:

The following tables present the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories as of June 30, 2023 and December 31, 2022:

Quoted Price in Active Market for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

As of March 31, 2023 (Level 1) (Level 2) (Level 3)

As of June 30, 2023 (Level 1) (Level 2) (Level 3)

Cash equivalents

Treasury securities 378 — —

Money market funds 847,781 — —

30 unchanged sentences

Accordingly, the convertible notes are remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value option recorded in other income, net.

As of March 31, 2023 and December 31, 2022, 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.

As of June 30, 2023 and December 31, 2022, 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.

bank loans 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.

4 unchanged sentences

Out-Licensing Arrangements

For the three months ended March 31, 2023 and 2022, the Company’s collaboration revenue consisted entirely of research and development services revenue and right to access intellectual property revenue from its collaboration agreements with Novartis for tislelizumab and ociperlimab.

The following table summarizes total collaboration revenue recognized for the three months ended March 31, 2023 and 2022:

Three Months Ended

For the three and six months ended June 30, 2023 and 2022, the Company’s collaboration revenue primarily consisted of research and development services revenue and right to access intellectual property revenue from its collaboration agreements with Novartis for tislelizumab and ociperlimab.

The following table summarizes total collaboration revenue recognized for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Revenue from Collaborators $ $ $ $

29 unchanged sentences

Based on the relative standalone selling prices of the two performance obligations, $ 484,646 of the total transaction price was allocated to the license and $ 165,354 was allocated to the tislelizumab R&D services.

The Company satisfied the license performance obligation at a point in time when the license was delivered and the transfer of know-how completed which occurred during the three months ended March 31, 2021.

As such, the Company recognized the entire amount of the transaction price allocated to the license as collaboration revenue during the three months ended March 31, 2021.

The Company satisfied the license performance obligation at a point in time when the license was delivered and the transfer of know-how completed which occurred during the six months ended June 30, 2021.

As such, the Company recognized the entire amount of the transaction price allocated to the license as collaboration revenue during the six months ended June 30, 2021.

The portion of the transaction price allocated to the tislelizumab R&D services was deferred and is being recognized as collaboration revenue as the tislelizumab R&D services are performed using a percentage-of-completion method.

Estimated costs to complete are reassessed on a periodic basis and any updates to the revenue earned are recognized on a prospective basis.

The Company recognized R&D service revenue of $ 5,025 and $ 11,635 during the three months ended March 31, 2023 and 2022, respectively.

The Company also recognized other collaboration revenue of $ 3,464 and $ 5,377 related to the sale of tislelizumab clinical supply to Novartis in conjunction with the collaboration during the three months ended March 31, 2023 and 2022, respectively.

The Company recognized R&D service revenue of $ 11,770 and $ 16,796 during the three and six months ended June 30, 2023, respectively, and $ 9,021 and $ 20,656 during the three and six months ended June 30, 2022, respectively.

The Company also recognized other collaboration revenue of $ 1,344 and $ 5,013 during the three and six months ended June 30, 2023, respectively, and nil and $ 5,377 during the three and six ended June 30, 2022, respectively, related to the sale of tislelizumab clinical supply to Novartis in conjunction with the collaboration.

Ociperlimab Option, Collaboration and License Agreement and China Broad Market Development Agreement

1 unchanged sentence

In addition, the Company and Novartis entered into an agreement granting the Company rights to market, promote and detail five approved Novartis oncology products, TAFINLAR ® (dabrafenib), MEKINIST ® (trametinib), VOTRIENT ® (pazopanib), AFINITOR ® (everolimus), and ZYKADIA ® (ceritinib), across designated regions of China referred to as “broad markets.” In the first quarter of 2022, the Company initiated marketing and promotion of these five products.

Under the terms of the option, collaboration and license agreement, the Company received an upfront cash payment of $ 300,000 in January 2022 from Novartis and will receive an additional payment of $ 600,000 or $ 700,000 in the event Novartis exercises its exclusive time-based option prior to mid-2023 or between then and late-2023, respectively.

Under the terms of the option, collaboration and license agreement, the Company received an upfront cash payment of $ 300,000 in January 2022 from Novartis and would have received an additional payment of $ 600,000 or $ 700,000 in the event Novartis exercised its exclusive time-based option prior to mid-2023 or between then and late-2023, respectively.

Following option exercise, the Company is eligible to receive up to $ 745,000 upon the achievement of regulatory approval milestones, $ 1,150,000 upon the achievement of sales milestones, and royalties on future sales of ociperlimab in the Novartis Territory.

