BeOne Medicines Ltd. 10-Q

Item 1. Financial Statements BEIGENE, LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) (Unaudited) Three Months Ended March 31, Note 2024 2023 $ $ Revenues Product revenue, net 11 746,918 410,291 Collaboration revenue 3 4,734 37,510 Total revenues 751,652 447,801 Cost of sales - product 124,935 81,789 Gross profit 626,717 366,012 Operating expenses Research and development 460,638 408,584 Selling, general and administrative 427,427 328,499 Amortization of intangible assets — 187 Total operating expenses 888,065 737,270 Loss from operations ( 261,348 ) ( 371,258 ) Interest income, net 16,160 16,016 Other income, net 1,762 18,303 Loss before income taxes ( 243,426 ) ( 336,939 ) Income tax expense 8 7,724 11,492 Net loss ( 251,150 ) ( 348,431 ) Net loss per share, basic and diluted 12 ( 0.19 ) ( 0.26 ) Weighted-average shares outstanding—basic and diluted 1,355,547,626 1,354,164,760 Net loss per American Depositary Share (“ADS”), basic and diluted 12 ( 2.41 ) ( 3.34 ) Weighted-average ADSs outstanding—basic and diluted 104,272,894 104,166,520 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents BEIGENE, LTD. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Amounts in thousands of U.S. Dollars (“$”)) (Unaudited) Three Months Ended March 31, 2024 2023 $ $ Net loss ( 251,150 ) ( 348,431 ) Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments ( 32,163 ) 13,347 Unrealized holding income (loss), net ( 35 ) 5,056 Comprehensive loss ( 283,348 ) ( 330,028 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents BEIGENE, LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data) As of March 31, December 31, Note 2024 2023 $ $ (unaudited) (audited) Assets Current assets: Cash and cash equivalents 2,793,370 3,171,800 Short-term investments 4 — 2,600 Accounts receivable, net 435,294 358,027 Inventories, net 5 447,345 416,122 Prepaid expenses and other current assets 9 231,741 254,865 Total current assets 3,907,750 4,203,414 Property, plant and equipment, net 6 1,417,992 1,324,154 Operating lease right-of-use assets 87,747 95,207 Intangible assets, net 7 55,171 57,138 Other non-current assets 9 199,021 125,362 Total non-current assets 1,759,931 1,601,861 Total assets 5,667,681 5,805,275 Liabilities and shareholders’ equity Current liabilities: Accounts payable 356,575 315,111 Accrued expenses and other payables 9 569,438 693,731 Tax payable 8 27,324 22,951 Operating lease liabilities, current portion 19,401 21,950 Research and development cost share liability, current portion 3 81,986 68,004 Short-term debt 10 826,965 688,366 Total current liabilities 1,881,689 1,810,113 Non-current liabilities: Long-term bank loans 10 199,027 197,618 Operating lease liabilities, non-current portion 17,722 22,251 Deferred tax liabilities 8 16,437 16,494 Research and development cost share liability, non-current portion 3 143,544 170,662 Other long-term liabilities 9 48,901 50,810 Total non-current liabilities 425,631 457,835 Total liabilities 2,307,320 2,267,948 Commitments and contingencies 17 Shareholders’ equity: Ordinary shares, $ 0.0001 par value per share; 9,500,000,000 shares authorized; 1,359,524,369 and 1,359,513,224 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 136 135 Additional paid-in capital 11,705,069 11,598,688 Accumulated other comprehensive loss 14 ( 131,644 ) ( 99,446 ) Accumulated deficit ( 8,213,200 ) ( 7,962,050 ) Total shareholders’ equity 3,360,361 3,537,327 Total liabilities and shareholders’ equity 5,667,681 5,805,275 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents BEIGENE, LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands of U.S. Dollars (“$”)) (Unaudited) Three Months Ended March 31, Note 2024 2023 $ $ Operating activities: Net loss ( 251,150 ) ( 348,431 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 25,293 20,011 Share-based compensation expenses 13 88,667 75,322 Gain on deconsolidation of a subsidiary ( 3,735 ) — Amortization of research and development cost share liability 3 ( 13,136 ) ( 17,398 ) Other items, net 848 780 Changes in operating assets and liabilities: Accounts receivable ( 80,025 ) ( 136,487 ) Inventories ( 37,264 ) ( 13,027 ) Other assets ( 4,401 ) ( 50,408 ) Accounts payable 46,300 ( 22,589 ) Accrued expenses and other payables ( 79,309 ) ( 38,681 ) Deferred revenue — ( 33,066 ) Other liabilities ( 660 ) 197 Net cash used in operating activities ( 308,572 ) ( 563,777 ) Investing activities: Purchases of property, plant and equipment ( 156,578 ) ( 125,585 ) Purchase of intangible asset ( 4,674 ) — Proceeds from sale or maturity of investments 2,655 376,962 Purchase of in-process research and development ( 31,800 ) — Other investing activities ( 19,434 ) ( 10,314 ) Net cash (used in) provided by investing activities ( 209,831 ) 241,063 Financing activities: Proceeds from long-term loan 10 9,053 — Repayment of long-term loan 10 ( 3,579 ) ( 1,457 ) Proceeds from short-term loans 10 142,028 — Repayment of short-term loans 10 — ( 50,000 ) Proceeds from option exercises and employee share purchase plan 14,791 31,589 Net cash provided by (used in) financing activities 162,293 ( 19,868 ) Effect of foreign exchange rate changes, net ( 22,438 ) 11,311 Net decrease in cash, cash equivalents, and restricted cash ( 378,548 ) ( 331,271 ) Cash, cash equivalents, and restricted cash at beginning of period 3,185,984 3,875,037 Cash, cash equivalents, and restricted cash at end of period 2,807,436 3,543,766 Supplemental cash flow information: Cash and cash equivalents 2,793,370 3,538,644 Short-term restricted cash 11,445 159 Long-term restricted cash 2,621 4,963 Income taxes paid 2,490 7,616 Interest expense paid 11,440 5,017 Supplemental non-cash information: Capital expenditures included in accounts payable and accrued expenses 100,473 64,013 Increase in equity investment from deconsolidation of a subsidiary 40,798 — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents BEIGENE, LTD. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Amounts in thousands of U.S. Dollars (“$”), except for number of shares) (Unaudited) Ordinary Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shares Amount $ $ $ $ $ Balance at December 31, 2023 1,359,513,224 135 11,598,688 ( 99,446 ) ( 7,962,050 ) 3,537,327 Use of shares reserved for share option exercises ( 3,634,952 ) — — — — — Exercise of options, ESPP and release of RSUs 3,646,097 1 15,662 — — 15,663 Share-based compensation — — 88,667 — — 88,667 Deconsolidation of a subsidiary — — 2,052 — — 2,052 Other comprehensive loss — — — ( 32,198 ) — ( 32,198 ) Net loss — — — — ( 251,150 ) ( 251,150 ) Balance at March 31, 2024 1,359,524,369 136 11,705,069 ( 131,644 ) ( 8,213,200 ) 3,360,361 Balance at December 31, 2022 1,356,140,180 135 11,540,979 ( 77,417 ) ( 7,080,342 ) 4,383,355 Use of shares reserved for share option exercises ( 98,774 ) — — — — — Exercise of options, ESPP and release of RSUs 6,610,695 1 28,656 — — 28,657 Share-based compensation — — 75,322 — — 75,322 Other comprehensive income — — — 18,403 — 18,403 Net loss — — — — ( 348,431 ) ( 348,431 ) Balance at March 31, 2023 1,362,652,101 136 11,644,957 ( 59,014 ) ( 7,428,773 ) 4,157,306 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents BEIGENE, LTD. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data) (Unaudited) 1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies Description of business BeiGene, Ltd. (the “Company”, “BeiGene”, “it”, “its”) is a global oncology company discovering and developing innovative treatments that are more accessible and affordable to cancer patients worldwide. The Company currently has three approved medicines that were internally discovered and developed, including BRUKINSA ® (zanubrutinib), a small molecule inhibitor of Bruton’s Tyrosine Kinase (“BTK”) for the treatment of various blood cancers; TEVIMBRA ® (tislelizumab), an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers; and PARTRUVIX ® (pamiparib), a selective small molecule inhibitor of PARP1 and PARP2. The Company has obtained approvals to market BRUKINSA in the United States (“U.S.”), the People’s Republic of China (“China” or the “PRC”), the European Union (“EU”), the United Kingdom (“UK”), Canada, Australia, and additional international markets; TEVIMBRA (tislelizumab) in the U.S., EU and China; and PARTRUVIX in China. By leveraging its strong commercial capabilities, the Company has in-licensed the rights to distribute additional 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. (“Amgen”) and Beijing Novartis Pharma Co., Ltd. (“Novartis”) to develop and commercialize innovative medicines. 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. Recognizing the importance of clinical trial activities in its industry and the challenges associated with outsourcing to third-party contract research organizations (“CROs”), the Company has built its own 3,000 + person internal clinical team and is largely CRO-free. 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 at the Princeton West Innovation Park in Hopewell, New Jersey (the “Hopewell facility”), in addition to its existing 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 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, primarily in the United States, China and Europe. Basis of presentation and consolidation The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023, and the condensed consolidated statements of shareholders’ equity for the three months ended March 31, 2024 and 2023, and the related footnote disclosures are unaudited. The accompanying unaudited interim condensed financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including guidance with respect to interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Annual Report”). The unaudited interim condensed consolidated 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, 2024 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. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. 8 Table of Contents 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 determining the standalone selling price of each performance obligation in the Company’s revenue arrangements, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions, valuation of inventory, 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 and reported amounts of revenues and expenses. Actual results could differ from these estimates. Recent accounting pronouncements New accounting standards which have not yet been adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. Early adoption is permitted. This guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact on its financial statements of adopting this guidance. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires that public entities on an annual basis, (1) in the rate reconciliation, disclose specific categories and provide additional information for reconciling items that meet a quantitative threshold; (2) about income taxes paid, disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and by individual jurisdiction in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received); and (3) disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) disaggregated by federal, state, and foreign. This update is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. This guidance should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact on its financial statements of adopting this guidance. Significant accounting policies 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, 2023. There have been no material changes to the Company’s significant accounting policies as of and for the three months ended March 31, 2024, as compared to the significant accounting policies described in the Annual Report. 2. Fair Value Measurements The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability. 9 Table of Contents 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, 2024 and December 31, 2023: Quoted Price in Active Market for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs As of March 31, 2024 (Level 1) (Level 2) (Level 3) $ $ $ Cash equivalents Money market funds 803,170 — — Time deposits 42,861 — — Prepaid expenses and other current assets: Convertible debt instrument — — 4,668 Other non-current assets (Note 4): Equity securities with readily determinable fair values 1,954 222 — Convertible debt instrument — — 4,603 Total 847,985 222 9,271 Quoted Price in Active Market for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs As of December 31, 2023 (Level 1) (Level 2) (Level 3) $ $ $ Cash equivalents Money market funds 1,052,149 — — Time deposits 42,852 — — Short-term investments (Note 4): U.S. Treasury securities 2,600 — — Prepaid expenses and other current assets: Convertible debt instrument — — 4,668 Other non-current assets (Note 4): Equity securities with readily determinable fair values 3,046 542 — Convertible debt instrument — — 4,215 Total 1,100,647 542 8,883 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”), a publicly-traded biotechnology company. The common stock investment is measured and carried at fair value and classified as a Level 1 investment. The warrants to purchase additional shares of common stock are measured using the Black-Scholes option-pricing valuation model and classified as a Level 2 investment. Refer to Note 4, Restricted Cash and Investments for details of the determination of the carrying amount of private equity investments without readily determinable fair values and equity method investments. The Company holds convertible notes issued by private biotech companies. The Company has elected the fair value option method of accounting for the convertible notes. 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. There were no fair value adjustments for the three months ended March 31, 2024. 10 Table of Contents As of March 31, 2024 and December 31, 2023, 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 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. 3. Collaborative and Licensing Arrangements The Company has entered into collaborative arrangements for the research and development, manufacture and/or commercialization of medicines and drug candidates. To date, these collaborative arrangements have included out-licenses of and options to out-license 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. For detailed descriptions of each arrangement, see the Company’s Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission on February 26, 2024. Out-Licensing Arrangements For the three months ended March 31, 2024, the Company’s collaboration revenue consisted primarily of revenue generated under the Novartis broad markets agreement. For the three months ended March 31, 2023, the Company’s collaboration revenue primarily consisted of the recognition of previously deferred revenue from its former collaboration agreements with Novartis for tislelizumab and ociperlimab. The following table summarizes total collaboration revenue recognized for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 Revenue from Collaborators $ $ Research and development service revenue — 6,817 Right to access intellectual property revenue — 26,249 Other 4,734 4,444 Total 4,734 37,510 11 Table of Contents Novartis Tislelizumab Collaboration and License In September 2023, the Company and Novartis agreed to mutually terminate the tislelizumab collaboration and license agreement, effective immediately. Pursuant to the termination agreement, the Company regained full, global rights to develop, manufacture and commercialize tislelizumab with no royalty payments due to Novartis. Novartis may continue its ongoing clinical trials and has the ability to conduct future combination trials with tislelizumab subject to BeiGene’s approval. BeiGene agreed to provide Novartis with ongoing clinical supply of tislelizumab to support its clinical trials. Pursuant to the termination agreement, Novartis agreed to provide transition services to the Company to enable key aspects of the tislelizumab development and commercialization plan to proceed without disruption, including manufacturing, regulatory, safety and clinical support. Upon termination of the agreement in September 2023, there were no further performance obligations, and the