What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-12 · 141 added, 234 removed, 203 unchanged (65% of the section changed)

40 unchanged sentences

Non-GAAP Financial Measures

We provide certain financial measures that are not defined under accounting principles generally accepted in the United States of America (“GAAP”), commonly referred to as non-GAAP financial measures, including Adjusted Operating Expenses and Adjusted Income (Loss) from Operations and certain other non-GAAP measures, each of which include adjustments to GAAP figures.

We provide certain financial measures that are not defined under accounting principles generally accepted in the United States of America (“GAAP”), commonly referred to as non-GAAP financial measures, including Adjusted Operating Expenses, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Earnings Per Share and certain other non-GAAP measures, each of which include adjustments to GAAP figures.

These non-GAAP measures are intended to provide additional information on our operating performance.

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Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred.

Non-GAAP adjustments are tax effected to the extent there is US GAAP current tax expense.

The Company currently records a valuation allowance on its net deferred tax assets, so there is no net impact recorded for deferred tax effects.

We maintain an established non-GAAP policy that guides the determination of what items may be excluded in non-GAAP financial measures.

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The non-GAAP financial measures used by BeiGene may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.

BeiGene’s strong third-quarter results underscore the Company’s global oncology leadership driven by our unique R&D and clinical advantages as well as the tremendous launch trajectory of BRUKINSA.

In the U.S., BRUKINSA, with the broadest label of any BTK inhibitor, is now the leader in new patient starts in both frontline and relapsed/refractory (R/R) CLL in addition to all other approved B-cell malignancies.

As the cornerstone of our hematology franchise, BRUKINSA shows tremendous promise for patients as a monotherapy and as a backbone for best-in-class combinations with our late-stage BCL2 inhibitor, sonrotoclax, and BTK degrader BGB-16673.

In the solid tumor area, we’re expanding access to our PD-1 inhibitor, TEVIMBRA, for patients worldwide and building global commercial capabilities to support our prolific pipeline of exciting potential cancer medicines.

We are laying the foundation for future franchises in breast, lung, and gastrointestinal cancers across three signature platform technologies including multi-specific antibodies, protein degraders, and antibody-drug conjugates.

This progress not only highlights our achievements but also emphasizes our commitment to positively impacting patients' lives globally, fostering hope and advancements in the fight against cancer.

Key highlights for the third quarter of 2024 are as follows:

• Continued financial progress with $1 billion in quarterly total revenue, reduced GAAP loss and second consecutive quarter of positive non-GAAP operating income;

• Strengthened franchise leadership in chronic lymphocytic leukemia (CLL) with foundational therapy BRUKINSA, global revenue of $690 million, rapidly progressing pivotal programs for late-stage hematology pipeline;

• Expanded oncology pipeline with four new molecular entities (NMEs) entering the clinic this quarter (eight year-to-date);

reaffirmed on track to achieve goal to enter 10+ by end of year;

in-house innovative “Fast to Proof of Concept” strategy quickly explores the clinical potential of molecules in parallel with industry leading speed of execution.

We achieved GAAP profitability in the first quarter of 2025 with continued global revenue growth.

In the U.S., BRUKINSA remains the leader in new CLL patient starts across all lines of therapy, and for the first time has become the overall BTKi market share leader.

We’ve made progress across our late-stage hematology and solid tumor pipelines, with multiple proof-of-concept readouts expected this year across our broad portfolio of antibody-drug conjugates, multispecific antibodies and targeted protein degraders.

Key highlights for the first quarter of 2025 are as follows:

• First quarter 2025 total revenues increased 49% to $1.1 billion with BRUKINSA® (zanubrutinib) global sales increasing 62%to $792 million on strong demand growth versus first quarter 2024

• Achieved GAAP profitability and significantly improved operating cash flow

• Advanced late-stage hematology and solid tumor pipelines with plan to host Investor R&D Day on June 26

• Secured shareholder approval to rename the Company to BeOne Medicines Ltd.

and redomicile to Switzerland

Recent Developments

Recent Business Developments

On October 21, 2024, we announced that the Committee for Medicinal Products for Human Use of the European Medicines Agency issued positive opinions recommending an extended authorization for TEVIMBRA in gastric or gastroesophageal junction adenocarcinoma and esophageal squamous cell carcinoma (“ESCC”).

On October 4, 2024, we announced that TEVIMBRA ® (tislelizumab-jsgr) is now available for commercial sale in the U.S.

for the treatment of adult patients with unresectable or metastatic ESCC after prior systemic chemotherapy that did not include a PD-(L)1 inhibitor, and subsequently dosed our first TEVIMBRA patient in the U.S.

On September 17, 2024, we announced that the Israeli Ministry of Health approved TEVIMBRA as monotherapy for the treatment of adult patients with unresectable or metastatic oesophageal squamous cell carcinoma after prior systemic chemotherapy.

On August 26, 2024, we announced that the FDA granted Fast Track Designation to BGB-16673, an orally available investigational BTK targeting chimeric degradation activation compound, for adult patients with relapsed or refractory CLL or

small lymphocytic lymphoma who have been previously treated with at least two prior lines of therapy, including BTK inhibitor and BCL2 inhibitor.

On April 29, 2025, we announced that the U.S.

