BeOne Medicines Ltd 10-Q for FY2021 Q2

BeOne Medicines Ltd. (ONC)

10-Q 2021-08-05 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

BeOne Medicines Ltd filed this 10-Q on August 5, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $149.99M; up 128.5% from $65.64M a year earlier
Net loss: $480.34M; compared with a net loss of $335.2M 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)


		Page

PART I.	FINANCIAL INFORMATION	5

Item 1.	Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4.	Controls and Procedures	49

PART II.	OTHER INFORMATION	50

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	50

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	104

Item 3.	Defaults Upon Senior Securities	104

Item 4.	Mine Safety Disclosures	104

Item 5.	Other Information	105

Item 6.	Exhibits	105

SIGNATURES		108


		As of
		June 30,	December 31,
	Note	2021	2020
		$	$
		(unaudited)	(audited)
Assets
Current assets:
Cash and cash equivalents		1,776,448	1,381,950
Short-term restricted cash	4	310	307
Short-term investments	4	2,605,452	3,268,725
Accounts receivable, net	10	73,787	60,403
Inventories	5	117,587	89,293
Prepaid expenses and other current assets	10	225,455	160,012
Total current assets		4,799,039	4,960,690
Long-term restricted cash	4	9,927	7,748
Property, plant and equipment, net	6	395,167	357,686
Operating lease right-of-use assets		95,980	90,581
Intangible assets, net	8	12,008	5,000
Deferred tax assets	9	79,751	65,962
Other non-current assets	10	132,244	113,090
Total non-current assets		725,077	640,067
Total assets		5,524,116	5,600,757
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		168,826	231,957
Accrued expenses and other payables	10	398,856	346,144
Deferred revenue, current portion	3	63,605	—
Tax payable	9	13,855	20,380
Operating lease liabilities, current portion		16,550	13,895
Research and development cost share liability, current portion	3	145,820	127,808
Short-term debt	11	434,802	335,015
Total current liabilities		1,242,314	1,075,199
Non-current liabilities:
Long-term bank loans	11	194,856	183,637
Deferred revenue, non-current portion	3	75,272	—
Operating lease liabilities, non-current portion		34,172	29,417
Deferred tax liabilities	9	12,270	10,792
Research and development cost share liability, non-current portion	3	303,126	375,040
Other long-term liabilities	10	55,331	57,429
Total non-current liabilities		675,027	656,315
Total liabilities		1,917,341	1,731,514
Commitments and contingencies	18
Equity:
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,204,567,023 and 1,190,821,941 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		120	118
Additional paid-in capital		7,561,155	7,414,932
Accumulated other comprehensive income	15	12,095	6,942
Accumulated deficit		(3,966,595)	(3,552,749)
Total equity		3,606,775	3,869,243
Total liabilities and equity		5,524,116	5,600,757


		Three Months Ended		Six Months Ended
		June 30,		June 30,
	Note	2021	2020	2021	2020
		$	$	$	$
Revenues
Product revenue, net	12	138,624	65,635	244,741	117,694
Collaboration revenue	3	11,368	—	511,123	—
Total revenues		149,992	65,635	755,864	117,694
Expenses
Cost of sales - product		36,263	14,307	68,948	28,456
Research and development		356,091	285,968	676,817	590,270
Selling, general and administrative		232,289	124,049	414,395	231,130
Amortization of intangible assets		187	188	375	471
Total expenses		624,830	424,512	1,160,535	850,327
Loss from operations		(474,838)	(358,877)	(404,671)	(732,633)
Interest (expense) income, net		(4,866)	1,108	(9,045)	7,798
Other (expense) income, net		(867)	19,976	(4,990)	23,657
Loss before income taxes		(480,571)	(337,793)	(418,706)	(701,178)
Income tax (benefit) expense	9	(230)	(1,475)	(4,860)	79
Net loss		(480,341)	(336,318)	(413,846)	(701,257)
Less: net loss attributable to noncontrolling interests		—	(1,116)	—	(2,320)
Net loss attributable to BeiGene, Ltd.		(480,341)	(335,202)	(413,846)	(698,937)

