Item 1. Financial Statements
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 Six Months Ended
June 30, June 30,
Note 2024 2023 2024 2023
$ $ $ $
Revenues
Product revenue, net 11 921,146 553,745 1,668,064 964,036
Collaboration revenue 3 8,020 41,516 12,754 79,026
Total revenues 929,166 595,261 1,680,818 1,043,062
Cost of sales - product 138,132 95,990 263,067 177,779
Gross profit 791,034 499,271 1,417,751 865,283
Operating expenses
Research and development 454,466 422,764 915,104 831,348
Selling, general and administrative 443,729 395,034 871,156 723,533
Amortization of intangible assets — 188 — 375
Total operating expenses 898,195 817,986 1,786,260 1,555,256
Loss from operations ( 107,161 ) ( 318,715 ) ( 368,509 ) ( 689,973 )
Interest income, net 13,225 15,070 29,385 31,086
Other expense, net ( 11,984 ) ( 63,818 ) ( 10,222 ) ( 45,515 )
Loss before income taxes ( 105,920 ) ( 367,463 ) ( 349,346 ) ( 704,402 )
Income tax expense 8 14,485 13,674 22,209 25,166
Net loss ( 120,405 ) ( 381,137 ) ( 371,555 ) ( 729,568 )
Net loss per share, basic and diluted 12 ( 0.09 ) ( 0.28 ) ( 0.27 ) ( 0.54 )
Weighted-average shares outstanding—basic and diluted 1,361,082,567 1,360,224,377 1,358,315,145 1,357,211,308
Net loss per American Depositary Share (“ADS”), basic and diluted 12 ( 1.15 ) ( 3.64 ) ( 3.56 ) ( 6.99 )
Weighted-average ADSs outstanding—basic and diluted 104,698,659 104,632,644 104,485,780 104,400,870
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands of U.S. Dollars (“$”))
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Net loss ( 120,405 ) ( 381,137 ) ( 371,555 ) ( 729,568 )
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments ( 9,236 ) ( 86,519 ) ( 41,399 ) ( 73,172 )
Pension liability adjustments 406 — 406 —
Unrealized holding (loss) income, net — 1,846 ( 35 ) 6,902
Comprehensive loss ( 129,235 ) ( 465,810 ) ( 412,583 ) ( 795,838 )
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BEIGENE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
As of
June 30, December 31,
Note 2024 2023
$ $
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents 2,592,655 3,171,800
Accounts receivable, net 529,449 358,027
Inventories, net 5 443,260 416,122
Prepaid expenses and other current assets 9 273,658 257,465
Total current assets 3,839,022 4,203,414
Property, plant and equipment, net 6 1,516,491 1,324,154
Operating lease right-of-use assets 103,633 95,207
Intangible assets, net 7 53,715 57,138
Other non-current assets 9 199,318 125,362
Total non-current assets 1,873,157 1,601,861
Total assets 5,712,179 5,805,275
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable 333,022 315,111
Accrued expenses and other payables 9 646,538 693,731
Tax payable 8 5,278 22,951
Operating lease liabilities, current portion 17,658 21,950
Research and development cost share liability, current portion 3 84,615 68,004
Short-term debt 10 851,657 688,366
Total current liabilities 1,938,768 1,810,113
Non-current liabilities:
Long-term bank loans 10 185,271 197,618
Operating lease liabilities, non-current portion 35,398 22,251
Deferred tax liabilities 8 15,942 16,494
Research and development cost share liability, non-current portion 3 119,012 170,662
Other long-term liabilities 9 51,533 50,810
Total non-current liabilities 407,156 457,835
Total liabilities 2,345,924 2,267,948
Commitments and contingencies 17
Shareholders’ equity:
Ordinary shares, $ 0.0001 par value per share; 9,500,000,000 shares authorized; 1,379,101,901 and 1,359,513,224 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
137 135
Additional paid-in capital 11,840,197 11,598,688
Accumulated other comprehensive loss 14 ( 140,474 ) ( 99,446 )
Accumulated deficit ( 8,333,605 ) ( 7,962,050 )
Total shareholders’ equity 3,366,255 3,537,327
Total liabilities and shareholders’ equity 5,712,179 5,805,275
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of U.S. Dollars (“$”))
(Unaudited)
Six Months Ended June 30,
Note 2024 2023
$ $
Operating activities:
Net loss ( 371,555 ) ( 729,568 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense 50,224 42,346
Share-based compensation expenses 13 219,304 178,693
Gain on deconsolidation of a subsidiary ( 3,735 ) —
Amortization of research and development cost share liability 3 ( 35,039 ) ( 22,669 )
