BeiGene, Ltd. (NASDAQ:BGNE), a commercial-stage biopharmaceutical
company focused on developing and commercializing innovative
molecularly targeted and immuno-oncology drugs for the treatment of
cancer, today reported business highlights and financial results
for the third quarter and first nine months of 2017.
“BeiGene has achieved several important milestones
since the beginning of the third quarter. Our strategic
collaboration with Celgene Corporation has transformed us into a
commercial-stage company in China and is expected to enhance the
potential of our investigational PD-1 inhibitor, BGB-A317. We have
also made important clinical progress with the expansion of the
global pivotal program for our BTK inhibitor BGB-3111, the
initiation of the first Phase 3 study for BGB-A317 in China, and
the completion of patient enrollment of our first China pivotal
trials for both BGB-3111 and BGB-A317. In addition, we strengthened
our balance sheet with the upfront payment and investment from
Celgene as well as our public offering in August,” said John V.
Oyler, Founder, Chief Executive Officer, and Chairman of
BeiGene.
“Looking ahead, we plan to present additional data
on BGB-3111 at the 59th American Society of Hematology Annual
Meeting in December. We also look forward to initiating additional
pivotal trials for our portfolio assets in the coming months,”
commented Mr. Oyler.
Third Quarter 2017 and Recent Business
Highlights
Clinical Programs:
BGB-3111, an investigational
small molecule inhibitor of Bruton’s tyrosine kinase (BTK)
• Completed enrollment in the pivotal Phase 2 trial in
China of BGB-3111 in relapsed/refractory mantle cell lymphoma;
• Initiated the following trials:
- Global Phase 3 trial of BGB-3111 compared to bendamustine and
rituximab in treatment-naïve chronic lymphocytic leukemia / small
lymphocytic lymphoma patients;
- Global pivotal Phase 2 trial of BGB-3111 in combination with
GAZYVA® (obinutuzumab) in relapsed or refractory follicular
lymphoma patients; and
- Pivotal Phase 2 trial in China of BGB-3111 in Waldenström’s
macroglobulinemia.
BGB-A317, an investigational
humanized monoclonal antibody against the immune
checkpoint receptor PD-1
• Presented data from patients with gastric cancer,
esophageal cancer, head and neck squamous cell carcinoma, and
ovarian cancer enrolled in the global Phase 1 trial of BGB-A317 in
patients with advanced solid tumors at the European Society for
Medical Oncology (ESMO) 2017 Congress;
• Presented preliminary Phase 1 data on BGB-A317 in
Chinese patients with advanced tumors at the 20th Annual Meeting of
the Chinese Society of Clinical Oncology;
• Completed enrollment in the pivotal Phase 2 trial of
BGB-A317 in China in relapsed/refractory classical Hodgkin’s
lymphoma;
• Completed enrollment in the global Phase 1a/1b trial of
BGB-A317 in advanced tumors with a total of over 450 patients;
• Initiated the following trials:
- Phase 3 trial in China of BGB-A317 as a second- or third-line
treatment for patients with advanced lung cancer;
- Pivotal Phase 2 trial in China of BGB-A317 in previously
treated, PD-L1-positive, locally advanced or metastatic urothelial
cancer;
- Phase 2 trial in China of BGB-A317 in combination with
chemotherapy as a first-line treatment for patients with advanced
lung cancer; and
- Phase 2 trial in China of BGB-A317 in combination with
chemotherapy as a first-line treatment for patients with locally
advanced or metastatic esophageal, gastric, or gastroesophageal
junction carcinoma.
BGB-290, an investigational
small molecule PARP inhibitor
• Presented updated data from the global Phase 1 trial of
BGB-290 in patients with advanced solid tumors at the ESMO 2017
Congress;
• Initiated the following trials:
- Global Phase 1 trial of BGB-290 in combination with
temozolomide in locally advanced or metastatic solid tumors;
and
- Global Phase 1b/2 trial of BGB-290 in combination with
radiation therapy and/or temozolomide in glioblastoma.
Corporate Development:
• Closed our global strategic collaboration with Celgene
Corporation.