26 unchanged sentences

The portion of the transaction price allocated to the ociperlimab R&D Services was deferred and is being recognized as collaboration revenue as the ociperlimab R&D Services are performed over the expected option period.

The Company recognized collaboration revenue of $ 26,249 related to Novartis right to access ociperlimab in clinical trials and the transfer of know how performance obligation during the three months ended March 31, 2023 and 2022, respectively, and R&D service revenue of $ 1,792 during the three months ended March 31, 2023 and 2022, respectively.

The Company also recognized other collaboration revenue of $ 980 related to the sale of ociperlimab clinical supply to Novartis in conjunction with the collaboration during the three months ended March 31, 2023.

The Company recognized collaboration revenue of $ 26,248 and $ 52,497 related to Novartis right to access ociperlimab in clinical trials and the transfer of know how performance obligation during the three and six months ended June 30, 2023, respectively, and $ 26,248 and $ 52,497 during the three and six months ended June 30, 2022, respectively.

The Company recognized R&D service revenue of $ 1,792 and $ 3,583 during the three and six months ended June 30, 2023 and $ 1,792 and $ 3,584 during the three and six months ended June 30, 2022, respectively.

The Company also recognized other collaboration revenue of $ 1,861 and $ 2,636 related primarily to revenue generated under the broad markets marketing and promotion agreement in conjunction with the collaboration during the three and six months ended June 30, 2023, respectively.

In July 2023, the Company entered into a Mutual Termination and Release Agreement (the "Termination Agreement") to mutually terminate the ociperlimab option, collaboration and license agreement with Novartis, effective immediately.

Pursuant to the Termination Agreement, the Company regained full, global rights to develop, manufacture and commercialize ociperlimab.

In-Licensing Arrangements

7 unchanged sentences

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).

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).

In July 2021, KYPROLIS was conditionally approved in China for injection in combination with dexamethasone for the treatment of adult patients with R/R multiple myeloma.

9 unchanged sentences

On April 20, 2022, the parties entered into the First Amendment to Amgen Collaboration Agreement, which amends certain terms and conditions relating to the financial responsibilities of the parties in connections with the development and commercialization of certain Amgen proprietary products for the treatment of oncology-related diseases and conditions.

Recently, in connection with the Company’s ongoing assessment of the Amgen Collaboration Agreement cost-share contributions, the Company determined that further investment in the development of LUMAKRAS was no longer commercially viable for BeiGene.

In connection with the Company’s ongoing assessment of the Amgen Collaboration Agreement cost-share contributions, the Company determined that further investment in the development of LUMAKRAS was no longer commercially viable for BeiGene.

As a result, in February 2023, the Company and Amgen entered into the Second Amendment to the Amgen Collaboration Agreement to (i) stop sharing costs with Amgen for the further development of LUMAKRAS during the period starting January 1, 2023 and ending August 31, 2023;

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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 Company's portion of the co-development funding on the pipeline assets for the three months ended March 31, 2023 and 2022 were as follows:

Three Months Ended

Amounts recorded related to the Company's portion of the co-development funding on the pipeline assets for the three and six months ended June 30, 2023 and 2022 were as follows:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Research and development expense 5,457 24,393 23,274 46,789

2 unchanged sentences

Remaining portion of development funding cap 549,765

As of March 31, 2023 and December 31, 2022, the research and development cost share liability recorded in the Company's balance sheet was as follows:

March 31, December 31,

As of June 30, 2023 and December 31, 2022, the research and development cost share liability recorded in the Company's balance sheet was as follows:

June 30, December 31,

Research and development cost share liability, current portion 62,516 114,335

1 unchanged sentence

Total research and development cost share liability 271,291 293,960

The total reimbursement due under the commercial profit-sharing agreement for product sales is classified in the income statement for the three months ended March 31, 2023 and 2022 as follows:

Three Months Ended

The total reimbursement due to (from) Amgen under the commercial profit-sharing agreement for product sales is classified in the income statement for the three and six months ended June 30, 2023 and 2022 as follows:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Cost of sales - product 4,011 2,449 1,184 3,478

3 unchanged sentences

The Company purchases commercial inventory from Amgen to distribute in China.

Inventory purchases amounted to $ 19,131 and $ 7,599 during the three months ended March 31, 2023 and 2022, respectively.

Net amounts payable to Amgen as of March 31, 2023 and December 31, 2022 were $ 22,950 and $ 54,064 , respectively.

Inventory purchases amounted to $ 20,146 and $ 39,277 during the three and six months ended June 30, 2023, respectively, and $ 22,462 and $ 30,061 during the three and six months ended June 30, 2022, respectively.

Net amounts receivable from Amgen as of June 30, 2023 was $ 11,069 and net amounts payable to Amgen as of December 31, 2022 was $ 54,064 , respectively.