Other items, net 5,413 2,930
Changes in operating assets and liabilities:
Accounts receivable ( 173,896 ) ( 131,923 )
Inventories ( 35,949 ) ( 53,598 )
Other assets ( 32,233 ) ( 30,627 )
Accounts payable 2,192 ( 32,678 )
Accrued expenses and other payables ( 28,256 ) ( 8,082 )
Deferred revenue 216 ( 72,577 )
Other liabilities ( 846 ) 88
Net cash used in operating activities ( 404,160 ) ( 857,665 )
Investing activities:
Purchases of property, plant and equipment ( 266,528 ) ( 247,055 )
Purchase of intangible asset ( 4,674 ) —
Proceeds from sale or maturity of investments 2,655 567,500
Purchase of in-process research and development ( 31,800 ) —
Other investing activities ( 20,516 ) ( 11,582 )
Net cash (used in) provided by investing activities ( 320,863 ) 308,863
Financing activities:
Proceeds from long-term loan 10 9,053 15,771
Repayment of long-term loan 10 ( 14,020 ) —
Proceeds from short-term loans 10 324,412 161,846
Repayment of short-term loans 10 ( 157,490 ) ( 66,574 )
Proceeds from option exercises and employee share purchase plan 20,355 35,169
Other financing activities 3,000 —
Net cash provided by financing activities 185,310 146,212
Effect of foreign exchange rate changes, net ( 28,340 ) ( 50,873 )
Net decrease in cash, cash equivalents, and restricted cash ( 568,053 ) ( 453,463 )
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 2,617,931 3,421,574
Supplemental cash flow information:
Cash and cash equivalents 2,592,655 3,410,368
Short-term restricted cash 23,155 9,693
Long-term restricted cash 2,121 1,513
Income taxes paid 45,636 32,529
Interest expense paid 24,148 10,015
Supplemental non-cash information:
Capital expenditures included in accounts payable and accrued expenses 115,564 95,404
Increase in equity investment from deconsolidation of a subsidiary 40,798 —
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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
Issuance of shares reserved for share option exercises 2,418,936 — — — — —
Exercise of options, ESPP and release of RSUs 17,158,596 1 4,491 — — 4,492
Share-based compensation — — 130,637 — — 130,637
Other comprehensive loss — — — ( 8,830 ) — ( 8,830 )
Net loss — — — — ( 120,405 ) ( 120,405 )
Balance at June 30, 2024 1,379,101,901 137 11,840,197 ( 140,474 ) ( 8,333,605 ) 3,366,255
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
Issuance 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
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 markets 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 a fully dedicated 3,000 + person clinical team that is largely CRO free, the majority of which are in the Americas, Europe, Australia, Japan and Korea.
Basis of presentation and consolidation
The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023, and the condensed consolidated statements of shareholders’ equity for the three and six months ended June 30, 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 and six months ended June 30, 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.
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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 six months ended June 30, 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.
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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 June 30, 2024 and December 31, 2023:
Quoted Price in Active Market for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs
As of June 30, 2024 (Level 1) (Level 2) (Level 3)
$ $ $
Cash equivalents
Money market funds 897,906 — —
Prepaid expenses and other current assets:
Convertible debt instrument — — 4,968
Other non-current assets (Note 4):
Equity securities with readily determinable fair values 1,440 115 —
Convertible debt instrument — — 4,773
Total 899,346 115 9,741
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 — —
Prepaid expenses and other current assets:
U.S. Treasury securities 2,600 — —
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. The Company’s investments in available-for-sale debt securities include U.S. Treasury 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 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 expense, net.
