ONC 10-Q

BeOne Medicines Ltd. (ONC)

10-Q 2023-08-02 For: 2023-06-30

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Added on April 06, 2026

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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	3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4.	Controls and Procedures	49

PART II.	OTHER INFORMATION	51

Item 1.	Legal Proceedings	51

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	110

Item 3.	Defaults Upon Senior Securities	110

Item 4.	Mine Safety Disclosures	110

Item 5.	Other Information	110

Item 6.	Exhibits	111

SIGNATURES		114


		As of
		June 30,	December 31,
	Note	2023	2022
		$	$
		(unaudited)	(audited)
Assets
Current assets:
Cash and cash equivalents		3,410,368	3,869,564
Short-term restricted cash	5	9,693	196
Short-term investments	5	105,693	665,251
Accounts receivable, net	10	299,282	173,168
Inventories	6	321,333	282,346
Prepaid expenses and other current assets	10	255,050	216,553
Total current assets		4,401,419	5,207,078
Long-term restricted cash	5	1,513	5,277
Property, plant and equipment, net	7	1,031,938	845,946
Operating lease right-of-use assets		99,422	109,960
Intangible assets, net	8	46,895	40,616

Other non-current assets	10	147,549	170,413
Total non-current assets		1,327,317	1,172,212
Total assets		5,728,736	6,379,290
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		266,975	294,781
Accrued expenses and other payables	10	454,950	467,352
Deferred revenue, current portion	4	159,034	213,861
Tax payable	9	17,074	25,189
Operating lease liabilities, current portion		23,508	24,041
Research and development cost share liability, current portion	4	62,516	114,335
Short-term debt	11	421,052	328,969
Total current liabilities		1,405,109	1,468,528
Non-current liabilities:
Long-term bank loans	11	207,426	209,148
Deferred revenue, non-current portion	4	24,276	42,026
Operating lease liabilities, non-current portion		25,821	34,517
Deferred tax liabilities	9	15,652	15,996
Research and development cost share liability, non-current portion	4	208,775	179,625
Other long-term liabilities	10	43,118	46,095
Total non-current liabilities		525,068	527,407
Total liabilities		1,930,177	1,995,935
Commitments and contingencies	18
Equity:
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,376,251,336 and 1,356,140,180 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		137	135
Additional paid-in capital		11,752,019	11,540,979
Accumulated other comprehensive loss	15	(143,687)	(77,417)
Accumulated deficit		(7,809,910)	(7,080,342)
Total equity		3,798,559	4,383,355
Total liabilities and equity		5,728,736	6,379,290


		Three Months Ended		Six Months Ended
		June 30,		June 30,
	Note	2023	2022	2023	2022
		$	$	$	$
Revenues
Product revenue, net	12	553,745	304,511	964,036	566,084
Collaboration revenue	4	41,516	37,061	79,026	82,114
Total revenues		595,261	341,572	1,043,062	648,198
Expenses
Cost of sales - product		95,990	71,173	177,779	136,410
Research and development		422,764	378,207	831,348	768,122
Selling, general and administrative		395,034	331,403	723,533	625,976
Amortization of intangible assets		188	188	375	376
Total expenses		913,976	780,971	1,733,035	1,530,884
Loss from operations		(318,715)	(439,399)	(689,973)	(882,686)
Interest income, net		15,070	11,431	31,086	21,502
Other expense, net		(63,818)	(129,617)	(45,515)	(117,650)
Loss before income taxes		(367,463)	(557,585)	(704,402)	(978,834)
Income tax expense	9	13,674	8,141	25,166	22,090
Net loss		(381,137)	(565,726)	(729,568)	(1,000,924)

Net loss per share		(0.28)	(0.42)	(0.54)	(0.75)


Weighted-average shares outstanding—basic and diluted		1,360,224,377	1,336,463,026	1,357,211,308	1,334,252,648


Net loss per American Depositary Share (“ADS”)		(3.64)	(5.50)	(6.99)	(9.75)


Weighted-average ADSs outstanding—basic and diluted		104,632,644	102,804,848	104,400,870	102,634,819


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2023	2022	2023	2022
	$	$	$	$
Net loss	(381,137)	(565,726)	(729,568)	(1,000,924)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(86,519)	(97,459)	(73,172)	(88,085)

Unrealized holding income (loss), net	1,846	(2,445)	6,902	(12,315)
Comprehensive loss	(465,810)	(665,630)	(795,838)	(1,101,324)