Restricted Cash and Investments

Restricted Cash

The Company’s restricted cash balance of $ 5,122 and $ 5,473 as of March 31, 2023 and December 31, 2022, respectively, primarily consists of RMB-denominated cash deposits held in designated bank accounts for collateral for letters of credit.

The Company’s restricted cash balance of $ 11,206 and $ 5,473 as of June 30, 2023 and December 31, 2022, respectively, primarily consists 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 the term of the restriction.

1 unchanged sentence

Short-Term Investments

Short-term investments as of March 31, 2023 consisted of the following available-for-sale debt securities:

Short-term investments as of June 30, 2023 consisted of the following available-for-sale debt securities:

Gross Gross Fair Value

9 unchanged sentences

Total 674,262 — 9,011 665,251

As of March 31, 2023, the Company's available-for-sale debt securities consisted entirely of short-term U.S.

As of June 30, 2023, 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 March 31, 2023.

Accordingly, no allowance for credit loss was recorded as of June 30, 2023.

Equity Securities with Readily Determinable Fair Values

3 unchanged sentences

In September 2021, the Company purchased $ 7,250 of common stock in Leap's underwritten public offering.

As of March 31, 2023, the Company's ownership interest in the outstanding common stock of Leap was 6.2 % based on information from Leap.

As of June 30, 2023, the Company's ownership interest in the outstanding common stock of Leap was 6.2 % 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 9.8 % 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 Company recorded unrealized losses of $ 1,107 and $ 16,753 for the three months ended March 31, 2023 and 2022, respectively, in the consolidated statements of operations.

As of March 31, 2023 and December 31, 2022, the fair value of the common stock and warrants were as follows:

March 31, December 31,

The Company recorded an unrealized gain of $ 470 and unrealized loss of $ 636 for the three and six months ended June 30, 2023, respectively, and unrealized losses of $ 5,908 and $ 22,661 for the three and six months ended June 30, 2022, respectively, in the consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, the fair value of the common stock and warrants were as follows:

June 30, December 31,

Fair value of Leap common stock 2,300 3,307

3 unchanged sentences

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 $ 59,673 and $ 57,054 in equity securities without readily determinable fair values as of March 31, 2023 and December 31, 2022, respectively.

The Company recorded gains of $ 1,081 and $ 336 related to observable price changes in orderly transactions for similar investments of the same issuer for the three months ended March 31, 2023 and 2022, respectively, to other income, net in the consolidated statements of operations.

The Company held investments of $ 59,209 and $ 57,054 in equity securities without readily determinable fair values as of June 30, 2023 and December 31, 2022, respectively.

The Company recorded no gain during the three months ended and a gain of $ 1,081 for the six months ended June 30, 2023, respectively, and a gain of $ 366 for the three and six months ended June 30, 2022, respectively, related to observable price changes in orderly transactions for similar investments of the same issuer to other income, net in the consolidated statements of operations.

Equity-Method Investments

The Company records equity-method investments at cost and subsequently adjusts the basis based on the Company's ownership percentage in the investee's income and expenses, as well as dividends, if any.

The Company holds equity-method investments totaling $ 32,368 and $ 27,710 as of March 31, 2023 and December 31, 2022, respectively, that it does not consider to be individually significant to its financial statements.

The Company recorded net unrealized losses of $ 144 and $ 587 for the three months ended March 31, 2023 and 2022, respectively, to other income, net in the consolidated statements of operations.

The Company holds equity-method investments totaling $ 30,020 and $ 27,710 as of June 30, 2023 and December 31, 2022, respectively, that it does not consider to be individually significant to its financial statements.

The Company recorded net unrealized losses of $ 2,480 and $ 2,624 for the three and six months ended June 30, 2023, respectively, and net unrealized losses of $ 647 and $ 1,234 for the three and six months ended June 30, 2022, respectively, to other income, net in the consolidated statements of operations.

The Company’s inventory balance consisted of the following:

March 31, December 31,

June 30, December 31,

Raw materials 109,048 88,957

4 unchanged sentences

Property, plant and equipment, net are recorded at cost and consisted of the following:

March 31, December 31,

June 30, December 31,

Land 65,485 65,485

11 unchanged sentences

The Company is constructing a biologics manufacturing facility and research and development center on the land.

Depreciation expense was $ 19,025 and $ 15,580 for the three months ended March 31, 2023 and March 31, 2022, respectively.

As of June 30, 2023, the Company has construction in process of $ 314,707 related to the Hopewell facility construction.