Patent and Trademark Office rendered a Final Written Decision invalidating all claims of Pharmacyclics LLC’s U.S.

11,672,803 (the “‘803 patent”) that were challenged by BeiGene in a post-grant review (“PGR”) proceeding.

On April 3, 2025, we announced the discontinuation of our clinical development program for ociperlimab (BGB-A1217), an anti-TIGIT antibody, as a potential treatment for lung cancer.

On March 31, 2025, we announced the Committee for Medicinal Products for Human Use of the European Medicines Agency issued a positive opinion recommending approval of TEVIMBRA ® (tislelizumab), in combination with etoposide and platinum chemotherapy, as a first-line treatment for adult patients with extensive-stage small cell lung cancer.

On March 4, 2025, we announced the U.S.

Food and Drug Administration has approved TEVIMBRA (tislelizumab-jsgr), in combination with platinum-containing chemotherapy, for the first-line treatment of adults with unresectable or metastatic esophageal squamous cell carcinoma whose tumors express PD-L1 (≥1).

Results of Operations

The following table summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended Nine Months Ended

September 30, Change September 30, Change

The following table summarizes our results of operations for the three months ended March 31, 2025 and 2024:

Three Months Ended

March 31, Change

2025 2024 $ %

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Total operating expenses 941,175 888,065 53,110 6.0 %

Loss from operations (120,265) (133,968) 13,703 (10.2) % (488,774) (823,941) 335,167 (40.7) %

Income (loss) from operations 11,102 (261,348) 272,450 (104.2) %

Interest income, net 5,848 16,160 (10,312) (63.8) %

Other income, net 3,950 1,762 2,188 124.2 %

(Loss) income before income taxes (98,304) 229,338 (327,642) (142.9) % (447,650) (475,064) 27,414 (5.8) %

Income (loss) before income taxes 20,900 (243,426) 264,326 (108.6) %

Income tax expense 19,630 7,724 11,906 154.1 %

Net (loss) income $ (121,350) $ 215,413 $ (336,763) (156.3) % $ (492,905) $ (514,155) $ 21,250 (4.1) %

Comparison of the Three Months Ended September 30, 2024 and 2023

Total revenue increased to $1,001.6 million for the three months ended September 30, 2024, from $781.3 million for the three months ended September 30, 2023, due to an increase in sales of BRUKINSA, tislelizumab, and our in-licensed products from Amgen, partially offset by a decrease in collaboration revenue.

Collaboration revenue decreased due to termination of the Novartis collaborations in the prior year.

The following table summarizes the components of revenue for the three months ended September 30, 2024 and 2023, respectively:

Three Months Ended

September 30, Changes

2024 2023 $ %

(dollars in thousands)

Product revenue $ 993,447 $ 595,290 $ 398,157 66.9 %

Collaboration revenue:

Research and development service revenue — 59,052 (59,052) (100.0) %

Right to access intellectual property revenue — 51,978 (51,978) (100.0) %

Material rights revenue — 71,980 (71,980) (100.0) %

Other 8,152 3,008 5,144 171.0 %

Total collaboration revenue 8,152 186,018 (177,866) (95.6) %

Total Revenue $ 1,001,599 $ 781,308 $ 220,291 28.2 %

Net income (loss) $ 1,270 $ (251,150) $ 252,420 (100.5) %

Comparison of the Three Months Ended March 31, 2025 and 2024

Total revenue increased to $1,117.3 million for the three months ended March 31, 2025, from $751.7 million for the three months ended March 31, 2024, due to increased sales of BRUKINSA, TEVIMBRA, and our in-licensed products from Amgen.

Net product revenue consisted of the following:

Three Months Ended

September 30, Changes

March 31, Changes

2025 2024 $ %

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13,745 16,633 (2,888) (17.4) %

11,103 14,960 (3,857) (25.8) %

Other 17,900 24,635 (6,735) (27.3) %

Total product revenue $ 1,108,530 $ 746,918 $ 361,612 48.4 %

Net product revenue increased 66.9% to $993.4 million for the three months ended September 30, 2024, compared to $595.3 million in the prior-year period, primarily due to continued increases in sales of BRUKINSA globally, driven by significant growth in the U.S.

In addition, product revenues in the third quarter of 2024 were positively impacted by sales of in-licensed products from Amgen in China and tislelizumab.

Global revenue for BRUKINSA totaled $690.3 million in the third quarter, representing a 93.0% increase compared to the prior-year period;

revenue for BRUKINSA totaled $503.7 million in the third quarter, compared to $270.1 million in the prior-year period, representing growth of 86.5%, due to quarter over quarter demand growth coming primarily from expanded use in CLL as BRUKINSA continued to gain share in CLL new patient starts.

BRUKINSA revenue in Europe totaled $97.3 million in the third quarter, compared to $30.7 million in the prior-year period, representing growth of 217.2%, driven by increased market share across all major markets, including Germany, Italy, Spain, France and the UK.

Net product revenue increased 48.4% to $1,108.5 million for the three months ended March 31, 2025, compared to $746.9 million in the prior-year period, primarily due to increased sales of BRUKINSA globally, driven by continued growth in the U.S.

In addition, product revenues in the first quarter of 2025 were positively impacted by sales of TEVIMBRA and in-licensed products from Amgen.

