Document
0false--12-31Q2201900016513080.00010.000195000000009500000000776263184784439632776263184784439632P9Y0 0001651308 2019-01-01 2019-06-30 0001651308 2019-07-31 0001651308 2018-12-31 0001651308 2019-06-30 0001651308 2018-04-01 2018-06-30 0001651308 bgne:CollaborationMember 2018-01-01 2018-06-30 0001651308 bgne:CollaborationMember 2018-04-01 2018-06-30 0001651308 2018-01-01 2018-06-30 0001651308 us-gaap:ProductMember 2018-04-01 2018-06-30 0001651308 2019-04-01 2019-06-30 0001651308 us-gaap:ProductMember 2019-01-01 2019-06-30 0001651308 us-gaap:ProductMember 2019-04-01 2019-06-30 0001651308 bgne:CollaborationMember 2019-04-01 2019-06-30 0001651308 bgne:CollaborationMember 2019-01-01 2019-06-30 0001651308 us-gaap:ProductMember 2018-01-01 2018-06-30 0001651308 2018-06-30 0001651308 2017-12-31 0001651308 us-gaap:ParentMember 2019-04-01 2019-06-30 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001651308 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001651308 us-gaap:ParentMember 2018-03-31 0001651308 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001651308 us-gaap:CommonStockMember 2018-12-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001651308 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001651308 us-gaap:ParentMember 2018-01-01 2018-03-31 0001651308 us-gaap:ParentMember 2018-04-01 2018-06-30 0001651308 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001651308 us-gaap:NoncontrollingInterestMember 2018-06-30 0001651308 us-gaap:NoncontrollingInterestMember 2019-06-30 0001651308 us-gaap:CommonStockMember 2018-03-31 0001651308 us-gaap:AccountingStandardsUpdate201409Member 2018-01-01 0001651308 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001651308 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-03-31 0001651308 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001651308 2019-01-01 2019-03-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001651308 us-gaap:ParentMember 2019-03-31 0001651308 us-gaap:CommonStockMember 2018-06-30 0001651308 us-gaap:RetainedEarningsMember 2017-12-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001651308 us-gaap:AccountingStandardsUpdate201409Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 0001651308 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001651308 2018-01-01 2018-03-31 0001651308 us-gaap:NoncontrollingInterestMember 2017-12-31 0001651308 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001651308 us-gaap:ParentMember 2018-01-01 0001651308 us-gaap:NoncontrollingInterestMember 2018-03-31 0001651308 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001651308 us-gaap:CommonStockMember 2018-01-01 0001651308 us-gaap:CommonStockMember 2019-06-30 0001651308 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001651308 us-gaap:RetainedEarningsMember 2018-06-30 0001651308 us-gaap:ParentMember 2019-01-01 2019-03-31 0001651308 2019-03-31 0001651308 us-gaap:RetainedEarningsMember 2018-12-31 0001651308 us-gaap:CommonStockMember 2017-12-31 0001651308 us-gaap:NoncontrollingInterestMember 2019-03-31 0001651308 us-gaap:AccountingStandardsUpdate201409Member us-gaap:NoncontrollingInterestMember 2018-01-01 0001651308 us-gaap:ParentMember 2018-06-30 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 0001651308 us-gaap:RetainedEarningsMember 2019-06-30 0001651308 us-gaap:NoncontrollingInterestMember 2018-04-01 2018-06-30 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 0001651308 us-gaap:ParentMember 2018-12-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001651308 us-gaap:RetainedEarningsMember 2018-03-31 0001651308 us-gaap:ParentMember 2019-06-30 0001651308 us-gaap:AccountingStandardsUpdate201409Member us-gaap:RetainedEarningsMember 2018-01-01 0001651308 2018-03-31 0001651308 us-gaap:RetainedEarningsMember 2019-03-31 0001651308 us-gaap:CommonStockMember 2019-03-31 0001651308 us-gaap:RetainedEarningsMember 2018-01-01 0001651308 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001651308 us-gaap:NoncontrollingInterestMember 2018-01-01 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001651308 2018-01-01 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001651308 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001651308 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001651308 us-gaap:NoncontrollingInterestMember 2018-12-31 0001651308 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001651308 us-gaap:ParentMember 2017-12-31 0001651308 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001651308 bgne:NonLandUseRightsMember us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001651308 bgne:ManufacturingFacilityinGuangzhouMember us-gaap:LandMember 2018-12-31 0001651308 bgne:FollowOnPublicOfferingMember 2018-08-08 2018-08-08 0001651308 bgne:ManufacturingFacilityinGuangzhouMember us-gaap:LandMember 2017-12-31 0001651308 2019-01-01 0001651308 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2018-12-31 0001651308 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2018-12-31 0001651308 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2018-12-31 0001651308 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AgencySecuritiesMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2019-06-30 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AgencySecuritiesMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:AgencySecuritiesMember 2019-06-30 0001651308 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001651308 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001651308 