Expected Upcoming Milestones
BGB-3111 (BTK Inhibitor)
• Present additional Phase 1 data for BGB-3111 in
non-Hodgkin’s lymphoma, updated Phase 1 data for the combination of
BGB-3111 and Gazyva® (obinutuzumab), and initial Phase 1 data for
the combination of BGB-3111 and BGB-A317 at the 59th American
Society of Hematology (ASH) Annual Meeting in Atlanta, GA, December
9-12, 2017.
BGB-A317 (PD-1 Antibody)
• Present initial Phase 1 data for the combination of
BGB-3111 and BGB-A317 at the 59th ASH Annual Meeting in Atlanta,
GA, December 9-12, 2017; and
• Initiate Phase 3 trials of BGB-A317 in China in the
fourth quarter of 2017 or the first quarter of 2018.
BGB-290 (PARP Inhibitor)
• Initiate a pivotal trial in China in the fourth quarter
of 2017.
Third Quarter 2017 Financial
Results
Cash, Cash
Equivalents, and Short-Term Investments were $757.44
million as of September 30, 2017, compared
to $407.43 million as of June 30, 2017 and $368.17
million as of December 31, 2016. The increase in the
quarter was primarily attributable to the Celgene strategic
collaboration. Funding from Celgene includes upfront licensing fees
of $263.00 million, $92.05 million of which was received as of
September 30, 2017 and the rest of which is payable in the fourth
quarter of 2017, and an equity investment of $150.00 million. In
addition, net proceeds from our August 2017 follow-on public
offering contributed $188.52 million, after deducting underwriting
discounts and offering-related expenses. These were partially
offset by cash used in operating activities and for capital
expenditures during the three months ended September 30, 2017.
The Company consolidates the BeiGene Biologics
joint venture in its consolidated financial statements. As of
September 30, 2017, cash, cash equivalents and short-term
investments included $141.64 million of cash held by BeiGene
Biologics.
Cash provided by operations for the three months
ended September 30, 2017 was $6.60 million, compared
to a use of cash of $24.28 million for the same period in
2016. The increase in cash flow from operating activities was
primarily attributable to upfront licensing fees of the Celgene
collaboration, which offset increased research and development
(R&D) and selling, general and administrative (SG&A)
expenses in the period. Capital expenditures for the quarter
ended September 30, 2017 were $18.79 million,
including $13.94 million attributable to BeiGene Biologics,
compared to $6.68 million for the same period in 2016. The
increase was primarily attributable to increased investment in our
manufacturing facilities in Guangzhou and Suzhou.
Revenue for the three months
ended September 30, 2017 was $220.21 million, compared
to nil in the same period in 2016, and was comprised of $8.82
million of net product revenue and $211.39 million of collaboration
revenue. The product revenues represent net product sales of
Abraxane and Revlimid in China following the effective date of the
Celgene transaction, August 31, 2017. The collaboration revenue
recognized in the period relates to the upfront fee allocated to
the BGB-A317 license element of the arrangement.
R&D Expenses for the
three months ended September 30, 2017 were $87.66
million, compared to $30.11 million in the same period in
2016. The increase was primarily attributable to increased
spending on clinical activities and manufacturing for BGB-3111,
BGB-A317, and BGB-290 due to expansion of ongoing clinical programs
and increased employee compensation-related expenses as a result of
increased headcount to support a broader clinical program.
R&D-associated share-based compensation expense was $10.38
million for the three months ended September 30, 2017,
compared to $2.14 million for the same period in 2016,
primarily due to increased headcount, higher share price, and
increased expense attributable to non-employee consultant
awards.
SG&A Expenses for
the three months ended September 30,
2017 were $15.64 million compared to $4.72 million in the
same period in 2016. The increase was primarily attributable
to increased employee compensation-related expenses as a result of
increased headcount, including personnel costs for the employees
transferred from Celgene China and higher share price as well as
higher professional service fees, including legal, finance and
accounting fees related to the Celgene transaction, patent
prosecution activities and costs to support our growing operations.
In addition, SG&A-associated share-based compensation expense
was $2.95 million for the three months
ended September 30, 2017, compared to $0.64 million for
the same period in 2016.