Loss per share attributable to BeiGene, Ltd.		(0.40)	(0.33)	(0.35)	(0.69)


Weighted-average shares outstanding—basic and diluted		1,194,071,476	1,010,230,470	1,191,521,766	1,007,967,904


Loss per American Depositary Share ("ADS")		(5.23)	(4.31)	(4.52)	(9.01)


Weighted-average ADSs outstanding—basic and diluted		91,851,652	77,710,036	91,655,520	77,535,993


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2021	2020	2021	2020
	$	$	$	$
Net loss	(480,341)	(336,318)	(413,846)	(701,257)
Other comprehensive (loss) income, net of tax of nil:
Foreign currency translation adjustments	9,626	1,732	5,864	(2,617)
Pension liability adjustments	(136)	—	361	—
Unrealized holding (loss) gain, net	(599)	(4,470)	(1,072)	1,228
Comprehensive loss	(471,450)	(339,056)	(408,693)	(702,646)
Less: comprehensive loss attributable to noncontrolling interests	—	(1,103)	—	(2,411)
Comprehensive loss attributable to BeiGene, Ltd.	(471,450)	(337,953)	(408,693)	(700,235)


☒			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


		Six Months Ended June 30,
	Note	2021	2020
		$	$
Operating activities:
Net loss		(413,846)	(701,257)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		21,159	15,617
Share-based compensation expenses	14	110,624	83,723

Unrealized losses/(gains) on equity investments	4	6,033	(11,264)

Acquired in-process research and development		53,500	43,000
Amortization of research and development cost share liability	3	(53,902)	(55,240)

Deferred income tax benefits		(12,311)	(1,060)
Other items, net		11,212	(7,064)
Changes in operating assets and liabilities:
Accounts receivable		(13,338)	9,094
Inventories		(28,294)	(4,681)
Other assets		(77,204)	(51,962)
Accounts payable		(42,558)	34,851
Accrued expenses and other payables		1,688	41,465

Deferred revenue		138,877	—
Other liabilities		3,189	(108)

Net cash used in operating activities		(295,171)	(604,886)
Investing activities:
Purchases of property, plant and equipment		(80,920)	(54,138)


Purchases of investments		(1,357,051)	(2,442,943)
Proceeds from sale or maturity of investments		1,997,515	997,242
Purchase of in-process research and development		(8,500)	(43,000)
Other investing activities		(7,500)	(2,025)
Net cash provided by (used in) investing activities		543,544	(1,544,864)
Financing activities:
Proceeds from sale of ordinary shares, net of cost	16	—	2,162,407
Proceeds from research and development cost share liability		—	616,834
Proceeds from long-term loan	11	10,819	49,525

Proceeds from short-term loans	11	112,589	26,197
Repayment of short-term loan		(15,959)	—
Proceeds from option exercises and employee share purchase plan		35,601	28,198
Net cash provided by financing activities		143,050	2,883,161
Effect of foreign exchange rate changes, net		5,257	(4,287)
Net increase in cash, cash equivalents, and restricted cash		396,680	729,124
Cash, cash equivalents, and restricted cash at beginning of period		1,390,005	620,775
Cash, cash equivalents, and restricted cash at end of period		1,786,685	1,349,899
Supplemental cash flow information:
Cash and cash equivalents		1,776,448	1,345,014
Short-term restricted cash		310	283
Long-term restricted cash		9,927	4,602
Income taxes paid		14,527	9,250
Interest paid		14,267	3,354
Supplemental non-cash information:
Acquisitions of equipment included in accounts payable		28,885	28,962
Acquired in-process research and development included in accrued expenses		45,000	—