☒			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	2023	2022
		$	$
Operating activities:
Net loss		(729,568)	(1,000,924)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		42,346	32,061
Share-based compensation expenses	14	178,693	146,860

Unrealized losses on equity investments	5	2,178	23,529


Amortization of research and development cost share liability	4	(22,669)	(45,583)

Deferred income tax (expense) benefits		(15)	555
Other items, net		767	6,360
Changes in operating assets and liabilities:
Accounts receivable		(131,923)	307,430
Inventories		(53,598)	(31,633)
Other assets		(30,627)	32,335
Accounts payable		(32,678)	(30,362)
Accrued expenses and other payables		(8,082)	21,168

Deferred revenue		(72,577)	(76,737)
Other liabilities		88	(1,581)

Net cash used in operating activities		(857,665)	(616,522)
Investing activities:
Purchases of property, plant and equipment		(247,055)	(95,421)
Purchase of intangible asset		—	—

Purchases of investments		(11,582)	(11,504)
Proceeds from sale or maturity of investments		567,500	1,051,028
Purchase of in-process research and development		—	(75,000)

Net cash provided by investing activities		308,863	869,103
Financing activities:



Proceeds from long-term loan	11	15,771	—
Repayment of long-term loan	11	—	—
Proceeds from short-term loans	11	161,846	67,586
Repayment of short-term loans	11	(66,574)	(115,405)
Proceeds from option exercises and employee share purchase plan		35,169	18,972
Net cash provided by (used in) financing activities		146,212	(28,847)
Effect of foreign exchange rate changes, net		(50,873)	(71,212)
Net decrease in cash, cash equivalents, and restricted cash		(453,463)	152,522
Cash, cash equivalents, and restricted cash at beginning of period		3,875,037	4,382,887
Cash, cash equivalents, and restricted cash at end of period		3,421,574	4,535,409
Supplemental cash flow information:
Cash and cash equivalents		3,410,368	4,531,137
Short-term restricted cash		9,693	333
Long-term restricted cash		1,513	3,939
Income taxes paid		32,529	24,436
Interest paid		10,015	12,899
Supplemental non-cash information:
Capital expenditures included in accounts payable and accrued expenses		95,404	58,676


	Attributable to BeiGene, Ltd.
	Ordinary Shares		Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
	Shares	Amount
		$	$	$	$	$
Balance at December 31, 2022	1,356,140,180	135	11,540,979	(77,417)	(7,080,342)	4,383,355

Use of shares reserved for share option exercises	(98,774)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	6,610,695	1	28,656	—	—	28,657
Share-based compensation	—	—	75,322	—	—	75,322
Other comprehensive income	—	—	—	18,403	—	18,403
Net loss	—	—	—	—	(348,431)	(348,431)
Balance at March 31, 2023	1,362,652,101	136	11,644,957	(59,014)	(7,428,773)	4,157,306
Use of shares reserved for share option exercises	220,116	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	13,379,119	1	3,691	—	—	3,692
Share-based compensation	—	—	103,371	—	—	103,371
Other comprehensive loss	—	—	—	(84,673)	—	(84,673)
Net loss	—	—	—	—	(381,137)	(381,137)
Balance at June 30, 2023	1,376,251,336	137	11,752,019	(143,687)	(7,809,910)	3,798,559








Balance at December 31, 2021	1,334,804,281	133	11,191,007	17,950	(5,076,527)	6,132,563
Cost from issuance of ordinary shares	—	—	(152)	—	—	(152)
Use of shares reserved for share option exercises	(2,850,328)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	2,851,316	—	11,880	—	—	11,880
Share-based compensation	—	—	65,555	—	—	65,555
Other comprehensive loss	—	—	—	(496)	—	(496)
Net loss	—	—	—	—	(435,198)	(435,198)
Balance at March 31, 2022	1,334,805,269	133	11,268,290	17,454	(5,511,725)	5,774,152
Use of shares reserved for share option exercises	5,016,232	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	9,817,923	1	7,091	—	—	7,092
Share-based compensation	—	—	81,305	—	—	81,305
Other comprehensive loss	—	—	—	(99,904)	—	(99,904)
Net loss	—	—	—	—	(565,726)	(565,726)
Balance at June 30, 2022	1,349,639,424	134	11,356,686	(82,450)	(6,077,451)	5,196,919