Net Income attributable to
BeiGene, Ltd. for the three months ended September 30,
2017 was $117.39 million compared to a net loss of $35.49
million in the same period in 2016.
Financial Summary
|
Select Consolidated
Balance
Sheet Data (U.S. GAAP) |
(Amounts in thousands of U.S. Dollars) |
|
|
|
September 30,
2017(unaudited) |
|
December 31, 2016(audited) |
Cash,
cash equivalents and short‑term investments |
$ |
757,435 |
$ |
368,174 |
Unbilled receivable |
|
170,950 |
|
— |
Prepaid expenses and other current assets |
|
33,945 |
|
6,225 |
Property and equipment, net |
|
55,322 |
|
25,977 |
Goodwill and other intangible assets |
|
9,421 |
|
— |
Total
assets |
|
1,049,059 |
|
405,813 |
|
|
|
|
|
Accounts payable |
|
35,168 |
|
11,957 |
Accrued expenses and other payables |
|
46,991 |
|
22,297 |
Deferred revenue |
|
38,609 |
|
— |
Bank
loan |
|
18,036 |
|
17,284 |
Shareholder loan |
|
140,311 |
|
— |
Noncontrolling interest |
|
14,349 |
|
— |
Total
equity |
$ |
764,489 |
$ |
352,907 |
|
|
|
|
|
|
Consolidated
Statements of Operations
(U.S. GAAP) |
(Amounts in thousands of U.S. Dollars, except for
number of American Depositary Shares (ADSs) and per ADS data)
(unaudited) |
|
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
|
|
|
|
|
|
|
|
Product revenue, net |
$ |
8,822 |
|
$ |
— |
|
$ |
8,822 |
|
$ |
— |
|
Collaboration revenue |
|
211,391 |
|
|
— |
|
|
211,391 |
|
|
1,070 |
|
Total
revenues |
|
220,213 |
|
|
— |
|
|
220,213 |
|
|
1,070 |
|
Expenses: |
|
|
|
|
|
|
|
|
Cost of sales – products |
|
(1,944 |
) |
|
— |
|
|
(1,944 |
) |
|
— |
|
Research and development |
|
(87,660 |
) |
|
(30,106 |
) |
|
(177,678 |
) |
|
(69,100 |
) |
Selling, general and administrative |
|
(15,641 |
) |
|
(4,722 |
) |
|
(35,187 |
) |
|
(11,760 |
) |
Amortization of intangible assets |
|
(63 |
) |
|
— |
|
|
(63 |
) |
|
— |
|
Total
expenses |
|
(105,308 |
) |
|
(34,828 |
) |
|
(214,872 |
) |
|
(80,860 |
) |
Income (loss) from operations |
|
114,905 |
|
|
(34,828 |
) |
|
5,341 |
|
|
(79,790 |
) |
Interest (expense) income, net |
|
(1,785 |
) |
|
(75 |
) |
|
(3,581 |
) |
|
336 |
|
Changes in fair value of financial instruments |
|
— |
|
|
— |
|
|
— |
|
|
(1,514 |
) |
(Loss)
gain on sale of available-for-sale securities |
|
— |
|
|
(137 |
) |
|
10 |
|
|
(1,077 |
) |
Other
income (expense), net |
|
1,103 |
|
|
(327 |
) |
|
1,531 |
|
|
732 |
|
Income (loss) before income taxes |
|
114,223 |
|
|
(35,367 |
) |
|
3,301 |
|
|
(81,313 |
) |
Income tax benefit (expense) |
|
3,061 |
|
|
(127 |
) |
|
2,680 |
|
|
(306 |
) |
Net
income (loss) |
$ |
117,284 |
|
$ |
(35,494 |
) |
$ |
5,981 |
|
|
(81,619 |
) |
Less:
Net loss attributable to noncontrolling interest |
|
(102 |
) |
|
— |
|
|
(237 |
) |
|
— |
|
Net
income (loss) attributable to BeiGene, Ltd. |
$ |
117,386 |
|
$ |
(35,494 |
) |
$ |
6,218 |
|
|
(81,619 |
) |
Net
income (loss) attributable to common shareholders per ADS,
basic |
$ |
2.79 |
|
$ |
(1.08 |
) |
$ |
0.15 |
|
|
(2.77 |
) |
Net
income (loss) attributable to common shareholders per ADS,
diluted |
$ |
2.54 |
|
$ |
(1.08 |
) |
$ |
0.14 |
|
|
(2.77 |
) |
Weighted-average number of ADS outstanding - basic |
|
42,118,973 |
|
|
32,933,655 |
|
|
40,563,845 |
|
|
29,497,875 |
|
Weighted-average number of ADS outstanding - diluted |
|
46,200,975 |
|
|
32,933,655 |
|
|
43,172,139 |
|
|
29,497,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of
Comprehensive Income (Loss) (U.S. GAAP) |
(Amounts in thousands of U.S. Dollars)
(unaudited) |
|
|
|
Three Months EndedSeptember
30, |
Nine Months Ended September