remaining deferred revenue balance associated with the tislelizumab R&D services was recognized in full. No collaboration revenue was recognized in connection with the tislelizumab collaboration and license agreement during the three months ended March 31, 2024 due to termination of the agreement in 2023. The following table summarizes collaboration revenue recognized for the three months ended March 31, 2023: Three Months Ended March 31, 2024 2023 $ $ Research and development service revenue — 5,025 Other (1) — 3,464 Total — 8,489 (1) Represents revenue recognized on sale of tislelizumab clinical supply to Novartis in conjunction with the collaboration. Ociperlimab Option, Collaboration and License Agreement and China Broad Market Development Agreement In July 2023, the Company and Novartis mutually agreed to terminate the ociperlimab option, collaboration and license agreement, effective immediately. Pursuant to the termination agreement, the Company regained full, global rights to develop, manufacture and commercialize ociperlimab. Upon termination the Company had no further performance obligations under the collaboration, and all remaining deferred revenue balances were recognized in full. The China broad markets agreement remains in place. The following table summarizes collaboration revenue recognized in connection with the China broad markets agreement for the three months ended March 31, 2024 and the terminated ociperlimab option, collaboration and license agreement for the three months ended March 31, 2023: Three Months Ended March 31, 2024 2023 $ $ Research and development service revenue — 1,792 Right to access intellectual property revenue — 26,249 China broad markets agreement 4,347 980 Total 4,347 29,021 In-Licensing Arrangements - Commercial Amgen During the three months ended March 31, 2024 and 2023, the Company recorded the following amounts related to its collaboration arrangement with Amgen. For a detailed description of the arrangement and related rights and obligation, see the Company’s Form 10-K for the year ended December 31, 2023 filed on February 26, 2024. 12 Table of Contents Amounts recorded related to the Company’s portion of the co-development funding on the pipeline assets for the three months ended March 31, 2024 and 2023 were as follows: Three Months Ended March 31, 2024 2023 $ $ Research and development expense 13,484 17,817 Amortization of research and development cost share liability 13,136 17,398 Total amount due to Amgen for BeiGene’s portion of the development funding 26,620 35,215 As of March 31, 2024 Remaining portion of development funding cap 457,031 As of March 31, 2024 and December 31, 2023, the research and development cost share liability recorded in the Company’s balance sheet was as follows: As of March 31, December 31, 2024 2023 $ $ Research and development cost share liability, current portion 81,986 68,004 Research and development cost share liability, non-current portion 143,544 170,662 Total research and development cost share liability 225,530 238,666 The total reimbursement paid under the commercial profit-sharing agreement for product sales is classified in the income statement for the three months ended March 31, 2024 and 2023 as follows: Three Months Ended March 31, 2024 2023 $ $ Cost of sales - product 8,569 ( 2,827 ) Research and development ( 705 ) 3,080 Selling, general and administrative ( 18,153 ) ( 11,836 ) Total ( 10,289 ) ( 11,583 ) The Company purchases commercial inventory from Amgen to distribute in China. Inventory purchases amounted to $ 62,226 and $ 19,131 during the three months ended March 31, 2024 and 2023, respectively. Net amounts payable to Amgen was $ 93,561 and $ 55,474 as of March 31, 2024 and December 31, 2023, respectively. 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. 13 Table of Contents Upfront and milestone payments incurred under these arrangements for the three months ended March 31, 2024 and 2023 are set forth below. All upfront and development milestones were expensed to research and development expense. All regulatory and commercial milestones were capitalized as intangible assets and are being amortized over the remainder of the respective product patent or the term of the commercialization agreements. Three Months Ended March 31, 2024 2023 Payments due to collaboration partners Classification $ $ Upfront payments Research and development expense 27 — Development milestone payments Research and development expense 35,000 — Total 35,027 — 4. Restricted Cash and Investments Restricted Cash The Company’s restricted cash 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. Restricted cash as of March 31, 2024 and December 31, 2023 was as follows: As of March 31, December 31, 2024 2023 $ $ Short-term restricted cash 11,445 11,473 Long-term restricted cash 2,621 2,711 Total 14,066 14,184 In addition to the restricted cash balances above, the Company is required by the PRC securities law to use the proceeds from our offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”) in strict compliance with the planned uses as disclosed in the PRC prospectus as well as those disclosed in the Company’s proceeds management policy approved by the board of directors. As of March 31, 2024, the Company had cash remaining related to the STAR Offering proceeds of $ 960,961 . Short-Term Investments As of December 31, 2023, the Company’s short-term investments in available-for-sale debt securities consisted of U.S. Treasury securities in the amount of $ 2,600 . During the three months ended March 31, 2024, the Company sold the entire investments in U.S. Treasury securities. 