	Three Months Ended			Six Months Ended
	June 30, 2022			June 30, 2022
	As Reported	Adjustments	As Revised	As Reported	Adjustments	As Revised
	$	$	$	$	$	$
Income tax expense	13,864	(5,723)	8,141	26,889	(4,799)	22,090
Net loss	(571,449)	5,723	(565,726)	(1,005,723)	4,799	(1,000,924)

Net loss per share	(0.43)	0.01	(0.42)	(0.75)	—	(0.75)

Net loss per American Depositary Share (“ADS”)	(5.56)	0.06	(5.50)	(9.80)	0.05	(9.75)


	Quoted Price in Active Market for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
As of June 30, 2023	(Level 1)	(Level 2)	(Level 3)
	$	$	$
Cash equivalents
Money market funds	847,781	—	—
Short-term investments (Note 5):
U.S. Treasury securities	105,693	—	—
Prepaid expenses and other current assets (Note 5):
Convertible debt instrument	—	—	5,190
Other non-current assets (Note 5):
Equity securities with readily determinable fair values	2,300	1,077	—
Convertible debt instrument	—	—	3,000
Total	955,774	1,077	8,190


		Gross	Gross	Fair Value
	Amortized	Unrealized	Unrealized	(Net Carrying
	Cost	Gains	Losses	Amount)
	$	$	$	$
U.S. Treasury securities	107,802	—	2,109	105,693
Total	107,802	—	2,109	105,693


	As of
	June 30, 2023			December 31, 2022
	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	(4,375)	3,125	7,500	(4,000)	3,500
Developed products	49,388	(5,618)	43,770	41,235	(4,119)	37,116
Trading license	816	(816)	—	816	(816)	—
Total finite-lived intangible assets	57,704	(10,809)	46,895	49,551	(8,935)	40,616


Year Ending December 31,	Cost of Sales - Product	Operating Expenses	Total
	$	$	$
2023 (remainder of year)	1,857	375	2,232
2024	3,714	750	4,464
2025	3,714	750	4,464
2026	3,714	750	4,464
2027	3,714	500	4,214
2028 and thereafter	27,057	—	27,057
Total	43,770	3,125	46,895


Lender	Agreement Date	Line of Credit	Term	Maturity Date	Interest Rate	As of
						June 30, 2023		December 31, 2022
						$	RMB	$	RMB
China Construction Bank	April 4, 2018	RMB580,000	9-year	April 4, 2027	(1)	10,343	75,000	7,250	50,000
China Merchants Bank	January 22, 2020	(2)	9-year	January 20, 2029	(2)	5,024	36,429	1,450	10,000
China Merchants Bank	November 9, 2020	RMB378,000	9-year	November 8, 2029	(3)	5,516	40,000	5,437	37,500
China Minsheng Bank (the “Senior Loan”)	September 24, 2020	$200,000	(4)		4.3%	150,000	1,087,666	150,000	1,034,554
Shanghai Pudong Development Bank	February 25, 2022	$50,000	1-year	February 25, 2023	2.2%	—	—	50,000	344,851
China Merchants Bank	June 5, 2023	RMB 400,000	1-year	June 4, 2024	3.2%	55,164	400,000	—	—
HSBC Bank	May 4, 2023	RMB 340,000	1-year	May 3, 2024	4.7%	46,889	340,000	—	—
China Industrial Bank	May 30, 2023	RMB 200,000	1-year	May 29, 2024	2.8%	27,582	200,000	—	—
Other short-term debt (5)						120,534	874,000	114,832	792,000
Total short-term debt						421,052	3,053,095	328,969	2,268,905

China Construction Bank	April 4, 2018	RMB580,000	9-year	April 4, 2027	(1)	64,818	470,000	75,395	520,000
China Merchants Bank	January 22, 2020	(2)	9-year	January 20, 2029	(2)	41,176	298,571	47,847	330,000
China Merchants Bank	November 9, 2020	RMB378,000	9-year	November 8, 2029	(3)	44,200	320,500	49,369	340,500
China CITIC Bank	July 29, 2022	RMB480,000	10-year	July 28, 2032	(6)	57,232	415,000	36,537	252,000
Total long-term bank loans						207,426	1,504,071	209,148	1,442,500


	As of
	June 30,	December 31,
	2023	2022
	$	$
Raw materials	109,048	88,957
Work in process	31,472	20,886
Finished goods	180,813	172,503
Total inventories	321,333	282,346


	As of
	June 30,	December 31,
	2023	2022
	$	$
Land	65,485	65,485
Building	214,080	222,448
Manufacturing equipment	172,844	175,679
Laboratory equipment	170,424	158,908
Leasehold improvement	53,366	53,786
Software, electronics and office equipment	72,839	47,483
Property, plant and equipment, at cost	749,038	723,789
Less: accumulated depreciation	(201,406)	(171,470)
Construction in progress	484,306	293,627
Property, plant and equipment, net	1,031,938	845,946


	As of
	June 30,	December 31,
	2023	2022
	$	$
Goodwill	109	109
Prepayment of property and equipment	13,140	22,025
Prepaid supply cost (1)	30,539	48,642
Prepaid VAT	1,734	804
Rental deposits and other	6,420	7,054
Long-term investments	95,607	91,779
Total	147,549	170,413


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2023	2022	2023	2022
	$	$	$	$
BRUKINSA®	308,276	128,747	519,658	233,072
Tislelizumab	149,464	104,879	264,314	192,522
REVLIMID®	21,847	19,916	45,005	41,576
XGEVA®	23,968	15,509	44,165	29,008
POBEVCY®	13,438	12,983	27,764	19,798
BLINCYTO®	14,578	9,530	25,524	21,396
KYPROLIS®	11,052	4,092	15,995	8,405
VIDAZA®	3,930	3,434	7,119	8,946
Pamiparib	1,919	2,022	3,725	4,577
Other	5,273	3,399	10,767	6,784
Total product revenue – net	553,745	304,511	964,036	566,084


		Market Price1				Purchase Price2
Issuance Date	Number of Ordinary Shares Issued	ADS		Ordinary		ADS		Ordinary		Proceeds
February 28, 2023	930,582	$	171.10	$	13.16	$	145.44	$	11.19	$	10,414
August 31, 2022	861,315	$	171.66	$	13.20	$	145.91	$	11.22	$	9,667
February 28, 2022	667,160	$	210.52	$	16.19	$	178.94	$	13.76	$	9,183


		Unrealized
	Foreign Currency	Gains/(Losses) on	Pension
	Translation	Available-for-Sale	Liability
	Adjustments	Securities	Adjustments	Total
	$	$	$	$
Balance as of December 31, 2022	(62,523)	(9,011)	(5,883)	(77,417)
Other comprehensive (loss) income before reclassifications	(73,172)	6,902	—	(66,270)

Net-current period other comprehensive (loss) income	(73,172)	6,902	—	(66,270)
Balance as of June 30, 2023	(135,695)	(2,109)	(5,883)	(143,687)


	Three Months Ended
	June 30,				Changes
	2023		2022		$		%
	(dollars in thousands)
Product revenue	$	553,745	$	304,511	$	249,234	81.8	%
Collaboration revenue:

Research and development service revenue	13,563		10,813		2,750		25.4	%
Right to access intellectual property revenue	26,248		26,248		—		—	%
Other	1,705		—		1,705		NM
Total collaboration revenue	41,516		37,061		4,455		12.0	%
Total Revenue	$	595,261	$	341,572	$	253,689	74.3	%


	Six Months Ended June 30,
	2023		2022

	(dollars in thousands)
Cash, cash equivalents and restricted cash at beginning of period	$	3,875,037	$	4,382,887
Net cash used in operating activities	(857,665)		(616,522)
Net cash provided by investing activities	308,863		869,103
Net cash provided by (used in) financing activities	146,212		(28,847)
Net effect of foreign exchange rate changes	(50,873)		(71,212)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(453,463)		152,522
Cash, cash equivalents and restricted cash at end of period	$	3,421,574	$	4,535,409


	Payments Due by Period
	Total		Short Term		Long Term
	(dollars in thousands)
Contractual obligations
Operating lease commitments	$	53,220	$	13,074	$	40,146
Purchase commitments	104,115		63,820		40,295
Debt obligations	628,478		421,052		207,426
Interest on debt	46,169		17,246		28,923
Co-development funding commitment	549,765		126,688		423,077
Funding commitment	10,557		2,625		7,932
Research and development commitment	17,990		5,959		12,031
Pension plan	7,986		2,627		5,359
Capital commitments	381,187		381,187		—
Total	$	1,799,467	$	1,034,278	$	765,189


	BEIGENE, LTD.

Date: August 2, 2023	By:	/s/ John V. Oyler
	John V. Oyler
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

Date: August 2, 2023	By:	/s/ Julia Wang
	Julia Wang
	Chief Financial Officer
	(Principal Financial and Accounting Officer)