Global revenue for BRUKINSA totaled $791.7 million in the first quarter, representing a 62.1% increase compared to the prior-year period;

revenue for BRUKINSA totaled $563.2 million in the first quarter, compared to $351.5 million in the prior-year period, representing growth of 60.2%, driven primarily by demand, with the quarter over quarter growth coming primarily from expanded use in CLL as BRUKINSA continued to gain share as the leader in new patient starts in the U.S.

in CLL and all other approved indications.

BRUKINSA revenue in Europe totaled $115.9 million in the first quarter, compared to $66.8 million in the prior-year period, representing growth of 73.4%, driven by increased market share across all major European markets, including Germany, Italy, Spain, France and the UK.

BRUKINSA revenue in China totaled $81.1 million, representing growth of 41.3%.

BRUKINSA rest of world revenue totaled $21.4 million in the third quarter, representing growth of 125.0% compared to the prior-year period.

Revenue for tislelizumab in China totaled $162.9 million in the third quarter, compared to $144.4 million in the prior-year period, representing a 12.8% increase.

Certain additional tislelizumab indications are eligible for 2025 NRDL inclusion.

We do not believe price reductions resulting from inclusion, if any, will be significant.

Revenue for Amgen products in China totaled $101.6 million in the third quarter, compared to $50.4 million in the prior-year period, representing a 101.5% increase, driven primarily by increased XGEVA sales volume.

Collaboration revenue totaled $8.2 million for the three months ended September 30, 2024, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement.

Collaboration revenue totaled $186.0 million for the three months ended September 30, 2023, recognized from deferred revenue associated with the former Novartis tislelizumab and ociperlimab collaborations.

Gross margin on global product sales increased to $823.0 million for the three months ended September 30, 2024, compared to $499.0 million in the prior-year period, primarily due to increased product sales in the current year period.

Gross margin as a percentage of product sales decreased to 82.8% for the three months ended September 30, 2024, from 83.8% in the comparable period of the prior year.

The decrease is the result of accelerated depreciation expense of $16.9 million resulting from the move to more efficient, larger scale production lines for tislelizumab, with a similar amount to be incurred in the fourth quarter related to this move.

On an adjusted basis, gross margin as a percentage of product sales increased to 84.9%, from 84.4% in the comparable period of the prior year due to proportionally higher sales mix of global BRUKINSA compared to other products in the portfolio.

BRUKINSA rest of world revenue totaled $31.4 million in the first quarter, representing growth of 145.4% compared to the prior-year period.

Revenue for TEVIMBRA totaled $171.2 million in the first quarter, compared to $145.3 million in the prior-year period, representing a 17.8% increase.

Revenue for Amgen products in China totaled $114.1 million in the first quarter, compared to $71.9 million in the prior-year period, representing a 58.7% increase, driven primarily by increased XGEVA ® sales volume.

Collaboration revenue totaled $8.7 million and $4.7 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement and royalty revenue under the Amgen collaboration.

Gross margin on global product sales increased to $943.5 million for the three months ended March 31, 2025, compared to $622.0 million in the prior-year period, primarily due to increased product sales in the current year period.

Gross margin as a percentage of product sales increased to 85.1% for the three months ended March 31, 2025, from 83.3% in the comparable period of the prior year.

The gross margin percentage increased due to a proportionally higher sales mix of global BRUKINSA compared to other products in our portfolio.

Gross margin also benefited from cost of sales productivity improvements for both BRUKINSA and TEVIMBRA.

On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 85.5%, from 83.7% in the comparable period of the prior year.

Research and Development Expense

Research and development expense increased by $42.9 million, or 9.5%, to $496.2 million for the three months ended September 30, 2024 from $453.3 million for the three months ended September 30, 2023.

The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended September 30, 2024 and 2023, respectively:

Research and development expense increased by $21.2 million, or 4.6%, to $481.9 million for the three months ended March 31, 2025 from $460.6 million for the three months ended March 31, 2024.

The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended

September 30, Changes

March 31, Changes

2025 2024 $ %

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$ 421,195 $ 405,440 $ 15,755 3.9 %

Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended September 30, 2024 totaled $33.6 million, of which $17.0 million was recorded as R&D expense.

Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended March 31, 2025 totaled $40.5 million, of which $20.7 million was recorded as R&D expense.

The remaining $19.8 million was recorded as a reduction of the R&D cost share liability.

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Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.

The increase in external research and development expenses in the third quarter was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, slightly offset by lower development upfront and milestone fees.

The increase in external research and development expenses in the first quarter was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, including Sonrotoclax (BCL2i), and slightly offset by lower development upfront and milestone fees.

Internal research and development expense increased modestly by $1.9 million, or 0.6%, to $291.1 million, and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend.

Included within internal research and development expense for the three months ended September 30, 2024 is $24.9 million of accelerated depreciation expense related to the move of clinical production to larger, more efficient production lines with approximately $2.0 million remaining to be incurred in the fourth quarter.

Selling, General and Administrative Expense

Three Months Ended

September 30, Changes

March 31, Changes

2025 2024 $ %

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Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.

Selling, general and administrative expense increased by $89.5 million, or 24.5%, to $455.2 million for the three months ended September 30, 2024, from $365.7 million for the three months ended September 30, 2023.