Depreciation expense was $ 21,307 and $ 40,332 for the three and six months ended June 30, 2023, respectively, and $ 14,461 and $ 30,041 for the three and six months ended June 30, 2022, respectively.

Intangible Assets

Intangible assets as of March 31, 2023 and December 31, 2022 are summarized as follows:

March 31, 2023 December 31, 2022

Intangible assets as of June 30, 2023 and December 31, 2022 are summarized as follows:

June 30, 2023 December 31, 2022

carrying Accumulated Intangible carrying Accumulated Intangible

2 unchanged sentences

Product distribution rights 7,500 ( 4,375 ) 3,125 7,500 ( 4,000 ) 3,500

Developed product 41,348 ( 4,925 ) 36,423 41,235 ( 4,119 ) 37,116

Developed products 49,388 ( 5,618 ) 43,770 41,235 ( 4,119 ) 37,116

Trading license 816 ( 816 ) — 816 ( 816 ) —

7 unchanged sentences

The trading license has been renewed through February 2024.

Amortization expense for developed product is included in cost of sales - product in the accompanying consolidated statements of operations.

Amortization expense for developed products is included in cost of sales - product in the accompanying consolidated statements of operations.

Amortization expense for product distribution rights and the trading licenses is included in operating expenses in the accompanying consolidated statements of operations.

1 unchanged sentence

Amortization expense was as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Amortization expense - Cost of sales - product

840 812 1,639 1,644

Amortization expense - Operating expense

188 188 375 376

Total 1,028 1,000 2,014 2,020

Estimated amortization expense for each of the five succeeding years and thereafter, as of March 31, 2023 is as follows:

Estimated amortization expense for each of the five succeeding years and thereafter, as of June 30, 2023 is as follows:

Year Ending December 31, Cost of Sales - Product Operating Expenses Total

7 unchanged sentences

Total 43,770 3,125 46,895

Income tax expense was $ 11,492 and $ 13,949 for the three months ended March 31, 2023 and 2022, respectively.

The income tax expense for the three months ended March 31, 2023 and 2022 was primarily attributable to current China tax

expense for certain subsidiaries determined after certain non-deductible expenses and current U.S.

Income tax expense was $ 13,674 and $ 25,166 for the three and six months ended June 30, 2023, respectively.

Income tax expense was $ 8,141 and $ 22,090 for the three and six months ended June 30, 2022.

The income tax expense for the three and

six months ended June 30, 2023 and 2022 was primarily attributable to current China tax expense due to certain non-deductible expenses and current U.S.

tax expense determined after other special tax deductions and research and development tax credits.

2 unchanged sentences

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, as of March 31, 2023, the Company will maintain a full valuation allowance against its net deferred tax assets.

As of March 31, 2023, the Company had gross unrecognized tax benefits of $ 11,965 .

After consideration of all positive and negative evidence, as of June 30, 2023, the Company will maintain a full valuation allowance against its net deferred tax assets.

As of June 30, 2023, the Company had gross unrecognized tax benefits of $ 12,524 .

The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months.

The Company’s reserve for uncertain tax positions increased by $ 410 in the three months ended March 31, 2023 primarily due to U.S.

The Company’s reserve for uncertain tax positions increased by $ 559 and $ 969 in the three and six months ended June 30, 2023 primarily due to U.S.

federal and state tax credits and incentives.

The Company has elected to record interest and penalties related to income taxes as a component of income tax expense.

As of March 31, 2023 and December 31, 2022, the Company's accrued interest and penalties, where applicable, related to uncertain tax positions were not material.

As of June 30, 2023 and December 31, 2022, 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 March 31, 2023, Australia tax matters are open to examination for the years 2013 through 2023, China tax matters are open to examination for the years 2012 through 2023, Switzerland tax matters are open to examination for the years 2018 through 2023, and U.S.

As of June 30, 2023, Australia tax matters are open to examination for the years 2013 through 2023, China tax matters are open to examination for the years 2013 through 2023, Switzerland tax matters are open to examination for the years 2018 through 2023, and U.S.

federal tax matters are open to examination for years 2015 through 2023.

1 unchanged sentence

Supplemental Balance Sheet Information

The roll-forward of the allowance for credit losses related to trade accounts receivable for the three months ended March 31, 2023 and 2022 consists of the following activity:

Three Months Ended

Balance at beginning of the period 211 415

Current period provision for expected credit losses 222 ( 241 )

Amounts written-off — —

Exchange rate changes — 19

Balance at end of the period 433 193

Prepaid expenses and other current assets consist of the following:

March 31, December 31,

June 30, December 31,

Prepaid research and development costs 72,391 71,488

4 unchanged sentences

Prepaid insurance 7,593 3,664

Short-term deposit 34,837 1,510

Short-term deposit for sales rebates 7,198 1,510

Other current assets 41,206 34,647

1 unchanged sentence

Other non-current assets consist of the following:

March 31, December 31,

June 30, December 31,

Goodwill 109 109

5 unchanged sentences

Total 147,549 170,413

(1) Represents payments for future supply purchases under the license agreement with Luye and facility expansion under commercial supply agreements.

