BeOne Medicines Ltd 10-Q for FY2020 Q3

BeOne Medicines Ltd. (ONC)

10-Q 2020-11-05 For: 2020-09-30

Added on April 06, 2026

About this 10-Q

BeOne Medicines Ltd filed this 10-Q on November 5, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $91.08M; up 81.6% from $50.14M a year earlier
Net loss: $425.22M; compared with a net loss of $307.36M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Cayman Islands			98-1209416
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

c/o Mourant Governance Services (Cayman) Limited
94 Solaris Avenue, Camana Bay
Grand Cayman
Cayman Islands			KY1-1108
(Address of principal executive offices)			(Zip Code)


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47

Item 4.	Controls and Procedures	48

PART II.	OTHER INFORMATION	49

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	103

Item 3.	Defaults Upon Senior Securities	103

Item 4.	Mine Safety Disclosures	103

Item 5.	Other Information	103

Item 6.	Exhibits	103

SIGNATURES		105


		As of
		September 30,	December 31,
	Note	2020	2019
		$	$
		(unaudited)	(audited)
Assets
Current assets:
Cash and cash equivalents		1,464,470	618,011
Short-term restricted cash	4	295	288
Short-term investments	4	3,254,300	364,728
Accounts receivable, net	10	60,266	70,878
Inventories	5	35,525	28,553
Prepaid expenses and other current assets	10	150,880	90,238
Total current assets		4,965,736	1,172,696
Long-term restricted cash	4	4,950	2,476
Property, plant and equipment, net	6	291,218	242,402
Operating lease right-of-use assets		88,689	82,520
Intangible assets, net	8	5,188	5,846
Deferred tax assets	9	48,009	37,894
Other non-current assets	10	162,600	68,455
Total non-current assets		600,654	439,593
Total assets		5,566,390	1,612,289
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		146,265	122,488
Accrued expenses and other payables	10	279,323	163,556
Tax payable	9	9,244	13,454
Operating lease liabilities, current portion		13,280	10,814
Research and development cost share liability, current portion	3	147,387	—
Short-term debt	11	50,222	—
Total current liabilities		645,721	310,312
Non-current liabilities:
Long-term debt	11	151,551	83,311
Shareholder loan	11	—	157,384
Operating lease liabilities, non-current portion		28,679	25,833
Deferred tax liabilities		11,884	10,532
Research and development cost share liability, non-current portion	3	384,151	—
Other long-term liabilities	10	47,890	46,562
Total non-current liabilities		624,155	323,622
Total liabilities		1,269,876	633,934
Commitments and contingencies	18
Equity:
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,182,916,659 and 801,340,698 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		118	79
Additional paid-in capital		7,367,799	2,925,970
Accumulated other comprehensive loss	15	(419)	(8,001)
Accumulated deficit		(3,080,004)	(1,955,843)
Total BeiGene, Ltd. shareholders’ equity		4,287,494	962,205
Noncontrolling interest		9,020	16,150
Total equity		4,296,514	978,355
Total liabilities and equity		5,566,390	1,612,289


		Three Months Ended		Nine Months Ended
		September 30,		September 30,
	Note	2020	2019	2020	2019
		$	$	$	$
Revenues
Product revenue, net	12	91,080	50,141	208,774	165,704
Collaboration revenue	3	—	—	—	205,616
Total revenues		91,080	50,141	208,774	371,320
Expenses
Cost of sales - product		21,123	20,106	49,579	53,206
Research and development		349,070	236,968	939,340	644,079
Selling, general and administrative		160,837	105,002	391,967	244,895
Amortization of intangible assets		187	331	658	994
Total expenses		531,217	362,407	1,381,544	943,174
Loss from operations		(440,137)	(312,266)	(1,172,770)	(571,854)
Interest (expense) income, net		(614)	2,206	7,184	9,569
Other income (expense), net		5,711	(1,817)	29,368	(967)
Loss before income taxes		(435,040)	(311,877)	(1,136,218)	(563,252)
Income tax benefit	9	(8,423)	(3,217)	(8,344)	(569)
Net loss		(426,617)	(308,660)	(1,127,874)	(562,683)
Less: net loss attributable to noncontrolling interests		(1,393)	(1,303)	(3,713)	(2,116)
Net loss attributable to BeiGene, Ltd.		(425,224)	(307,357)	(1,124,161)	(560,567)

Net loss per share attributable to BeiGene, Ltd., basic and diluted	13	(0.37)	(0.39)	(1.07)	(0.72)
Weighted-average shares outstanding, basic and diluted	13	1,148,973,077	781,482,459	1,052,940,583	777,938,599