The increase was primarily attributable to investing in the expansion of our commercial activities to support our product launches, primarily BRUKINSA in the U.S.

and Europe to drive continued revenue and margin expansion.

Selling, general and administrative expenses as a percentage of product sales were 45.8% in the third quarter of 2024 compared to 61.4% in the prior-year period.

We expect continued investment growth in selling and marketing expenses as our product sales increase.

Selling, general and administrative expense increased by $31.9 million, or 7.5%, to $459.3 million for the three months ended March 31, 2025, from $427.4 million for the three months ended March 31, 2024.

The increase was primarily attributable to continued investment in the global commercial expansion of BRUKINSA primarily in the U.S.

Selling, general and administrative expenses as a percentage of product sales were 41.4% in the first quarter of 2025 compared to 57.2% in the prior-year period.

We expect continued investment in selling and marketing activities as our product sales increase.

Interest Income, Net

Interest income, net decreased by $16.0 million, or 60.1%, to $10.6 million for the three months ended September 30, 2024, from $26.6 million for three months ended September 30, 2023.

Interest income, net decreased by $10.3 million, or 63.8%, to $5.8 million for the three months ended March 31, 2025, from $16.2 million for three months ended March 31, 2024.

The decrease in interest income, net, was primarily attributable to decreased interest income resulting from lower interest rates on our cash and cash equivalents balance.

1 unchanged sentence

Other Income, Net

Other income, net was $11.3 million for the three months ended September 30, 2024, primarily due to foreign exchange gains.

For the three months ended September 30, 2023, other income, net was $336.7 million, primarily due to the noncash gain recorded for the receipt of ordinary shares resulting from the BMS settlement and government subsidy income, partially offset by foreign exchange losses resulting from the strengthening of the U.S.

dollar compared to the RMB in the period and the revaluation impact of foreign currencies held in U.S.

functional currency subsidiaries and unrealized losses on our equity investments.

Income Tax Expense

Income tax expense was $23.0 million for the three months ended September 30, 2024 as compared to $13.9 million for the three months ended September 30, 2023.

The income tax expense for the three months ended September 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.

Comparison of the Nine Months Ended September 30, 2024 and 2023

Total revenue increased to $2,682.4 million, or 47.0%, for the nine months ended September 30, 2024, from $1,824.4 million for the nine months ended September 30, 2023, primarily due to increased sales of our internally developed products, BRUKINSA and tislelizumab, as well as increased sales of in-licensed products, most notably from the Amgen products.

The following table summarizes the components of revenue for the nine months ended September 30, 2024 and 2023, respectively:

Nine Months Ended

September 30, Changes

2024 2023 $ %

(dollars in thousands)

Product revenue $ 2,661,511 $ 1,559,326 $ 1,102,185 70.7 %

Collaboration revenue:

Research and development service revenue — 79,432 (79,432) (100.0) %

Right to access intellectual property revenue — 104,475 (104,475) (100.0) %

Material rights revenue — 71,980 (71,980) (100.0) %

Other 20,906 9,157 11,749 128.3 %

Total collaboration revenue 20,906 265,044 (244,138) (92.1) %

Total Revenue $ 2,682,417 $ 1,824,370 $ 858,047 47.0 %

Net product revenue consisted of the following:

Nine Months Ended

September 30, Changes

2024 2023 $ %

(dollars in thousands)

$ 1,816,192 $ 877,353 $ 938,839 107.0 %

467,038 408,666 58,372 14.3 %

161,880 68,621 93,259 135.9 %

53,712 40,394 13,318 33.0 %

48,019 27,096 20,923 77.2 %

40,398 41,894 (1,496) (3.6) %

32,469 59,965 (27,496) (45.9) %

Other 41,803 35,337 6,466 18.3 %

Total product revenue $ 2,661,511 $ 1,559,326 $ 1,102,185 70.7 %

Net product revenue increased 70.7% to $2,661.5 million for the nine months ended September 30, 2024, compared to $1,559.3 million in the prior-year period, primarily due to increased sales of BRUKINSA in the U.S.

and China and increased sales of tislelizumab in China.

In addition, there were increased sales of our in-licensed products from Amgen.

Global revenue for BRUKINSA totaled $1,816.2 million in the nine months ended September 30, 2024, representing a 107.0% increase compared to the prior-year period.

revenue for BRUKINSA totaled $1,334.6 million in the nine months ended September 30, 2024, compared to $632.4 million in the prior-year period, representing growth of 111.0%.

volume growth continued to accelerate in the period due primarily to demand growth coming from expanded use in CLL as BRUKINSA continued to gain share in CLL new patient starts.

BRUKINSA revenue in Europe totaled $245.5 million in the nine months ended September 30, 2024, representing growth of 221.0% compared to the prior-year period, driven by continued gains in market share across all major markets.

Revenue for tislelizumab in China totaled $466.4 million in the nine months ended September 30, 2024, compared to $408.7 million representing a 14.1% increase compared to the prior-year period.

In the nine months ended September 30, 2024, new patient demand volume resulting from broader reimbursement and further expansion of our salesforce and hospital listings continued to drive increased market penetration and market share for tislelizumab.

Certain additional tislelizumab indications are eligible for 2025 NRDL inclusion.

We do not believe price reductions resulting from inclusion, if any, will be significant.