(1) Represents payments for future supply purchases under the license agreement with Luye Pharma Group and facility expansion under commercial supply agreements.

The payments are providing future benefit to the Company through credits on commercial supply purchases.

Accrued expenses and other payables consist of the following:

March 31, December 31,

June 30, December 31,

Compensation related 135,719 184,775

6 unchanged sentences

Other long-term liabilities consist of the following:

March 31, December 31,

June 30, December 31,

Deferred government grant income 34,865 38,176

2 unchanged sentences

Total 43,118 46,095

The following table summarizes the Company's short-term and long-term debt obligations as of March 31, 2023 and December 31, 2022:

The following table summarizes the Company's short-term and long-term debt obligations as of June 30, 2023 and December 31, 2022:

Lender Agreement Date Line of Credit Term Maturity Date Interest Rate As of

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

China Construction Bank April 4, 2018 RMB 580,000 9 -year

7 unchanged sentences

February 25, 2023 2.2 % — — 50,000 344,851

China Merchants Bank June 5, 2023 RMB 400,000 1 -year

June 4, 2024 3.2 % 55,164 400,000 — —

HSBC Bank May 4, 2023 RMB 340,000 1 -year

May 3, 2024 4.7 % 46,889 340,000 — —

China Industrial Bank May 30, 2023 RMB 200,000 1 -year

May 29, 2024 2.8 % 27,582 200,000 — —

Other short-term debt (5) 120,534 874,000 114,832 792,000

10 unchanged sentences

The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC.

The loan interest rate was 4.7 % as of March 31, 2023.

The loan interest rate was 4.5 % as of June 30, 2023.

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.

The Company repaid $ 3,483 (RMB 25,000 ) during the six months ended June 30, 2023.

On January 22, 2020, BeiGene Guangzhou Biologics Manufacturing Co., Ltd.(“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.

1 unchanged sentence

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 March 31, 2023.

The Company repaid $ 369 (RMB 2,500 ) during the three months ended March 31, 2023.

The loan interest rate was 4.1 % as of June 30, 2023.

The Company repaid $ 731 (RMB 5,000 ) during the six months ended June 30, 2023.

BeiGene Guangzhou Biologics Manufacturing Co., Ltd.

1 unchanged sentence

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 March 31, 2023.

The loan interest rate was 4.0% as of June 30, 2023.

The loan is secured by fixed assets placed into service upon completion of the third phase of the Guangzhou manufacturing facility's build out.

The Company repaid $ 1,088 (RMB 7,500 ) during the three months ended March 31, 2023.

The Company repaid $ 2,518 (RMB 17,500 ) during the six months ended June 30, 2023.

In September 2020, 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 designated to fund the purchase of noncontrolling equity interest in BeiGene Biologics Co., Ltd.

8 unchanged sentences

During the years ended December 31, 2022 and 2021, the Company entered into short-term working capital loans with China Industrial Bank and China Merchants Bank to borrow up to RMB 875,000 in aggregate, with maturity dates ranging from December 15, 2022 to September 18, 2023.

The weighted average interest rate for the short-term working capital loans was approximately 2.6 % as of March 31, 2023.

The Company repaid $ 16,574 (RMB 117,000 ) and drew down $ 28,174 (RMB 199,000 ) during the six months ended June 30, 2023.The weighted average interest rate for the short-term working capital loans was approximately 2.6 % as of June 30, 2023.

In July 2022, the Company entered into a 10-year bank loan agreement with China CITIC Bank to borrow up to RMB 480,000 at a floating interest rate benchmarked against prevailing interest rates of certain PRC financial institutions.

The loan interest rate was 4.2 % as of March 31, 2023.

The Company drew down $ 22,502 (RMB 163,000 ) during the six months ended June 30, 2023.

The weighted average loan interest rate was 4.1 % as of June 30, 2023.

The loan is secured by BeiGene Suzhou Co., Ltd.'s land use right.

Interest Expense

Interest expense recognized for the three months ended March 31, 2023 and 2022 was $ 4,574 and $ 5,528 , respectively, among which, $ 344 and $ 1,281 was capitalized, respectively.