bgne:CollaborationOtherMember 2018-04-01 2018-06-30 0001651308 bgne:CollaborationResearchAndDevelopmentServiceMember 2018-04-01 2018-06-30 0001651308 bgne:CollaborationReimbursementOfResearchAndDevelopmentCostsMember 2019-04-01 2019-06-30 0001651308 bgne:CollaborationOtherMember 2019-04-01 2019-06-30 0001651308 bgne:CollaborationReimbursementOfResearchAndDevelopmentCostsMember 2018-04-01 2018-06-30 0001651308 bgne:CollaborationResearchAndDevelopmentServiceMember 2019-04-01 2019-06-30 0001651308 bgne:CollaborationOtherMember 2018-01-01 2018-06-30 0001651308 bgne:CollaborationReimbursementOfResearchAndDevelopmentCostsMember 2019-01-01 2019-06-30 0001651308 bgne:CollaborationResearchAndDevelopmentServiceMember 2019-01-01 2019-06-30 0001651308 bgne:CollaborationResearchAndDevelopmentServiceMember 2018-01-01 2018-06-30 0001651308 bgne:CollaborationOtherMember 2019-01-01 2019-06-30 0001651308 bgne:CollaborationReimbursementOfResearchAndDevelopmentCostsMember 2018-01-01 2018-06-30 0001651308 bgne:CollaborationResearchAndDevelopmentServiceMilestonePaymentMember 2018-04-01 2018-06-30 0001651308 bgne:BioAtlaLLCMember 2019-04-09 2019-04-09 0001651308 bgne:BeiGeneGuangzhouMember bgne:BeiGenePharmaceuticalsGuangzhouCo.LimitedMember 2018-09-21 0001651308 bgne:BeigeneHongKongCoLimitedMember bgne:BeijingInnerwayBiotechCo.LtdMember 2018-10-04 0001651308 bgne:BeiGeneGuangzhouMember bgne:BeiGenePharmaceuticalsGuangzhouCo.LimitedMember 2018-09-21 2018-09-21 0001651308 bgne:BeigeneHongKongCoLimitedMember bgne:BeijingInnerwayBiotechCo.LtdMember 2018-10-04 2018-10-04 0001651308 bgne:BeiGeneGuangzhouMember bgne:BeiGenePharmaceuticalsGuangzhouCo.LimitedMember us-gaap:LicensingAgreementsMember 2018-09-21 2018-09-21 0001651308 us-gaap:USTreasurySecuritiesMember 2018-12-31 0001651308 bgne:BeigeneGuangzhouBiologicsManufacturingCoLtdMember srt:SubsidiariesMember 2019-06-30 0001651308 us-gaap:USTreasurySecuritiesMember 2019-06-30 0001651308 us-gaap:AgencySecuritiesMember 2019-06-30 0001651308 us-gaap:MachineryAndEquipmentMember 2019-06-30 0001651308 us-gaap:OfficeEquipmentMember 2018-12-31 0001651308 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2019-06-30 0001651308 us-gaap:MachineryAndEquipmentMember 2018-12-31 0001651308 us-gaap:OfficeEquipmentMember 2019-06-30 0001651308 us-gaap:BuildingMember 2019-06-30 0001651308 us-gaap:BuildingMember 2018-12-31 0001651308 us-gaap:TechnologyEquipmentMember 2019-06-30 0001651308 bgne:LaboratoryEquipmentMember 2018-12-31 0001651308 us-gaap:LeaseholdImprovementsMember 2019-06-30 0001651308 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2018-12-31 0001651308 us-gaap:ConstructionInProgressMember 2019-06-30 0001651308 us-gaap:LeaseholdImprovementsMember 2018-12-31 0001651308 us-gaap:ConstructionInProgressMember 2018-12-31 0001651308 us-gaap:TechnologyEquipmentMember 2018-12-31 0001651308 bgne:LaboratoryEquipmentMember 2019-06-30 0001651308 bgne:GuangzhouGetTechnologyDevelopmentCoLtdMember bgne:BeigeneBiologicsCoLtdMember 2017-03-07 0001651308 bgne:BeigeneHongKongCoLimitedMember bgne:BeigeneBiologicsCoLtdMember 2017-03-07 2017-03-07 0001651308 bgne:BeigeneBiologicsCoLtdMember bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-03-07 0001651308 bgne:BeigeneHongKongCoLimitedMember bgne:BeigeneShanghaiCoLtdMember 2017-10-01 2017-12-31 0001651308 bgne:GuangzhouGetTechnologyDevelopmentCoLtdMember 2017-04-14 2017-04-14 0001651308 bgne:BeigeneBiologicsCoLtdMember 2019-06-30 0001651308 bgne:BeigeneHongKongCoLimitedMember 2017-03-07 0001651308 bgne:BeigeneBiologicsCoLtdMember bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-04-14 0001651308 bgne:BeigeneHongKongCoLimitedMember 2017-04-13 2017-04-13 0001651308 bgne:GuangzhouGetTechnologyDevelopmentCoLtdMember bgne:BeigeneBiologicsCoLtdMember 2019-01-01 2019-06-30 0001651308 bgne:BeigeneBiologicsCoLtdMember 2019-01-01 2019-06-30 0001651308 bgne:BeigeneHongKongCoLimitedMember 2017-05-04 2017-05-04 0001651308 bgne:BeigeneHongKongCoLimitedMember 2017-03-07 2017-03-07 0001651308 bgne:GuangzhouGetTechnologyDevelopmentCoLtdMember 2017-03-07 0001651308 us-gaap:LandMember 2019-06-30 0001651308 bgne:ManufacturingFacilityinGuangzhou2Member us-gaap:LandMember 2019-06-30 0001651308 bgne:ManufacturingFacilityinGuangzhouMember us-gaap:LandMember 2019-06-30 0001651308 bgne:OfficeFacilityInChangpingMember us-gaap:LandMember 2019-06-30 0001651308 us-gaap:DistributionRightsMember 2019-01-01 2019-06-30 0001651308 us-gaap:LicensingAgreementsMember 2018-12-31 0001651308 us-gaap:DistributionRightsMember 2019-06-30 0001651308 us-gaap:DistributionRightsMember 2018-12-31 0001651308 us-gaap:LicensingAgreementsMember 2019-06-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2018-01-01 2018-06-30 0001651308 bgne:LongTermBankLoanSeptember22015Member us-gaap:LoansPayableMember 2019-06-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2019-01-01 2019-06-30 0001651308 bgne:LongTermBankLoanSeptember22015Member us-gaap:LoansPayableMember 2015-09-02 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2018-04-04 0001651308 bgne:LongTermBankLoanSeptember22015Member us-gaap:LoansPayableMember 2018-09-01 2018-09-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2019-04-01 2019-06-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2018-04-05 2019-06-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2018-04-01 2018-06-30 0001651308 bgne:LongTermBankLoanApril42018Member us-gaap:LoansPayableMember 2018-04-04 2018-04-04 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2019-04-01 