Revenue for Amgen products in China totaled $263.6 million in the nine months ended September 30, 2024, compared to $136.1 million in the prior-year period, driven primarily by increased XGEVA demand since the NRDL inclusion.

Collaboration revenue totaled $20.9 million for the nine months ended September 30, 2024, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement.

Collaboration revenue totaled $265.0 million for the nine months ended September 30, 2023, recognized from deferred revenue associated with the former Novartis tislelizumab and ociperlimab collaborations.

Gross margin on product sales increased to $2,228.0 million for the nine months ended September 30, 2024, compared to $1,285.2 million in the prior-year period, primarily due to increased product revenue in the current year period.

On a GAAP basis, gross margin as a percentage of product sales increased to 83.7% for the nine months ended September 30, 2024, from 82.4% in the comparable period of the prior year.

The increase is primarily due to a proportionally higher sales mix of global BRUKINSA compared to other products in the portfolio, slightly offset by the impact of accelerated depreciation expense of $16.9 million resulting from the move to more efficient, larger scale production lines for tislelizumab, with a similar amount to be incurred in the fourth quarter related to this move.

On an adjusted basis, which does not include the accelerated depreciation, gross margin as a percentage of product sales increased to 84.8% for the nine months ended September 30, 2024, from 83.0% in the comparable period of the prior year.

Research and Development Expense

Research and development expense increased by $126.7 million, or 9.9%, to $1,411.3 million for the nine months ended September 30, 2024 from $1,284.6 million for the nine months ended September 30, 2023.

The following table summarizes external clinical, external non-clinical and internal research and development expense for the nine months ended September 30, 2024 and 2023, respectively:

Nine Months Ended

September 30, Changes

2024 2023 $ %

(dollars in thousands)

External research and development expense:

Cost of development programs $ 396,659 $ 384,520 $ 12,139 3.2 %

Upfront license and development milestone fees 51,528 15,000 36,528 243.5 %

Amgen co-development expense 1

52,981 39,106 13,875 35.5 %

Total external research and development expenses 501,168 438,626 62,542 14.3 %

Internal research and development expenses 910,115 845,981 64,134 7.6 %

Total research and development expenses $ 1,411,283 $ 1,284,607 $ 126,676 9.9 %

Adjusted research and development expenses 2

$ 1,193,494 $ 1,121,577 $ 71,917 6.4 %

Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the nine months ended September 30, 2024 totaled $104.6 million, of which $53.0 million was recorded as R&D expense.

The remaining $51.6 million was recorded as a reduction of the R&D cost share liability.

Adjusted research and development expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items.

Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.

The increase in external research and development expenses in the nine months ended September 30, 2024 was primarily attributable to higher development milestone fees, increases in Amgen co-development expense, and higher external clinical trial costs.

Internal research and development expense increased $64.1 million, or 7.6%, to $910.1 million and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities.

Included within internal research and development expenses for the nine months ended September 30, 2024 is $24.9 million of accelerated depreciation expense related to the move of clinical production to larger, more efficient production lines with approximately $2.0 million remaining to be incurred in the fourth quarter.

Selling, General and Administrative Expense

Nine Months Ended

September 30, Changes

2024 2023 $ %

(dollars in thousands)

Selling, general and administrative expenses $ 1,326,379 $ 1,089,616 $ 236,763 21.7 %

Adjusted selling, general and administrative expenses 1

$ 1,116,805 $ 923,254 $ 193,551 21.0 %

Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items.

Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items.

Selling, general and administrative expense increased by $236.8 million, or 21.7%, to $1,326.4 million, for the nine months ended September 30, 2024, from $1,089.6 million for the nine months ended September 30, 2023.

The increase was primarily attributable to investing in the expansion of our commercial activities to support our product launches, primarily BRUKINSA in the U.S.

and Europe to drive continued revenue and margin expansion.

Selling, general and administrative expenses as a percentage of product sales were 49.8% for the nine months ended September 30, 2024 compared to 69.9% in the prior-year period.

We expect continued investment growth in selling and marketing expenses as our product sales increase.

Interest Income, Net

Interest income, net decreased by $17.7 million, or 30.7%, to $40.0 million for the nine months ended September 30, 2024, from $57.7 million for the nine months ended September 30, 2023.

The decrease in interest income was primarily attributable to lower interest rates earned on our cash and cash equivalents.

Interest expense increased resulting from a higher debt balance, slightly offset by an increase in interest capitalization related to Hopewell construction.

Other Income, Net

Other income, net was $1.1 million for the nine months ended September 30, 2024, primarily due to foreign exchange gains.

For the nine months ended September 30, 2023, other income, net was $291.1 million, primarily due to the noncash gain recorded for the receipt of ordinary shares resulting from the BMS settlement and government subsidy income, partially offset by foreign exchange losses resulting from the strengthening of the U.S.

Other income, net was $4.0 million for the three months ended March 31, 2025, primarily due to foreign exchange gains and government subsidy income, partially offset by unrealized losses on our equity investments.

For the three months ended March 31, 2024, other income, net was $1.8 million, primarily due to government subsidy income, partially offset by foreign exchange losses resulting from the strengthening of the U.S.

dollar compared to the RMB in the period and the revaluation impact of foreign currencies held in U.S.

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Income Tax Expense

Income tax expense increased to $45.3 million for the nine months ended September 30, 2024, from $39.1 million for the nine months ended September 30, 2023.

