BeOne Medicines Ltd. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Cautionary Note Regarding Forward-Looking Statements You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements (unaudited) and related notes included in the section of this Quarterly Report on Form 10-Q (this “Quarterly Report”), titled “Part I – Item 1 – Financial Statements.” This Quarterly Report contains forward-looking statements t hat involve substantial risks and uncertainties. These forward-looking statements are based on management’s current expectations and projections about future events and trends that may affect the business, financial condition, and operating results. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Forward-looking statements often include words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms or other similar expressions. These forward-looking statements include, among other things, statements about: our ability to successfully commercialize our approved medicines and to obtain approvals in additional indications and territories for our medicines; our ability to successfully develop and commercialize our in-licensed medicines and drug candidates and any other medicines and drug candidates we may in-license; our ability to further develop sales and marketing capabilities and launch and commercialize new medicines, if approved; our ability to maintain and expand regulatory approvals for our medicines and drug candidates, if approved; the pricing and reimbursement of our medicines and drug candidates, if approved; the initiation, timing, progress and results of our preclinical studies and clinical trials and our research and development programs; our ability to advance our drug candidates into, and successfully complete, clinical trials and obtain regulatory approvals; our reliance on the success of our clinical stage drug candidates; our plans, expected milestones and the timing or likelihood of regulatory filings and approvals; the implementation of our business model, strategic plans for our business, medicines, drug candidates and technology; the scope of protection we (or our licensors) are able to establish and maintain for intellectual property rights covering our medicines, drug candidates and technology; our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property rights and proprietary technology of third parties; costs associated with enforcing or defending against intellectual property infringement, misappropriation or violation, product liability and other claims; the regulatory environment and regulatory developments in the United States (“U.S.”), China, the United Kingdom (“UK”), Switzerland, the European Union (“EU”) and other jurisdictions in which we operate; the accuracy of our estimates regarding expenses, revenues, including collaboration revenue, capital requirements and our need for additional financing; the potential benefits of strategic collaboration and licensing agreements and our ability to enter into and maintain strategic arrangements; our construction and operation of independent production facilities for small molecule medicines and large molecule biologics, as well as clinical R&D facilities, to support the global demand for both commercial and clinical supply; our reliance on third parties to conduct drug development, manufacturing and other services; our ability to manufacture and supply, or have manufactured and supplied, drug candidates for clinical development and medicines for commercial sale; the rate and degree of market access and acceptance of our medicines and drug candidates, if approved; developments relating to our competitors and our industry, including competing therapies; the size of the potential markets for our medicines and drug candidates and our ability to serve those markets; our ability to effectively manage our growth; our ability to attract and retain qualified employees and key personnel; statements regarding future revenue, key milestones, expenses, capital expenditures, capital requirements and share performance; and the future trading price of our ADSs, ordinary shares and RMB Shares, and impact of securities analysts’ reports on these prices. These statements involve risks and uncertainties, including those that are described in “Part II—Item 1A—Risk Factors” of this Quarterly Report, that may cause actual future events or results to differ materially from those expected. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We do not assume any obligation to update any forward-looking statements where as a result of new information or otherwise, except as required by law. This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information. Effective May 27, 2025, we changed 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 Act on Private International Law (the “Continuation”) and changed our legal English name from BeiGene, Ltd. to BeOne Medicines Ltd. This Quarterly Report includes the results of BeiGene, Ltd. prior to the Continuation and BeOne Medicines Ltd. following the Continuation. Unless the context requires otherwise, in this Quarterly Report, the terms “BeOne,” the “Company,” “we,” “us” and “our” refer to (i) BeOne Medicines Ltd., a Switzerland holding company with operations conducted by its subsidiaries, and its subsidiaries, on a consolidated basis, following the Continuation and (ii) BeiGene, Ltd., a Cayman Islands holding company with operations conducted by its subsidiaries, and its subsidiaries, on a consolidated basis, prior to the Continuation. 