Interest expense recognized for the three and six months ended June 30, 2023 was $ 4,891 and $ 9,465 , respectively, among which, $ 428 and $ 772 was capitalized, respectively.

Interest expense recognized for the three and six months ended June 30, 2022 was $ 5,456 and $ 10,984 , respectively, among which, $ 654 and $ 1,935 was capitalized, respectively.

Product Revenue

The Company’s product revenue is primarily derived from the sale of its internally developed products BRUKINSA in the United States and China, and tislelizumab and pamiparib in China;

The Company’s product revenue is primarily derived from the sale of its internally developed products BRUKINSA in the United States China, and other regions, and tislelizumab and pamiparib in China;

XGEVA, BLINCYTO and KYPROLIS in China under a license from Amgen;

1 unchanged sentence

and POBEVCY ® in China under a license from Bio-Thera.

The table below presents the Company’s net product sales for the three months ended March 31, 2023 and 2022.

Three Months Ended

The table below presents the Company’s net product sales for the three and six months ended June 30, 2023 and 2022.

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Product revenue – gross 667,328 342,885 1,176,933 638,273

1 unchanged sentence

Product revenue – net 553,745 304,511 964,036 566,084

The following table disaggregates net product sales by product for the three months ended March 31, 2023 and 2022:

Three Months Ended

The following table disaggregates net product sales by product for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

308,276 128,747 519,658 233,072

Tislelizumab 149,464 104,879 264,314 192,522

2 unchanged sentences

13,438 12,983 27,764 19,798

14,578 9,530 25,524 21,396

11,052 4,092 15,995 8,405

3,930 3,434 7,119 8,946

Pamiparib 1,919 2,022 3,725 4,577

1 unchanged sentence

Total product revenue – net 553,745 304,511 964,036 566,084

The following table presents the roll-forward of accrued sales rebates and returns for the three months ended March 31, 2023 and 2022:

Three Months Ended

The following table presents the roll-forward of accrued sales rebates and returns for the six months ended June 30, 2023 and 2022:

Six Months Ended

Balance at beginning of the period 41,817 59,639

4 unchanged sentences

The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Net loss ( 381,137 ) ( 565,726 ) ( 729,568 ) ( 1,000,924 )

Weighted average shares outstanding—basic and diluted 1,360,224,377 1,336,463,026 1,357,211,308 1,334,252,648

For the three months ended March 31, 2023 and 2022, the computation of basic loss per share using the two-class method was not applicable as the Company was in a net loss position, and the effects of all share options, restricted shares, restricted share units and ESPP shares were excluded from the calculation of diluted loss per share, as their effect would have been anti-dilutive.

For the three and six months ended June 30, 2023 and 2022, the computation of basic loss per share using the two-class method was not applicable as the Company was in a net loss position, and the effects of all share options, restricted shares, restricted share units and ESPP shares were excluded from the calculation of diluted loss per share, as their effect would have been anti-dilutive.

Share-Based Compensation Expense

2 unchanged sentences

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 March 31, 2023, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 5,166,666 .

As of June 30, 2023, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 5,166,822 .

In December 2018, the shareholders approved an 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.

2 unchanged sentences

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.

During the three months ended March 31, 2023, the Company granted options for 154,960 ordinary shares and restricted share units for 1,751,451 ordinary shares under the 2016 Plan.

As of March 31, 2023, options and restricted share units for ordinary shares outstanding under the 2016 Plan totaled 57,373,183 and 54,164,188 , respectively.

As of March 31, 2023, share-based awards to acquire 74,540,647 ordinary shares were available for future grant under the 2016 Plan.

During the six months ended June 30, 2023, the Company granted options for 9,396,660 ordinary shares and restricted share units for 29,453,021 ordinary shares under the 2016 Plan.

As of June 30, 2023, options and restricted share units for ordinary shares outstanding under the 2016 Plan totaled 64,070,175 and 68,073,668 , respectively.

As of June 30, 2023, share-based awards to acquire 38,873,106 ordinary shares were available for future grant under the 2016 Plan.

In order to continue to provide incentive opportunities under the 2016 Plan, the Board of Directors and shareholders of the Company approved an amendment to the 2016 Plan (the “Amendment No.

5 unchanged sentences

In August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated 2018 Plan to implement changes required by the listing rules of the Stock Exchange of Hong Kong Limited (“HKEX”).

As of March 31, 2023, there were no options or restricted share units for ordinary shares outstanding under the 2018 Plan.

As of June 30, 2023, there were no options or restricted share units for ordinary shares outstanding under the 2018 Plan.

Upon the effectiveness of Amendment No.

9 unchanged sentences

Eligible employees are able to authorize payroll deductions of up to 10 % of their eligible earnings, subject to applicable limitations.