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As of June 30, 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 and six months ended June 30, 2024, the Company’s collaboration revenue consisted primarily of revenue generated under the Novartis broad markets agreement. For the three and six months ended June 30, 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 and six months ended June 30, 2024 and 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
Revenue from Collaborators $ $ $ $
Research and development service revenue — 13,563 — 20,380
Right to access intellectual property revenue — 26,248 — 52,497
Other 8,020 1,705 12,754 6,149
Total 8,020 41,516 12,754 79,026
Novartis
Tislelizumab Collaboration and License
In September 2023, the Company and Novartis agreed to mutually terminate the tislelizumab collaboration and license agreement. 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.
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No research and development service collaboration revenue was recognized in connection with the tislelizumab collaboration and license agreement during the three and six months ended June 30, 2024 due to termination of the agreement in 2023. The following table summarizes revenue recognized related to the sale of tislelizumab clinical supply to Novartis for the three and six months ended June 30, 2024 and research and development service revenue recognized for the three and six months ended June 30, 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Research and development service revenue — 11,770 — 16,796
Other (1)
2,113 1,344 2,113 5,013
Total 2,113 13,114 2,113 21,809
(1) Represents revenue recognized on final shipment of tislelizumab clinical supply to Novartis in conjunction with the former 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. 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 and six months ended June 30, 2024 and the terminated ociperlimab option, collaboration and license agreement for the three and six months ended June 30, 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Research and development service revenue — 1,792 — 3,583
Right to access intellectual property revenue — 26,248 — 52,497
China broad markets agreement 4,154 1,861 8,501 2,636
Total 4,154 29,901 8,501 58,716
In-Licensing Arrangements - Commercial
Amgen
During the three and six months ended June 30, 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.
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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, 2024 and 2023 were as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Research and development expense 22,482 5,457 35,966 23,274
Amortization of research and development cost share liability 21,903 5,271 35,039 22,669
Total amount due to Amgen for BeiGene’s portion of the development funding 44,385 10,728 71,005 45,943
As of
June 30, 2024
$
Remaining portion of development funding cap 412,647
As of June 30, 2024 and December 31, 2023, the research and development cost share liability recorded in the Company’s balance sheet was as follows:
As of
June 30, December 31,
2024 2023
$ $
Research and development cost share liability, current portion 84,615 68,004
Research and development cost share liability, non-current portion 119,012 170,662
Total research and development cost share liability 203,627 238,666
The total reimbursement paid under the commercial profit-sharing agreement for product sales is classified in the income statement for the three and six months ended June 30, 2024 and 2023 as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Cost of sales - product 9,590 4,011 18,159 1,184
Research and development ( 439 ) ( 1,769 ) ( 1,144 ) 1,311
Selling, general and administrative ( 21,100 ) ( 17,552 ) ( 39,253 ) ( 29,388 )
Total ( 11,949 ) ( 15,310 ) ( 22,238 ) ( 26,893 )
The Company purchases commercial inventory from Amgen to distribute in China. Inventory purchases amounted to $ 47,653 and $ 109,879 during the three and six months ended June 30, 2024, respectively, and $ 20,146 and $ 39,277 during the three and six months ended June 30, 2023, respectively. Net amounts payable to Amgen was $ 66,824 and $ 55,474 as of June 30, 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.
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Upfront and milestone payments incurred under these arrangements for the three and six months ended June 30, 2024 and 2023 are set forth below. All upfront and development milestones were expensed to research and development expense.
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
Payments due to collaboration partners Classification $ $ $ $
Upfront payments Research and development expense — — 27 —
Development milestones incurred Research and development expense 11,500 — 46,500 —
Total 11,500 — 46,527 —
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 June 30, 2024 and December 31, 2023 was as follows:
As of
June 30, December 31,
2024 2023
$ $
Short-term restricted cash 23,155 11,473
Long-term restricted cash 2,121 2,711
Total 25,276 14,184
In addition to the restricted cash balances above, the Company is required by the PRC securities law to use the proceeds from its 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 June 30, 2024, the Company had cash remaining related to the STAR Offering proceeds of $ 856,722 .
Investments in Equity Securities
The following table summarizes the Company’s investments in equity securities:
As of
June 30, December 31,
2024 2023
$ $
Equity securities with readily determinable fair values (1)
Fair value of Leap common stock 1,440 3,046
Fair value of Leap warrants 115 542
Equity securities without readily determinable fair values
Pi Health, Inc. (2) 40,798 —
Other
54,865 55,860
Equity-method investments
37,780 25,981
Total 134,998 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 expense, net.
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(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 expense, net during the six months ended June 30, 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 investments in equity securities recorded in other expense, net for the three and six months ended June 30, 2024 and 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Equity securities with readily determinable fair values
( 621 ) 470 ( 2,033 ) ( 636 )
Equity securities without readily determinable fair values — — ( 797 ) 1,081
Equity-method investments
( 4,017 ) ( 2,480 ) ( 4,873 ) ( 2,624 )
5. Inventories, Net
The Company’s inventories, net consisted of the following:
As of
June 30, December 31,
2024 2023
$ $
Raw materials 143,655 148,772
Work in process 59,499 39,098
Finished goods 240,106 228,252
Total inventories, net 443,260 416,122
6. Property, Plant and Equipment, Net
Property, plant and equipment, net are recorded at cost and consisted of the following:
As of
June 30, December 31,
2024 2023
$ $
Land 65,485 65,485
Building 304,854 231,656
Manufacturing equipment 227,146 186,856
Laboratory equipment 216,673 205,349
Leasehold improvement 60,382 60,124
Software, electronics and office equipment 67,649 83,281
Property, plant and equipment, at cost 942,189 832,751
Less: accumulated depreciation ( 289,114 ) ( 249,212 )
Construction in progress 863,416 740,615
Property, plant and equipment, net 1,516,491 1,324,154
The Company has made a significant investment in its newly opened manufacturing and R&D center in Hopewell, New Jersey. As of June 30, 2024, the Company had land and construction in progress of $ 677,126 related to the Hopewell facility, the majority of which will be put into service in the second half of 2024.
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In March 2024, the Company acquired a land use right and the facility currently being constructed on the land for $ 73,373 . The Company plans to complete the construction of the facility and build a research and development center on the land. Based on the relative fair values of the land use right and construction in progress, $ 28,699 of the total purchase price was allocated to the land use right and $ 44,674 was allocated to the construction in progress. In May 2024, the Company acquired additional construction in progress in connection with the properties for $ 22,637 . As of June 30, 2024, title of the land use right was 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 June 30, 2024 and will be transferred to operating lease right-of-use asset upon the closing of the transaction.
Depreciation expense was $ 23,754 and $ 47,864 for the three and six months ended June 30, 2024, respectively, and $ 21,307 and $ 40,332 for the three and six months ended June 30, 2023, respectively.
7. Intangible Assets
Intangible assets as of June 30, 2024 and December 31, 2023 are summarized as follows:
As of
June 30, 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 63,098 ( 10,054 ) 53,044 64,274 ( 7,807 ) 56,467
Other 8,987 ( 8,316 ) 671 8,987 ( 8,316 ) 671
Total finite-lived intangible assets 72,085 ( 18,370 ) 53,715 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.
The weighted-average life for each finite-lived intangible assets is approximately 12 years. Amortization expense was as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Amortization expense - Cost of sales - product
1,177 840 2,360 1,639
Amortization expense - Operating expense
— 188 — 375
Total 1,177 1,028 2,360 2,014
Estimated amortization expense for each of the five succeeding years and thereafter, as of June 30, 2024 is as follows:
Year Ending December 31, Cost of Sales - Product Operating Expenses Total
$ $ $
2024 (remainder of year)
2,348 67 2,415
2025 4,696 67 4,763
2026 4,696 67 4,763
2027 4,696 67 4,763
2028 4,696 67 4,763
2029 and thereafter 31,912 336 32,248
Total 53,044 671 53,715
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8. Income Taxes
Income tax expense was $ 14,485 and $ 22,209 for the three and six months ended June 30, 2024, respectively, and $ 13,674 and $ 25,166 for the three and six months ended June 30, 2023, respectively. The income tax expense for the three and six months ended June 30, 2024 and 2023 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits, current Switzerland tax expense based on year to date earnings, and current China tax expense due to certain non-deductible expenses.