14 Table of Contents Investments in Equity Securities The following table summarizes the Company’s investments in equity securities: As of March 31, December 31, 2024 2023 Equity securities with readily determinable fair values (1) Fair value of Leap common stock 1,954 3,046 Fair value of Leap warrants 222 542 Equity securities without readily determinable fair values Pi Health, Inc. (2) 40,798 — Other 54,919 55,860 Equity-method investments 41,119 25,981 Total 139,012 85,429 (1) Represents common stock and warrants to purchase additional shares of common stock of Leap Therapeutics, Inc. (“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. (2) In the first quarter of 2024, the Company divested the net assets comprising substantially all of its Pi Health business with a carrying value of $ 38,063 . The consideration received for the divestiture consisted of preferred stock in a newly formed entity, Pi Health, Inc., with a fair value of $ 40,798 and cash consideration of $ 1,000 . The transaction resulted in a pre-tax gain of $ 3,735 recorded within other income, net during the three months ended March 31, 2024. The Company will account for its investment prospectively as a private equity security without a readily determinable fair value and the divestiture is not treated as a discontinued operation in the Statement of Operations and therefore the historical results of operations of the Pi Health business will remain in the Company’s continuing operations. The following table summarizes unrealized (losses) gains related to equity securities recorded in other income, net for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 $ $ Equity securities with readily determinable fair values ( 1,412 ) ( 1,107 ) Equity securities without readily determinable fair values ( 797 ) 1,081 Equity-method investments ( 856 ) ( 144 ) 5. Inventories, Net The Company’s inventories, net consisted of the following: As of March 31, December 31, 2024 2023 $ $ Raw materials 157,735 148,772 Work in process 49,365 39,098 Finished goods 240,245 228,252 Total inventories, net 447,345 416,122 15 Table of Contents 6. Property, Plant and Equipment, Net Property, plant and equipment, net are recorded at cost and consisted of the following: As of March 31, December 31, 2024 2023 $ $ Land 65,485 65,485 Building 281,424 231,656 Manufacturing equipment 216,564 186,856 Laboratory equipment 210,513 205,349 Leasehold improvement 59,425 60,124 Software, electronics and office equipment 66,726 83,281 Property, plant and equipment, at cost 900,137 832,751 Less: accumulated depreciation ( 265,002 ) ( 249,212 ) Construction in progress 782,857 740,615 Property, plant and equipment, net 1,417,992 1,324,154 The Company is making a significant investment in its future manufacturing and R&D center in the U.S., a 42 -acre site that is being constructed in Hopewell, New Jersey. As of March 31, 2024, the Company had land and construction in progress of $ 652,369 related to the Hopewell facility. In March 2024, the Company acquired a land use right and the facility currently being constructed on the land for $ 73,853 in Shanghai, China. Based on the relative fair values of the land use right and construction in progress, $ 28,887 of the total purchase price was allocated to the land use right and $ 44,966 was allocated to the construction in progress. As of March 31, 2024, title and risk of loss associated with the acquired properties were being transitioned to the Company. As such, the purchase price allocated to the land use right was recorded as a long-term prepaid as of March 31, 2024 and will be transferred to operating lease right-of-use asset upon the closing of the transaction. The Company plans to complete the construction of the facility and build a research and development center on the land. Depreciation expense was $ 24,110 and $ 19,025 for the three months ended March 31, 2024 and 2023, respectively. 7. Intangible Assets Intangible assets as of March 31, 2024 and December 31, 2023 are summarized as follows: As of March 31, 2024 December 31, 2023 Gross Gross carrying Accumulated Intangible carrying Accumulated Intangible amount amortization assets, net amount amortization assets, net $ $ $ $ $ $ Finite-lived intangible assets: Developed products 63,413 ( 8,913 ) 54,500 64,274 ( 7,807 ) 56,467 Other 8,987 ( 8,316 ) 671 8,987 ( 8,316 ) 671 Total finite-lived intangible assets 72,400 ( 17,229 ) 55,171 73,261 ( 16,123 ) 57,138 Developed products represent post-approval milestone payments under license and commercialization agreements. The Company is amortizing the developed products over the remainder of the respective product patent or the term of the commercialization agreements. Amortization expense for developed products is included in cost of sales - product in the accompanying consolidated statements of operations. Amortization expense for other intangible assets is included in operating expenses in the accompanying consolidated statements of operations. 