The income tax expense for the nine months ended September 30, 2024 and 2023 was primarily attributable to current U.S.

tax expense determined after other special 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.

Income tax expense was $19.6 million for the three months ended March 31, 2025 as compared to $7.7 million for the three months ended March 31, 2024.

The income tax expense for the three months ended March 31, 2025 and 2024 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, current China tax expense due to certain non-deductible expenses, and other intercompany discrete adjustments.

Net Income (Loss) and Earnings Per Share

GAAP net income improved for the first quarter of 2025, as compared to the prior-year period loss, primarily attributable to revenue growth and improved operating leverage.

For the first quarter of 2025, both basic and diluted earnings per share was $0.00 per share and $0.01 per American Depositary Share (“ADS”), respectively, compared to basic loss of $0.19 per share and $2.41 per ADS in the prior-year period.

Non-GAAP Reconciliation

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Three Months Ended

( in thousands)

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Reconciliation of GAAP to adjusted income (loss) from operations:

GAAP loss from operations $ (120,265) $ (133,968) $ (488,774) $ (823,941)

GAAP income (loss) from operations $ 11,102 $ (261,348)

Share-based compensation expenses 95,451 88,714

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Adjusted income (loss) from operations $ 139,357 $ (147,341)

Reconciliation of GAAP to adjusted net income (loss):

GAAP net income (loss) $ 1,270 $ (251,150)

Share-based compensation expenses 95,451 88,714

Depreciation 31,614 24,110

Amortization of intangibles 1,190 1,183

Impairment of equity investments 12,376 —

Income tax effect of non-GAAP adjustments (5,764) (8,753)

Adjusted net income (loss) $ 136,137 $ (145,896)

Reconciliation of GAAP to adjusted EPS - basic

GAAP earnings (loss) per share - basic $ 0.00 $ (0.19)

Share-based compensation expenses 0.07 0.07

Depreciation 0.02 0.02

Amortization of intangibles 0.00 0.00

Impairment of equity investments 0.01 0.00

Income tax effect of non-GAAP adjustments (0.00) (0.01)

Adjusted earnings (loss) per share - basic $ 0.10 $ (0.11)

Reconciliation of GAAP to adjusted EPS - diluted

GAAP earnings (loss) per share - diluted $ 0.00 $ (0.19)

Share-based compensation expenses 0.07 0.07

Depreciation 0.02 0.02

Amortization of intangibles 0.00 0.00

Impairment of equity investments 0.01 0.00

Income tax effect of non-GAAP adjustments (0.00) (0.01)

Adjusted earnings (loss) per share - diluted $ 0.09 $ (0.11)

Reconciliation of GAAP to adjusted earnings (loss) per ADS - basic

GAAP earnings (loss) per ADS - basic $ 0.01 $ (2.41)

Share-based compensation expenses 0.89 0.85

Depreciation 0.30 0.23

Amortization of intangibles 0.01 0.01

Impairment of equity investments 0.12 0.00

Income tax effect of non-GAAP adjustments (0.05) (0.08)

Adjusted earnings (loss) per ADS - basic $ 1.27 $ (1.40)

Reconciliation of GAAP to adjusted earnings (loss) per ADS - diluted

GAAP earnings (loss) per ADS - diluted $ 0.01 $ (2.41)

Share-based compensation expenses 0.86 0.85

Depreciation 0.28 0.23

Amortization of intangibles 0.01 0.01

Impairment of equity investments 0.11 0.00

Income tax effect of non-GAAP adjustments (0.05) (0.08)

Adjusted earnings (loss) per ADS - diluted $ 1.22 $ (1.40)

Liquidity and Capital Resources

The following table represents our cash and debt balances as of September 30, 2024 and December 31, 2023:

September 30, December 31,

The following table represents our cash and debt balances as of March 31, 2025 and December 31, 2024:

March 31, December 31,

(dollars in thousands)

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Total debt $ 923,627 $ 1,018,013

To date, we have financed our operations principally through proceeds from public and private offerings of our common stock (including ADSs), proceeds from debt, and our collaborations, together with product sales since September 2017.

Based on our current operating plan, we expect that our existing cash and cash equivalents as of September 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months after the date that the financial statements included in this report are issued.

We have also financed our operations and investments with proceeds from debt incurred primarily from various banks both through our subsidiaries and BeiGene, Ltd.

of $1.1 billion at September 30, 2024.

The majority of those debt obligations, or approximately $863.8 million, owed by BeiGene, Ltd., have due dates within the next 12 months.

We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations.

To date, we have financed our operations and investments in long-term assets principally through proceeds from public and private offerings of our securities, proceeds from debt and our collaborations, and since the third quarter of 2024 cash flow from operations.

Based on our current operating plan, we expect that our operating cash flows and existing cash and cash equivalents will enable us to fund our operating expenses and planned long-term investments for at least the next 12 months after the date that the financial statements included in this report are issued.

We have also financed our operations and investments with proceeds from debt primarily incurred through various banks by both our subsidiaries and the Parent Company of $923.6 million as of March 31, 2025.

We paid down $97.1 million of the debt in the first quarter of 2025 using existing cash.

The majority of those debt obligations, or approximately $670.5 million, owed by BeiGene, Ltd.

mature within the next 12 months.