24 Table of Contents Non-GAAP Financial Measures We provide certain financial measures that are not defined under accounting principles generally accepted in the United States of America (“GAAP”), commonly referred to as non-GAAP financial measures, including Adjusted Operating Expenses, Adjusted Income (Loss) from Operations, Adjusted Net Income (Loss), Adjusted Earnings Per Share, Free Cash Flow and certain other non-GAAP measures, each of which include adjustments to GAAP figures. These non-GAAP measures are intended to provide additional information on our operating performance. Adjustments to our GAAP figures exclude, as applicable, non-cash items such as share-based compensation, depreciation and amortization. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred. Non-GAAP adjustments are tax effected to the extent there is US GAAP current tax expense. The Company currently records a valuation allowance on its net deferred tax assets, so there is no net impact recorded for deferred tax effects. We maintain an established non-GAAP policy that guides the determination of what items may be excluded in non-GAAP financial measures. We believe that these non-GAAP measures, when considered together with the GAAP figures, can enhance an overall understanding of our operating performance. The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of our historical and expected financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators BeOne’s management uses for planning and forecasting purposes and measuring our performance. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, GAAP financial measures. The non-GAAP financial measures used by BeOne may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies. Overview Our second quarter performance reinforces us as a global oncology leader and proves our ability to deliver sustainable, long-term growth. BRUKINSA continues as the BTK inhibitor market leader in the US across five indications. Our two additional Phase 3 hematology assets, BCL2 inhibitor sonrotoclax and BTK CDAC BGB-16673, have the potential to expand our franchise with pivotal data readouts and new trial initiations anticipated in the near-term. At our recent Investor R&D Day, we outlined more than 20 expected R&D milestones in the next 18 months. This includes advances across our solid tumor pipeline, where we are building future global franchises targeting a range of highly prevalent cancers. Key highlights for the second quarter of 2025 are as follows: • Second quarter 2025 total revenues increased 42% to $1.3 billion versus second quarter 2024 • Global BRUKINSA ® (zanubrutinib) revenues increased 49% to $950 million versus second quarter 2024 • Reported GAAP diluted Earnings per American Depositary Share (ADS) of $0.84, non-GAAP diluted Earnings per ADS of $2.25 • Anticipate 20+ near-term milestones in next 18 months across hematology and solid tumor pipeline 25 Table of Contents Recent Developments Recent Business Developments On July 31, 2025, we announced that the European Medicines Agency (“EMA”) has granted PRIority MEdicines (PRIME) designation to the Company’s investigational Bruton’s tyrosine kinase (BTK) degrader, BGB-16673, for the treatment of patients with Waldenstrom’s macroglobulinemia (WM) previously treated with a BTK inhibitor. On July 28, 2025, we announced that the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency issued a positive opinion recommending approval of TEVIMBRA ® (tislelizumab), in combination with platinum-containing chemotherapy as neoadjuvant treatment and then continued as monotherapy as adjuvant treatment, for the treatment of adult patients with resectable non-small cell lung cancer (NSCLC) at high risk of recurrence. On July 10, 2025, we announced that the European Commission has approved TEVIMBRA, in combination with gemcitabine and cisplatin, for the first-line treatment of adult patients with metastatic or recurrent nasopharyngeal carcinoma, not amenable to curative surgery or radiotherapy. On June 26, 2025, we announced major advancements to our industry-leading oncology pipeline during our investor R&D Day. On June 25, 2025, we announced that the CHMP of the European Medicines Agency issued a positive opinion recommending approval of a new film-coated tablet formulation of BRUKINSA ® (zanubrutinib) for all approved indications. The CHMP positive opinion will now be reviewed by the European Commission, which will grant the marketing authorization for the tablet formulation in the European Union and in the European Economic Area countries Norway and Iceland. On June 11, 2025, we announced that the U.S. Food and Drug Administration approved a new tablet formulation of BRUKINSA for all five approved indications. On May 27, 2025, we announced our new name and completed the redomiciliation to Switzerland, marking a significant milestone in the Company’s evolution. 26 Table of Contents Results of Operations The following table summarizes our results of operations for the three and six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30, Change June 30, Change 2025 2024 $ % 2025 2024 $ % (dollars in thousands) Revenues Product revenue, net $ 1,302,076 $ 921,146 $ 380,930 41.4 % $ 2,410,606 $ 1,668,064 $ 742,542 44.5 % Collaboration revenue 13,224 8,020 5,204 64.9 % 21,973 12,754 9,219 72.3 % Total revenues 1,315,300 929,166 386,134 41.6 % 2,432,579 1,680,818 751,761 44.7 % Cost of sales - product 164,606 138,132 26,474 19.2 % 329,608 263,067 66,541 25.3 % Gross profit 1,150,694 791,034 359,660 45.5 % 2,102,971 1,417,751 685,220 48.3 % Operating expenses Research and development 524,896 454,466 70,430 15.5 % 1,006,783 915,104 91,679 10.0 % Selling, general and administrative 537,913 443,729 94,184 21.2 % 997,201 871,156 126,045 14.5 % Total operating expenses 1,062,809 898,195 164,614 18.3 % 2,003,984 1,786,260 217,724 12.2 % Income (loss) from operations 87,885 (107,161) 195,046 (182.0) % 98,987 (368,509) 467,496 (126.9) % Interest income, net 3,497 13,225 (9,728) (73.6) % 9,345 29,385 (20,040) (68.2) % Other income (expense), net 8,167 (11,984) 20,151 (168.1) % 12,117 (10,222) 22,339 (218.5) % Income (loss) before income taxes 99,549 (105,920) 205,469 (194.0) % 120,449 (349,346) 469,795 (134.5) % Income tax expense 5,229 14,485 (9,256) (63.9) % 24,859 22,209 2,650 11.9 % Net income (loss) $ 94,320 $ (120,405) $ 214,725 (178.3) % $ 95,590 $ (371,555) $ 467,145 (125.7) % Comparison of the Three Months Ended June 30, 2025 and 2024 Revenue Total revenue increased to $1,315.3 million for the three months ended June 30, 2025, from $929.2 million for the three months ended June 30, 2024, due to increased sales of BRUKINSA, TEVIMBRA, and our in-licensed products from Amgen. Net product revenue consisted of the following: Three Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) BRUKINSA ® $ 949,840 $ 637,399 $ 312,441 49.0 % TEVIMBRA ® 193,524 158,410 35,114 22.2 % XGEVA ® 81,318 55,054 26,264 47.7 % BLINCYTO ® 25,587 19,131 6,456 33.7 % KYPROLIS ® 19,416 15,936 3,480 21.8 % POBEVCY ® 11,242 11,572 (330) (2.9) % Other 21,149 23,644 (2,495) (10.6) % Total product revenue $ 1,302,076 $ 921,146 $ 380,930 41.4 % Net product revenue increased 41.4% to $1,302.1 million for the three months ended June 30, 2025, compared to $921.1 million in the prior-year period, primarily due to increased sales of BRUKINSA globally, driven by continued growth in the U.S. and Europe. In addition, product revenues in the second quarter of 2025 were positively impacted by sales of TEVIMBRA and in-licensed products from Amgen, primarily XGEVA ® . 27 Table of Contents Global revenue for BRUKINSA totaled $949.8 million in the second quarter, representing a 49.0% increase compared to the prior-year period; U.S. revenue for BRUKINSA totaled $683.7 million in the second quarter, compared to $479.4 million in the prior-year period, representing growth of 42.6%, driven primarily by robust demand growth across all indications and modest benefit due to net pricing. BRUKINSA continues to maintain its leading new patient share across the BTKi class due to its differentiated, best-in-class clinical profile. BRUKINSA revenue in Europe totaled $150.5 million in the second quarter, compared to $81.4 million in the prior-year period, representing growth of 84.9%, driven by increased market share across all major European markets, including Germany, Italy, Spain, France and the UK. BRUKINSA revenue in China totaled $83.2 million, representing growth of 30.8%. BRUKINSA rest of world revenue totaled $32.5 million in the second quarter, representing growth of 149.0% compared to the prior-year period. Revenue for TEVIMBRA totaled $193.5 million in the second quarter, compared to $158.4 million in the prior-year period, representing a 22.2% increase. Revenue for Amgen products in China totaled $126.3 million in the second quarter, compared to $90.1 million in the prior-year period, representing a 40.2% increase, driven primarily by increased XGEVA ® sales volume. Collaboration revenue totaled $13.2 million and $8.0 million for the three months ended June 30, 2025 and 2024, respectively, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement and royalty revenue under the Amgen collaboration. Gross Margin Gross margin on global product sales increased to $1,137.5 million for the three months ended June 30, 2025, compared to $783.0 million in the prior-year period, primarily due to increased product sales in the current year period. Gross margin as a percentage of product sales increased to 87.4% for the three months ended June 30, 2025, from 85.0% in the comparable period of the prior year. The gross margin percentage increased due to a proportionally higher sales mix of global BRUKINSA compared to other products in our portfolio. Gross margin also benefited from cost of sales productivity improvements for both BRUKINSA and TEVIMBRA. On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 88.1%, from 85.4% in the comparable period of the prior year. Research and Development Expense Research and development expense increased by $70.4 million, or 15.5%, to $524.9 million for the three months ended June 30, 2025 from $454.5 million for the three months ended June 30, 2024. The following table summarizes external clinical, external non-clinical and internal research and development expense for the three months ended June 30, 2025 and 2024, respectively: Three Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 182,567 $ 124,762 $ 57,805 46.3 % Upfront license and development milestone fees 500 11,500 (11,000) (95.7) % Amgen co-development expense 1 26,439 22,482 3,957 17.6 % Total external research and development expenses 209,506 158,744 50,762 32.0 % Internal research and development expenses 315,390 295,722 19,668 6.7 % Total research and development expenses $ 524,896 $ 454,466 $ 70,430 15.5 % Adjusted research and development expenses 2 $ 444,057 $ 382,509 $ 61,548 16.1 % 1. Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the three months ended June 30, 2025 totaled $52.2 million, of which $26.4 million was recorded as R&D expense. The remaining $25.8 million was recorded as a reduction of the R&D cost share liability. 2. Adjusted research and development expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. 28 Table of Contents The increase in external research and development expenses in the second quarter was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, including Sonrotoclax (BCL2i), offset by lower development upfront and milestone fees. Internal research and development expense increased by $19.7 million, or 6.7%, to $315.4 million, and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend. Selling, General and Administrative Expense Three Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) Selling, general and administrative expenses $ 537,913 $ 443,729 $ 94,184 21.2 % Adjusted selling, general and administrative expenses 1 $ 441,655 $ 363,922 $ 77,733 21.4 % 1. Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. Selling, general and administrative expense increased by $94.2 million, or 21.2%, to $537.9 million for the three months ended June 30, 2025, from $443.7 million for the three months ended June 30, 2024. The increase was primarily attributable to continued investment in global commercial expansion primarily in the U.S. and Europe. Selling, general and administrative expenses as a percentage of product sales were 41.3% in the second quarter of 2025 compared to 48.2% in the prior-year period. We expect continued investment in selling and marketing activities as our product sales increase. Interest Income, Net Interest income, net decreased by $9.7 million, or 73.6%, to $3.5 million for the three months ended June 30, 2025, from $13.2 million for three months ended June 30, 2024. The decrease in interest income, net, was primarily attributable to decreased interest income resulting from lower interest rates on our cash and cash equivalents balance. Interest expense increased resulting from higher interest rates on debt balance and lower interest capitalized related to completion of certain phases of our Hopewell facility. Other Income (Expense), Net Other income, net was $8.2 million for the three months ended June 30, 2025, primarily due to foreign exchange gains and government subsidy income, partially offset by unrealized losses on our equity investments. For the three months ended June 30, 2024, other expense, net was $12.0 million, primarily due to foreign exchange losses. Income Tax Expense Income tax expense was $5.2 million for the three months ended June 30, 2025 as compared to $14.5 million for the three months ended June 30, 2024. The income tax expense for the three months ended June 30, 2025 was primarily attributable to current Switzerland tax expense based on year to date earnings, current China tax expense due to certain non-deductible expenses, offset by discrete adjustments of approximately $14.2 million, primarily related to updated provision estimates for R&D tax credits. The income tax expense for the three months ended June 30, 2024 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits, current Switzerland tax expense based on year to date earnings, and current China tax expense due to certain non-deductible expenses. On July 4, 2025, the reconciliation bill (H.R. 1), commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law and includes a broad range of tax reform provisions that may affect our financial results. The OBBBA allows an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on foreign-derived deduction eligible Income. We are in the process of evaluating the impact of the OBBBA on our consolidated financial statements. 29 Table of Contents Net Income (Loss) and Earnings Per Share GAAP net income improved for the second quarter of 2025, as compared to the prior-year period loss, primarily attributable to revenue growth and improved operating leverage. For the second quarter of 2025, basic and diluted earnings per share was $0.07 and $0.06 per share and $0.87 and $0.84 per American Depositary Share (“ADS”), respectively, compared to basic loss of $0.09 per share and $1.15 per ADS in the prior-year period. Comparison of the Six Months Ended June 30, 2025 and 2024 Revenue Total revenue increased to $2,432.6 million, or 44.7%, for the six months ended June 30, 2025, from $1,680.8 million for the six months ended June 30, 2024, primarily due to increased sales of our internally developed products, BRUKINSA and tislelizumab, as well as increased sales of in-licensed products, most notably from the Amgen products. Net product revenues consisted of the following: Six Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) BRUKINSA ® 1,741,504 1,125,914 $ 615,590 54.7 % TEVIMBRA ® 364,688 303,687 61,001 20.1 % XGEVA ® 151,741 98,435 53,306 54.2 % BLINCYTO ® 49,493 33,497 15,996 47.8 % KYPROLIS ® 39,144 30,047 9,097 30.3 % POBEVCY ® 24,987 28,205 (3,218) (11.4) % Other 39,049 48,279 (9,230) (19.1) % Total product revenue 2,410,606 1,668,064 742,542 44.5 % Net product revenue increased 44.5% to $2,410.6 million for the six months ended June 30, 2025, compared to $1,668.1 million in the prior-year period, primarily due to increased sales of BRUKINSA globally, driven by continued growth in the U.S. and Europe. In addition, product revenues in the six months ended June 30, 2025 were positively impacted by sales of TEVIMBRA and in-licensed products from Amgen, primarily XGEVA ® . Global sales of BRUKINSA totaled $1,741.5 million in the six months ended June 30, 2025, representing a 54.7% increase compared to the prior-year period. U.S. sales of BRUKINSA totaled $1,246.9 million in the six months ended June 30, 2025, compared to $830.8 million in the prior-year period, representing growth of 50.1%, driven primarily by robust demand growth across all indications and modest benefit due to net pricing. BRUKINSA continues to maintain its leading new patient share across the BTKi class due to its differentiated, best-in-class clinical profile. BRUKINSA sales in Europe totaled $266.4 million in the six months ended June 30, 2025, representing growth of 79.7% driven by increased market share across all major European markets, including Germany, Italy, Spain, France and the UK. BRUKINSA revenue in China totaled $164.4 million, representing growth of 35.8%. BRUKINSA rest of world revenue totaled $63.9 million in the six months ended June 30, 2025, representing growth of 147.2% compared to the prior-year period. Revenue for TEVIMBRA totaled $364.7 million in the six months ended June 30, 2025, compared to $303.7 million in the prior-year period, representing a 20.1% increase. Revenue for Amgen products in China totaled $240.4 million in the six months ended June 30, 2025, compared to $162.0 million in the prior-year period, driven primarily by increased XGEVA ® sales volume. Collaboration revenue totaled $22.0 million and $12.8 million for the six months ended June 30, 2025 and 2024, respectively, primarily related to revenue generated under the Novartis broad markets marketing and promotion agreement and royalty revenue under the Amgen collaboration. 30 Table of Contents Gross Margin Gross margin on product sales increased to $2,081.0 million for the six months ended June 30, 2025, compared to $1,405.0 million in the prior-year period, primarily due to increased product revenue in the current year period. Gross margin as a percentage of product sales increased to 86.3% for the six months ended June 30, 2025, from 84.2% in the comparable period of the prior year. The gross margin percentage increased due to a proportionally higher sales mix of global BRUKINSA compared to other products in our portfolio. Gross margin also benefited from cost of sales productivity improvements for both BRUKINSA and TEVIMBRA. On an adjusted basis, which does not include depreciation and amortization, gross margin as a percentage of product sales increased to 86.9%, from 84.7% in the comparable period of the prior year. Research and Development Expense Research and development expense increased by $91.7 million, or 10.0%, to $1,006.8 million for the six months ended June 30, 2025 from $915.1 million for the six months ended June 30, 2024. The following table summarizes external clinical, external non-clinical and internal research and development expense for the six months ended June 30, 2025 and 2024, respectively: Six Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 352,613 $ 247,633 $ 104,980 42.4 % Upfront license and development milestone fees 500 46,528 (46,028) (98.9) % Amgen co-development expense 1 47,146 35,966 11,180 31.1 % Total external research and development expenses 400,259 330,127 70,132 21.2 % Internal research and development expenses 606,524 584,977 21,547 3.7 % Total research and development expenses $ 1,006,783 $ 915,104 $ 91,679 10.0 % Adjusted research and development expenses 2 $ 865,252 $ 787,949 $ 77,303 9.8 % 1. Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the six months ended June 30, 2025 totaled $92.7 million, of which $47.1 million was recorded as R&D expense. The remaining $45.6 million was recorded as a reduction of the R&D cost share liability. 2. Adjusted research and development expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. The increase in external research and development expenses in the six months ended June 30, 2025 was primarily attributable to an increase in external costs of development programs primarily due to advancing preclinical programs into the clinic and early clinical programs into late stage, including Sonrotoclax (BCL2i), offset by lower development upfront and milestone fees. Internal research and development expense increased $21.5 million, or 3.7%, to $606.5 million and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities and control spend. 31 Table of Contents Selling, General and Administrative Expense Six Months Ended June 30, Changes 2025 2024 $ % (dollars in thousands) Selling, general and administrative expenses $ 997,201 $ 871,156 $ 126,045 14.5 % Adjusted selling, general and administrative expenses 1 $ 837,166 $ 736,068 $ 101,098 13.7 % 1. Adjusted selling, general and administrative expense is intended to provide investors and others with information about our performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures and Non-GAAP Reconciliation in this MD&A for more information about, and a detailed reconciliation of, these items. Selling, general and administrative expense increased by $126.0 million, or 14.5%, to $997.2 million, for the six months ended June 30, 2025, from $871.2 million for the six months ended June 30, 2024. The increase was primarily attributable to continued investment in global commercial expansion primarily in the U.S. and Europe. Selling, general and administrative expenses as a percentage of product sales were 41.4% for the six months ended June 30, 2025 compared to 52.2% in the prior-year period. We expect continued investment in selling and marketing activities as our product sales increase. Interest Income, Net Interest income, net decreased by $20.0 million, or 68.2%, to $9.3 million for the six months ended June 30, 2025, from $29.4 million for the six months ended June 30, 2024. The decrease in interest income was primarily attributable to lower interest rates earned on our cash and cash equivalents. Interest expense increased resulting from higher interest rates on debt balance and lower interest capitalized related to completion of certain phases of our Hopewell facility. Other Income (Expense), Net Other income, net was $12.1 million for the six months ended June 30, 2025, primarily due to foreign exchange gains and government subsidy income, partially offset by unrealized losses on our equity investments. For the six months ended June 30, 2024, other expense, net was $10.2 million, primarily due to foreign exchanges losses resulting from the strengthening of the U.S. dollar compared to the RMB and the revaluation impact of RMB-denominated deposits held in U.S. functional currency subsidiaries. Income Tax Expense Income tax expense increased to $24.9 million for the six months ended June 30, 2025, from $22.2 million for the six months ended June 30, 2024. The income tax expense for the six months ended June 30, 2025 was primarily attributable to current Switzerland tax expense based on year to date earnings, current China tax expense due to certain non-deductible expenses, offset by net discrete adjustments of approximately $8.7 million, primarily related to updated provision estimates for R&D tax credits. The income tax expense for the six months ended June 30, 2024 was primarily attributable to current U.S. tax expense determined after other special tax deductions and research and development tax credits, current Switzerland tax expense based on year to date earnings, and current China tax expense due to certain non-deductible expenses. On July 4, 2025, the reconciliation bill (H.R. 1), commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law and includes a broad range of tax reform provisions that may affect our financial results. The OBBBA allows an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on foreign-derived deduction eligible Income. We are in the process of evaluating the impact of the OBBBA on our consolidated financial statements. Net Income (Loss) and Earnings Per Share GAAP net income improved for the six months ended June 30, 2025, as compared to the prior-year period loss, primarily attributable to revenue growth and improved operating leverage. For the six months ended June 30, 2025, basic and diluted earnings per share was $0.07 per share and $0.89 and $0.85 per ADS, respectively, compared to basic loss of $0.27 per share and $3.56 per ADS in the prior-year period. 32 Table of Contents Non-GAAP Reconciliation Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 ( in thousands) Reconciliation of GAAP to adjusted cost of sales - products: GAAP cost of sales - products $ 164,606 $ 138,132 $ 329,608 $ 263,067 Less: Depreciation 3,321 2,684 5,934 5,029 Less: Amortization of intangibles 5,749 1,177 6,922 2,360 Less: Other 893 — 893 — Adjusted cost of sales - products $ 154,643 $ 134,271 $ 315,859 $ 255,678 Reconciliation of GAAP to adjusted research and development: GAAP research and development $ 524,896 $ 454,466 $ 1,006,783 $ 915,104 Less: Share-based compensation expenses 64,392 55,406 106,159 93,451 Less: Depreciation 16,447 16,551 35,372 33,704 Adjusted research and development $ 444,057 $ 382,509 $ 865,252 $ 787,949 Reconciliation of GAAP to adjusted selling, general and administrative: GAAP selling, general and administrative $ 537,913 $ 443,729 $ 997,201 $ 871,156 Less: Share-based compensation expenses 86,161 75,288 139,845 125,957 Less: Depreciation 10,086 4,519 20,162 9,131 Less: Amortization of intangibles 11 — 28 — Adjusted selling, general and administrative $ 441,655 $ 363,922 $ 837,166 $ 736,068 Reconciliation of GAAP to adjusted operating expenses GAAP operating expenses $ 1,062,809 $ 898,195 $ 2,003,984 $ 1,786,260 Less: Share-based compensation expenses 150,553 130,694 246,004 219,408 Less: Depreciation 26,533 21,070 55,534 42,835 Less: Amortization of intangibles 11 — 28 — Adjusted operating expenses $ 885,712 $ 746,431 $ 1,702,418 $ 1,524,017 Reconciliation of GAAP to adjusted income (loss) from operations: GAAP income (loss) from operations $ 87,885 $ (107,161) $ 98,987 $ (368,509) Plus: Share-based compensation expenses 150,553 130,694 246,004 219,408 Plus: Depreciation 29,854 23,754 61,468 47,864 Plus: Amortization of intangibles 5,760 1,177 6,950 2,360 Plus: Other 893 — 893 — Adjusted income (loss) from operations $ 274,945 $ 48,464 $ 414,302 $ (98,877) Reconciliation of GAAP to adjusted net income (loss): GAAP net income (loss) $ 94,320 $ (120,405) $ 95,590 $ (371,555) Plus: Share-based compensation expenses 150,553 130,694 246,004 219,408 Plus: Depreciation 29,854 23,754 61,468 47,864 Plus: Amortization of intangibles 5,760 1,177 6,950 2,360 Plus: Other 893 — 893 — Plus: Impairment of equity investments 3,118 — 15,494 — Plus: Discrete tax items (14,210) 1,513 (8,737) 2,403 Plus: Income tax effect of non-GAAP adjustments (17,466) (13,439) (28,703) (23,082) Adjusted net income (loss) $ 252,822 $ 23,294 $ 388,959 $ (122,602) 33 Table of Contents Reconciliation of GAAP to adjusted EPS - basic GAAP earnings (loss) per share - basic $ 0.07 $ (0.09) $ 0.07 $ (0.27) Plus: Share-based compensation expenses 0.11 0.10 0.18 0.16 Plus: Depreciation 0.02 0.02 0.04 0.04 Plus: Amortization of intangibles 0.00 0.00 0.00 0.00 Plus: Other 0.00 0.00 0.00 0.00 Plus: Impairment of equity investments 0.00 0.00 0.01 0.00 Plus: Discrete tax items (0.01) 0.00 (0.01) 0.00 Plus: Income tax effect of non-GAAP adjustments (0.01) (0.01) (0.02) (0.02) Adjusted earnings (loss) per share - basic $ 0.18 $ 0.02 $ 0.28 $ (0.09) Reconciliation of GAAP to adjusted EPS - diluted GAAP earnings (loss) per share - diluted $ 0.06 $ (0.09) $ 0.07 $ (0.27) Plus: Share-based compensation expenses 0.10 0.09 0.17 0.16 Plus: Depreciation 0.02 0.02 0.04 0.04 Plus: Amortization of intangibles 0.00 0.00 0.00 0.00 Plus: Other 0.00 0.00 0.00 0.00 Plus: Impairment of equity investments 0.00 0.00 0.01 0.00 Plus: Discrete tax items (0.01) 0.00 (0.01) 0.00 Plus: Income tax effect of non-GAAP adjustments (0.01) (0.01) (0.02) (0.02) Adjusted earnings (loss) per share - diluted $ 0.17 $ 0.02 $ 0.27 $ (0.09) Reconciliation of GAAP to adjusted earnings (loss) per ADS - basic GAAP earnings (loss) per ADS - basic $ 0.87 $ (1.15) $ 0.89 $ (3.56) Plus: Share-based compensation expenses 1.39 1.25 2.29 2.10 Plus: Depreciation 0.28 0.23 0.57 0.46 Plus: Amortization of intangibles 0.05 0.01 0.06 0.02 Plus: Other 0.01 0.00 0.01 0.00 Plus: Impairment of equity investments 0.03 0.00 0.14 0.00 Plus: Discrete tax items (0.13) 0.01 (0.08) 0.02 Plus: Income tax effect of non-GAAP adjustments (0.16) (0.13) (0.27) (0.22) Adjusted earnings (loss) per ADS - basic $ 2.33 $ 0.22 $ 3.61 $ (1.17) Reconciliation of GAAP to adjusted earnings (loss) per ADS - diluted GAAP earnings (loss) per ADS - diluted 1 $ 0.84 $ (1.13) $ 0.85 $ (3.56) Plus: Share-based compensation expenses 1.34 1.23 2.20 2.10 Plus: Depreciation 0.27 0.22 0.55 0.46 Plus: Amortization of intangibles 0.05 0.01 0.06 0.02 Plus: Other 0.01 0.00 0.01 0.00 Plus: Impairment of equity investments 0.03 0.00 0.14 0.00 Plus: Discrete tax items (0.13) 0.01 (0.08) 0.02 Plus: Income tax effect of non-GAAP adjustments (0.16) (0.13) (0.26) (0.22) Adjusted earnings (loss) per ADS - diluted $ 2.25 $ 0.22 $ 3.48 $ (1.17) 1. For the second quarter of 2024, GAAP diluted loss per ADS includes $0.02 loss per ADS attributable to the dilutive ADS outstanding for purposes of this reconciliation. As the Company was in a GAAP net loss position no diluted weighted average shares outstanding were calculated for US GAAP purposes. 34 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Free Cash Flow (Non-GAAP): Net cash provided by (used in) operating activities (GAAP) $ 263,598 $ (95,588) $ 307,680 $ (404,160) Less: Purchases of property, plant and equipment (43,826) (109,950) (100,233) (266,528) Free Cash Flow (Non-GAAP) $ 219,772 $ (205,538) $ 207,447 $ (670,688) Liquidity and Capital Resources The following table represents our cash and debt balances as of June 30, 2025 and December 31, 2024: As of June 30, December 31, 2025 2024 (dollars in thousands) Cash, cash equivalents and restricted cash $ 2,786,086 $ 2,638,747 Total debt $ 954,485 $ 1,018,013 To date, we have financed our operations and investments in long-term assets principally through proceeds from public and private offerings of our securities, proceeds from debt and our collaborations, and since the third quarter of 2024 cash flow from operations. Based on our current operating plan, we expect that our operating cash flows and existing cash and cash equivalents will enable us to fund our operating expenses and planned long-term investments for at least the next 12 months after the date that the financial statements included in this report are issued. We have also financed our operations and investments with proceeds from debt primarily incurred through various banks by both our subsidiaries and the Parent Company of $954.5 million as of June 30, 2025. We paid down $71.1 million of the debt in the six months ended June 30, 2025 using existing cash. The majority of those debt obligations, or approximately $672.3 million, owed by BeOne Medicines Ltd. mature within the next 12 months. We believe we will have sufficient cash and cash equivalents and other sources of capital to be able to repay and/or refinance those debt obligations on a consolidated basis. On December 15, 2021, we completed our initial public offering on the STAR Market of the Shanghai Stock Exchange (the “STAR Offering”). As required by the PRC securities laws, the net proceeds from the STAR Offering must be used in compliance with the planned uses as disclosed in the PRC prospectus as well as our proceeds management policy for the STAR Offering approved by our board of directors. As of June 30, 2025, we had cash remaining related to the STAR Offering proceeds of $359.5 million. The following table provides information regarding our cash flows for the six months ended June 30, 2025 and 2024: Six Months Ended June 30, 2025 2024 (dollars in thousands) Cash, cash equivalents and restricted cash at beginning of period $ 2,638,747 $ 3,185,984 Net cash provided by (used in) operating activities 307,680 (404,160) Net cash used in investing activities (188,546) (320,863) Net cash provided by financing activities 1,248 185,310 Net effect of foreign exchange rate changes 26,957 (28,340) Net increase (decrease) in cash, cash equivalents, and restricted cash 147,339 (568,053) Cash, cash equivalents and restricted cash at end of period $ 2,786,086 $ 2,617,931 Operating Activities Cash provided by operating activities improved $711.8 million in the six months ended June 30, 2025, versus the prior year period due to our significantly improved revenue and $359.7 million of increase in gross margin in the current year period, offset by continued funding of our development pipeline and commercial operations, and increasing working capital to support our global expansion. 35 Table of Contents Investing Activities Investing activities used $188.5 million of cash in the six months ended June 30, 2025, compared to $320.9 million in the prior year period due primarily to a decrease in capital expenditures, partially offset by an increase in acquired in-process research and development and regulatory milestone payments. Financing Activities Financing activities provided $1.2 million of cash in the six months ended June 30, 2025, compared to $185.3 million in the prior year period due primarily to a net reduction in debt borrowings in the current year period and higher payroll tax payments upon vesting of share-based compensation awards, partially offset by higher proceeds from option exercises and employee share purchase plan. Our borrowing and repayment cycle is dictated by the short-term maturities of our debt and the ability to increase our borrowings, if necessary, is dependent on interest rates, credit spreads, bank lending capacity and other factors. We expect to repay approximately $808.4 million of loans in the next 12 months and expect to be able to re-finance those on a consistent basis with our historical experience, with the cost of those borrowings depending on prevailing interest rates and credit spreads. Effects of Exchange Rates on Cash As noted above, we hold RMB denominated cash in our Parent Company (largely arising from the STAR Offering) and incur foreign currency gains or losses when remeasuring such cash to the U.S. dollar. In the six months ended June 30, 2025, we incurred realized gains on cash of $6.5 million that is included in the reconciling items between net income and net cash provided by operating activities on the consolidated statements of cash flows primarily related to the remeasurement of RMB denominated cash to USD. The RMB denominated cash in our Parent Company, however, is required to be used to fund RMB denominated expenditures and thus foreign currency gains or losses on such cash does not affect our ability to fund those expenditures. We also have substantial operations in China and Europe, where the functional currency is the RMB and Euro, and as such the net cash flows are translated to the U.S. dollar for financial reporting. This process generates translation gains and losses primarily on RMB-denominated cash held in China and Euro-denominated cash held in Europe that are included in the effects of foreign exchange rate changes on the consolidated statements of cash flows, as such translation gains and losses are excluded from cash flows from operating, investing and financing activities. Future Liquidity and Material Cash Requirements Our material cash requirements in the short- and long-term consist of the following operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations. We plan to fund our material cash requirements with cash on hand. Contractual and Other Obligations The following table summarizes our significant contractual obligations as of the payment due date by period as of June 30, 2025: Payments Due by Period Total Short Term Long Term (dollars in thousands) Contractual obligations Operating lease commitments $ 79,054 $ 10,608 $ 68,446 Purchase commitments 130,087 105,910 24,177 Debt obligations 954,485 808,394 146,091 Interest on debt 39,869 28,533 11,336 Co-development funding commitment 242,916 220,869 22,047 Funding commitment 6,740 2,298 4,442 Capital commitments 62,029 62,029 — Total $ 1,515,180 $ 1,238,641 $ 276,539 36 Table of Contents Operating Lease Commitments We lease office facilities in the U.S. and Switzerland, and office and manufacturing facilities in China under non-cancelable operating leases expiring on various dates. Payments under operating leases are expensed on a straight-line basis over the respective lease terms. The aggregate future minimum payments under these non-cancelable operating leases are summarized in the table above. Purchase Commitments As of June 30, 2025, non-cancellable purchase commitments amounted to $130.1 million, of which $32.6 million related to minimum purchase requirements for supply purchased from contract manufacturers and $97.5 million related to binding purchase obligations of inventory from Amgen. We do not have any minimum purchase requirements for inventory from Amgen. Debt Obligations and Interest Total debt obligations coming due in the next twelve months are $808.4 million. Total long-term debt obligations are $146.1 million. We have numerous financial and non-financial covenants on our debt obligations with various banks and other lenders. Some of these covenants include default and/or cross-default provisions that could require acceleration of repayment of loans in the event of default. However, our debt is primarily short-term in nature. Any acceleration would be a matter of months but may impact our ability to refinance debt obligations if an event of default occurs. As of June 30, 2025, we were in compliance with all covenants of our material debt agreements. See above regarding Liquidity and Capital Resources and Note 10 in the Notes to the Condensed Consolidated Financial Statements for further detail of our debt obligations. Interest on bank loans is paid quarterly until the respective loans are fully settled. For the purpose of contractual obligations calculation, current interest rates on floating rate obligations were used for the remainder contractual life of the outstanding borrowings. Co-Development Funding Commitment Under the Amgen collaboration, we are responsible for co-funding global development costs for the licensed Amgen oncology pipeline assets up to a total cap of $1.25 billion. We are funding our portion of the co-development costs by contributing cash and development services. As of June 30, 2025, our remaining co-development funding commitment was $242.9 million. Funding Commitment Funding commitment represents our committed capital related to equity investments. As of June 30, 2025, our remaining capital commitment was $6.7 million and is expected to be paid from time to time over the investment period. Capital Commitments We had capital commitments amounting to $62.0 million for the acquisition of property, plant and equipment as of June 30, 2025, related to various facilities across the globe, including the manufacturing and clinical R&D campus in Hopewell, New Jersey. Critical Accounting Policies and Significant Judgments and Estimates Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates. These include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, estimating the incremental borrowing rate for operating lease liabilities, identifying separate accounting units and the standalone selling price of each performance obligation in the Company’s revenue arrangements, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets and the fair value of financial instruments. We base our estimates on historical experience, known trends and events, contractual milestones and other various factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. 37 Table of Contents There have been no material changes to our critical accounting policies as of and for the three and six months ended June 30, 2025, as compared to those described in the section titled “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024. For new accounting policies adopted during the three and six months ended June 30, 2025, see “Part I—Item 1—Financial Statements—Notes to the Condensed Consolidated Financial Statements—1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies—Significant accounting policies” in this Quarterly Report on Form 10-Q.