	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, 2020	1,190,821,941	118	7,414,932	6,942	(3,552,749)	3,869,243	—	3,869,243
Use of shares reserved for share option exercises	(123,097)	—	—	—	—	—	—	—
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")	6,623,773	1	25,753	—	—	25,754	—	25,754
Share-based compensation	—	—	45,833	—	—	45,833	—	45,833
Other comprehensive loss	—	—	—	(3,738)	—	(3,738)	—	(3,738)
Net income	—	—	—	—	66,495	66,495	—	66,495
Balance at March 31, 2021	1,197,322,617	119	7,486,518	3,204	(3,486,254)	4,003,587	—	4,003,587
Use of shares reserved for share option exercises	(1,599,676)	—	—	—	—	—	—	—
Exercise of options, ESPP and release of Restricted Share Units ("RSUs")	8,844,082	1	9,846	—	—	9,847	—	9,847
Share-based compensation	—	—	64,791	—	—	64,791	—	64,791
Other comprehensive loss	—	—	—	8,891	—	8,891	—	8,891
Net loss	—	—	—	—	(480,341)	(480,341)	—	(480,341)
Balance at June 30, 2021	1,204,567,023	120	7,561,155	12,095	(3,966,595)	3,606,775	—	3,606,775

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 and release of Restricted Share Units ("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 entity	—	—	—	—	—	—	(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


	Quoted Price
	in Active	Significant
	Market for	Other	Significant
	Identical	Observable	Unobservable
	Assets	Inputs	Inputs
As of June 30, 2021	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Cash equivalents
U.S. treasury securities	527,749	—	—
Money market funds	195,444	—	—
Short-term investment (Note 4):
U.S. Treasury securities	2,605,452	—	—
Other non-current assets (Note 4):
Equity securities with readily determinable fair values	7,880	4,223	—
Total	3,336,525	4,223	—


		Gross	Gross	Fair Value
	Amortized	Unrealized	Unrealized	(Net Carrying
	Cost	Gains	Losses	Amount)
	$	$	$	$
U.S. treasury securities	2,605,653	—	(201)	2,605,452
Total	2,605,653	—	(201)	2,605,452


	As of
	June 30, 2021			December 31, 2020
	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	(2,875)	4,625	7,500	(2,500)	5,000
Developed product	7,500	(117)	7,383	—	—	—
Trading license	816	(816)	—	816	(816)	—
Total finite-lived intangible assets	15,816	(3,808)	12,008	8,316	(3,316)	5,000


Lender	Agreement Date	Line of Credit	Term	Maturity Date	Interest Rate		June 30, 2021		December 31, 2020
							$	RMB	$	RMB
China Construction Bank	April 4, 2018	RMB580,000	9-year	April 4, 2027	(1)		774	5,000	307	2,000
China Merchants Bank	January 22, 2020	(2)	9-year	January 20, 2029	(2)		774	5,000	—	—
China Minsheng Bank (the "Senior Loan")	September 24, 2020	$200,000	(3)		5.8	%	198,320	1,280,475	198,320	1,294,010
Zhuhai Hillhouse (the "Related Party Loan")	September 24, 2020	RMB500,000	(4)		5.8	%	15,488	100,000	15,326	100,000
Other short-term debt (5)							219,446	1,416,874	121,062	789,918
Total short-term debt							434,802	2,807,349	335,015	2,185,928

China Construction Bank	April 4, 2018	RMB580,000	9-year	April 4, 2027	(1)		88,901	574,000	88,584	578,000
China Merchants Bank	January 22, 2020	(2)	9-year	January 20, 2029	(2)		53,434	345,000	53,641	350,000
China Merchants Bank	November 9, 2020	RMB378,000	9-year	November 8, 2029	(6)		52,521	339,111	41,412	270,206
Total long-term bank loans							194,856	1,258,111	183,637	1,198,206


		Market Price1				Purchase Price2
Issuance Date	Number of Ordinary Shares Issued	ADS		Ordinary		ADS		Ordinary		Proceeds
February 26, 2021	436,124	$	236.30	$	18.18	$	200.86	$	15.45	$	6,738
August 31, 2020	485,069	$	164.06	$	12.62	$	139.45	$	10.73	$	5,203
February 28, 2020	425,425	$	145.54	$	11.20	$	123.71	$	9.52	$	4,048