Net loss per American Depositary Share (“ADS”), basic and diluted		(4.81)	(5.11)	(13.88)	(9.37)
Weighted-average ADSs outstanding, basic and diluted		88,382,544	60,114,035	80,995,429	59,841,431


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
	$	$	$	$
Net loss	(426,617)	(308,660)	(1,127,874)	(562,683)
Other comprehensive (loss)/ income, net of tax of nil:
Foreign currency translation adjustments	10,143	(13,670)	7,526	(17,252)
Unrealized holding (loss) gain, net	(1,044)	(1,260)	184	326
Comprehensive loss	(417,518)	(323,590)	(1,120,164)	(579,609)
Less: comprehensive loss attributable to noncontrolling interests	(1,174)	(1,628)	(3,585)	(2,686)
Comprehensive loss attributable to BeiGene, Ltd.	(416,344)	(321,962)	(1,116,579)	(576,923)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Nine months ended September 30,
	Note	2020	2019
		$	$
Operating activities:
Net loss		(1,127,874)	(562,683)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		23,961	11,133
Share-based compensation expenses	14	134,020	95,812

Unrealized gains on equity method investments	4	(9,974)	—
Gain on deconsolidation of a subsidiary	4	(11,307)	—
Acquired in-process research and development		89,500	49,000
Amortization of research and development cost share liability		(85,296)	—

Deferred income tax benefits		(8,762)	(13,334)
Other items, net		1,144	(2,733)
Changes in operating assets and liabilities:
Accounts receivable		10,497	(14,856)
Inventories		(6,972)	(21,270)
Prepaid expenses and other current assets		(52,941)	(5,653)
Operating lease right-of-use assets		(5,207)	(4,303)
Other non-current assets		(5,980)	(15,307)
Accounts payable		21,979	(8,151)
Accrued expenses and other payables		115,872	33,494
Tax payable		(12,272)	3,173
Deferred revenue		—	(27,982)
Operating lease liabilities		5,312	2,072
Other long-term liabilities		(26,827)	(1,500)
Net cash used in operating activities		(951,127)	(483,088)
Investing activities:
Purchases of property, plant and equipment		(82,819)	(74,148)
Deconsolidation of a subsidiary		(2,025)	—
Purchases of investments		(4,879,705)	(850,825)
Proceeds from sale or maturity of investments		1,972,608	1,552,028
Purchase of in-process research and development		(89,500)	(49,000)
Net cash (used in) provided by investing activities		(3,081,441)	578,055
Financing activities:
Proceeds from sale of ordinary shares, net of cost	16	4,232,017	—
Proceeds from research and development cost share liability		616,834	—
Capital contribution from noncontrolling interest		—	4,000
Prepayment to acquire joint venture ("JV") minority interest	7	(28,723)	—
Proceeds from long-term loans	11	64,288	67,489
Repayment of long-term loans	11	(132,061)	(8,394)
Proceeds from short-term loans	11	48,983	—
Proceeds from option exercises and employee share purchase plan		75,830	20,387
Net cash provided by financing activities		4,877,168	83,482
Effect of foreign exchange rate changes, net		4,340	(18,339)
Net increase in cash, cash equivalents, and restricted cash		848,940	160,110
Cash, cash equivalents, and restricted cash at beginning of period		620,775	740,713
Cash, cash equivalents, and restricted cash at end of period		1,469,715	900,823
Supplemental cash flow information:
Cash and cash equivalents		1,464,470	856,851
Short-term restricted cash		295	14,271
Long-term restricted cash		4,950	30,401
Income taxes paid		10,596	8,951
Interest paid		41,577	3,335
Supplemental non-cash information:
Acquisitions of equipment included in accounts payable		30,926	29,255


	Attributable to BeiGene, Ltd.
	Ordinary Shares		Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total	Noncontrolling Interests
	Shares	Amount						Total
		$	$	$	$	$	$	$
Balance at December 31, 2019	801,340,698	79	2,925,970	(8,001)	(1,955,843)	962,205	16,150	978,355
Issuance of ordinary shares in connection with collaboration	206,635,013	21	2,162,386	—	—	2,162,407	—	2,162,407
Use of shares reserved for share option exercises	(3,705,468)	—	—	—	—	—	—	—
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")	3,706,573	1	11,628	—	—	11,629	—	11,629
Share-based compensation	—	—	38,255	—	—	38,255	—	38,255
Other comprehensive income	—	—	—	1,453	—	1,453	(104)	1,349
Net loss	—	—	—	—	(363,735)	(363,735)	(1,204)	(364,939)
Balance at March 31, 2020	1,007,976,816	101	5,138,239	(6,548)	(2,319,578)	2,812,214	14,842	2,827,056
Exercise of options, ESPP issuances and release of RSUs	10,493,392	1	16,568	—	—	16,569	—	16,569
Use of shares reserved for share option exercises and RSU releases	(3,493,516)	—	—	—	—	—	—	—
Share-based compensation	—	—	45,468	—	—	45,468	—	45,468
Deconsolidation of a subsidiary	—	—	—	—	—	—	(3,545)	(3,545)
Other comprehensive loss	—	—	—	(2,751)	—	(2,751)	13	(2,738)
Net loss	—	—	—	—	(335,202)	(335,202)	(1,116)	(336,318)
Balance at June 30, 2020	1,014,976,692	102	5,200,275	(9,299)	(2,654,780)	2,536,298	10,194	2,546,492
Proceeds from issuance of ordinary shares, net of cost	145,838,979	14	2,069,596	—	—	2,069,610	—	2,069,610
Exercise of options, ESPP and release of RSUs	16,575,806	1	47,631	—	—	47,632	—	47,632
Issuance of shares reserved for share option exercises	5,525,182	1	—	—	—	1	—	1
Share-based compensation	—	—	50,297	—	—	50,297	—	50,297
Other comprehensive loss	—	—	—	8,880	—	8,880	219	9,099
Net loss	—	—	—	—	(425,224)	(425,224)	(1,393)	(426,617)
Balance at September 30, 2020	1,182,916,659	118	7,367,799	(419)	(3,080,004)	4,287,494	9,020	4,296,514

Balance at December 31, 2018	776,263,184	77	2,744,814	1,526	(1,007,215)	1,739,202	14,445	1,753,647
Use of shares reserved for share option exercises	(916,383)	—	—	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	2,066,383	1	6,268	—	—	6,269	—	6,269
Share-based compensation	—	—	26,392	—	—	26,392	—	26,392
Other comprehensive income	—	—	—	4,546	—	4,546	(106)	4,440
Net loss	—	—	—	—	(167,640)	(167,640)	(429)	(168,069)
Balance at March 31, 2019	777,413,184	78	2,777,474	6,072	(1,174,855)	1,608,769	13,910	1,622,679
Contributions from shareholders	—	—	—	—	—	—	4,000	4,000
Exercise of options, ESPP and release of RSUs	3,802,747	—	4,373	—	—	4,373	—	4,373
Issuance of shares reserved for share option exercises	3,223,701	—	—	—	—	—	—	—
Share-based compensation	—	—	32,602	—	—	32,602	—	32,602


Other comprehensive income	—	—	—	(6,297)	—	(6,297)	(139)	(6,436)
Net loss	—	—	—	—	(85,570)	(85,570)	(384)	(85,954)
Balance at June 30, 2019	784,439,632	78	2,814,449	(225)	(1,260,425)	1,553,877	17,387	1,571,264
Exercise of options, ESPP and release of RSUs	4,171,349	—	9,745	—	—	9,745	—	9,745
Use of shares reserved for share option exercises	(4,170,283)	—	—	—	—	—	—	—
Share-based compensation	—	—	36,818	—	—	36,818	—	36,818
Other comprehensive loss	—	—	—	(14,605)	—	(14,605)	(325)	(14,930)
Net loss	—	—	—	—	(307,357)	(307,357)	(1,303)	(308,660)
Balance at September 30, 2019	784,440,698	78	2,861,012	(14,830)	(1,567,782)	1,278,478	15,759	1,294,237


	Quoted Price
	in Active	Significant
	Market for	Other	Significant
	Identical	Observable	Unobservable
	Assets	Inputs	Inputs
As of September 30, 2020	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Short-term investments (Note 4):
U.S. treasury securities	3,254,300	—	—
Cash equivalents:
U.S. treasury securities	634,655	—	—
Money market funds	236,500	—	—
Other non-current assets:
Equity securities (Note 4)	9,513	5,703	—
Total	4,134,968	5,703	—


		Gross	Gross	Fair Value
	Amortized	Unrealized	Unrealized	(Net Carrying
	Cost	Gains	Losses	Amount)
	$	$	$	$
U.S. treasury securities	3,252,873	1,427	—	3,254,300
Total	3,252,873	1,427	—	3,254,300


	As of
	September 30, 2020			December 31, 2019
	Gross			Gross
	carrying	Accumulated	Intangible	carrying	Accumulated	Intangible
	amount	amortization	assets, net	amount	amortization	assets, net
	$	$	$	$	$	$
Finite-lived intangible assets:
Product distribution rights	7,500	(2,312)	5,188	7,500	(1,750)	5,750
Trading license	816	(816)	—	816	(720)	96
Total finite-lived intangible assets	8,316	(3,128)	5,188	8,316	(2,470)	5,846


						Allowance for Credit Losses
						$
Balance as of December 31, 2019						—
Current period provision for expected credit losses						114
Amounts written-off						—
Recoveries of amounts previously written-off						—
Balance as of September 30, 2020						114


						Sales Rebates and Returns
						$
Balance as of December 31, 2018						4,749
Accrual						4,026
Payments						(5,013)
Balance as of September 30, 2019						3,762
Balance as of December 31, 2019						3,198
Accrual						7,436
Payments						(3,110)
Balance as of September 30, 2020						7,524


	As of
	September 30,	December 31,
	2020	2019
	$	$
Laboratory equipment	62,402	47,154
Leasehold improvements	29,225	24,008
Building	111,813	109,514
Manufacturing equipment	70,081	62,775
Software, electronics and office equipment	18,569	14,705
Property, plant and equipment, at cost	292,090	258,156
Less accumulated depreciation	(61,443)	(36,709)
Construction in progress	60,571	20,955
Property, plant and equipment, net	291,218	242,402


	Three Months Ended
	September 30,				Changes
	2020		2019		$		%

	(dollars in thousands)
Tislelizumab	$	49,934	$	—	$	49,934	NM
BRUKINSA®	15,662		—		15,662		NM
REVLIMID®	14,067		19,019		(4,952)		(26.0)	%
VIDAZA®	8,366		8,624		(258)		(3.0)	%
ABRAXANE®	—		22,498		(22,498)		(100.0)	%
XGEVA®	3,051		—		3,051		NM
Total product revenue	$	91,080	$	50,141	$	40,939	81.6	%


	Three Months Ended
	September 30,				Changes
	2020		2019		$		%

	(dollars in thousands)
External cost of development programs	$	110,037	$	132,325	$	(22,288)	(16.8)	%
Upfront license fees and milestones	67,500		—		67,500		NM
Amgen co-development expense1	30,795		—		30,795		NM
Internal research and development expenses	140,738		104,643		36,095		34.5	%
Total research and development expenses	$	349,070	$	236,968	$	112,102	47.3	%


		Unrealized
	Foreign Currency	Gains on
	Translation	Available-for-Sale
	Adjustments	Securities	Total
	$	$	$
Balance as of December 31, 2019	(9,291)	1,290	(8,001)
Other comprehensive income before reclassifications	7,398	1,734	9,132
Amounts reclassified from accumulated other comprehensive income	—	(1,550)	(1,550)
Net-current period other comprehensive income	7,398	184	7,582
Balance as of September 30, 2020	(1,893)	1,474	(419)


	Nine Months Ended September 30,
	2020		2019

	(in thousands)
Cash, cash equivalents and restricted cash at beginning of period	$	620,775	$	740,713
Net cash used in operating activities	(951,127)		(483,088)
Net cash (used in) provided by investing activities	(3,081,441)		578,055
Net cash provided by financing activities	4,877,168		83,482
Net effect of foreign exchange rate changes	4,340		(18,339)
Net increase in cash, cash equivalents, and restricted cash	848,940		160,110
Cash, cash equivalents and restricted cash at end of period	$	1,469,715	$	900,823


	Payments Due by Period
			Less Than						More Than
	Total		1 Year		1–3 Years		3–5 Years		5 Years
	(in thousands)
Contractual obligations
Operating lease commitments	$	46,602	$	15,573	$	22,052	$	8,611	$	366
Purchase commitments	142,858		46,568		51,330		23,240		21,720
Debt obligations	201,773		50,222		22,313		43,816		85,422
Co-development funding commitment	1,077,206		151,956		633,500		291,750		—
Capital commitments	63,125		63,125		—		—		—
Total	$	1,531,564	$	327,444	$	729,195	$	367,417	$	107,508


	BEIGENE, LTD.

Date: November 5, 2020	By:	/s/ John V. Oyler
	John V. Oyler
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

Date: November 5, 2020	By:	/s/ Howard Liang
	Howard Liang
	Chief Financial Officer and Chief Strategy Officer
	(Principal Financial and Accounting Officer)