On 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 June 30, 2024, the Company will maintain a full valuation allowance against its net deferred tax assets.
As of June 30, 2024, the Company had gross unrecognized tax benefits of $ 15,804 . 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 $ 880 and $ 1,540 in the three and six months ended June 30, 2024 primarily due to U.S. federal and state tax credits and incentives.
9. Supplemental Balance Sheet Information
Prepaid expenses and other current assets consist of the following:
As of
June 30, December 31,
2024 2023
$ $
Prepaid research and development costs 68,234 60,476
Prepaid manufacturing cost 32,986 42,066
Prepaid taxes 32,193 37,320
Other receivables 58,776 37,859
Short-term restricted cash 23,155 11,473
Prepaid insurance 10,158 8,872
Other current assets 48,156 59,399
Total 273,658 257,465
Other non-current assets consist of the following:
As of
June 30, December 31,
2024 2023
$ $
Prepayment of property and equipment (1) 34,335 4,144
Prepaid supply cost 12,487 18,122
Prepaid VAT 2,602 2,546
Rental deposits and other 8,002 8,195
Long-term restricted cash 2,121 2,711
Long-term investments (Note 4) 139,771 89,644
Total 199,318 125,362
(1) Includes payment for acquired land use right in Shanghai, China that was in the process of being transitioned to the Company as of June 30, 2024 (See Note 6).
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Accrued expenses and other payables consist of the following:
As of
June 30, December 31,
2024 2023
$ $
Compensation related 167,960 217,803
External research and development activities related 133,412 162,969
Commercial activities 70,641 87,572
Individual income tax and other taxes 48,466 30,083
Sales rebates and returns related 173,263 139,936
Other 52,796 55,368
Total 646,538 693,731
Other long-term liabilities consist of the following:
As of
June 30, December 31,
2024 2023
$ $
Deferred government grant income 32,021 34,204
Pension liability 14,639 14,995
Asset retirement obligation 1,101 1,127
Other 3,772 484
Total 51,533 50,810
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10. Debt
The following table summarizes the Company’s short-term and long-term debt obligations as of June 30, 2024 and December 31, 2023:
Lender Line of Credit Term Maturity Date Interest Rate As of
June 30, 2024 December 31, 2023
$ RMB $ RMB
China Construction Bank RMB 580,000 9 -year
April 4, 2027 (1) 15,136 110,000 14,089 100,000
China Merchants Bank RMB 350,000 9 -year
January 20, 2029 (2) 8,649 62,857 8,856 62,857
China Merchants Bank RMB 378,000 9 -year
November 8, 2029 (3) 6,848 49,765 5,636 40,000
China Merchants Bank $ 380,000 1 -year
(4) 380,000 2,761,628 300,000 2,129,321
China Minsheng Bank $ 150,000 1 -year
December 19, 2024 7.3 % 150,000 1,090,116 150,000 1,064,660
China Industrial Bank RMB 675,000 364 -day
March 27, 2025 (5) 92,880 675,000 — —
China Merchants Bank RMB 400,000 1 -year
June 5, 2025 3.0 % 55,040 400,000 56,356 400,000
HSBC Bank RMB 340,000 1 -year
May 5, 2025 (6) 46,784 340,000 47,903 340,000
China Industrial Bank RMB 200,000 1 -year
May 29, 2024 — — — 28,177 200,000
Shanghai Pudong Development Bank RMB 700,000 1 -year
(7) 2.9 % 96,320 700,000 49,312 350,000
Other short-term debt (8) — — 28,037 199,000
Total short-term debt 851,657 6,189,366 688,366 4,885,838
China Construction Bank RMB 580,000 9 -year
April 4, 2027 (1) 49,536 360,000 59,174 420,000
China Merchants Bank RMB 350,000 9 -year
January 20, 2029 (2) 32,434 235,714 37,638 267,143
China Merchants Bank RMB 378,000 9 -year
November 8, 2029 (3) 37,253 270,735 42,337 300,500
China CITIC Bank RMB 480,000 10 -year
July 28, 2032 (9) 66,048 480,000 58,469 415,000
Total long-term bank loans 185,271 1,346,449 197,618 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 4.2 % as of June 30, 2024. The loan is secured by BeiGene Guangzhou Factory’s property ownership certificate. The Company repaid $ 6,886 (RMB 50,000 ) during the six months ended June 30, 2024.
