Quantitative and Qualitative Disclosures About Market Risk
−Removed: Interest and Credit Risk
−Removed: Financial instruments that are potentially subject to credit risk consist of cash and cash equivalents, restricted cash, short term investments and accounts receivable.
−Removed: We had cash and cash equivalents of $3.2 billion, $3.9 billion and $4.4 billion, restricted cash of $14.2 million, $5.5 million and $7.2 million, and short-term investments of $2.6 million, $0.7 billion and $2.2 billion, at December 31, 2023, 2022 and 2021, respectively.
−Removed: Our cash and cash equivalents are deposited with various major reputable global financial institutions.
−Removed: The deposits placed with these financial institutions are not protected by statutory or commercial insurance.
−Removed: In the event of bankruptcy of one of these financial institutions, we may be unlikely to claim our deposits back in full.
−Removed: We believe that these financial institutions are of high credit quality, and we continually monitor the credit worthiness of these financial institutions.
−Removed: The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significantly increasing risk.
−Removed: Our primary exposure to market risk relates to fluctuations in the interest rates, which are affected by changes in the general level of PRC and U.S.
−Removed: interest rates.
−Removed: Given the short‑term nature of our cash equivalents, we believe that a sudden change in market interest rates would not be expected to have a material impact on our financial condition and/or results of operation.
−Removed: We estimate that a hypothetical 100‑basis point increase or decrease in market interest rates would result in a decrease of $0.1 million or increase of $0.1 million, respectively, in the fair value of our investment portfolio as of December 31, 2023.
+Added: Interest Risk
We are exposed to risk related to changes in interest rates on our outstanding borrowings.
1 unchanged sentence
A 100-basis point increase in interest rates as of December 31, 2024 would increase our annual pre-tax interest expense by approximately $7.2 million.
−Removed: We do not believe that our cash, cash equivalents, and short‑term investments have significant risk of default or illiquidity.
−Removed: While we believe our cash, cash equivalents, and short-term investments do not contain excessive risk, we cannot provide absolute assurance that in the future investments will not be subject to adverse changes in market value.
−Removed: We had accounts receivable, net of $358.0 million, $173.2 million and $483.1 million at December 31, 2023, 2022 and 2021, respectively.
−Removed: Accounts receivable at December 31, 2021 included the upfront fee from Novartis of $300.0 million under the ociperlimab agreement.
−Removed: Accounts receivable, net represent amounts arising from product sales and amounts due from our collaboration partners.
−Removed: We monitor economic conditions to identify facts or circumstances that may indicate receivables are at risk of collection.
−Removed: To date, we have not experienced any significant losses with respect to the collection of our accounts receivable.
−Removed: Currency Convertibility Risk
−Removed: A significant portion of our expenses, assets, and liabilities are denominated in RMB.
−Removed: In 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”).
−Removed: However, the unification of exchange rates does not imply that the RMB may be readily convertible into U.S.
−Removed: dollars or other foreign currencies.
−Removed: All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC.
−Removed: Approvals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.
−Removed: Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market.
Foreign Currency Exchange Rate Risk
−Removed: We are exposed to foreign exchange risk arising from various currency exposures.
−Removed: Our reporting currency is the U.S.
−Removed: dollar, but a portion of our operating transactions and assets and liabilities are in other currencies, such as RMB, Euro, and Australian dollar.
+Added: China Exchange Rate Regime
RMB is not freely convertible into foreign currencies for capital account transactions.
+Added: The State Administration of Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies.
The value of RMB against the U.S.
2 unchanged sentences
The RMB compared to the U.S.
−Removed: dollar depreciated approximately 2.8%, depreciated approximately 8.2%, and appreciated approximately 2.3% for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: dollar depreciated approximately 2.8% for both the years ended December 31, 2024 and 2023, and depreciated approximately 8.2% for the year ended December 31, 2022, respectively.
It is difficult to predict how market forces or PRC or U.S.
1 unchanged sentence
dollar in the future.
−Removed: To the extent that we need to convert U.S.
−Removed: dollars into RMB for capital expenditures, working capital and other business purposes, appreciation of RMB against the U.S.
−Removed: dollar would have an adverse effect on the RMB amount we would receive from the conversion.
−Removed: Conversely, if we decide to convert RMB into U.S.
−Removed: dollars for the purpose of making payments for dividends on our ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of the U.S.
−Removed: dollar against RMB would have a negative effect on the U.S.
−Removed: dollar amount available to us.
−Removed: In addition, a significant depreciation of the RMB against the U.S.
+Added: Transactional Risk
+Added: We are exposed to foreign exchange risk arising from various currency exposures when we enter into transactions denominated in foreign currencies.
+Added: Our reporting currency is the U.S.
+Added: dollar, and our most significant functional currencies are the U.S.
+Added: dollar and the RMB.
+Added: A portion of our operating transactions and monetary assets and liabilities are in currencies other than the U.S.
+Added: dollar and RMB, primarily the U.S.
+Added: dollar against the RMB, Euro, and Australian dollar.
+Added: During the years ended December 31, 2024, 2023 and 2022, we recognized foreign exchange losses of $16.0 million, $64.8 million and $233.8 million, respectively, resulting from the strengthening of the U.S.
+Added: dollar compared to the RMB and the revaluation impact of RMB-denominated deposits held in U.S.
+Added: dollar functional currency entities, including the Parent Company.
+Added: As of December 31, 2024, the Parent Company held RMB-denominated deposits of $220.4 million.
+Added: A hypothetical 10% appreciation in the U.S.
+Added: dollar exchange rate compared with the RMB as of December 31, 2024 would have resulted in an increase in foreign exchange loss of approximately $20.0 million.
+Added: Translational Risk
+Added: We also face foreign currency exposure that arises from translating the results of our global operations to the U.S.
+Added: dollar at exchange rates that have fluctuated from the beginning of the period, primarily the RMB against the U.S.
+Added: A significant depreciation of the RMB against the U.S.
dollar may significantly reduce the U.S.
1 unchanged sentence
Further, volatility in exchange rate fluctuations may have a significant impact on the foreign currency translation adjustments recorded in other comprehensive income (loss).
−Removed: We have not used derivative financial instruments to hedge exposure to foreign exchange risk.
+Added: We have not used derivative financial instruments to reduce the effect of fluctuating currency exchange rates.
Effects of Inflation
−Removed: Inflation generally affects us by increasing our cost of labor and clinical development costs.
+Added: Inflation generally affects us by increasing our cost of labor and clinical trial costs.
We do not believe that inflation has had a material effect on our results of operations during the year ended December 31, 2024.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.