16 Table of Contents The weighted-average life for each finite-lived intangible assets is approximately 12 years. Amortization expense was as follows: Three Months Ended March 31, 2024 2023 $ $ Amortization expense - Cost of sales - product 1,183 799 Amortization expense - Operating expense — 187 Total 1,183 986 Estimated amortization expense for each of the five succeeding years and thereafter, as of March 31, 2024 is as follows: Year Ending December 31, Cost of Sales - Product Operating Expenses Total $ $ $ 2024 (remainder of year) 3,533 67 3,600 2025 4,710 67 4,777 2026 4,710 67 4,777 2027 4,710 67 4,777 2028 4,710 67 4,777 2029 and thereafter 32,127 336 32,463 Total 54,500 671 55,171 8. Income Taxes Income tax expense was $ 7,724 and $ 11,492 for the three months ended March 31, 2024 and 2023, respectively. The Company is anticipating a lower annual effective tax rate in 2024 due to the forecasted jurisdictional mix of consolidated pre-tax earnings, which is expected to increase in jurisdictions where the Company has tax attributes to offset current tax expense. The income tax expense for the three months ended March 31, 2024 and 2023 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits and current China tax expense due to certain non-deductible expenses. On a quarterly basis, the Company evaluates the realizability of deferred tax assets by jurisdiction and assesses the need for a valuation allowance. In assessing the realizability of deferred tax assets, the Company considers historical profitability, evaluation of scheduled reversals of deferred tax liabilities, projected future taxable income and tax-planning strategies. 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, 2024, the Company will maintain a full valuation allowance against its net deferred tax assets. As of March 31, 2024, the Company had gross unrecognized tax benefits of $ 14,924 . 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 $ 660 in the three months ended March 31, 2024 primarily due to U.S. federal and state tax credits and incentives. 17 Table of Contents 9. Supplemental Balance Sheet Information Prepaid expenses and other current assets consist of the following: As of March 31, December 31, 2024 2023 $ $ Prepaid research and development costs 66,772 60,476 Prepaid manufacturing cost 42,225 42,066 Prepaid taxes 32,686 37,320 Other receivables 31,818 37,859 Short-term restricted cash 11,445 11,473 Prepaid insurance 7,899 8,872 Other current assets 38,896 56,799 Total 231,741 254,865 Other non-current assets consist of the following: As of March 31, December 31, 2024 2023 $ $ Prepayment of property and equipment (1) 30,834 4,144 Prepaid supply cost 13,044 18,122 Prepaid VAT 2,756 2,546 Rental deposits and other 6,151 8,195 Long-term restricted cash 2,621 2,711 Long-term investments (Note 4) 143,615 89,644 Total 199,021 125,362 (1) Includes payment for acquired land use right in Shanghai, China that was being transitioned to the Company as of March 31, 2024 (See Note 6). Accrued expenses and other payables consist of the following: As of March 31, December 31, 2024 2023 $ $ Compensation related 114,657 217,803 External research and development activities related 99,009 162,969 Commercial activities 74,747 87,572 Individual income tax and other taxes 47,229 30,083 Sales rebates and returns related 186,277 139,936 Other 47,519 55,368 Total 569,438 693,731 18 Table of Contents Other long-term liabilities consist of the following: As of March 31, December 31, 2024 2023 $ $ Deferred government grant income 32,939 34,204 Pension liability 14,428 14,995 Asset retirement obligation 1,108 1,127 Other 426 484 Total 48,901 50,810 19 Table of Contents 10. Debt The following table summarizes the Company’s short-term and long-term debt obligations as of March 31, 2024 and December 31, 2023: Lender Agreement Date Line of Credit Term Maturity Date Interest Rate As of March 31, 2024 December 31, 2023 $ RMB $ RMB China Construction Bank April 4, 2018 RMB 580,000 9 -year April 4, 2027 (1) 13,850 100,000 14,089 100,000 China Merchants Bank January 22, 2020 RMB 350,000 9 -year January 20, 2029 (2) 8,706 62,857 8,856 62,857 China Merchants Bank November 9, 2020 RMB 378,000 9 -year November 8, 2029 (3) 6,220 44,910 5,636 40,000 China Merchants Bank July 28, 2023 $ 380,000 1 -year December 25, 2024 (4) 300,000 2,166,065 300,000 2,129,321 China Minsheng Bank December 20, 2023 $ 150,000 1 -year December 19, 2024 7.3 % 150,000 1,083,032 150,000 1,064,660 China Industrial Bank March 21, 2024 RMB 675,000 364 -day March 27, 2025 (5) 93,488 675,000 — — China Merchants Bank June 5, 2023 RMB 400,000 1 -year June 4, 2024 3.2 % 55,400 400,000 56,356 400,000 HSBC Bank May 4, 2023 RMB 340,000 1 -year May 3, 2024 (6) 47,090 340,000 47,903 340,000 China Industrial Bank May 30, 2023 RMB 200,000 1 -year May 29, 2024 2.8 % 27,699 200,000 28,177 200,000 Shanghai Pudong Development Bank November 14, 2023 RMB 700,000 1 -year (7) 2.9 % 96,950 700,000 49,312 350,000 Other short-term debt (8) 27,562 199,000 28,037 199,000 Total short-term debt 826,965 5,970,864 688,366 4,885,838 China Construction Bank April 4, 2018 RMB 580,000 9 -year April 4, 2027 (1) 58,170 420,000 59,174 420,000 China Merchants Bank January 22, 2020 RMB 350,000 9 -year January 20, 2029 (2) 34,823 251,429 37,638 267,143 China Merchants Bank November 9, 2020 RMB 378,000 9 -year November 8, 2029 (3) 39,554 285,590 42,337 300,500 China CITIC Bank July 29, 2022 RMB 480,000 10 -year July 28, 2032 (9) 66,480 480,000 58,469 415,000 Total long-term bank loans 199,027 1,437,019 197,618 1,402,643 1. The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 4.5 % as of March 31, 2024. 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 was in the process of substituting the land use right with the real estate interest in BeiGene Guangzhou Factory as collateral of the loan as of March 31, 2024. 2. The outstanding borrowings bear floating interest rates benchmarking against prevailing interest rates of certain PRC financial institutions. The loan interest rate was 4.1 % as of March 31, 2024. The loan is secured by Guangzhou Factory’s second land use right and certain fixed assets in the second phase of the Guangzhou manufacturing facility’s build out. The Company repaid $ 2,189 (RMB 15,714 ) during the three months ended March 31, 2024. 3. The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 3.9 % as of March 31, 2024. 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 $ 1,390 (RMB 10,000 ) during the three months ended March 31, 2024. 4. The outstanding borrowings bear floating interest rates benchmarking the secured overnight financing rate. The loan interest rate was 7.2 % as of March 31, 2024. 5. The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 2.6 % as of March 31, 2024. 6. The outstanding borrowings bear floating interest rates benchmarking Hong Kong interbank market rate for RMB. The loan interest rate was 5.2 % as of March 31, 2024. 7. $ 48,475 (RMB 350,000 ) of the outstanding borrowings matures on November 21, 2024 and March 19, 2025, respectively. 8. During the two years ended December 31, 2023, 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 May 24, 2024. The weighted average interest rate for the short-term working capital loans was approximately 3.2 % as of March 31, 2024. 9. 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 Company drew down $ 9,053 (RMB 65,000 ) during the three months ended March 31, 2024. The weighted average loan interest rate was 3.9 % as of March 31, 2024. The loan is secured by BeiGene Suzhou Co., Ltd.’s land use right and certain fixed assets that will be placed into service upon completion of the small molecule manufacturing campus in Suzhou, China. 20 Table of Contents The Company has numerous financial and non-financial covenants on its debt obligations with various banks and other lenders. Some of these covenants include cross-default provisions that could require acceleration of repayment of loans in the event of default. However, the Company’s debt is primarily short-term in nature. Any acceleration would be a matter of months but may impact the Company’s ability to refinance debt obligations if an event of default occurs. As of March 31, 2024, the Company was in compliance with all covenants of its material debt agreements. Interest Expense Interest expense recognized for the three months ended March 31, 2024 and 2023 was $ 12,404 and $ 4,574 , respectively, among which, $ 9,209 and $ 344 was capitalized, respectively. 11. Product Revenue The Company’s product revenue is primarily derived from the sale of its internally developed products BRUKINSA in the U.S., China, and other regions, and tislelizumab in China; XGEVA ® , BLINCYTO ® and KYPROLIS ® in China under a license from Amgen; 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, 2024 and 2023. Three Months Ended March 31, 2024 2023 $ $ Product revenue – gross 944,464 509,605 Less: Rebates and sales returns ( 197,546 ) ( 99,314 ) Product revenue – net 746,918 410,291 The following table disaggregates net product sales by product for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 $ $ BRUKINSA ® 488,515 211,382 Tislelizumab 145,277 114,850 XGEVA ® 43,381 20,197 POBEVCY ® 16,633 14,326 BLINCYTO ® 14,366 10,946 KYPROLIS ® 14,111 4,943 REVLIMID ® 12,233 23,158 Other 12,402 10,489 Total product revenue – net 746,918 410,291 The following table presents the roll-forward of accrued sales rebates and returns for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 $ $ Balance at beginning of the period 139,936 41,817 Accrual 197,546 99,314 Payments ( 151,205 ) ( 62,399 ) Balance at end of the period 186,277 78,732 21 Table of Contents 12. Loss Per Share The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share: Three Months Ended March 31, 2024 2023 $ $ Numerator: Net loss ( 251,150 ) ( 348,431 ) Denominator: Weighted average shares outstanding for computing basic and diluted loss per share 1,355,547,626 1,354,164,760 Loss per share ( 0.19 ) ( 0.26 ) For the three months ended March 31, 2024 and 2023, 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. 13. Share-Based Compensation Expense 2016 Share Option and Incentive Plan In January 2016, in connection with the Company’s initial public offering (“IPO”) on the Nasdaq Stock Market, 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. 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. 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. 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. 2”), which became effective as of June 22, 2022, to increase the number of authorized shares available for issuance under the 2016 Plan by 66,300,000 ordinary shares, or 5 % of the Company’s outstanding shares as of March 31, 2022. As of March 31, 2024, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 5,166,822 . During the three months ended March 31, 2024, the Company granted options for 180,323 ordinary shares and restricted share units for 2,757,547 ordinary shares under the 2016 Plan. As of March 31, 2024, options and restricted share units for ordinary shares outstanding under the 2016 Plan totaled 60,637,471 and 65,397,709 , respectively. As of March 31, 2024, share-based awards to acquire 36,894,454 ordinary shares were available for future grant under the 2016 Plan. 22 Table of Contents 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 December 2018, the board of directors of the Company approved an 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. In June 2019, the board of directors adopted an amendment to revise the eligibility criteria for enrollment in the plan. In June 2021, the board of directors of the Company adopted the third amended and restated ESPP to include certain technical amendments under U.S. tax rules and to consolidate the changes in the prior amendment, effective on September 1, 2021. 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. As of March 31, 2024, 919,678 ordinary shares were available for future issuance under the ESPP. 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 February 29, 2024 1,021,397 $ 165.65 $ 12.74 $ 140.80 $ 10.83 $ 11,063 August 31, 2023 794,144 $ 207.55 $ 15.97 $ 176.42 $ 13.57 $ 10,777 February 28, 2023 930,582 $ 171.10 $ 13.16 $ 145.44 $ 11.19 $ 10,414 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. Share-Based Compensation Expense The following table summarizes total share-based compensation expense recognized for the three months ended March 31, 2024 and 2023: Three Months Ended March 31, 2024 2023 $ $ Research and development 38,045 34,028 Selling, general and administrative 50,669 41,360 Total 88,714 75,388 14. Accumulated Other Comprehensive Loss The movement of accumulated other comprehensive loss was as follows: Unrealized Foreign Currency Gains/(Losses) on Pension Translation Available-for-Sale Liability Adjustments Securities Adjustments Total $ $ $ $ Balance as of December 31, 2023 ( 87,987 ) 35 ( 11,494 ) ( 99,446 ) Other comprehensive (loss) income before reclassifications ( 32,163 ) ( 35 ) — ( 32,198 ) Net-current period other comprehensive (loss) income ( 32,163 ) ( 35 ) — ( 32,198 ) Balance as of March 31, 2024 ( 120,150 ) — ( 11,494 ) ( 131,644 ) 23 Table of Contents 15. Shareholders’ Equity BMS Settlement 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. In consideration for the shares being returned, the Company agreed to drop its claims 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. The receipt of the shares occurred on August 15, 2023. The Company recorded a noncash gain upon receipt of $ 362,917 , which represents the fair value on the day the shares were received. The gain was recorded within other income, net in the consolidated statements of operations. The shares were constructively retired as of December 31, 2023. The Company recorded the amount of the cancelled shares in excess of par to additional paid-in capital. 16. 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 statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of the subsidiary’s retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the condensed 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 enterprises and therefore are subject to the above-mentioned restrictions on distributable profits. 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 March 31, 2024 and December 31, 2023, the net cash of the Company’s PRC subsidiaries amounted to $ 1,660,848 and $ 1,837,790 , respectively . 17. Commitments and Contingencies Purchase Commitments As of March 31, 2024, the Company had non-cancellable purchase commitments amounting to $ 93,511 , of which $ 35,405 related to minimum purchase requirements for supply purchased from contract manufacturing organizations and $ 58,106 related to binding purchase obligations of inventory from Amgen. The Company does not have any minimum purchase requirements for inventory from Amgen. Capital Commitments The Company had capital commitments amounting to $ 61,577 for the acquisition of property, plant and equipment as of March 31, 2024, which were mainly for the Company’s manufacturing and clinical R&D campus in Hopewell, New Jersey, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and a new building for Beijing Innerway Bio-tech Co., Ltd. 24 Table of Contents 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 development services. As of March 31, 2024, the Company’s remaining co-development funding commitment was $ 457,031 . Funding Commitment The Company had committed capital related to two equity method investments in the amount of $ 15,054 . As of March 31, 2024, the remaining capital commitment was $ 8,905 and is expected to be paid from time to time over the investment period. 18. 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 primarily located in the U.S. and 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 revenues by geographic area are presented as follows: Three Months Ended March 31, 2024 2023 $ $ U.S. - total revenue 351,456 164,483 Product revenue 351,456 138,768 Collaboration revenue — 25,715 China- total revenue 320,376 247,681 Product revenue 315,662 246,906 Collaboration revenue 4,714 775 Europe- total revenue 66,860 30,521 Product revenue 66,840 19,501 Collaboration revenue 20 11,020 Rest of world- total revenue 12,960 5,116 Product revenue 12,960 5,116 Collaboration revenue — — Total Revenue 751,652 447,801 25 Table of Contents