(2) The outstanding borrowings bear floating interest rates benchmarking against prevailing interest rates of certain PRC financial institutions. The loan interest rate was 3.7 % as of June 30, 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 $ 4,362 (RMB 31,429 ) during the six months ended June 30, 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 June 30, 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 $ 2,772 (RMB 20,000 ) during the six months ended June 30, 2024.
(4) The outstanding borrowings bear floating interest rates benchmarking the secured overnight financing rate. The loan interest rate was 7.2 % as of June 30, 2024. $ 300,000 of the borrowings matures on December 25, 2024, and $ 80,000 matures on January 27, 2025.
(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 June 30, 2024.
(6) The outstanding borrowings bear floating interest rates benchmarking Hong Kong interbank market rate for RMB. The loan interest rate was 5.7 % as of June 30, 2024.
(7) $ 48,160 (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. The Company repaid $ 27,476 (RMB 199,000 ) during the six months ended June 30, 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 six months ended June 30, 2024. The weighted average loan interest rate was 3.9 % as of June 30, 2024. The loan is secured by BeiGene Suzhou Co., Ltd.’s property ownership certificate of the small molecule manufacturing campus in Suzhou, China.
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 June 30, 2024, the Company was in compliance with all covenants of its material debt agreements.
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Interest Expense
Interest expense recognized for the three and six months ended June 30, 2024 was $ 13,233 and $ 25,637 , respectively, among which, $ 8,312 and $ 17,521 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.
11. Product Revenue
The Company’s product revenue is primarily derived from the sale of its internally developed products BRUKINSA in the U.S., Europe, 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 and six months ended June 30, 2024 and 2023.
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Product revenue – gross 1,167,155 667,328 2,111,619 1,176,933
Less: Rebates and sales returns ( 246,009 ) ( 113,583 ) ( 443,555 ) ( 212,897 )
Product revenue – net 921,146 553,745 1,668,064 964,036
The following table disaggregates net product sales by product for the three and six months ended June 30, 2024 and 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
BRUKINSA ®
637,399 308,276 1,125,914 519,658
Tislelizumab 158,410 149,464 303,687 264,314
XGEVA ®
55,054 23,968 98,435 44,165
BLINCYTO ®
19,131 14,578 33,497 25,524
KYPROLIS ®
15,936 11,052 30,047 15,995
POBEVCY ®
11,572 13,438 28,205 27,764
REVLIMID ®
9,133 21,847 21,366 45,005
Other 14,511 11,122 26,913 21,611
Total product revenue – net 921,146 553,745 1,668,064 964,036
The following table presents the roll-forward of accrued sales rebates and returns for the six months ended June 30, 2024 and 2023:
Six Months Ended
June 30,
2024 2023
$ $
Balance at beginning of the period 139,936 41,817
Accrual 443,555 212,897
Payments ( 410,228 ) ( 169,123 )
Balance at end of the period 173,263 85,591
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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 Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Numerator:
Net loss ( 120,405 ) ( 381,137 ) ( 371,555 ) ( 729,568 )
Denominator:
Weighted average shares outstanding for computing basic and diluted loss per share 1,361,082,567 1,360,224,377 1,358,315,145 1,357,211,308
Loss per share ( 0.09 ) ( 0.28 ) ( 0.27 ) ( 0.54 )
For the three and six months ended June 30, 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 a second amended and restated 2016 Plan to increase the number of shares authorized for issuance by 38,553,159 ordinary shares, as well as amend the cap on annual compensation to independent directors and make other changes. In June 2020, the shareholders approved an amendment 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 another 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. In June 2024, the shareholders of the Company approved a third amended and restated 2016 Plan (the “Amended 2016 Plan”) to comply with certain amendments of Chapter 17 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “HK Listing Rules”) and to increase the number of shares available for issuance thereunder by 92,820,000 ordinary shares.
As of June 30, 2024, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the Amended 2016 Plan totaled 5,166,848 . During the six months ended June 30, 2024, the Company granted options for 8,394,737 ordinary shares, restricted share units for 42,514,355 ordinary shares, and performance share units for 2,287,402 ordinary shares under the Amended 2016 Plan. As of June 30, 2024, options, restricted share units, and performance share units for ordinary shares outstanding under the Amended 2016 Plan totaled 67,378,462 , 87,422,244 , and 2,287,402 , respectively. As of June 30, 2024, share-based awards to acquire 82,059,496 ordinary shares were available for future grant under the Amended 2016 Plan.
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2018 Employee Share Purchase Plan
In June 2018, the shareholders of the Company approved the 2018 Employee Share Purchase Plan (the “ESPP”). Initially, 3,500,000 ordinary shares of the Company were reserved for issuance under the ESPP. In August 2018, in connection with the Company’s listing on the Hong Kong Stock Exchange, the board of directors approved an amended and restated ESPP to remove an “evergreen” share replenishment provision originally included in the plan and implemented other changes required by the HK Listing Rules. In December 2018, the shareholders of the Company approved a second amended and restated ESPP to increase the number of shares authorized for issuance by 3,855,315 ordinary shares to 7,355,315 ordinary shares. 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. In June 2024, the shareholders approved a fourth amended and restated ESPP (the “Amended ESPP”) to comply with certain amendments of Chapter 17 of the HK Listing Rules and to increase the number of shares available for sale thereunder by 5,070,000 shares. The Amended 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 June 30, 2024, 5,989,678 ordinary shares were available for future issuance under the Amended 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 and six months ended June 30, 2024 and 2023:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
Research and development 55,406 45,948 93,451 79,976
Selling, general and administrative 75,288 57,381 125,957 98,741
Total 130,694 103,329 219,408 178,717
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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 ( 41,399 ) ( 35 ) — ( 41,434 )
Amounts reclassified from accumulated other comprehensive income (loss) — — 406 406
Net-current period other comprehensive (loss) income ( 41,399 ) ( 35 ) 406 ( 41,028 )
Balance as of June 30, 2024 ( 129,386 ) — ( 11,088 ) ( 140,474 )
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 expense, 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.
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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 June 30, 2024 and December 31, 2023, the net cash of the Company’s PRC subsidiaries amounted to $ 1,378,872 and $ 1,837,790 , respectively .
17. Commitments and Contingencies
Purchase Commitments
As of June 30, 2024, the Company had non-cancellable purchase commitments amounting to $ 120,366 , of which $ 28,822 related to minimum purchase requirements for supply purchased from contract manufacturing organizations and $ 91,544 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 $ 62,576 for the acquisition of property, plant and equipment as of June 30, 2024, related to various facilities across the globe, including the manufacturing and clinical R&D campus in Hopewell, New Jersey.
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 June 30, 2024, the Company’s remaining co-development funding commitment was $ 412,647 .
Funding Commitment
The Company had committed capital related to two equity-method investments in the amount of $ 15,054 . As of June 30, 2024, the remaining capital commitment was $ 8,154 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.
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Total revenues by geographic area are presented as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
$ $ $ $
U.S. - total revenue 481,430 252,347 832,886 416,830
Product revenue 479,365 223,539 830,821 362,307
Collaboration revenue 2,065 28,808 2,065 54,523
China- total revenue 352,070 295,783 672,446 543,464
Product revenue 347,112 293,922 662,774 540,828
Collaboration revenue 4,958 1,861 9,672 2,636
Europe- total revenue 82,389 37,169 149,249 67,690
Product revenue 81,392 26,322 148,232 45,823
Collaboration revenue 997 10,847 1,017 21,867
Rest of world- total revenue 13,277 9,962 26,237 15,078
Product revenue 13,277 9,962 26,237 15,078
Collaboration revenue — — — —
Total Revenue 929,166 595,261 1,680,818 1,043,062
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