We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations on a consolidated basis.

On December 15, 2021, we completed our initial public offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”).

The shares offered in the STAR Offering were issued to and subscribed for by permitted investors in the People’s Republic of China (“PRC”) in Renminbi (“RMB Shares”).

The public offering price of the RMB Shares was RMB 192.60 per ordinary share, or $391.68 per ADS.

In this offering, we sold 115,055,260 ordinary shares.

Net proceeds after deducting underwriting commissions and offering expenses were $3.4 billion (RMB 21.7 billion).

As required by the PRC securities laws, the net proceeds from the STAR Offering must be used in compliance with the planned uses as disclosed in the PRC prospectus as well as our proceeds management policy for the STAR Offering approved by our board of directors.

As of September 30, 2024, the Company had cash remaining related to the STAR Offering proceeds of $0.8 billion.

The following table provides information regarding our cash flows for the nine months ended September 30, 2024 and 2023:

Nine Months Ended

September 30,

As of March 31, 2025, the Company had cash remaining related to the STAR Offering proceeds of $461.6 million.

The following table provides information regarding our cash flows for the three months ended March 31, 2025 and 2024:

Three Months Ended

(dollars in thousands)

Cash, cash equivalents and restricted cash at beginning of period $ 2,638,747 $ 3,185,984

Net cash used in operating activities (215,791) (935,815)

Net cash (used in) provided by investing activities (454,745) 122,588

Net cash provided by financing activities 197,972 69,430

Net cash provided by (used in) operating activities 44,082 (308,572)

Net cash used in investing activities (121,941) (209,831)

Net cash (used in) provided by financing activities (33,777) 162,293

Net effect of foreign exchange rate changes 3,480 (22,438)

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Operating Activities

Cash used in operating activities improved $720.0 million in the nine months ended September 30, 2024, versus the prior year period due to our significantly improved revenue and $698.6 million of increase in gross margin in the current year period, offset by continued funding of our development pipeline, commercial operations and increasing working capital to support our global expansion.

Cash provided by operating activities improved $352.7 million in the three months ended March 31, 2025, versus the prior year period due to our significantly improved revenue and $325.6 million of increase in gross margin in the current year period, offset by continued funding of our development pipeline and commercial operations, increasing working capital to support our global expansion and the timing of compensation-related payments.

Investing Activities

Investing activities used $454.7 million of cash in the nine months ended September 30, 2024, compared to $122.6 million of cash provided in the prior year period due primarily to a decrease in proceeds from sales and maturities of investment securities.

Investing activities used $121.9 million of cash in the three months ended March 31, 2025, compared to $209.8 million in the prior year period due primarily to a decrease in capital expenditures, partially offset by an increase in acquired in-process research and development.

Financing Activities

Financing activities provided $198.0 million of cash in the nine months ended September 30, 2024, compared to $69.4 million in the prior year period due primarily to higher proceeds from short-term bank loans in the current year period.

Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings is dependent on interest rates, credit spreads, bank lending capacity and other factors.

Financing activities used $33.8 million of cash in the three months ended March 31, 2025, compared to $162.3 million of cash provided in the prior year period due primarily to a net reduction in short-term debt borrowings in the current year period, partially offset by higher proceeds from option exercises and employee share purchase plan.

Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings, if necessary, is dependent on interest rates, credit spreads, bank lending capacity and other factors.

We expect to repay approximately $763.5 million of loans in the next 12 months and expect to be able to re-finance those on a consistent basis with our historical experience, with the cost of those borrowings depending on prevailing interest rates and credit spreads.

Effects of Exchange Rates on Cash

We have substantial operations in the PRC, which generate a significant amount of RMB-denominated cash from product sales and require a significant amount of RMB-denominated cash to pay our obligations.

We hold a significant amount of RMB-denominated deposits at our China subsidiaries.

Since the reporting currency of the Company is the U.S.

dollar, periods of volatility in exchange rates may have a significant impact on our consolidated cash balances as they are translated into U.S.

The impact of foreign currency deposits being translated into the U.S.

dollar positively impacted ending cash by $8.0 thousand in the nine months ended September 30, 2024, compared to a negative impact of $50.3 million in the prior-year period.

As noted above, we hold RMB denominated cash in our Parent Company (largely arising from the STAR Offering) and incur foreign currency gains or losses when remeasuring such cash to the U.S.

In the three months ended March 31, 2025, we incurred realized gains on cash of $3.2 million that is included in the reconciling items between net income and net cash provided by operating activities on the consolidated statements of cash flows primarily related to the remeasurement of RMB denominated cash to USD.

The RMB denominated cash in our Parent Company, however, is required to be used to fund RMB denominated expenditures and thus foreign currency gains or losses on such cash does not affect our ability to fund those expenditures.

We also have substantial operations in China and Europe, where the functional currency is the RMB and Euro, and as such the net cash flows are translated to the U.S.

dollar for financial reporting.

This process generates translation gains and losses primarily on RMB-denominated cash held in China and Euro-denominted cash held in Europe that are included in the effects of foreign exchange rate changes on the consolidated statements of cash flows, as such translation gains and losses are excluded from cash flows from operating, investing and financing activities.