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net
income (loss) |
$ |
117,284 |
|
$ |
(35,494 |
) |
$ |
5,981 |
|
$ |
(81,619 |
) |
Other
comprehensive income (loss), net of tax of nil: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
341 |
|
|
377 |
|
|
985 |
|
|
(13 |
) |
Unrealized holding gain, net |
|
51 |
|
|
121 |
|
|
58 |
|
|
857 |
|
Comprehensive income (loss) |
|
117,676 |
|
|
(34,996 |
) |
|
7,024 |
|
|
(80,775 |
) |
Less:
Comprehensive loss attributable to noncontrolling interests |
|
(70 |
) |
|
— |
|
|
(178 |
) |
|
— |
|
Comprehensive income (loss) attributable to BeiGene, Ltd. |
$ |
117,746 |
|
$ |
(34,996 |
) |
$ |
7,202 |
|
$ |
(80,775 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
About BeiGene
BeiGene is a global, commercial-stage, research-based
biotechnology company focused on molecularly targeted and
immuno-oncology cancer therapeutics. With a team of over 700
employees in China, the United States, and Australia, BeiGene is
advancing a pipeline consisting of novel oral small molecules and
monoclonal antibodies for cancer. BeiGene is also working to create
combination solutions aimed to have both a meaningful and lasting
impact on cancer patients. BeiGene markets ABRAXANE® (nanoparticle
albumin–bound paclitaxel), REVLIMID® (lenalidomide), and VIDAZA®
(azacitidine) in China under a license from Celgene
Corporation.i
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and other federal securities laws, including statements regarding
BeiGene’s financial condition; results of operations and business
outlook; the momentum of its business, as well as the advancement
of, and anticipated clinical development and regulatory milestones
and plans related to BeiGene’s drug candidates and clinical trials,
including commencing new trials and providing data readouts and
updates for its drug candidates. Actual results may differ
materially from those indicated in the forward-looking statements
as a result of various important factors, including risks related
to BeiGene's ability to demonstrate the efficacy and safety of its
drug candidates; the clinical results for its drug candidates,
which may not support further development; actions of regulatory
agencies, which may affect the initiation, timing and progress of
clinical trials; BeiGene's ability to achieve market acceptance in
the medical community necessary for commercial success; BeiGene's
ability to obtain and maintain protection of intellectual property
for its technology and drugs; BeiGene's reliance on third parties
to conduct preclinical studies and clinical trials and to
manufacture its products and product candidates; BeiGene’s limited
operating history and BeiGene's ability to obtain additional
funding for operations and to complete the development and
commercialization of its drug candidates, as well as those risks
more fully discussed in the section entitled “Risk Factors” in
BeiGene’s most recent quarterly report on Form 10-Q, as well as
discussions of potential risks, uncertainties, and other important
factors in BeiGene's subsequent filings with the U.S. Securities
and Exchange Commission. All information in this press release is
as of the date of this press release, and BeiGene undertakes no
duty to update such information unless required by law.
Investor/Media Contact
Lucy Li, Ph.D.+1 781-801-1800ir@beigene.com
media@beigene.com
i ABRAXANE®, REVLIMID®, and VIDAZA® are
registered trademarks of Celgene Corporation.
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