2019-06-30 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-03-07 2017-03-07 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-04-14 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-03-07 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2018-01-01 2018-06-30 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2019-01-01 2019-06-30 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2017-04-14 2017-04-14 0001651308 bgne:ShareholderLoanMember us-gaap:ConvertibleDebtMember us-gaap:InvestorMember 2018-04-01 2018-06-30 0001651308 us-gaap:ProductMember 2018-06-30 0001651308 us-gaap:ProductMember 2018-12-31 0001651308 us-gaap:ProductMember 2017-12-31 0001651308 us-gaap:ProductMember 2019-06-30 0001651308 us-gaap:GeneralAndAdministrativeExpenseMember 2018-01-01 2018-06-30 0001651308 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-06-30 0001651308 us-gaap:ResearchAndDevelopmentExpenseMember 2018-01-01 2018-06-30 0001651308 us-gaap:ResearchAndDevelopmentExpenseMember 2019-04-01 2019-06-30 0001651308 us-gaap:ResearchAndDevelopmentExpenseMember 2018-04-01 2018-06-30 0001651308 us-gaap:GeneralAndAdministrativeExpenseMember 2019-04-01 2019-06-30 0001651308 us-gaap:GeneralAndAdministrativeExpenseMember 2018-04-01 2018-06-30 0001651308 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-06-30 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2018-12-01 2018-12-31 0001651308 bgne:ShareOptionAndIncentivePlan2016Member 2016-01-14 0001651308 us-gaap:RestrictedStockUnitsRSUMember bgne:InducementEquityPlan2018Member 2019-06-30 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2018-06-06 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2019-02-28 2019-02-28 0001651308 bgne:InducementEquityPlan2018Member 2018-06-06 0001651308 bgne:EmployeeAndNonemployeeStockOptionMember bgne:InducementEquityPlan2018Member 2019-06-30 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2019-02-28 0001651308 bgne:EmployeeAndNonemployeeStockOptionMember bgne:ShareOptionAndIncentivePlan2016Member 2019-06-30 0001651308 bgne:ShareIncentivePlan2011Member 2019-01-01 2019-06-30 0001651308 bgne:ShareOptionAndIncentivePlan2016Member 2018-12-01 2018-12-31 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2018-12-31 0001651308 us-gaap:RestrictedStockUnitsRSUMember bgne:ShareOptionAndIncentivePlan2016Member 2019-01-01 2019-06-30 0001651308 us-gaap:RestrictedStockUnitsRSUMember bgne:ShareOptionAndIncentivePlan2016Member 2019-06-30 0001651308 bgne:EmployeeAndNonemployeeStockOptionMember bgne:ShareOptionAndIncentivePlan2016Member 2019-01-01 2019-06-30 0001651308 bgne:EmployeeSharePurchasePlan2018Member 2018-06-06 2018-06-06 0001651308 bgne:ShareOptionAndIncentivePlan2016Member 2019-06-30 0001651308 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-06-30 0001651308 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-06-30 0001651308 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-06-30 0001651308 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0001651308 us-gaap:AccumulatedTranslationAdjustmentMember 2019-06-30 0001651308 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0001651308 bgne:FollowOnPublicOfferingMember 2018-01-22 0001651308 us-gaap:CommonStockMember bgne:FollowOnPublicOfferingMember 2018-08-08 0001651308 us-gaap:OverAllotmentOptionMember 2018-01-22 2018-01-22 0001651308 bgne:FollowOnPublicOfferingMember 2018-01-22 2018-01-22 0001651308 us-gaap:CommonStockMember bgne:FollowOnPublicOfferingMember 2018-08-08 2018-08-08 0001651308 country:CN 2018-12-31 0001651308 country:CN 2019-06-30 0001651308 us-gaap:CapitalAdditionsMember 2019-06-30 0001651308 us-gaap:InventoriesMember 2019-06-30 0001651308 country:US 2018-01-01 2018-06-30 0001651308 bgne:AllOtherCountriesExceptChinaAndUnitedStatesOfAmericaMember 2019-01-01 2019-06-30 0001651308 bgne:AllOtherCountriesExceptChinaAndUnitedStatesOfAmericaMember 2019-04-01 2019-06-30 0001651308 country:CN 2019-01-01 2019-06-30 0001651308 country:CN 2019-04-01 2019-06-30 0001651308 country:US 2019-01-01 2019-06-30 0001651308 bgne:AllOtherCountriesExceptChinaAndUnitedStatesOfAmericaMember 2018-01-01 2018-06-30 0001651308 country:US 2019-04-01 2019-06-30 0001651308 country:CN 2018-04-01 2018-06-30 0001651308 country:US 2018-04-01 2018-06-30 0001651308 country:CN 2018-01-01 2018-06-30 0001651308 bgne:AllOtherCountriesExceptChinaAndUnitedStatesOfAmericaMember 2018-04-01 2018-06-30 iso4217:USD bgne:asset xbrli:pure xbrli:shares iso4217:USD xbrli:shares iso4217:CNY bgne:segment
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM 10-Q
___________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  to
Commission File Number: 001-37686
___________________________________________________________
BEIGENE, LTD.
(Exact name of registrant as specified in its charter)
___________________________________________________________
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)
+1 (345) 949-4123
(Registrant's telephone number, including area 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
As of July 31, 2019, 784,439,632 ordinary shares, par value $0.0001 per share, were outstanding, of which 617,265,493 ordinary shares were held in the form of 47,481,961 American Depositary Shares, each representing 13 ordinary shares.
*Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not registered or listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
Smaller reporting company
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes       No  


Table of Contents


BeiGene, Ltd.
Quarterly Report on Form 10-Q
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2

Table of Contents


PART I.     FINANCIAL INFORMATION
Item 1.     Financial Statements
BEIGENE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
 
 
 
 
As of
 
 
 
 
June 30,
 
December 31, 
 
 
Note
 
2019
 
2018
 
 
 
 
$
 
$
 
 
 
 
(unaudited)
 
(audited)
Assets
 
 
 
 
 
 

Current assets:
 
 
 
 
 
 

Cash and cash equivalents
 
 
 
918,948

 
712,937

Short-term restricted cash
 
5
 
14,567

 
14,544

Short-term investments
 
5
 
618,803

 
1,068,509

Accounts receivable
 
 
 
58,108

 
41,056

Unbilled receivable
 
 
 

 
8,612

Inventories
 
6
 
49,048

 
16,242

Prepaid expenses and other current assets
 
12
 
96,206

 
81,942

Total current assets
 
 
 
1,755,680

 
1,943,842

Long-term restricted cash
 
5
 
9,161

 
13,232

Property, plant and equipment, net
 
7
 
212,672

 
157,061

Land use right, net
 
1
 

 
45,058

Operating lease right-of-use assets
 
9
 
74,640

 

Intangible assets, net
 
10
 
6,509

 
7,172

Goodwill
 
 
 
109

 
109

Deferred tax assets
 
11
 
31,389

 
29,542

Other non-current assets
 
12
 
60,158

 
53,668

Total non-current assets
 
 
 
394,638

 
305,842

Total assets
 
 
 
2,150,318

 
2,249,684

Liabilities and shareholders' equity
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Accounts payable
 
 
 
148,536

 
113,283

Accrued expenses and other payables
 
12
 
103,061

 
100,414

Deferred revenue, current portion
 
 
 

 
18,140

Tax payable
 
11
 
2,175

 
5,888

Current portion of operating lease liabilities
 
9
 
9,167

 

Current portion of long-term bank loan
 
13
 
8,740

 
8,727

Total current liabilities
 
 
 
271,679

 
246,452

Non-current liabilities:
 
 
 
 
 
 
Long-term bank loan
 
13
 
84,489

 
40,785

Shareholder loan
 
14
 
154,321

 
148,888

Deferred revenue, non-current portion
 
 
 

 
9,842

Operating lease liabilities
 
9
 
18,662

 

Deferred tax liabilities
 
 
 
11,802

 
11,139

Other long-term liabilities
 
12
 
38,101

 
38,931

Total non-current liabilities
 
 
 
307,375

 
249,585

Total liabilities
 
 
 
579,054

 
496,037

Commitments and contingencies
 
21
 

 

Equity:
 
 
 

 

Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 784,439,632 and 776,263,184 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
 
 
 
78

 
77

Additional paid-in capital
 
 
 
2,814,449

 
2,744,814

Accumulated other comprehensive (loss)/income
 
18
 
(225
)
 
1,526

Accumulated deficit
 
 
 
(1,260,425
)
 
(1,007,215
)
Total BeiGene, Ltd. shareholders’ equity
 
 
 
1,553,877

 
1,739,202

Noncontrolling interest
 
 
 
17,387

 
14,445

Total equity
 
 
 
1,571,264

 
1,753,647

Total liabilities and equity
 
 
 
2,150,318

 
2,249,684

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents


BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
June 30,
 
June 30,
 
 
Note
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
Revenues
 
 
 
 

 
 

 
 

 
 

Product revenue, net
 
15
 
58,142

 
31,426

 
115,563

 
54,676

Collaboration revenue
 
3
 
185,204

 
21,378

 
205,616

 
30,672

Total revenues
 
 
 
243,346

 
52,804

 
321,179

 
85,348

Expenses
 
 
 
 
 
 
 
 
 
 
Cost of sales - product
 
 
 
(17,839
)
 
(6,256
)
 
(33,100
)
 
(10,806
)
Research and development
 
 
 
(228,760
)
 
(164,251
)
 
(407,111
)
 
(273,951
)
Selling, general and administrative
 
 
 
(82,248
)
 
(45,160
)
 
(139,893
)
 
(74,075
)
Amortization of intangible assets
 
 
 
(332
)
 
(187
)
 
(663
)
 
(375
)
Total expenses
 
 
 
(329,179
)
 
(215,854
)
 
(580,767
)
 
(359,207
)
Loss from operations
 
 
 
(85,833
)
 
(163,050
)
 
(259,588
)
 
(273,859
)
Interest income, net
 
 
 
2,886

 
1,892

 
7,363

 
3,444

Other (expense) income, net
 
 
 
(878
)
 
75

 
850

 
804

Loss before income taxes
 
 
 
(83,825
)
 
(161,083
)
 
(251,375
)
 
(269,611
)
Income tax (expense) benefit
 
11
 
(2,129
)
 
3,368

 
(2,648
)
 
6,780

Net loss
 
 
 
(85,954
)
 
(157,715
)
 
(254,023
)
 
(262,831
)
Less: net loss attributable to noncontrolling interests
 
 
 
(384
)
 
(828
)
 
(813
)
 
(1,348
)
Net loss attributable to BeiGene, Ltd.
 
 
 
(85,570
)
 
(156,887
)
 
(253,210
)
 
(261,483
)
 
 
 
 
 
 
 
 
 
 
 
Net loss per share attributable to BeiGene, Ltd., basic and diluted
 
16
 
(0.11
)
 
(0.22
)
 
(0.33
)
 
(0.38
)
Weighted-average shares outstanding, basic and diluted
 
16
 
777,509,102

 
698,506,891

 
776,137,299

 
684,586,086

 
 
 
 
 
 
 
 
 
 
 
Net loss per American Depositary Share (“ADS”), basic and diluted
 
 
 
(1.43
)
 
(2.92
)
 
(4.24
)
 
(4.97
)
Weighted-average ADSs outstanding, basic and diluted

 
 
 
59,808,392

 
53,731,299

 
59,702,869

 
52,660,468

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents


BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
$
 
$
 
$
 
$
Net loss
 
(85,954
)
 
(157,715
)
 
(254,023
)
 
(262,831
)
Other comprehensive (loss)/ income, net of tax of nil:
 
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
(7,337
)
 
2,033

 
(3,582
)
 
2,305

Unrealized holding gain, net
 
901

 
719

 
1,586

 
1,048

Comprehensive loss
 
(92,390
)
 
(154,963
)
 
(256,019
)
 
(259,478
)
Less: comprehensive loss attributable to noncontrolling interests
 
(523
)
 
(870
)
 
(1,058
)
 
(1,326
)
Comprehensive loss attributable to BeiGene, Ltd.
 
(91,867
)
 
(154,093
)
 
(254,961
)
 
(258,152
)
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents


BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 
 
 
 
Six months ended June 30,
 
 
Note
 
2019
 
2018
 
 
 
 
$
 
$
Operating activities:
 
 
 
 
 
 
Net loss
 
 
 
(254,023
)
 
(262,831
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
Depreciation and amortization expense
 
 
 
7,111

 
4,580

Share-based compensation expenses
 
17
 
58,994

 
36,037

Acquired in-process research and development
 
 
 
49,000

 
10,000

Non-cash interest expense
 
 
 
3,759

 
4,115

Deferred income tax benefits
 
 
 
(1,456
)
 
(8,413
)
Disposal gain on available-for-sale securities
 
 
 
(1,806
)
 
(2,336
)
Non-cash amortization of bond discount
 
 
 
(3,652
)
 

Changes in operating assets and liabilities:
 
 
 
 
 
 
Accounts receivable
 
 
 
(17,052
)
 
(3,743
)
Unbilled receivable
 
 
 
8,612

 
3,605

Inventories
 
 
 
(32,806
)
 
4,608

Prepaid expenses and other current assets
 
 
 
(14,535
)
 
(27,669
)
Operating lease right-of-use assets
 
 
 
(3,604
)
 

Other non-current assets
 
 
 
(10,293
)
 
(3,694
)
Accounts payable
 
 
 
21,431

 
10,308

Accrued expenses and other payables
 
 
 
3,535

 
25,439

Tax payable
 
 
 
(3,713
)
 
(8,005
)
Deferred revenue
 
 
 
(27,982
)
 
(3,442
)
Other long-term liabilities
 
 
 
21

 
(197
)
Operating lease liabilities
 
 
 
383

 

Net cash used in operating activities
 
 
 
(218,076
)
 
(221,638
)
Investing activities:
 
 
 
 
 
 
Purchases of property, plant and equipment
 
 
 
(43,275
)
 
(20,309
)
Purchases of investments
 
 
 
(710,791
)
 
(1,198,922
)
Proceeds from sale or maturity of investments
 
 
 
1,167,491

 
869,011

Purchase of in-process research and development
 
 
 
(49,000
)
 
(10,000
)
Net cash provided by (used in) investing activities
 
 
 
364,425

 
(360,220
)
Financing activities:
 
 
 
 
 
 
Proceeds from follow-on public offering, net of underwriter discount
 
 
 

 
758,001

Payment of follow-on public offering cost
 
 
 

 
(414
)
Capital contribution from noncontrolling interest
 
 
 
4,000

 

Proceeds from long-term loan
 
13
 
43,704

 
42,315

Proceeds from option exercises and employee share purchase plan
 
 
 
10,642

 
10,582

Net cash provided by financing activities
 
 
 
58,346

 
810,484

Effect of foreign exchange rate changes, net
 
 
 
(2,732
)
 
1,783

Net increase in cash, cash equivalents, and restricted cash
 
 
 
201,963

 
230,409

Cash, cash equivalents, and restricted cash at beginning of period
 
 
 
740,713

 
239,602

Cash, cash equivalents, and restricted cash at end of period
 
 
 
942,676

 
470,011

Supplemental cash flow information:
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
918,948

 
438,420

Restricted cash, current
 
 
 
14,567

 
31,591

Restricted cash, non-current
 
 
 
9,161

 

Income taxes paid
 
 
 
7,874

 
11,842

Interest expense paid
 
 
 
2,090

 
667

Supplemental non-cash information:
 
 
 
 
 
 
Acquisitions of equipment included in accounts payable
 
 
 
35,927

 
8,006

Changes in operating assets and liabilities adjusted through accumulated deficit
 
 
 

 
2,291

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents


BEIGENE, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 
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, 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 loss

 

 

 
(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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
592,072,330

 
59

 
1,000,747

 
(480
)
 
(330,517
)
 
669,809

 
14,422

 
684,231

Adjustment to opening balance of equity

 

 

 
263

 
(2,929
)
 
(2,666
)
 
375

 
(2,291
)
Balance at January 1, 2018
592,072,330

 
59

 
1,000,747

 
(217
)
 
(333,446
)
 
667,143

 
14,797

 
681,940

Issuance of ordinary shares in connection with follow-on public offering
102,970,400

 
10

 
757,577

 

 

 
757,587

 

 
757,587

Issuance of shares reserved for share option exercises
213,018

 

 

 

 

 

 

 

Share-based compensation

 

 
17,396

 

 

 
17,396

 

 
17,396

Exercise of options and release of Restricted Share Units ("RSUs")
3,686,982

 
1

 
6,313

 

 

 
6,314

 

 
6,314

Other comprehensive income

 

 

 
537

 

 
537

 
64

 
601

Net loss

 

 

 

 
(104,596
)
 
(104,596
)
 
(520
)
 
(105,116
)
Balance at March 31, 2018
698,942,730

 
70

 
1,782,033

 
320

 
(438,042
)
 
1,344,381

 
14,341

 
1,358,722

Issuance of shares reserved for share option exercises
514,909

 

 

 

 

 

 

 

Share-based compensation

 

 
18,641

 

 

 
18,641

 

 
18,641

Exercise of options and release of Restricted Share Units ("RSUs")
2,105,545

 

 
4,268

 

 

 
4,268

 

 
4,268

Other comprehensive income

 

 

 
2,794

 

 
2,794

 
(42
)
 
2,752

Net loss

 

 

 

 
(156,887
)
 
(156,887
)
 
(828
)
 
(157,715
)
Balance at June 30, 2018
701,563,184

 
70

 
1,804,942

 
3,114

 
(594,929
)
 
1,213,197

 
13,471

 
1,226,668


The accompanying notes are an integral part of these condensed consolidated financial statements.


7

Table of Contents


BEIGENE, LTD.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data)
(Unaudited) 
1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies
Description of business
BeiGene, Ltd. (the “Company”) is a commercial-stage biotechnology company focused on developing and commercializing innovative molecularly targeted and immuno-oncology drugs for the treatment of cancer. The Company’s internally developed lead drug candidates are currently in late-stage clinical trials, and it is marketing three in-licensed drugs in China from which it has been generating product revenue since September 2017.
The Company was incorporated under the laws of the Cayman Islands as an exempted company with limited liability in October 2010. The Company completed its initial public offering (“IPO”) on the NASDAQ Global Select Market in February 2016 and has completed subsequent follow-on public offerings and a sale of ordinary shares to Celgene Switzerland LLC (“Celgene Switzerland”) in a business development transaction. On August 8, 2018, the Company completed its IPO on the Stock Exchange of Hong Kong Limited (“HKEx”) and a global follow-on public offering in which it raised approximately $869,709 in net proceeds, after deducting underwriting discounts and commissions and offering expenses. Effective August 8, 2018, the Company is dual listed in both the United States and Hong Kong.
As of June 30, 2019, there were no changes to the Company's subsidiaries listed in Note 1 to the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 ("Annual Report"), except for the addition of BeiGene Singapore Pte., Ltd., a new wholly-owned subsidiary of BeiGene, Ltd.; BeiGene France Sarl and BeiGene (Taiwan) Limited, new wholly-owned subsidiaries of BeiGene Switzerland GmbH; and MapKure, LLC ("MapKure"), a majority-owned entity of BeiGene, Ltd.
Basis of presentation and consolidation
The accompanying condensed consolidated balance sheet as of June 30, 2019 and December 31, 2018, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018, the condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018, and the condensed consolidated statements of shareholders' equity for the three and six months ended June 30, 2019 and 2018, and the related footnote disclosures are unaudited. The accompanying unaudited interim financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including guidance with respect to interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report.
The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all normal recurring adjustments, necessary to present a fair statement of the results for the interim periods presented. Results of the operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.
The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
Noncontrolling interests are recognized to reflect the portion of the equity of subsidiaries which are not attributable, directly or indirectly, to the controlling shareholders. The Company consolidates its interests in its joint venture, BeiGene Biologics Co., Ltd. ("BeiGene Biologics") and MapKure, under the voting model and recognizes the minority shareholders' equity interest as a noncontrolling interest in its condensed consolidated financial statements.
Use of estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

8

Table of Contents


Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, estimating the incremental borrowing rate for operating lease liabilities, identifying separate accounting units and the standalone selling price of each performance obligation in the Company’s revenue arrangements, estimating the fair value of net assets acquired in business combinations, assessing the impairment of long-lived assets, share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.
Recent accounting pronouncements
New accounting standards which have been adopted
In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-2, Leases. Subsequently, the FASB issued ASU 2018-1, Land Easement Practical Expedient, which provides an optional transition practical expedient for land easements, ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarifies certain aspects of the guidance issued in ASU 2016-2; ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides an additional transition method and a practical expedient for separating components of a contract for lessors, ASU 2018-20, Leases (Topic 842)- Narrow-Scope Improvements for Lessors, which allows certain accounting policy elections for lessors; and ASU 2019-1, Leases (Topic 842): Codification Improvements, which clarifies certain aspects of the guidance (collectively, the "Lease ASUs"). The Lease ASUs require lessees to recognize assets and liabilities related to lease arrangements longer than 12 months on the balance sheet. This standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. The updated guidance was effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. Leases will be classified as finance or operating, with the classification affecting the pattern and classification of expense recognition. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial adoption. The guidance permits entities to choose to use either its effective date or the beginning of the earliest period presented in the financial statements as its date of initial application.
The Company adopted the new standard effective January 1, 2019 using the effective date method and did not restate comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. Upon adoption, the Company recognized a lease liability of $27,446, with corresponding right-of-use ("ROU") assets of $25,978 based on the present value of the remaining minimum rental payments under existing operating leases. The difference between the lease liability and right-of-use asset relates to the reversal of existing deferred rent and prepaid rent balances of $1,739 and $271, respectively. Additionally, the Company reclassified its land use rights of $45,058 to ROU assets upon adoption. The adoption of the standard did not impact the Company’s condensed consolidated statements of operations or cash flows.
In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update provides companies the option to reclassify to retained earnings the income tax accounting effects related to items originating in accumulated other comprehensive income ("AOCI") as a result of the U.S. Tax Cuts and Jobs Act ("TCJA") enacted on December 22, 2017. This update was effective in fiscal years, including interim periods, beginning after December 15, 2018, with early adoption permitted. None of the income tax accounting effects of the TCJA related to items that originated in AOCI and thus adopting of this standard did not have any impact on the Company’s condensed consolidated financial statements. Other tax effects of items that originate in AOCI will be removed when the underlying circumstance which gives rise to the tax impact no longer exists, based on an aggregate portfolio approach.


9

Table of Contents


Impact of adopted accounting standards
The cumulative effect of changes made to the Company’s condensed consolidated January 1, 2019 balance sheet for the adoption of the Lease ASUs were as follows:
 
 
Balance at
 
Adjustments
 
Balance at
 
 
December 31,
 
Due to
 
January 1,
 
 
2018
 
Lease ASUs 
 
2019
 
 
$
 
$
 
$
Assets:
 
 

 
 

 
 

Prepaid expenses and other current assets
 
81,942

 
(271
)
 
81,671

Land use right, net
 
45,058

 
(45,058
)
 

Operating lease right-of-use assets
 

 
71,036

 
71,036

Liabilities:
 
 
 
 
 
 
Accrued expenses and other payables
 
100,414

 
(888
)
 
99,526

Current portion of operating lease liabilities
 

 
8,684

 
8,684

Operating lease liabilities
 

 
18,762

 
18,762

Other long-term liabilities
 
38,931

 
(851
)
 
38,080


 New accounting standards which have not yet been adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses ("ASU 2016-13"). Subsequently, the FASB issued ASU 2019-05, Financial Instruments- Credit Losses (Topic 326): Targeted Transition Relief. The amendments in ASU 2016-13 update guidance on reporting credit losses for financial assets. These amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. For public business entities that are U.S. SEC filers, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact on its financial statements of adopting this guidance.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement. The update eliminates, modifies, and adds certain disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. The added disclosure requirements and the modified disclosure on the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented. All other changes to disclosure requirements in this update should be applied retrospectively to all periods presented upon their effective date. The Company is currently evaluating the impact on its financial statements of adopting this guidance.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to defer and recognize as an asset. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. This guidance should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact on its financial statements of adopting this guidance.
In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This update clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The update is effective in fiscal years beginning after December 15, 2019, and interim periods therein, and early adoption is permitted for entities that have adopted ASC 606. This guidance should be applied retrospectively to the date of initial application of Topic 606. The Company is currently evaluating the impact on its financial statements of adopting this guidance.

10

Table of Contents


Significant accounting policies
For a more complete discussion of the Company’s significant accounting policies and other information, the condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2018.
Leases
The Company determines if an arrangement is a lease at inception. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component based on the Company’s policy election to combine lease and non-lease components for its leases. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Company’s lease portfolio consists entirely of operating leases as of June 30, 2019. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.
At the commencement date of a lease, the Company determines the classification of the lease based on the relevant factors present and records a ROU asset and lease liability. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are calculated as the present value of the lease payments not yet paid. Variable lease payments not dependent on an index or rate are excluded from the ROU asset and lease liability calculations and are recognized in expense in the period which the obligation for those payments is incurred. As the rate implicit in the Company’s leases is not typically readily available, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. ROU assets include any lease prepayments and are reduced by lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Company will exercise that option.
Operating leases are included in operating lease right-of-use assets and lease liabilities on the condensed consolidated balance sheet. Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities.
Leases with an initial lease term of 12 months or less are not recorded on the condensed consolidated balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term.
Land Use Rights 
All land in the People's Republic of China ("PRC") is owned by the PRC government. The PRC government may sell land use rights for a specified period of time. Land use rights represent operating leases in accordance with ASC 842. The purchase price of land use rights represents lease prepayments to the PRC government and is recorded as an operating lease ROU asset on the balance sheet. The ROU asset is amortized over the remaining lease term.
In 2017, the Company acquired a land use right from the local Bureau of Land and Resources in Guangzhou for the purpose of constructing and operating the biologics manufacturing facility in Guangzhou.  In 2019, the Company acquired a second Guangzhou land use right from the local Bureau of Land and Resources in Guangzhou. Both Guangzhou land use rights are being amortized over the respective terms of the land use rights, which are each 50 years.
In 2018, the Company acquired a second land use right in conjunction with the Innerway asset acquisition (see Note 4). The land use right is being amortized over the term of the land use right, which is 36 years.
Except for the changes to the Company’s significant accounting policies related to the adoption of the Lease ASUs, there have been no other material changes to the Company’s significant accounting policies as of and for the three and six months ended June 30, 2019, as compared to the significant accounting policies described in the Annual Report.
2. Fair Value Measurements
The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

11

Table of Contents


Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in market with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.
The Company considers an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and considers an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.
The following tables present the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories as of June 30, 2019 and December 31, 2018:
 
 
Quoted Price
 
 
 
 
 
 
in Active
 
Significant
 
 
 
 
Market for
 
Other
 
Significant
 
 
Identical
 
Observable
 
Unobservable
 
 
Assets
 
Inputs
 
Inputs
As of June 30, 2019
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
$
 
$
 
$
Short-term investments (Note 5):
 
 

 
 
 
 
U.S. treasury securities
 
605,015

 

 

U.S. agency securities
 
13,788

 

 

Cash equivalents
 
 
 
 
 
 
U.S. treasury securities
 
272,945

 

 

Money market funds
 
100,797

 

 

Total
 
992,545

 

 

 
 
 
Quoted Price
 
 
 
 
 
 
in Active
 
Significant
 
 
 
 
Market for
 
Other
 
Significant
 
 
Identical
 
Observable
 
Unobservable
 
 
Assets
 
Inputs
 
Inputs
As of December 31, 2018
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
$
 
$
 
$
Short-term investments (Note 5):
 
 
 
 
 
 
U.S. treasury securities
 
1,068,509

 

 

Cash equivalents
 
 
 
 
 
 
Money market funds
 
159,810

 

 

Total
 
1,228,319

 

 


 The Company had no liabilities measured and recorded at fair value on a recurring basis as of June 30, 2019 or December 31, 2018. 
3. Research and Development Collaborative Arrangements
To date, the Company’s collaboration revenue has consisted of (1) upfront license fees, research and development reimbursement revenue, and research and development services revenue from its collaboration agreement with Celgene Corporation ("Celgene") on the Company’s investigational anti-programmed cell death protein 1 (“PD-1”) inhibitor, tislelizumab (BGB-A317), and (2) upfront license fees and milestone payments from its collaboration agreement with Merck KGaA, Darmstadt Germany on pamiparib (BGB-290) and lifirafenib (BGB-283).

12

Table of Contents


The Company entered into a mutual agreement with Celgene to terminate the tislelizumab (BGB-A317) collaboration effective June 14, 2019. In connection with the termination, the Company regained full global rights to tislelizumab and received a $150,000 payment from Celgene. The payment was recognized as other collaboration revenue during the three months ended June 30, 2019, as the Company has no further performance obligations under the collaboration. Upon termination, the Company also recognized the remainder of the deferred revenue balance related to the upfront consideration allocated to research and development services at the time of the original collaboration. The Company's license from Celgene to distribute the approved cancer therapies ABRAXANE® (nanoparticle albumin-bound paclitaxel), REVLIMID® (lenalidomide), and VIDAZA® (azaciditine) in China is not affected by the termination of the tislelizumab collaboration. The collaboration agreement with Merck KGaA was terminated in December 2018.
The following table summarizes total collaboration revenue recognized for the three and six months ended June 30, 2019 and 2018:
 
 
Three Months Ended
Six Months Ended
 
 
June 30,
June 30,
 
 
2019
 
2018
2019
 
2018
 
 
$
 
$
$
 
$
Reimbursement of research and development costs
 
9,460

 
18,175

27,634

 
25,730

Research and development service revenue
 
25,744

 
3,203

27,982

 
4,942

Other
 
150,000

 

150,000

 

Total
 
185,204

 
21,378

205,616

 
30,672


For the three and six months ended June 30, 2019, the Company recognized collaboration revenue of $185,204 and $205,616, respectively. The Company recognized $9,460 and $27,634 of research and development reimbursement revenue for the three and six months ended June 30, 2019 for the trials that Celgene opted into through the termination of the collaboration agreement. The $25,744 and $27,982 of research and development services revenue, respectively, for the three and six months ended June 30, 2019, primarily reflect the recognition of the remaining upfront consideration that was allocated to research and development services at the time of the collaboration and was recognized over the term of the respective clinical studies for the specified indications. The Company recognized $150,000 of other collaboration revenue for the three and six months ended June 30, 2019 related to the payment received from Celgene in connection with the termination of the collaboration agreement.
For the three and six months ended June 30, 2018, the Company recognized collaboration revenue of $21,378 and $30,672, respectively. The Company recognized $18,175 and $25,730 of research and development reimbursement revenue for the three and six months ended June 30, 2018 for the trials that Celgene had opted into. The $1,703 and $3,442 and of research and development services revenue, respectively, for the three and six months ended June 30, 2018, reflect the recognition of upfront consideration that was allocated to research and development services at the time of the collaboration and was recognized over the term of the respective clinical studies for the specified indications.
In May 2018, the Company achieved the milestone related to its collaboration agreement with Merck KGaA for dosing patients in the first Phase 3 clinical trial of pamiparib in the PRC Territory, and the related $1,500 milestone payment was recognized as research and development services revenue for the three months ended June 30, 2018.

BioAtla, LLC
On April 9, 2019, the Company entered into a global co-development and collaboration agreement with BioAtla LLC ("BioAtla") for the development, manufacturing and commercialization of BioAtla's investigational CAB-CTLA-4 antibody (BA3071), whereby BioAtla has agreed to co-develop the CAB-CTLA-4 antibody to defined early clinical objectives and the Company has agreed to then lead the parties' joint efforts to develop the product candidate and be responsible for global regulatory filings and commercialization. Subject to the terms of the agreement, the Company will hold a co-exclusive license with BioAtla to develop and manufacture the product candidate globally and an exclusive license to commercialize the product candidate globally. The Company has agreed to be responsible for all costs of development, manufacturing and commercialization in Asia (excluding Japan), Australia and New Zealand (the "Company Territory"), and the parties have agreed to share development and manufacturing costs and commercial profits and losses upon specified terms in the rest of the world. BioAtla received an upfront payment of $20,000 and is eligible to receive a milestone payment upon reaching the defined early clinical objectives. BioAtla is also eligible to receive additional payments in subsequent development and regulatory milestones globally and commercial milestones in the Company Territory, together with tiered royalties on sales in the Company Territory.


13

Table of Contents


4. Business Combinations and Asset Acquisitions
BeiGene Pharmaceuticals (Guangzhou) Co., Ltd.
 On September 21, 2018, BeiGene (Guangzhou) Co., Ltd. ("BeiGene Guangzhou") acquired 100% of the equity interests of Baiji Shenzhou (Guangzhou) Pharmaceuticals Co., Ltd. (formerly known as Huajian Pharmaceuticals Co., Ltd.), which subsequently changed its name to BeiGene Pharmaceuticals (Guangzhou) Co., Ltd., a pharmaceutical distribution company, for total cash consideration of $612, including transaction costs of $59. The acquisition was concentrated in a single identifiable asset, a drug distribution license, and thus the Company has concluded that the transaction is an asset acquisition as it does not meet the accounting definition of a business combination. The total cost was allocated to the drug distribution license and corresponding deferred tax liability, resulting in an $816 intangible asset for the license and a deferred tax liability of $204.
Beijing Innerway Bio-tech Co., Ltd.
On October 4, 2018, BeiGene (Hong Kong) Co., Ltd. ("BeiGene HK") completed the acquisition of 100% of the equity interest of Beijing Innerway Bio-tech Co., Ltd., the owner of the Company's research, development and office facility in Changping, Beijing, China, for total cash consideration of $38,654. The acquisition was concentrated in a single identifiable asset or group of assets, the building and associated land use right, and thus the Company has concluded that the transaction is an asset acquisition as it does not meet the accounting definition of a business combination. The total cost of the transaction of $38,865, which includes transaction costs of $211, was allocated based on the relative fair values of the net assets acquired, as follows:
 
Amount
Land use right
$
33,783

Building
15,874

Deferred tax liability
(11,221
)
Other
429

Total cost
38,865


5. Restricted Cash and Short-term Investments
The Company’s restricted cash balance of $23,728 as of June 30, 2019 primarily consisted of BeiGene Guangzhou Biologics Manufacturing Co., Ltd.'s ("BeiGene Guangzhou Factory's") secured deposits held in designated bank accounts for issuance of letter of credit, and restricted cash deposits as security for the long-term bank loan (Note 13).
Short-term investments as of June 30, 2019 consisted of the following available-for-sale debt securities:
 
 
 
 
Gross
 
Gross