As of March 31, 2023, 2,735,219 ordinary shares were available for future issuance under the ESPP.

As of June 30, 2023, 2,735,219 ordinary shares were available for future issuance under the ESPP.

The following tables summarizes the shares issued under the ESPP:

7 unchanged sentences

2 The purchase price is the price which was discounted from the applicable market price, in accordance with the terms of the ESPP.

The following table summarizes total share-based compensation expense recognized for the three months ended March 31, 2023 and 2022:

Three Months Ended

The following table summarizes total share-based compensation expense recognized for the three and six months ended June 30, 2023 and 2022:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Research and development 45,948 37,107 79,976 52,082

7 unchanged sentences

Balance as of December 31, 2022 ( 62,523 ) ( 9,011 ) ( 5,883 ) ( 77,417 )

Other comprehensive income before reclassifications 13,347 5,056 — 18,403

Net-current period other comprehensive income 13,347 5,056 — 18,403

Balance as of March 31, 2023 ( 49,176 ) ( 3,955 ) ( 5,883 ) ( 59,014 )

Other comprehensive (loss) income before reclassifications ( 73,172 ) 6,902 — ( 66,270 )

Net-current period other comprehensive (loss) income ( 73,172 ) 6,902 — ( 66,270 )

Balance as of June 30, 2023 ( 135,695 ) ( 2,109 ) ( 5,883 ) ( 143,687 )

Shareholders’ Equity

18 unchanged sentences

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 March 31, 2023 and December 31, 2022, the net assets of the Company’s PRC subsidiaries amounted to $ 3,531,229 and $ 3,548,881 , respectively.

As of June 30, 2023 and December 31, 2022, the net assets of the Company’s PRC subsidiaries amounted to $ 3,305,583 and $ 3,548,881 , respectively.

Commitments and Contingencies

Purchase Commitments

As of March 31, 2023, the Company had purchase commitments amounting to $ 76,097 , of which $ 45,378 related to minimum purchase requirements for supply purchased from contract manufacturing organizations and $ 30,719 related to binding purchase obligations of inventory from BMS and Amgen.

As of June 30, 2023, the Company had purchase commitments amounting to $ 104,115 , of which $ 40,295 related to minimum purchase requirements for supply purchased from contract manufacturing organizations and $ 63,820 related to binding purchase 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 $ 407,031 for the acquisition of property, plant and equipment as of March 31, 2023, which were mainly for the Company’s manufacturing and clinical R&D campus in Hopewell, NJ, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and new building for Beijing Innerway Bio-tech Co., Ltd.

The Company had capital commitments amounting to $ 381,187 for the acquisition of property, plant and equipment as of June 30, 2023, which were mainly for the Company’s manufacturing and clinical R&D campus in Hopewell, NJ, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and new building for Beijing Innerway Bio-tech Co., Ltd.

Co-Development Funding Commitment

1 unchanged sentence

The Company is funding its portion of the co-development costs by contributing cash and development services.

As of March 31, 2023, the Company's remaining co-development funding commitment was $ 560,488 .

As of June 30, 2023, the Company's remaining co-development funding commitment was $ 549,765 .

Research and Development Commitment

The Company entered into a long-term research and development agreement in June 2021, which includes obligations to make an upfront payment and fixed quarterly payments over the next four years .

As of March 31, 2023, the total research and development commitment amounted to $ 20,878 .

As of June 30, 2023, the total research and development commitment amounted to $ 17,990 .

Funding Commitment

The Company had committed capital related to two equity method investments in the amount of $ 15,057 .

As of March 31, 2023, the remaining capital commitment was $ 11,307 and is expected to be paid from time to time over the investment period.

As of June 30, 2023, the remaining capital commitment was $ 10,557 and is expected to be paid from time to time over the investment period.

Pension Commitment

The Company maintains a defined benefit pension plan in Switzerland.

Funding obligations under the defined benefit pension plan are equivalent to $ 2,553 per year based on annual funding contributions in effect as of March 31, 2023 to achieve fully funded status where the market value of plan assets equals the projected benefit obligations.

Funding obligations under the defined benefit pension plan are equivalent to $ 2,627 per year based on annual funding contributions in effect as of June 30, 2023 to achieve fully funded status where the market value of plan assets equals the projected benefit obligations.

Future funding requirements will be subject to change as a result of future changes in staffing and compensation levels, various actuarial assumptions and actual investment returns on plan assets.

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.

The Company enters into agreements with contract research organizations (“CROs”) to some extent to provide research and development services.

These contracts are generally cancellable at any time by us with prior written notice.