		Unrealized
	Foreign Currency	Gains/(Losses) on	Pension
	Translation	Available-for-Sale	Liability
	Adjustments	Securities	Adjustments	Total
	$	$	$	$
Balance as of December 31, 2020	14,184	871	(8,113)	6,942
Other comprehensive (loss) income before reclassifications	5,864	(1,010)	361	5,215
Amounts reclassified from accumulated other comprehensive income (1)	—	(62)	—	(62)
Net-current period other comprehensive (loss) income	5,864	(1,072)	361	5,153
Balance as of June 30, 2021	20,048	(201)	(7,752)	12,095


	As of
	June 30,	December 31,
	2021	2020
	$	$
Raw materials	44,856	19,330
Work in process	10,806	1,378
Finished goods	61,925	68,585
Total inventories	117,587	89,293


	As of
	June 30,	December 31,
	2021	2020
	$	$
Laboratory equipment	100,187	78,640
Leasehold improvements	42,691	37,643
Building	133,280	111,527
Manufacturing equipment	113,527	96,669
Software, electronics and office equipment	23,791	20,782
Property, plant and equipment, at cost	413,476	345,261
Less accumulated depreciation	(97,173)	(73,354)
Construction in progress	78,864	85,779
Property, plant and equipment, net	395,167	357,686


	As of
	June 30,	December 31,
	2021	2020
	$	$
Goodwill	109	109
Prepayment of property and equipment	24,244	16,984
Prepayment of facility capacity expansion activities (1)	23,096	29,778
Prepaid VAT	23,600	10,913
Rental deposits and other	7,244	5,962
Long-term investments (Note 4)	53,951	49,344
Total	132,244	113,090


	As of
	June 30,	December 31,
	2021	2020
	$	$
Compensation related	81,795	106,765
External research and development activities related	169,826	143,302
Commercial activities	73,073	66,131
Employee tax withholdings	36,074	14,373
Sales rebates and returns related	25,572	11,874
Professional fees and other	12,516	3,699
Total	398,856	346,144


	Three Months Ended
	June 30,				Changes
	2021		2020		$		%
	(dollars in thousands)
Product revenue	$	138,624	$	65,635	$	72,989	111.2	%
Collaboration revenue:

Research and development service revenue	11,368		—		11,368		NM
Total collaboration revenue	11,368		—		11,368		NM
Total Revenue	$	149,992	$	65,635	$	84,357	128.5	%


	Six Months Ended June 30,
	2021		2020

	(dollars in thousands)
Cash, cash equivalents and restricted cash at beginning of period	$	1,390,005	$	620,775
Net cash used in operating activities	(295,171)		(604,886)
Net cash provided by (used in) investing activities	543,544		(1,544,864)
Net cash provided by financing activities	143,050		2,883,161
Net effect of foreign exchange rate changes	5,257		(4,287)
Net increase in cash, cash equivalents, and restricted cash	396,680		729,124
Cash, cash equivalents and restricted cash at end of period	$	1,786,685	$	1,349,899


	Payments Due by Period
			Less Than						More Than
	Total		1 Year		1–3 Years		3–5 Years		5 Years
	(dollars in thousands)
Contractual obligations
Operating lease commitments	$	55,468	$	8,866	$	31,590	$	14,422	$	590
Purchase commitments	220,147		140,844		33,885		31,438		13,980
Debt obligations	629,658		434,802		29,881		72,717		92,258
Interest on debt	54,096		17,753		17,291		12,745		6,307
Co-development funding commitment	909,777		295,500		559,500		54,777		—
Funding commitment	13,500		4,500		4,500		4,500		—
Research and development commitment	74,751		49,578		11,659		12,369		1,145
Pension plan	7,752		649		2,594		2,594		1,915
Capital commitments	70,669		70,669		—		—		—
Total	$	2,035,818	$	1,023,161	$	690,900	$	205,562	$	116,195


	BEIGENE, LTD.

Date: August 5, 2021	By:	/s/ John V. Oyler
	John V. Oyler
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

Date: August 5, 2021	By:	/s/ Julia Wang
	Julia Wang
	Chief Financial Officer
	(Principal Financial and Accounting Officer)