Future Liquidity and Material Cash Requirements

Until such time, if ever, as we can generate sustained positive operating cash flow, we will continue to use existing cash and net proceeds from short-term financing (see Financing Activities above) to fund our capital expansion needs and business development goals.

We may be required to finance our incremental cash needs through a combination of equity offerings, new debt financings, collaboration agreements, strategic alliances, licensing arrangements, government grants, and other available sources.

Under the rules of the U.S.

Securities and Exchange Commissions (“SEC”), we currently qualify as a “well-known seasoned issuer,” which allows us to file shelf registration statements to register an unspecified amount of securities that are effective upon filing.

In May 2023, we filed such a shelf registration statement with the SEC for the issuance of an unspecified amount of ordinary shares (including in the form of ADSs), preferred shares, various series of debt securities and/or warrants to purchase any of such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any such offering.

This registration statement was effective upon filing and will remain in effect for up to three years from filing, prior to which time we may file another shelf registration statement that will be effective for up to three years from filing.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of ADSs, ordinary shares, or RMB Shares.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, and may require the issuance of warrants, which could potentially dilute our investors’ ownership interest.

If we raise additional funds through collaboration agreements, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our medicines or drug candidates, future revenue streams or research programs, or to grant licenses on terms that may not be favorable to us.

Furthermore, our ability to raise additional capital may be adversely impacted by worsening global economic conditions, with disruptions to, and volatility in, the credit and financial markets in the U.S.

and worldwide, resulting from the effects of inflationary pressures, previous and potential future bank failures and otherwise.

If these conditions persist and deepen, we could experience an inability to access additional capital or our liquidity could otherwise be impacted, which could in the future negatively affect our capacity for certain corporate development transactions or our ability to make other important, opportunistic investments.

If we are unable to raise additional funds through equity or debt financings, collaborations or other sources when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market products or drug candidates that we would otherwise prefer to develop and market ourselves.

Our material cash requirements in the short- and long-term consist of the following operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations.

We plan to fund our material cash requirements with our current financial resources together with our anticipated receipts of accounts receivable and product sales.

We plan to fund our material cash requirements with cash on hand.

Contractual and Other Obligations

The following table summarizes our significant contractual obligations as of the payment due date by period as of September 30, 2024:

The following table summarizes our significant contractual obligations as of the payment due date by period as of March 31, 2025:

Payments Due by Period

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Purchase Commitments

As of September 30, 2024, non-cancellable purchase commitments amounted to $155.9 million, of which $30.0 million related to minimum purchase requirements for supply purchased from contract manufacturers and $125.9 million related to binding purchase obligations of inventory from Amgen.

As of March 31, 2025, non-cancellable purchase commitments amounted to $152.9 million, of which $31.0 million related to minimum purchase requirements for supply purchased from contract manufacturers and $121.9 million related to binding purchase obligations of inventory from Amgen.

We do not have any minimum purchase requirements for inventory from Amgen.

Debt Obligations and Interest

Total debt obligations coming due in the next twelve months is $863.8 million.

Total debt obligations coming due in the next twelve months are $763.5 million.

Total long-term debt obligations are $160.2 million.

See Note 10 in the Notes to the Financial Statements for further detail of our debt obligations.

We have numerous financial and non-financial covenants on our 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.

Some of these covenants include default and/or cross-default provisions that could require acceleration of repayment of loans in the event of default.

However, our debt is primarily short-term in nature.

Any acceleration would be a matter of months but may impact our ability to refinance debt obligations if an event of default occurs.

As of September 30, 2024, we were in compliance with all covenants of our material debt agreements.

As of March 31, 2025, we were in compliance with all covenants of our material debt agreements.

See above regarding Liquidity and Capital Resources and Note 10 in the Notes to the Financial Statements for further detail of our debt obligations.

Interest on bank loans is paid quarterly until the respective loans are fully settled.

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We are funding our portion of the co-development costs by contributing cash and development services.

As of September 30, 2024, our remaining co-development funding commitment was $379.1 million.

As of March 31, 2025, our remaining co-development funding commitment was $295.1 million.

Funding Commitment

Funding commitment represents our committed capital related to two equity method investments.

As of September 30, 2024, our remaining capital commitment was $8.2 million and is expected to be paid from time to time over the investment period.

As of March 31, 2025, our remaining capital commitment was $5.9 million and is expected to be paid from time to time over the investment period.

Capital Commitments

We had capital commitments amounting to $66.2 million for the acquisition of property, plant and equipment as of September 30, 2024, related to various facilities across the globe, including the manufacturing and clinical R&D campus in Hopewell, New Jersey.

We had capital commitments amounting to $56.3 million for the acquisition of property, plant and equipment as of March 31, 2025, related to various facilities across the globe, including the manufacturing and clinical R&D campus in Hopewell, New Jersey.

Critical Accounting Policies and Significant Judgments and Estimates

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Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies as of and for the three and nine months ended September 30, 2024, as compared to those described in the section titled “Part I—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

For new accounting policies adopted during the three and nine months ended September 30, 2024, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1.

There have been no material changes to our critical accounting policies as of and for the three months ended March 31, 2025, as compared to those described in the section titled “Part I—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

For new accounting policies adopted during the three months ended March 31, 2025, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1.

Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies—Significant accounting policies” in this Quarterly Report on Form 10-Q.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis