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Item 1A. Risk Factors

2025-05-07 compared with 2024-11-12 · 216 added, 102 removed, 1390 unchanged (19% of the section changed)

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The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, and growth prospects.

In such an event, the market price of our ADSs, ordinary shares or RMB Shares could decline, and you may lose all or part of your investment.

In such an event, the market price of our ADSs, ordinary shares, and RMB Shares could decline, and you may lose all or part of your investment.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Please refer to the explanation of the qualifications and limitation on forward-looking statements set forth at the outset of “Part I – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Please refer to the explanation of the qualifications and limitation on forward-looking statements set forth on page 1 hereof.

The risk factors denoted with a “*”, if any, are newly added or have been materially updated from our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”).

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• Our medicines and any future approved drug candidates will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our medicines and drug candidates.

• We have incurred significant net losses since our inception and expect to incur net losses in the future and may not become profitable.

• We have historically incurred significant net losses and may incur net losses in the future.

• We may need to obtain additional financing to fund our operations, and if we are unable to obtain such financing, we may be unable to complete the development of our drug candidates or achieve profitability.

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• The trading prices of our ordinary shares, ADSs, and/or RMB Shares can be volatile, which could result in substantial losses to you.

• Your rights as a shareholder will change as a result of the Continuation.

• As a result of increased shareholder voting requirements upon completion of the Continuation, we will have less flexibility with respect to certain aspects of capital management than previously.

• The Continuation will result in additional direct and indirect costs whether or not completed.

Risks Related to Clinical Development and Commercialization of Our Medicines and Drug Candidates

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We prepare for the NRDL negotiations in China for our eligible medicines/indications annually.

If any of these medicines/indications are not included in the NRDL or included at a significantly lower price, the revenues for such medicines could be limited, which could have a material adverse effect on our business, financial condition and results of operations.

The government in China also has a program for volume-based, centralized drug procurement with minimum quantity commitments to negotiate lower prices from drug manufacturers and reduce the price of drugs.

The Chinese government awards contracts to the lowest bidders who can satisfy the quality and quantity requirements.

The Chinese government awards contracts to the bidders who can satisfy the quality and quantity requirements, with price being a significant factor in the procurement decisions.

The successful bidders are guaranteed a sale volume for at least a year, which gives an opportunity to gain or increase market share.

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Moreover, the program may change how generic drugs are priced and procured in China and is likely to accelerate the replacement of originator drugs with generics.

This program may negatively impact our existing commercial operations in China as well as our strategies on how to commercialize our drugs in China, which could have a material adverse effect on our business, financial condition and results of operations.

Countries in Europe provide options to restrict the range of medicinal products for which their national health insurance systems provide reimbursement.

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• potential third-party patent rights or potentially reduced protection for intellectual property rights;

• unexpected changes in tariffs, trade barriers and regulatory requirements, including the loss of normal trade status between China and the U.S.

• unexpected changes in tariffs, including tariffs that have been or may in the future be imposed by the U.S.

or other countries, trade barriers and regulatory requirements, including the loss of normal trade status between China and the U.S.

or actions taken by U.S.

or China governmental authorities on companies with significant operations in the U.S.

and China, such as us;

and China, such as us, and protectionist or retaliatory measures taken by the U.S.

• economic weakness;

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• business interruptions resulting from geo-political actions, including trade disputes, war and terrorism, public health crises or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires;

• economic and political instability, including as may result from the uncertainty surrounding the 2024 U.S.

presidential election;

• economic and political instability;

• international military conflicts and related sanctions.

For example, the U.S.

has recently imposed blanket 10% tariffs on virtually all imports to the U.S.

and significantly higher tariffs applicable to imports from many countries, which have resulted in other countries imposing additional tariffs on imports from the U.S., and is likely to continue to result in more retaliatory tariffs.

On April 9, 2025, the U.S.

announced a temporary pause on its tariffs applicable to many countries, while increasing the tariffs applicable to imports from China to 145%.

In response, China announced an increase in tariffs on U.S.

imports to 125%.

administration has threatened to continue to broadly impose tariffs, which could lead to corresponding punitive actions by the countries with which the U.S.

Historically, tariffs have led to increased trade and political tensions, between not only the U.S.

and China, but also between the U.S.

and other countries in the international community.

Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets.

Furthermore, increased tariffs may make certain products no longer commercially viable.

These and other risks, including the risks described in “Risks Related to Our Doing Business in the PRC”, may materially adversely affect our ability to attain or sustain revenue in international markets.

Furthermore, on April 1, 2025, the Bureau of Industry and Security of the U.S.

Department of Commerce (“BIS”) initiated an investigation into whether imports of pharmaceutical products present a risk to the national security of the U.S.

This investigation could result in BIS recommending additional tariffs on imports of pharmaceutical products into the U.S.

The scope or scale of any resulting tariffs could adversely impact our business.

The illegal distribution and sale by third parties of counterfeit versions of our medicines or stolen products could have a negative impact on our reputation and business.

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Supreme Court’s July 2024 decision to overturn established case law giving deference to regulatory agencies’ interpretations of ambiguous statutory language has introduced uncertainty regarding the extent to which the FDA’s regulations, policies and decisions may become subject to increasing legal challenges, delays, and/or changes.

From time to time, laws may be passed that significantly change the statutory provisions governing the approval, manufacturing, and marketing of products regulated by the FDA.

In addition to new legislation, FDA regulations, guidance, and policies are often revised or reinterpreted by the agency in ways that may significantly affect the manner in which pharmaceutical products are regulated and marketed.

The process of obtaining regulatory approvals and compliance with laws and regulations require the expenditure of substantial time and financial resources.

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law enforcement authorities, including Chinese authorities who recently increased anti-bribery efforts to reduce improper payments and other benefits received by physicians, staff and hospital administrators in relation to sales, marketing and purchase of pharmaceuticals.

There are ambiguities as to what is required to comply with these state requirements, and if we fail to comply with an applicable state law requirement, we could be subject to penalties.

In the past, we have made grants to independent charitable foundations that help financially needy patients with their premium, co-pay, and co-insurance obligations and we expect to make such grants in the future.

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Such restatements increase our costs and could result in an overage or underage in our rebate liability for past quarters.

Price recalculations also may affect the ceiling price at which we are required to offer our products under the 340B program and give rise to an obligation to refund entities participating in the 340B program for overcharges during past quarters impacted by a price recalculation.

Price recalculations may also affect the ceiling price at which we are required to offer our products under the 340B program and give rise to an obligation to refund entities participating in the 340B program for overcharges during past quarters impacted by a price recalculation.

Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we are found to have made a misrepresentation in the reporting of our average sales price, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

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The outcome of those judicial proceedings and the potential impact on the way in which manufacturers extend discounts to covered entities through contract pharmacies remain uncertain.

*The approval processes of regulatory authorities in the United States, China, Europe and other comparable regulatory authorities are lengthy, time consuming, costly, and inherently unpredictable.

*The approval processes of regulatory authorities in the U.S., China, Europe and other comparable regulatory authorities are lengthy, time consuming, costly, and inherently unpredictable.

If we experience delays or are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.

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For example, in 2022, the FDA extended the Prescription Drug User Fee Act goal date for the supplemental new drug application (“sNDA”) for BRUKINSA as a treatment for adult patients with chronic lymphocytic leukemia or small lymphocytic lymphoma by three months, to allow time to review additional clinical data submitted by us, which was deemed a major amendment to the sNDA.

In 2022, the FDA deferred action on the BLA for tislelizumab as a second-line treatment for patients with unresectable or metastatic ESCC, citing only the inability to complete inspections due to COVID-19 related restrictions on travel.

In 2022, the FDA deferred action on the BLA for TEVIMBRA ® as a second-line treatment for patients with unresectable or metastatic ESCC, citing only the inability to complete inspections due to COVID-19 related restrictions on travel.

In 2024, the FDA deferred approval for tislelizumab in first-line unresectable, recurrent, locally advanced, or metastatic ESCC on account of a delay in scheduling clinical site inspections.

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If the FDA or other health authorities are delayed or unable to complete required regulatory inspections of our development activities, regulatory filings or manufacturing operations due to government shutdowns, public health crises, or other reasons, or we do not satisfactorily complete such inspections, our business could be materially harmed.

Without appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S.

market could be impacted.

Delays in the completion of a clinical trial of any of our drug candidates will increase our costs, slow down our drug development and approval process, and jeopardize our ability to commence product sales and generate revenues for that candidate.

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If these third parties encounter any manufacturing difficulties, disruptions or delays and are not able to supply sufficient quantities of drug candidates, our drug combination study program may be delayed.

For additional information, please see the section of this Quarterly Report titled “Risks Related to Our Reliance on Third Parties—We rely on third parties to manufacture some of our commercial and clinical drug supplies.

For additional information, please see the section of our Annual Report titled “Risks Related to Our Reliance on Third Parties—We rely on third parties to manufacture some of our commercial and clinical drug supplies.

Our business could be harmed if those third parties fail to comply with manufacturing regulations, provide us with insufficient quantities of product or provide product at unacceptable quality levels or prices.”

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In the U.S., China, Europe and some other jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding healthcare that could prevent or delay regulatory approval of our drug candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our medicines and any drug candidates for which we obtain regulatory approval.

For example, in August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law.

The IRA includes several provisions that may impact our business to varying degrees, including provisions that create a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S.

government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our medicines and drug candidates.

For additional information, please see the section of our Annual Report titled “ Part I – Item 1 – Business – Government Regulation – Healthcare Reform .”

Furthermore, the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act), requires sponsors of approved new drug applications and biologics license applications to provide sufficient quantities of product samples on commercially reasonable, market-based terms to entities developing generic drugs and biosimilar biological products.

The law establishes a private right of action allowing developers to sue application holders that refuse to sell them product samples needed to support their applications.

If we are required to provide product samples or allocate additional resources to respond to such requests or any legal challenges under this law, our business could be adversely impacted.

In addition, proponents of drug reimportation may attempt to pass legislation that would directly allow reimportation under certain circumstances.

For example, by Executive Order, the FDA works with states and Indian Tribes that propose to develop importation programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

In January 2024, the FDA issued to Florida the first approval for a state importation plan and several states have pending applications with the FDA.

If successfully implemented, importation of drugs from Canada may materially and adversely affect the price we receive for any of our product candidates.

Legislation or regulations allowing the reimportation of drugs, if enacted, could decrease the price we receive for any products that we may develop and adversely affect our future revenues and prospects for profitability.

We expect that healthcare reform measures may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved medicine.

For additional information, please see the section of our Annual Report titled “Part I—Item 1—Business—Government Regulation—Healthcare Reform.”

We cannot predict the initiatives that may be adopted in the future.

Furthermore, changes to U.S.

policy implemented by the U.S.

Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S.

and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S.

regulatory environment, inflation and other areas.

We cannot predict the initiatives or changes that may be adopted in the future or the impact, if any, they may have on our business.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare and/or impose price controls may adversely affect the demand for our product candidates, if we obtain regulatory approval;

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Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant net losses since our inception and expect to incur net losses in the future and may not become profitable.

We have historically incurred significant net losses and may incur net losses in the future.

Investment in pharmaceutical drug development is highly capital-intensive and speculative.

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As a result, we have incurred losses in most periods since our inception, other than periods when we were profitable due to revenue recognized from up-front license fees from collaboration agreements or the settlement of legal proceedings.

As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $8.5 billion and $8.0 billion, respectively.

As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $8.6 billion and $8.6 billion, respectively.

Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative expenses associated with our operations.

We expect to continue to incur losses in the future, although we expect these losses to decrease in the near term as product sales growth exceeds expense growth.

Although we expect to achieve positive GAAP operating income for full year 2025 as product sales growth exceeds expense growth, we may incur losses in the future.

We expect expenses to continue to increase as we continue to expand our development of, and seek regulatory approvals for, our drug candidates, and our manufacturing facilities, commercialize our medicines and launch new medicines, if approved, maintain and expand regulatory approvals, contribute up to $1.25 billion to the global development of a portfolio of Amgen pipeline assets under our collaboration agreement, and commercialize the medicines that we have in-licensed.

In addition, we will continue to incur costs associated with operating as a public company.

The size of our future net losses will depend, in part, on the number and scope of our drug development programs and the associated costs of those programs, the cost of our manufacturing activities, the cost of commercializing our approved products, our ability to generate revenues and the timing and amount of milestones and other payments we make or receive with arrangements with third parties.

The size of any future net losses will depend, in part, on the number and scope of our drug development programs and the associated costs of those programs, the cost of our manufacturing activities, the cost of commercializing our approved products, our ability to generate revenues and the timing and amount of milestones and other payments we make or receive with arrangements with third parties.

If we fail to achieve market acceptance for our medicines or if promising drug candidates fail in clinical trials or do not gain regulatory approval, or if approved, fail to achieve market acceptance, we may never become profitable.

Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

To the extent we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research, development, manufacturing and commercialization efforts, expand our business or continue our operations.

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Our operations have consumed substantial amounts of cash since inception.

Our operating activities used $1.2 billion, $1.5 billion and $1.3 billion of net cash during the years ended December 31, 2023, 2022 and 2021, respectively, and used $215.8 million and $935.8 million of net cash during the nine months ended September 30, 2024 and 2023, respectively.

Our operating activities used $0.1 billion, $1.2 billion and $1.5 billion of net cash during the years ended December 31, 2024, 2023 and 2022, respectively.

Our operating activities provided approximately $44 million of net cash during the three months ended March 31, 2025 and used approximately $309 million of net cash during the three months ended March 31, 2024, respectively.

We recorded negative net cash flows from operating activities in 2024, 2023 and 2022 primarily due to our net losses of $0.6 billion, $0.9 billion and $2.0 billion, respectively.

We cannot assure you that we will be able to generate positive cash flows from operating activities in the future.

We cannot assure you that we will be able to continue to generate positive cash flows from operating activities in the future.

Since September 2017, we have generated revenues from the sale of medicines in China licensed from BMS, and since the fourth quarter of 2019, we have generated revenues from our internally developed medicines.

These revenues are not yet sufficient to support our operations.

Although it is difficult to predict our liquidity requirements, based upon our current operating plan, we believe that we have sufficient cash, cash equivalents and short-term investments to meet our projected operating requirements for at least the next 12 months.

However, our existing cash, cash equivalents and short-term investments may not be sufficient to enable us to complete all global development or launch all of our current medicines and drug candidates for the currently anticipated indications and to invest in additional programs.

Although it is difficult to predict our liquidity requirements, based upon our current operating plan, we believe that we have sufficient cash and cash equivalents to meet our projected operating requirements for at least the next 12 months.

However, our existing cash and cash equivalents and potential future short-term investments may not be sufficient to enable us to complete all global development or launch all of our current medicines and drug candidates for the currently anticipated indications and to invest in additional programs.

Accordingly, we may require further funding through public or private offerings, debt financing, collaboration and licensing arrangements or other sources.

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Any acceleration may impact the Company’s ability to refinance debt obligations if an event of default occurs.

Our liquidity and financial condition may be materially and adversely affected by the negative net cash flows and current debt structure, and we cannot assure you that we will have sufficient cash from other sources to fund our operations.

Our liquidity and financial condition may be materially and adversely affected by negative net cash flows and our current debt structure, and we cannot assure you that we will have sufficient cash from other sources to fund our operations.

If we resort to other financing activities to generate additional cash, we will incur financing costs and we cannot guarantee that we will be able to obtain the financing on terms acceptable to us, or at all, and if we raise financing by issuing further equity securities, your interest in our company may be diluted.

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In addition, issuance of additional equity securities, or the possibility of such issuance, may cause the market price of our shares to decline.

In the event that we enter into collaborations or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to technologies or drug candidates that we otherwise would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve more favorable terms.

In the event that we enter into collaborations or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to technologies or drug candidates that we otherwise would seek to develop or commercialize ourselves or possibly reserve for future potential arrangements when we might be able to achieve more favorable terms.

Fluctuations in exchange rates could result in foreign currency exchange losses and could materially reduce the value of your investment.

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*Our business, profitability and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, our distributors and customers or by actual events or concerns involving the liquidity, default, or non-performance of financial institutions, including the U.S.

government, and an impairment in the carrying value of our short-term investments could negatively affect our consolidated results of operations.

government, and an impairment in the carrying value of any short-term investments could negatively affect our consolidated results of operations.

We are exposed to the risk that our distributors and customers may default on their obligations to us as a result of bankruptcy, lack of liquidity, operational failure or other reasons.

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In addition, U.S.

debt ceiling and budget deficit concerns have increased the possibility a downgrade in the credit rating of the U.S.

debt ceiling and budget deficit concerns have increased the possibility of a downgrade in the credit rating of the U.S.

government and could result in economic slowdowns or a recession in the U.S.

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government issued or guaranteed investments will not occur.

At September 30, 2024, we had approximately $966.1 million invested in government money market funds.

At March 31, 2025, we had approximately $756.3 million invested in government money market funds.

Downgrades to the U.S.

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The carrying amounts of cash and cash equivalents, restricted cash and short-term investments represent the maximum amount of loss due to credit risk.

We had cash and cash equivalents of $2.7 billion, $3.2 billion and $3.9 billion, restricted cash of $11.5 million, $14.2 million and $5.5 million and short-term investments of nil, $2.6 million and $665.3 million as of September 30, 2024, December 31, 2023 and 2022, respectively, most of which are deposited in financial institutions outside of China.

We had no short-term investments, cash and cash equivalents of $2.5 billion and restricted cash of $14.2 million as of March 31, 2025, most of which are deposited in financial institutions outside of China.

As required by the PRC securities laws, the net proceeds from our offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”) must be used in strict compliance with the planned uses as disclosed in the PRC prospectus for the STAR Offering as well as our proceeds management policy for the STAR Offering approved by our board of directors.

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In the event of bankruptcy of one of these financial institutions, we may be unlikely to claim our deposits back in full.

As of December 31, 2023, our short-term investments consisted of U.S.

Treasury securities, provided that we no longer held any U.S.

Treasury securities as of September 30, 2024.

As of March 31, 2025, we held no short-term investments.

To the extent we invest in U.S.

Treasury securities in the future, although we believe that such securities are of high credit quality and continually monitor the credit worthiness of these institutions, concerns about, or a default by, one institution in the U.S.

Treasury securities as short-term investments in the future, although we believe that such securities are of high credit quality and continually monitor the credit worthiness of these institutions, concerns about, or a default by, one institution in the U.S.

market, could lead to significant liquidity problems, losses or defaults by other institutions, which in turn could adversely affect us.

Failure to meet ESG expectations or standards or achieve our ESG goals could adversely affect our business, results of operations, financial condition or stock price.

There has been an increased focus from regulators and stakeholders on environmental, social, and governance (“ESG”) matters, including greenhouse gas emissions and climate-related risks;

Failure to meet responsible business and sustainability expectations or standards or achieve our corporate strategy goals could adversely affect our business, results of operations, financial condition or stock price.

There has been focus from global regulators and stakeholders on responsible business and sustainability matters, including greenhouse gas emissions and climate-related risks;

human capital management;

diversity, equity, and inclusion;

responsible sourcing and supply chain;

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and corporate governance and oversight.

Given our commitment to ESG as part of our long-term strategy, we actively manage these issues and have established and publicly announced certain goals which we may refine in the future.

These goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Evolving stakeholder expectations and our efforts and ability to manage these issues and accomplish our goals present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have a material adverse impact on our business, including on our stock price.

Further, there is uncertainty around the accounting standards and climate-related disclosures associated with emerging ESG laws and reporting requirements and the related costs to comply with the emerging regulations.

Our failure or perceived failure to achieve our ESG goals or comply with ESG regulations could expose us to increased scrutiny from the investment community and enforcement authorities.

Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on ESG-related issues.

As part of our long-term strategy and in-line with safeguarding sustainable value growth, we actively manage these issues.

We have identified key strategic priorities and set goals that reflect our current plans and aspirations and cannot guarantee that we will be able to achieve them.

Evolving stakeholder expectations and our efforts and ability to manage these issues and goals present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have a material adverse impact on our business, including on our stock price.

Further, there is uncertainty around the accounting standards and climate-related disclosures associated with emerging sustainability laws and reporting requirements and the related costs to comply with the emerging regulations.

Our failure, or perceived failure, to achieve our sustainability goals or comply with sustainability-related regulations could expose us to increased scrutiny from the investment community and enforcement authorities.

Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on these sustainability issues.

Risks Related to Our Intellectual Property

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However, filing, prosecuting and maintaining patents/patent applications in all countries worldwide could be prohibitively expensive.

As the patent laws of different countries vary, our patent applications may not be granted in all countries and the issued patents may have various scope and enforceabilities.

As the patent laws of different countries vary, our patent applications may not be granted in all countries and the issued patents may vary in scope and enforceability.

In addition, different countries may provide varying regulatory exclusivities to pharmaceutical drugs, and some countries provide no regulatory exclusivities.

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Upon expiration, we may no longer have exclusivities on the corresponding medicines or drug candidates.

Moreover, issued patents may be invalidated for a number of reasons, including known or unknown prior art, deficiencies in the patent applications or the lack of novelty or inventive step of the underlying invention or technology.

Moreover, issued patents may be invalidated for a number of reasons, including but not limited to known or unknown prior art, deficiencies in the patent applications or the lack of novelty or inventive step of the underlying invention or technology.

Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

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When a generic drug company files an Abbreviated New Drug Application (“ANDA”) with the FDA seeking approval to market a generic version of any of our products before the expiration of Orange Book listed patents (“OB Patents”) covering such products, this will most likely trigger ANDA litigation.

For example, on March 8, 2024, our subsidiaries, BeiGene USA, Inc.

and BeiGene Switzerland GmbH, filed patent infringement suits against Sandoz Inc.

(“Sandoz”), and MSN Pharmaceuticals, Inc.

and MSN Laboratories Private Ltd.

(collectively “MSN”), in the U.S.

District Court for the District of New Jersey, in response to Sandoz’s and MSN’s notices informing their filings of ANDAs with the FDA regarding BRUKINSA.

For additional information on this litigation, please see the section of this Quarterly Report titled “Legal Proceedings”.

The success of ANDA litigation depends on the strength of the OB Patents and our ability to prove infringement.

The outcome of ANDA litigation is inherently uncertain and may result in potential loss of market exclusivity for our products which may have a significant financial impact on product revenue.

The scope, validity or enforceability of our or our collaborators’ patents may be challenged in court or other authorities, and we or they may not be successful in enforcing or defending those intellectual property rights and, as a result, may not be able to develop or market the relevant product exclusively, which would have a material adverse effect on any potential sales of that product.

As such, any issued patents may not protect us from generic or biosimilar competition for these medicines.

Specifically, in patent litigation, defendants often challenge the validity and/or enforceability of the asserted patents, and there are numerous potential grounds upon which a patent can be found invalid and/or unenforceable.

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For example, in September 2024, AbbVie filed a lawsuit alleging misappropriation of certain trade secrets concerning our Bruton’s tyrosine kinase degrader program, including lead compound BGB-16673.

Defending against such claims could result in substantial costs and be a distraction to management.

If we fail in defending any such claims, we may need to pay monetary damages and lose valuable intellectual property rights.

Defending against such claims, regardless of their merit, could result in substantial costs and be a distraction to management.

If we fail in defending any such claims, we may need to pay monetary damages and lose valuable intellectual property rights and suffer reputational harm.

Risks Related to Our Reliance on Third Parties

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In December 2021, we entered into an option, collaboration and license agreement with Novartis to develop, manufacture and commercialize our investigational TIGIT inhibitor, ociperlimab, in North America, Europe, and Japan, terminated that agreement in July 2023 and regained full, global rights to develop, manufacture and commercialize ociperlimab.

In December 2024, we entered into a global licensing agreement with CSPC Zhongqi Pharmaceutical Technology (Shijiazhuang) Co., Ltd.

for a methionine adenosyltransferase 2A (MAT2A)-inhibitor being explored for solid tumors.

Our strategic collaborations involve numerous risks.

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We rely on third-party distributors to distribute our approved medicines.

For example, we rely on sole third-party distributors to distribute some of our in-licensed approved medicines in China and multiple third-party distributors for the distribution of our internally developed medicines.

We also expect to rely on third-party distributors to distribute our other internally developed and in-licensed medicines, if approved.

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We have significantly increased and expect to continue to increase our research, development, manufacturing, and commercial capabilities, and we may experience difficulties in managing our growth.

At the beginning of 2023, we had approximately 9,000 employees, and we ended the year with close to 10,000 employees, an increase of over 10%.

At the beginning of 2024, we had approximately 10,500 employees, and we ended the year with over 11,000 employees, an increase of approximately 5%.

As of the date of this Quarterly Report, we had over 11,000 employees.

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If we are not able to effectively manage our growth and further expand our organization by hiring new employees and expanding our groups of consultants and contractors as needed, we may not be able to successfully implement the tasks necessary to further develop, manufacture and commercialize our medicines and drug candidates and, accordingly, may not achieve our research, development, manufacturing and commercialization goals.

Additionally, we are investing significant time, resources and capital into the expansion of our facilities, including the creation of additional capacity at our Guangzhou and Suzhou manufacturing facilities and the construction of our Hopewell facility.

Additionally, we have invested, and are investing significant time, resources and capital into the expansion of our facilities, including the creation of additional capacity at our Guangzhou and Suzhou manufacturing facilities and the construction of our Hopewell facility.

If actual demand for our medicines does not meet our future projections, we will likely incur increased costs related to idle capacity including, but not limited to, acceleration of the timing of depreciation or impairment charges, which may adversely affect our financial condition and results of operations.

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Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided share option, restricted share unit and restricted share grants that vest over time or based on performance conditions.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided share options, restricted share units and restricted shares that vest over time or are based on performance conditions.

The value to employees of these equity grants that may be significantly affected by movements in our share price that are beyond our control and may be insufficient to counteract more lucrative offers from other companies.

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The term “important data” is a broadly defined term under the Cybersecurity Law and Data Security Law, and further clarifications need to be put in place by the Chinese government.

However, under the latest draft Important Data Identification Rules, HGR data is classified as “important data,” and if the guidance is finalized as is, it can be expected that this new cross-border data transfer rule may create considerable additional regulatory burdens on international companies’ human gene-involved R&D activities in China.

However, under the latest draft Information Security Technology – Guideline for Identification of Critical Data, HGR data is classified as “important data,” and if the guidance is finalized as is, it can be expected that this new cross-border data transfer rule may create considerable additional regulatory burdens on international companies’ human gene-involved R&D activities in China.

If the Chinese parties fail to comply with data protection laws, regulations and practice standards, and our research data is obtained by unauthorized persons, used or disclosed inappropriately or destroyed, it could result in a loss of our confidential information and subject us to litigation and government enforcement actions.

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Also in 2021, the PRC Biosecurity Law became effective.

The Biosecurity Law establishes an integrated system to regulate biosecurity-related activities in China, including the security regulation of HGR and biological resources.

The Biosecurity Law for the first time expressly declared that China has sovereignty over its HGR and further endorsed the HGR Regulation by recognizing the fundamental regulatory principles and systems established by it over the utilization of Chinese HGR by foreign entities in China.

The PRC Biosecurity Law establishes an integrated system to regulate biosecurity-related activities in China, including the security regulation of HGR and biological resources.

The PRC Biosecurity Law for the first time expressly declared that China has sovereignty over its HGR and further endorsed the HGR Regulation by recognizing the fundamental regulatory principles and systems established by it over the utilization of Chinese HGR by foreign entities in China.

Although the Biosecurity Law does not provide any specific new regulatory requirements on HGR, as it is a law adopted by China’s highest legislative authority, it gives the National Health Commission, China’s major regulatory authority of HGR, significantly more power and discretion to regulate HGR and it is expected that the overall regulatory landscape for Chinese HGR will continue to evolve and become even more rigorous.

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Our information technology systems, or those used by our contractors or collaborators, may fail or suffer security breaches, which could result in a material disruption of our product development and commercialization efforts.

Despite the implementation of security measures, our information technology systems and those of our contractors and collaborators, are vulnerable to damage from internal or external events, such as computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failures, which can compromise the confidentiality, integrity and availability of the systems.

Although to our knowledge we have not experienced any material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our research, development, manufacturing, regulatory and commercialization efforts and our business operations.

Despite the implementation of security measures, our information technology systems and those of our contractors and collaborators, are vulnerable to damage from internal or external events, such as cyberattacks, computer viruses, unauthorized access to systems and data, malicious internet-based activity, online and offline fraud, wrongful conduct by insider employees and vendors, denial-of-service attacks, ransomware attacks, business email compromises, social engineering (including phishing attacks), computer malware, malicious codes, wrongful intrusions, and other similar activities, as well as natural disasters, terrorism, war, and telecommunication and electrical failures, which can compromise the confidentiality, integrity and availability of the systems.

Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources.

Although, to our knowledge, we have not experienced any material cyber incidents or data breaches to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our research, development, manufacturing, regulatory and commercialization efforts and our business operations.

In the ordinary course of our business, we collect and store sensitive data, including, among other things, legally protected patient health information, personally identifiable information about our employees, banking information of our vendors, intellectual property, and proprietary business information.

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Because information systems, networks and other technologies are critical to many of our operating activities, shutdowns or service disruptions at our company or vendors that provide information systems, networks, or other services to us pose increasing risks.

Such disruptions may be caused by events such as computer hacking, phishing attacks, ransomware, dissemination of computer viruses, worms and other destructive or disruptive software, denial of service attacks and other malicious activity, as well as power outages, natural disasters (including extreme weather), terrorist attacks or other similar events.

Such disruptions may be caused by events such as computer hacking, phishing attacks, ransomware, business email compromises, social engineering (including phishing attacks), dissemination of computer viruses, worms and other destructive or disruptive software, denial-of-service attacks and other malicious activity, as well as power outages, natural disasters (including extreme weather), terrorist attacks or other similar events.

Such events could cause loss of data, damage to systems and data and leave us unable to utilize key business systems or access important data needed to operate our business.

Our contractors and collaborators have faced, and in the future may face, similar risks, and service disruptions or security breaches of their systems could adversely affect our security, leave us without access to important systems, products, raw materials, components, services or information or expose our confidential data.

Like other companies in our industry, we, and our contractors and collaborators, have experienced and will continue to experience cybersecurity threats and incidents relating to our information technology systems and infrastructure, including malicious codes and viruses, phishing, email compromise attacks, ransomware, or other cyber-attacks.

Such threats could adversely affect our security, leave us without access to important systems, products, raw materials, components, services or information and expose our confidential data.

For example, one of our third-party vendors experienced a business email compromise which resulted in us sending payment to a fraudulent bank account.

Funds were successfully recovered in this case, but it is possible that to the extent a similar future event occurs, funds will not be recoverable.

In addition, system redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient to cover all eventualities.

Significant events could result in a disruption of our operations, damage to our reputation or a loss of revenues.

In addition, we may not have adequate insurance coverage to compensate for any losses associated with such events.

We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in the information systems and networks of our company and our vendors, including personal information of our employees and patients, and company and vendor confidential data.

In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our personnel or the personnel of our vendors to disclose sensitive information in order to gain access to our data and/or systems.

Like other companies, we and our third-party vendors have on occasion experienced, and will continue to experience, threats to our or their data and systems, including malicious codes and viruses, phishing, email compromise attacks, ransomware, or other cyber-attacks.

For example, one of our third-party vendors experienced a business email compromise which resulted in us sending payment to a fraudulent bank account.

Funds were successfully recovered in this case, but it is possible that to the extent a similar future event occurs, funds will not be recoverable.

The number and complexity of these threats continue to increase over time.

If a material breach of our information technology systems or those of our vendors occurs, we could be required to expend significant amounts of money and other resources to respond to these threats or breaches and to repair or replace information systems or networks and could suffer financial loss or the loss of valuable confidential information.

If a material breach of our information technology systems or those of our vendors occurs, we could be required to provide legal notifications and disclosures, as well as expend significant amounts of money and other resources to respond to these threats or breaches and to repair or replace information systems or networks and could suffer financial loss or the loss of valuable confidential information.

In addition, we could be subject to regulatory actions and/or claims made by individuals and groups in private litigation involving privacy issues related to data collection and use practices and other data privacy laws and regulations, including claims for misuse or inappropriate disclosure of data, as well as unfair or deceptive practices.

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As we outsource more of our information systems to vendors, engage in more electronic transactions with payors and patients, and rely more on cloud-based information systems, the related security risks will increase and we will need to expend additional resources to protect our technology and information systems.

In addition, there can be no assurance that our internal information technology systems or those of our contractors and collaborators, as well as our and their efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruptions, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, ransomware, industrial espionage attack or insider threat attack that could adversely affect our business and operations and/or result in the loss or exposure of critical, proprietary, private, confidential or otherwise sensitive data, which could result in financial, legal, business or reputational harm to us.

In addition, there can be no assurance that our internal information technology systems or those of our contractors and collaborators, as well as our and their efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruptions, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, data breach, ransomware, industrial espionage attack or insider threat attack that could adversely affect our business and operations and/or result in the loss or exposure of critical, proprietary, private, confidential or otherwise sensitive data, which could result in financial, legal, business or reputational harm to us.

Further, our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations.

Further, although we maintain cyber liability insurance, this insurance may not provide adequate coverage against potential liabilities related to any experienced cybersecurity incident or breach.

The increasing use of artificial intelligence-based software (including machine learning) and social media platforms may result in reputation harm or liability or could otherwise adversely affect our business.

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Furthermore, use of artificial intelligence-based software may lead to the inadvertent release of confidential information which may impact our ability to realize the benefit of our intellectual property.

A growing number of laws and regulations are being adopted which focus on enforcement efforts surrounding artificial intelligence and the use of such technologies in compliance with ethical standards and societal expectations.

For example, the EU’s Artificial Intelligence Act imposes significant obligations on providers and deployers of artificial intelligence systems, and encourages ethical principles in the development and use of these systems.

Likewise, in the U.S., several states passed laws to regulate various uses of artificial intelligence.

In addition, various federal regulators have issued guidance and focused enforcement efforts on the use of artificial intelligence in regulated sectors.

The FDA, for example, issued guidance on the use of artificial intelligence in medical devices, requiring detailed risk management and review processes to obtain approvals.

We currently use systems that incorporate artificial intelligence, and if we develop or continue to use artificial intelligence systems governed by these laws or regulations, we will need to apply significant resources to design, develop, test and maintain such systems in accordance with applicable law and regulation, with the potential for significant enforcement or litigation in the event of any perceived non-compliance.

Additionally, our vendors may incorporate artificial intelligence tools into their offerings, and the providers of these artificial intelligence tools may not meet regulatory standards, including with respect to privacy and data security.

Further, bad actors around the world use increasingly sophisticated methods, including artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property.

Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business.

Relatedly, social media platforms are increasingly being used to communicate about our products and the diseases our medicines and drug candidates are designed to treat.

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If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face restrictive regulatory actions or incur other harm to our business.

Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

*Our failure to comply with privacy and data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.

In the U.S., Europe, China, and many other jurisdictions where we operate, we are subject to laws and regulations that address privacy, personal information protection, use of artificial intelligence-based software and data security.

Numerous laws and regulations, including, without limitation, privacy laws (such as the European Union’s General Data Protection Regulation (“GDPR”) or similar laws), security breach notification laws (such as Australia’s amendment to the Privacy Act), health information privacy laws (such as the United States’ Health Insurance Portability and Accountability Act (“HIPAA”) and the Human Genetic Resources Administration of China’s rules), and consumer protection laws (such as the United States’ Federal Trade Commission’s unfair or deceptive practices rules or California’s Consumer Privacy Act and California’s Privacy Rights Act), govern the collection, use, disclosure and protection of health-related and other personal information.

A subset of these laws also have strict requirements governing the cross-border transmission of personal information (see the risk factor titled “ Compliance with the Data Security Law of the People’s Republic of China (the “Data Security Law”), Cybersecurity Review Measures, Personal Information Protection Law of the People’s Republic of China (the “PIPL”), regulations and guidelines relating to the multi-level protection scheme (the “MLPS”) and any other future laws and regulations may entail significant expenses and could materially affect our business.

Numerous laws and regulations, including, without limitation, privacy laws (such as the European Union’s General Data Protection Regulation (“GDPR”) or similar laws), security breach notification laws (such as Australia’s amendment to the Privacy Act), health information privacy laws (such as the United States’ Health Insurance Portability and Accountability Act (“HIPAA”) and the Human Genetic Resources Administration of China’s rules), and consumer protection laws (such as the United States’ Federal Trade Commission’s unfair or deceptive practices rules, or California’s Consumer Privacy Act), govern the collection, use, disclosure and protection of health-related and other personal information.

A subset of these laws also have strict requirements governing the cross-border transfer of, or access to, personal information (see the risk factor titled “ Compliance with the Data Security Law of the People’s Republic of China (the “Data Security Law”), Cybersecurity Review Measures, Personal Information Protection Law of the People’s Republic of China (the “PIPL”), regulations and guidelines relating to the multi-level protection scheme (the “MLPS”) and any other future laws and regulations may entail significant expenses and could materially affect our business.

The legal and regulatory landscape around data privacy is rapidly changing with countries, states and other localities passing new laws and regulations every year.

For example, the U.S.

Department of Justice issued regulations implementing Executive Order (“EO”) 14117, “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern,” which became effective in April 2025 and prohibit certain transactions involving access to bulk sensitive data by countries of concern, such as China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and Venezuela.

For example, the regulations prohibit transactions involving human genomic data and biospecimens of more than 100 U.S.

individuals, except where necessary for specified exempt activities, such as for regulatory approvals, clinical investigations in support of FDA applications, and post-marketing surveillance.

Tracking and complying with these laws and regulations requires significant time and expenses and could materially affect our business.

By way of example and without limitation, these laws may require updating of contracts, informed consent forms, clinical trial protocols and privacy notices;

changes to company procedures;

changes to company procedures and corporate structures;

limiting what personal information we collect, who has access to it and how/where we use it;

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changes to the security and hosting solution of our systems;

changes to vendors and other third parties that we work with;

specific reporting and remediation efforts in the event of a data breach;

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Additionally, we may experience a reportable data breach (see the risk factor titled “ Our information technology systems, or those used by our contractors or collaborators, may fail or suffer security breaches, which could result in a material disruption of our product development and commercialization efforts ”).

Any failure or perceived failure by us to comply with applicable laws and regulations could subject us to significant administrative, civil or criminal fines or other penalties and negatively impact our reputation.

For severe violations, in some countries these laws even allow courts and government agencies to delay or halt transfer of personal information, require deletion of personal information, or even order we stop collection, use or other processing of personal information in that country.

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We face significant uncertainties and risks related to these laws, regulations and policies, some of which were only recently enacted, and the interpretation of these legal requirements by government regulators as applied to biotechnology companies like us.

For example, we do not maintain, nor do we intend to maintain in the future, personally identifiable health information of patients in China.

We do, however, collect and maintain de-identified or pseudonymized health data for clinical trials in compliance with local regulations.

This data could be deemed “personal data” or “important data” by government regulators.

For example, we collect and maintain de-identified or pseudonymized health data for clinical trials in compliance that could be deemed “personal data” or “important data” by government regulators.

With China’s growing emphasis of its sovereignty over data derived from China, the outbound transmission of de-identified or pseudonymized health data for clinical trials may be subject to the new national security legal regime, including the Data Security Law, the Cyber Security Law of the People’s Republic of China (the “Cyber Security Law”), the PIPL, and various implementing regulations and standards.

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Specifically, the Cyber Security Law provides that companies adopt an MLPS, under which network operators are required to perform obligations of security protection to ensure that the network is free from interference, disruption or unauthorized access, and prevent network data from being disclosed, stolen or tampered.

The CAC released draft amendments to the Cyber Security Law in September 2022, which propose to impose more stringent legal liabilities for violations.

Under the MLPS, entities’ operating information systems must have a thorough assessment of the risks and the conditions of their information and network systems to determine the level to which the entity’s information and network systems belong, from the lowest Level 1 to the highest Level 5, pursuant to a series of national standards on the grading and implementation of the classified protection of cybersecurity.

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We are obligated to notify affected individuals and appropriate Chinese regulators of, and respond to, any data security and network security incidents.

Chinese authorities have issued guidance, regulations, and amendments that continue to evolve the required standard of security and potential liabilities for violations.

For example, the Network Data Security Management Regulations issued in September 2024 impose detailed and prescriptive requirements for protecting network security.

Establishing and maintaining such systems takes substantial time, effort and cost, and we may not be able to establish and maintain such systems as fully as needed to ensure compliance with our legal obligations.

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Interpretation, application and enforcement of these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation, amendments to existing legislation or changes in enforcement.

Compliance with the Cyber Security Law, the Data Security Law and the PIPL could significantly increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future.

Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security, it is possible that our practices, offerings or platform could fail to meet all of the requirements imposed by the Cyber Security Law, the Data Security Law and/or related implementing regulations.

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Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

If a prolonged government shutdown occurs, or if staffing changes prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, including formal and informal interactions with product developers, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

In particular, the COVID-19 pandemic negatively impacted our business and our financial performance, and future global pandemics or other public health crises could have similar negative impacts, including delays or other disruptions to required regulatory inspections of our development activities, regulatory filings, manufacturing operations, or clinical trial recruitment and progress.

Currently, federal agencies in the U.S.

are operating under a continuing resolution that is set to expire on September 30, 2025.

Without appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S.

market could be impacted.

The Trump Administration has issued executive orders seeking to greatly reduce the size of the federal workforce, including through layoffs and severance packages offered to employees of federal agencies within the executive branch and independent agencies, including the FDA.

Any such reduction in personnel may result in longer review times by the FDA and other agencies.

Furthermore, the COVID-19 pandemic negatively impacted our business and our financial performance, and future global pandemics or other public health crises could have similar negative impacts, including delays or other disruptions to required regulatory inspections of our development activities, regulatory filings, manufacturing operations, or clinical trial recruitment and progress.

Additionally, the commercial or clinical supply of our medicines and drug candidates could be negatively impacted due to reduced operations or a shutdown of our or our third-party manufacturing facilities, distribution channels and transportation systems, or shortages of raw materials and drug product.

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The effects could impair, for example, the availability and cost of certain products, commodities and energy (including utilities), which in turn may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require.

Furthermore, related environmental regulation as a response to climate change could result in additional costs in the form of taxes and investments of capital to maintain complacent with such laws.

We bear losses incurred as a result of, for example, physical damage to or destruction of our facilities, loss or spoilage of inventory, and business interruption due to weather events that may be attributable to climate change and could materially adversely affect our business operations, financial position or results of operation.

Furthermore, related environmental regulation as a response to climate change could result in additional costs in the form of taxes and investments of capital to maintain compliant with such laws.

We bear losses incurred as a result of, for example, physical damage to or destruction of our facilities, loss or spoilage of inventory, and business interruption due to weather events that may be attributable to climate change, which could materially adversely affect our business operations, financial position or results of operation.

Product liability claims or lawsuits could cause us to incur substantial liabilities.

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If we cannot successfully defend ourselves against, or obtain indemnification from our collaborators for, product liability claims, we may incur substantial liabilities or be required to limit commercialization of our medicines and drug candidates.

Even successful defense would require significant financial and management resources.

Even a successful defense would require significant financial and management resources.

Regardless of the merits or eventual outcome, liability claims may result in:

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laws and regulations on foreign investment in the U.S.

under the jurisdiction of the CFIUS and other agencies;

under the jurisdiction of CFIUS and other agencies;

the effects of applicable local tax regimes and potentially adverse tax consequences;

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In the U.S., the Alternative Reference Rate Committee (“ARRC”), a steering committee assembled by the Federal Reserve Board and the Federal Reserve Bank of New York, was tasked with identifying alternative reference rates to replace LIBOR.

The AARC selected, and the Federal Reserve Bank of New York has recommended, the Secured Overnight Finance Rate (“SOFR”) as an alternative to LIBOR.

The AARC selected, and the Federal Reserve Bank of New York recommended, the Secured Overnight Finance Rate (“SOFR”) as an alternative to LIBOR.

SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.

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LIBOR and SOFR have significant differences:

LIBOR was an unsecured lending rate and SOFR is a secured lending rate, and SOFR is an overnight rate while LIBOR is a forward-looking rate that reflected term rates at different maturities.

LIBOR is an unsecured lending rate and SOFR is a secured lending rate, and SOFR is an overnight rate while LIBOR is a forward-looking rate that reflected term rates at different maturities.

At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates, and as such, the replacement of LIBOR could have an adverse effect on the market for, or value of, LIBOR-linked financial instruments.

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Risks Related to Our Doing Business in the PRC

*Changes in the political and economic policies of the PRC government or in relations between China and the United States or other governments and the significant oversight and discretion the PRC government has over the conduct of the business operations of our PRC subsidiaries may materially and adversely affect our business, financial condition, and results of operations and may result in our inability to sustain our growth and expansion strategies.

Changes in the political and economic policies of the PRC government or in relations between China and the U.S.

or other governments and the significant oversight and discretion the PRC government has over the conduct of the business operations of our PRC subsidiaries may materially and adversely affect our business, financial condition, and results of operations and may result in our inability to sustain our growth and expansion strategies.

Due to our operations in China, our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in the PRC or changes in government relations between China and the U.S.

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The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.

In December 2020, the Holding Foreign Companies Accountable Act (“HFCAA”), was signed into law, providing that if the SEC determines we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit securities from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.

The Holding Foreign Companies Accountable Act (as amended, the “HFCAA”) provides that if the SEC determines an issuer has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years beginning in 2021, the SEC shall prohibit that issuer’s securities from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.

Following the filing of our annual report on Form 10-K for fiscal year ended December 31, 2021, which was audited by Ernst & Young Hua Ming LLP, the SEC added us to its list of Commission-Identified Issuers identified under HFCAA.

In December 2022, the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) was signed into law, which amended the HFCAA to shorten the three-year period to two years.

However, as our global business expanded, we built substantial organizational capabilities outside of the PRC and we evaluated, designed and implemented business processes and control changes which enabled us to engage Ernst & Young LLP, located in Boston, Massachusetts, U.S., as our independent registered public accounting firm for the audits of our financial statements and internal control over financial reporting commencing for the fiscal years ended December 31, 2022 and December 31, 2023.

We believe that this satisfies the PCAOB inspection requirements for the audit of our consolidated financial statements prior to the two-year deadline of the AHFCAA.

Given that Ernst and Young LLP (U.S.) has served as the principal accountant to audit our consolidated financial statements since 2022, we are compliant with the HFCAA and AHFCAA and can certify that we retained a registered public accounting firm that the PCAOB is able to inspect or investigate which would preclude any further finding by the SEC that we are a Commission-Identified Issuer and therefore the delisting of our ADSs from Nasdaq.

We believe that this satisfies the PCAOB inspection requirements for the audit of our consolidated financial statements prior to the two-year deadline of the HFCAA.

Given that Ernst and Young LLP (U.S.) has served as the principal accountant to audit our consolidated financial statements since 2022, we believe this should preclude the delisting of our ADSs from Nasdaq under HFCAA.

We may be subject to enforcement under similar legislation that may be enacted into law or executive orders that may be adopted in the future.

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According to the Revised Confidentiality and Archives Administration Provisions, where overseas securities regulators or relevant competent authorities request to inspect, investigate or collect evidence from Chinese domestic companies concerning their overseas offering and listing or their securities firms and securities service providers that undertake securities business for such Chinese domestic companies, such inspection, investigation and evidence collection must be conducted under the cross-border regulatory cooperation mechanism, and the CSRC or competent authorities of the Chinese government will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanism.

Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of a mutual and practical cooperation mechanism.

may not be efficient in the absence of a mutual and practical cooperation mechanism.

For risks associated with investing in us as a Cayman Islands company, see the risk factor titled “Because we are a Cayman Islands company, our shareholders may have fewer shareholder rights than they would have under Hong Kong law, Chinese law or U.S.

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In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each operating subsidiary.

As of September 30, 2024 and December 31, 2023, these restricted assets totaled $4.5 billion and $4.1 billion, respectively.

As of March 31, 2025 and December 31, 2024, these restricted assets totaled $1.8 billion and $1.7 billion, respectively.

Our PRC subsidiaries generate primarily all of their revenue in RMB, which is not freely convertible into other currencies.

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Broad market and industry factors may negatively affect the market price of our ordinary shares, ADSs, and/or RMB Shares, regardless of our actual operating performance.

The characteristics of capital markets in the United States, Hong Kong and Shanghai are different, which may cause volatility in the market price of our ordinary shares, ADSs, and RMB Shares.

The characteristics of capital markets in the U.S., Hong Kong and Shanghai are different, which may cause volatility in the market price of our ordinary shares, ADSs, and RMB Shares.

Our ordinary shares are listed on the HKEx in Hong Kong under the stock code “06160”, our ADSs are listed on Nasdaq in the U.S.

under the symbol “BGNE”, and our RMB Shares are listed on the STAR Market in the PRC under the stock code “688235”.

under the symbol “ONC”, and our RMB Shares are listed on the STAR Market in the PRC under the stock code “688235”.

Under current PRC laws and regulations, our ADSs and ordinary shares listed on Nasdaq and the HKEx are not interchangeable or fungible with the RMB Shares listed on the STAR Market, and there is no trading or settlement between either Nasdaq or the HKEx on the one hand, and the STAR Market on the other hand.

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These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

As of November 1, 2024, 1,386,034,320 ordinary shares, par value $0.0001 per share, were outstanding, of which 868,958,610 ordinary shares were held in the form of 66,842,970 ADSs, each representing 13 ordinary shares, and 115,055,260 were RMB Shares.

As of May 2, 2025, 1,403,311,086 ordinary shares, par value $0.0001 per share, were outstanding, of which 740,541,607 ordinary shares were held in the form of 56,964,739 ADSs, each representing 13 ordinary shares, and 115,055,260 were RMB Shares.

We filed a registration statement on Form S-3 with the SEC on behalf of certain shareholders on May 9, 2023, registering 298,738,765 ordinary shares, including 222,835,028 ordinary shares in the form of 17,141,156 ADSs to be resold by the selling shareholders identified therein and in any related prospectus supplement from time to time.

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Our corporate actions are substantially controlled by our directors, executive officers and other principal shareholders, who can exert significant influence over important corporate matters, which may reduce the price of our ordinary shares, ADSs, and/or RMB Shares and deprive shareholders of an opportunity to receive a premium for their ordinary shares, ADSs, and/or RMB Shares.

Our directors, executive officers and principal shareholders beneficially owned approximately 51% of our outstanding ordinary shares as of November 1, 2024.

Our directors, executive officers and principal shareholders beneficially owned approximately 45% of our outstanding ordinary shares as of May 2, 2025.

These shareholders, if acting together, could exert substantial influence over matters such as electing directors and approving material mergers, acquisitions or other business combination transactions.

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Holders are urged to consult their own tax advisors with respect to our potential CFC status and the consequences thereof.

Risks Related to Our Continuation to Switzerland

*Your rights as a shareholder will change as a result of the Continuation.

As announced in August 2024, and approved by shareholders on April 28, 2025, we are changing our jurisdiction of incorporation from the Cayman Islands to Switzerland through a transaction known as a continuation under Section 206 of the Companies Act (as amended) of the Cayman Islands and Article 161 of the Swiss Federal Code on Private International Law (such transaction, the “Continuation”).

Because of differences in Swiss law and Cayman law and certain changes that will be made to our governing documents in connection with the Continuation, your rights as a shareholder will change if the Continuation is completed.

For a description of these differences, see “Proposal No.

Approval of the Continuation — Comparison of Shareholder Rights” in the proxy statement/prospectus filed with the SEC on March 10, 2025.

As a result of increased shareholder voting requirements upon completion of the Continuation, we will have less flexibility with respect to certain aspects of capital management than previously.

Under Cayman law, our directors may issue, without shareholder approval, any ordinary shares authorized in our amended and restated articles of association that are not issued or reserved.

In addition, our board of directors has the right, subject to statutory limitations, to declare and pay dividends on our ordinary shares without a shareholder vote.

Swiss law allows our shareholders to authorize our board of directors to issue new registered shares from the redomiciled Swiss public company for general corporate purposes based on a capital band included in the proposed Swiss articles, and for convertible instruments and for long term incentive plan purposes based on a conditional capital included in the proposed Swiss articles, in each case without additional shareholder approval.

However, the shareholder authorization for general corporate purposes must be renewed by the shareholders at least every five years, and both the authorizations under the capital band and the conditional capital are limited to 50% of a company’s stated capital.

Swiss law also reserves for approval by shareholders many corporate actions over which our board of directors currently has authority.

For example, dividends must be approved by shareholders.

While we do not believe that the differences between Cayman law and Swiss law relating to our capital management will have an adverse effect on our company, we cannot assure you that situations will not arise where such flexibility would have provided substantial benefits to our shareholders.

*The Continuation will result in additional direct and indirect costs whether or not completed.

The Continuation will result in additional direct costs.

Following the Continuation, we may hold a large portion of meetings of our board of directors and management strategy meetings as well as our annual general meetings in Basel.

We also plan to continue expanding our physical presence in Switzerland.

With that, we will further strengthen our presence in Switzerland.

We will incur additional costs and expenses, primarily Swiss tax and professional fees, to comply with Swiss corporate and tax laws.

In addition, we will incur attorneys’ fees, accountants’ fees, filing fees, mailing expenses and financial printing expenses in connection with the Continuation, whether or not it is approved.

The Continuation may also result in certain indirect costs by diverting attention of our management and employees from our business with resulting increased administrative costs and expenses.

*If you fail to make a required tax filing, the Continuation could result in adverse tax consequences for you.

Depending on your circumstances, you may be required to make a filing with the U.S.

Internal Revenue Service or your respective tax authority, as a result of the change of our place of incorporation.

Failure to make this filing on a timely basis could result in your owing taxes because of the change, even though you will not have realized any income or liquidity as a result of the change.

For a more detailed description of the tax consequences associated with this transaction, please read “Proposal No.

Approval of the Continuation — Material Tax Considerations — United States Tax Considerations” in the proxy statement/prospectus filed with the SEC on March 10, 2025.

*You may be subject to Swiss withholding taxes on the payment of dividends.

Under current Swiss law, distributions made out of capital contribution reserves recognized by the Swiss Federal Tax Administration or made in the form of a par value reduction are not subject to Swiss withholding tax.

We currently expect to have qualifying capital contribution reserves in the amount of approximately US$11-12 billion available for distribution not subject to Swiss withholding tax as of the effective date of the Continuation.

However, there can be no assurances that the Swiss withholding rules will not be changed in the future or that shareholders will approve a distribution out of qualifying capital contribution reserves recognized by the Swiss Federal Tax Administration.

Further, over the long term, the amount of qualifying contribution reserves available may be limited.

If we are unable to make a distribution out of qualifying capital contribution reserves, then any dividends paid will generally be subject to a Swiss withholding tax at a rate of 35%.

The withholding tax must be withheld from the gross distribution and paid to the Swiss Federal Tax Administration.

Currently, dividends, if any, paid on our shares are not subject to withholding tax in the Cayman Islands.

holder that qualifies for benefits under the Convention between the U.S.

and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income, (the “U.S.-Swiss Treaty”), may apply for a refund of the tax withheld in excess of the 15% treaty rate (or for a full refund in case of qualified pension funds).

A China Holder that qualifies for benefits under the Agreement between the Government of the People’s Republic of China and the Swiss Federal Council for the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital (“PRC-Swiss Treaty”) may apply for a refund of the tax withheld in excess of the 10% or 5% treaty rate (as applicable).

A Hong Kong shareholder that qualifies for benefits under the Agreement between the Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income (“Hong Kong-Swiss Treaty”) may apply for a refund of the tax withheld in excess of the 10% treaty rate (or a full refund in case of specific qualified persons, including, a pension fund, or a corporate shareholder that directly holds at least 10% our capital).

Subject to applicable laws and regulations, this may also apply to other shareholders that are entitled to a dividend withholding tax rate lower than the Swiss withholding tax rate under the tax treaties between the shareholders’ own tax residency jurisdictions and Switzerland.

Switzerland currently has concluded more than 100 tax treaties with the same treatment regarding the refund of Swiss withholding taxes.

Under current Swiss law, repurchases of shares for the purposes of capital reduction are treated as a partial liquidation subject to 35% Swiss withholding tax, irrespective of the tax residency of the shareholder.

The repurchase of shares for purposes other than capital reduction, such as to retain as treasury shares for use in connection with equity incentive plans, convertible debt, similar instruments or acquisitions, will not be subject to the 35% Swiss withholding tax, irrespective of the tax residency of the shareholder.

Any portion of the repurchase price attributable to par value or qualifying capital contribution reserves recognized by the Swiss Federal Tax Administration will not be subject to the 35% Swiss withholding tax.

See “Proposal No.

Approval of the Continuation — Material Tax Considerations — Taxation of Shareholders Subsequent to the Continuation — Swiss Taxation” in the proxy statement/prospectus filed with the SEC on March 10, 2025.

We will be subject to various Swiss taxation as a result of the Continuation.

We will be subject to corporate income tax at federal, cantonal and communal levels on our worldwide income.

However, qualifying net dividend income and net capital gains on the sale of qualifying investments in subsidiaries are effectively exempt from federal, cantonal and communal corporate income tax under the Swiss participation relief rules.

Consequently, we expect dividends from our subsidiaries and capital gains from sales of investments in our subsidiaries to be exempt from Swiss corporate income tax.

In addition, we will be subject to an annual cantonal capital tax on our year-end taxable equity.

We will also be subject to a Swiss issuance stamp tax levied on any future issuance of shares or any other increase in our equity unless the equity is increased in the context of a merger or other qualifying restructuring transaction.

In addition, we will be subject to some other Swiss taxes (e.g., VAT and Swiss securities transfer stamp tax).

We are currently not subject to income, capital, stamp or issuance taxes in the Cayman Islands.

Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.

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What changed 10-Q

Item 1A. Risk Factors