4 unchanged sentences

When the achievement of these milestones or sales have occurred, the corresponding amounts are recognized in the Company’s financial statements.

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal proceedings, claims and litigation as the Company operates in an industry susceptible to patent legal claims.

The Company accounts for estimated losses with respect to legal proceedings and claims when such losses are probable and estimable.

Legal costs associated with these matters are expensed when incurred.

Segment and Geographic Information

4 unchanged sentences

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:

Three Months Ended

Total product revenues by geographic area are presented as follows:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

PRC 293,919 212,429 540,828 403,164

2 unchanged sentences

Total 553,745 304,511 964,036 566,084

PRC revenues consisted primarily of product revenues for the three months ended March 31, 2023 and 2022.

revenues for the three months ended March 31, 2023 consisted of collaboration revenue of $ 26,257 and BRUKINSA product sales of $ 138,768 , respectively.

revenues for the three months ended March 31, 2022 consisted of collaboration revenue of $ 31,537 and BRUKINSA product sales of $ 67,888 , respectively.

Rest of world revenues for the three months ended March 31, 2023 consisted of collaboration revenue of $ 11,253 and product sales of $ 24,615 , respectively.

Rest of world revenues for the three months ended March 31, 2022 consisted of collaboration revenue of $ 13,516 and product sales of $ 2,950 , respectively.

Total collaboration revenues by geographic area are presented as follows:

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

PRC 1,861 — 2,636 —

United States 28,809 25,943 54,523 57,480

Rest of world 10,846 11,118 21,867 24,634

Total 41,516 37,061 79,026 82,114

Subsequent Events

On July 28, 2023 (the “Signing Date”), a credit facility agreement (the “Credit Agreement”) was entered into by and between the Company, as the borrower, and China Merchants Bank Co., Ltd., as the lender (the “Lender”).

The Credit Agreement provides for a $ 400 million uncommitted and unsecured credit facility (the “Credit Facility”), pursuant to which each loan issued has a term up to one year, provided that all loans must be repaid within eighteen months of the Signing Date.

Loans under the Credit Facility have a floating interest rate based on the secured overnight financing rate plus an applicable margin and are calculated daily from the date the loan is utilized and settled on a quarterly basis.

The proceeds of the loans under the Credit Facility are available to finance the working capital needs and for daily operations of the Company and its subsidiaries.

The Credit Agreement contains financial covenants that require the Company to uphold certain ratios of liabilities to ownership equity, maintain specified amounts of both consolidated net assets and consolidated cash balance, and reach a certain amount of annual sales revenue for products, all which are tested either quarterly or annually.

The Credit Agreement also contains operating covenants including, among other things, (i) maintaining its listing status on The Stock Exchange of Hong Kong Limited and The Science and Technology Innovation Board of the Shanghai Stock Exchange, (ii) preserving interest reserve in the account with the Lender, (iii) limitations on the incurrence of certain additional indebtedness, and (iv) preservation of ownership of key patents and other covenants surrounding the Company’s intellectual property.

Other certain covenants, representations and warranties, and events of default, are contained in the Credit Agreement, many of which would be breached or triggered solely to the extent they have a material adverse effect on the Company’s ability to perform its obligations under the Credit Agreement or affect the Company’s normal operations.

As of the date of this report, no borrowings were outstanding under the Credit Agreement.

On August 1, 2023, the Company entered into a Settlement and Termination Agreement (the “Settlement Agreement”) with BMS-Celgene and certain of its affiliates relating to the termination of the parties’ ongoing contractual relationships, the

previously-disclosed ongoing arbitration proceeding concerning ABRAXANE ® (the “Arbitration”), the License and Supply Agreement (“LSA”), the Amended and Restated Quality Agreement (the “QA”), and the Share Subscription Agreement (the “SSA”), entered into by the parties in 2017 and 2018.

Pursuant to the Settlement Agreement, the parties agreed to mutually dismiss the Arbitration and BMS-Celgene and its affiliates agreed to transfer 23,273,108 ordinary shares of the Company originally purchased in 2017, in each case subject to and in accordance with the terms and conditions of the Settlement Agreement.

The Company has no payment obligation in exchange for the transferred shares pursuant to the Settlement Agreement.

Furthermore, the parties agreed to terminate the LSA and QA on December 31, 2023, subject to the Company’s right to continue selling all inventory of Revlimid and Vidaza until sold out or December 31, 2024, whichever is earlier.

The Settlement Agreement provides for a settlement and release by each party of claims arising from or relating to the Arbitration, the LSA, the QA and the SSA, as well as other disputes and potential disputes between the parties, in each case subject to and in accordance with the terms and conditions of the Agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements