BeOne Medicines Ltd 10-Q for FY2020 Q1

BeOne Medicines Ltd. (ONC)

10-Q 2020-05-11 For: 2020-03-31

Added on April 06, 2026

About this 10-Q

BeOne Medicines Ltd filed this 10-Q on May 11, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $52.06M; down 33.1% from $77.83M a year earlier
Net loss: $363.74M; compared with a net loss of $167.64M a year earlier

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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)



Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing 13 Ordinary Shares, par value $0.0001 per share	BGNE	The NASDAQ Global Select Market
Ordinary Shares, par value $0.0001 per share*	06160	The Stock Exchange of Hong Kong Limited



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐



		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	26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41

Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION	43

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	95

Item 3.	Defaults Upon Senior Securities	95

Item 4.	Mine Safety Disclosures	95

Item 5.	Other Information	95

Item 6.	Exhibits	95

SIGNATURES		97



		As of
		March 31,		December 31,
	Note	2020		2019
		$		$
		(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents		1,957,101		618,011
Short-term restricted cash	4	282		288
Short-term investments	4	1,417,097		364,728
Accounts receivable, net	10	65,620		70,878
Inventories	5	28,775		28,553
Prepaid expenses and other current assets	10	126,312		90,238
Total current assets		3,595,187		1,172,696
Long-term restricted cash	4	2,435		2,476
Property, plant and equipment, net	6	240,331		242,402
Operating lease right-of-use assets		91,509		82,520
Intangible assets, net	8	5,563		5,846
Deferred tax assets	9	37,937		37,894
Other non-current assets	10	94,250		68,455
Total non-current assets		472,025		439,593
Total assets		4,067,212		1,612,289
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		98,364		122,488
Accrued expenses and other payables	10	179,331		163,556
Tax payable	9	19,535		13,454
Operating lease liabilities, current portion		14,597		10,814
Research and development cost share liability, current portion	3	128,672		—
Short-term bank loan	11	11,298		—
Total current liabilities		451,797		310,312
Non-current liabilities:
Long-term bank loan	11	81,913		83,311
Shareholder loan	12	157,278		157,384
Operating lease liabilities, non-current portion		32,967		25,833
Deferred tax liabilities		10,368		10,532
Research and development cost share liability, non-current portion	3	460,528		—
Other long-term liabilities	10	45,305		46,562
Total non-current liabilities		788,359		323,622
Total liabilities		1,240,156		633,934
Commitments and contingencies	19
Equity:
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,007,976,816 and 801,340,698 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively		101		79
Additional paid-in capital		5,138,239		2,925,970
Accumulated other comprehensive loss	16	(6,548	)	(8,001	)
Accumulated deficit		(2,319,578	)	(1,955,843	)
Total BeiGene, Ltd. shareholders’ equity		2,812,214		962,205
Noncontrolling interest		14,842		16,150
Total equity		2,827,056		978,355
Total liabilities and equity		4,067,212		1,612,289



☒	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



		Three Months Ended
		March 31,
	Note	2020		2019
		$		$
Revenues
Product revenue, net	13	52,059		57,421
Collaboration revenue	3	—		20,412
Total revenues		52,059		77,833
Expenses
Cost of sales - product		14,149		15,261
Research and development		304,302		178,351
Selling, general and administrative		107,081		57,645
Amortization of intangible assets		283		331
Total expenses		425,815		251,588
Loss from operations		(373,756	)	(173,755	)
Interest income, net		6,690		4,477
Other income, net		3,681		1,728
Loss before income taxes		(363,385	)	(167,550	)
Income tax expense	9	1,554		519
Net loss		(364,939	)	(168,069	)
Less: net loss attributable to noncontrolling interests		(1,204	)	(429	)
Net loss attributable to BeiGene, Ltd.		(363,735	)	(167,640	)

Net loss per share attributable to BeiGene, Ltd., basic and diluted	14	(0.36	)	(0.22	)
Weighted-average shares outstanding, basic and diluted	14	1,005,347,581		774,750,255

Net loss per American Depositary Share (“ADS”), basic and diluted		(4.70	)	(2.81	)
Weighted-average ADSs outstanding, basic and diluted		77,334,429		59,596,173



		Three months ended March 31,
	Note	2020		2019
		$		$
Operating activities:
Net loss		(364,939	)	(168,069	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		7,750		3,416
Share-based compensation expenses	15	38,255		26,392
Provision for doubtful accounts		2,022		—
Unrealized gain on equity securities	4	(6,964	)	—
Acquired in-process research and development		43,000		29,000
Amortization of research and development cost share liability		(27,634	)	—
Non-cash interest expense		2,572		1,858
Deferred income tax benefits		(206	)	(983	)
Other items, net		(1,105	)	(3,218	)
Changes in operating assets and liabilities:
Accounts receivable		3,236		(17,920	)
Inventories		(222	)	3,102
Prepaid expenses and other current assets		(36,075	)	(5,772	)
Operating lease right-of-use assets		(8,990	)	(1,588	)
Other non-current assets		(2,710	)	(10,212	)
Accounts payable		(21,450	)	(20,364	)
Accrued expenses and other payables		15,775		(8,790	)
Tax payable		6,080		969
Deferred revenue		—		(2,238	)
Operating lease liabilities		10,917		1,550
Other long-term liabilities		(1,256	)	892
Net cash used in operating activities		(341,944	)	(171,975	)
Investing activities:
Purchases of property, plant and equipment		(21,533	)	(21,828	)
Purchases of investments		(1,307,179	)	(487,354	)
Proceeds from sale or maturity of investments		256,743		710,598
Purchase of in-process research and development		(43,000	)	(29,000	)
Net cash (used in) provided by investing activities		(1,114,969	)	172,416
Financing activities:
Proceeds from sale of ordinary shares, net of cost		2,162,407		—
Proceeds from research and development cost share liability		616,834		—
Proceeds from long-term bank loan	11	—		36,695
Proceeds from short-term bank loan	11	11,298		—
Proceeds from option exercises and employee share purchase plan		11,629		6,269
Net cash provided by financing activities		2,802,168		42,964
Effect of foreign exchange rate changes, net		(6,212	)	4,265
Net increase in cash, cash equivalents, and restricted cash		1,339,043		47,670
Cash, cash equivalents, and restricted cash at beginning of period		620,775		740,713
Cash, cash equivalents, and restricted cash at end of period		1,959,818		788,383
Supplemental cash flow information:
Cash and cash equivalents		1,957,101		764,492
Short-term restricted cash		282		14,900
Long-term restricted cash		2,435		8,991
Income taxes paid		531		360
Interest paid		1,136		888
Supplemental non-cash information:
Acquisitions of equipment included in accounts payable		26,412		32,462



	Attributable to BeiGene, Ltd.
	Ordinary Shares			Additional Paid-In Capital	Accumulated Other Comprehensive Income		Accumulated Deficit		Total		Noncontrolling Interests
	Shares		Amount	Additional Paid-In Capital	Accumulated Other Comprehensive Income		Accumulated Deficit		Total		Noncontrolling Interests		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

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



	Quoted Price
	in Active	Significant
	Market for	Other	Significant
	Identical	Observable	Unobservable
	Assets	Inputs	Inputs
As of March 31, 2020	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Short-term investments (Note 4):
U.S. treasury securities	1,417,097	—	—
Cash equivalents:
U.S. treasury securities	251,505	—	—
Money market funds	1,144,458	—	—
Other non-current assets:
Equity securities (Note 4)	7,592	4,372	—
Total	2,820,652	4,372	—



		Gross	Gross	Fair Value
	Amortized	Unrealized	Unrealized	(Net Carrying
	Cost	Gains	Losses	Amount)
	$	$	$	$
U.S. treasury securities	1,410,129	6,968	—	1,417,097
Total	1,410,129	6,968	—	1,417,097



	As of
	March 31, 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	(1,937	)	5,563	7,500	(1,750	)	5,750
Trading license	816	(816	)	—	816	(720	)	96
Total finite-lived intangible assets	8,316	(2,753	)	5,563	8,316	(2,470	)	5,846



		Allowance for Credit Losses
		$
Balance as of December 31, 2019		—
Current period provision for expected credit losses		2,022
Amounts written-off		—
Recoveries of amounts previously written-off		—
Balance as of March 31, 2020		2,022



	Sales Rebates and Returns
	$
Balance as of December 31, 2019	4,749
Accrual	1,115
Payments	(2,498	)
Balance as of March 31, 2019	3,366
Balance as of December 31, 2019	3,198
Accrual	1,129
Payments	(313	)
Balance as of March 31, 2020	4,014



	As of
	March 31,		December 31,
	2020		2019
	$		$
Laboratory equipment	49,059		47,154
Leasehold improvements	23,866		24,008
Building	107,992		109,514
Manufacturing equipment	65,123		62,775
Software, electronics and office equipment	14,688		14,705
Property, plant and equipment, at cost	260,728		258,156
Less accumulated depreciation	(43,375	)	(36,709	)
Construction in progress	22,978		20,955
Property, plant and equipment, net	240,331		242,402



	As of
	March 31,	December 31,
	2020	2019
	$	$
Goodwill	109	109
Prepayment of property and equipment	20,421	10,289
Prepayment of facility capacity expansion activities (1)	25,963	24,881
Prepaid VAT	32,396	29,967
Rental deposits and other	3,397	3,209
Long-term investment (Note 4)	11,964	—
Total	94,250	68,455


•	expenses incurred under agreements with contract research organizations ("CROs"), CMOs, and consultants that conduct and support clinical trials and preclinical studies;


•	costs of comparator drugs in certain of our clinical trials;



			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 (loss)/ income before reclassifications	(4,245	)	6,938		2,693
Amounts reclassified from accumulated other comprehensive income	—		(1,240	)	(1,240	)
Net-current period other comprehensive (loss)/ income	(4,245	)	5,698		1,453
Balance as of March 31, 2020	(13,536	)	6,988		(6,548	)


•	manufacturing costs related to pre-commercial activities;


•	costs associated with preclinical activities and development activities;


•	employee-related expenses, including salaries, benefits, travel and share-based compensation expense for research and development personnel;


•	in-process research and development costs expensed as part of collaboration agreements entered into; and


•	other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies used in research and development activities.


•	tislelizumab, a humanized monoclonal antibody against PD‑1;


•	pamiparib, an investigational selective small molecule inhibitor of PARP1 and PARP2;


•	lifirafenib, an investigational novel small molecule inhibitor of both the monomer and dimer forms of BRAF;


•	BGB-A333, an investigational humanized monoclonal antibody against PD-L1;


•	BGB-A425, an investigational humanized monoclonal antibody against TIM-3;


•	BGB-A1217, an investigational humanized monoclonal antibody against TIGIT; and


•	BGB-11417, an investigational small molecular inhibitor of Bcl-2.


•	sitravatinib, an investigational, spectrum-selective kinase inhibitor in clinical development by Mirati Therapeutics, Inc. ("Mirati");


•	ZW25 and ZW49, two bispecific antibody-based product candidates targeting HER2, under development by Zymeworks Inc.;


•	BA3071, an investigational CAB-CTLA-4 antibody, under development by BioAtla LLC;


•	R&D expense related to the co-development of pipeline assets under the Amgen collaboration agreement. Our total cost share obligation to Amgen is split between R&D expense and a reduction to the R&D cost share liability.


•	successful enrollment in and completion of clinical trials;


•	establishing commercial manufacturing capabilities or making arrangements with third‑party manufacturers;


•	receipt of marketing and other required approvals from applicable regulatory authorities;