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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 September 30, 2022
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
bgne-20220930_g1.jpg
BEIGENE, LTD.
(Exact name of registrant as specified in its charter)

Cayman Islands98-1209416
(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 IslandsKY1-1108
(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 classTrading Symbol(s)Name of each exchange on which registered
American Depositary Shares, each representing 13 Ordinary Shares, par value $0.0001 per shareBGNEThe NASDAQ Global Select Market
Ordinary Shares, par value $0.0001 per share*06160The Stock Exchange of Hong Kong Limited
*Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited (HKEX).
As of October 31, 2022, 1,349,640,180 ordinary shares, par value $0.0001 per share, were outstanding, of which 946,295,584 ordinary shares were held in the form of 72,791,968 American Depositary Shares, each representing 13 ordinary shares, and 115,055,260 were RMB shares.
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
TABLE OF CONTENTS
  Page
   
   
   
   
  
  
  
  
  
  
  
  
  
  

2

Table of Contents

Summary of Risk Factors
Below is a summary of the principal factors that make an investment in our American Depositary Shares ("ADSs") listed on Nasdaq, our ordinary shares listed on The Stock Exchange of Hong Kong Limited ("HKEX"), and our ordinary shares issued to permitted investors in China and listed and traded on the Science and Technology Innovation Board ("STAR") of the Shanghai Stock Exchange ("SSE") in Renminbi ("RMB Shares") speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, are summarized in “Part II – Item 1A – Risk Factors” and should be carefully considered, together with other information in this Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), before making an investment decision regarding our ADSs, ordinary shares or RMB Shares.
Our medicines may fail to achieve and maintain the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success.
We have limited experience in launching and marketing our internally developed and in-licensed medicines. If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our medicines, we may not be able to generate substantial product sales revenue.
If we are not able to continue to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize our medicines and drug candidates, and our ability to generate revenue will be materially impaired.
We face substantial competition, which may result in others discovering, developing, or commercializing competing medicines before or more successfully than we do.
We have limited manufacturing capability and must rely on third-party manufacturers to manufacture some of our commercial products and clinical supplies, and if they fail to meet their obligations, the development and commercialization of our medicines and drug candidates could be adversely affected.
We depend substantially on the success of the clinical development of our medicines and drug candidates. If we are unable to successfully complete clinical development, obtain regulatory approvals and commercialize our medicines and drug candidates, or experience significant delays in doing so, our business will be materially harmed.
Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.
If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.
All material aspects of the research, development, manufacturing and commercialization of pharmaceutical products are heavily regulated, and we may face difficulties in complying with or be unable to comply with such regulations, which could have a material adverse effect on our business.
The approval processes of regulatory authorities in the United States, China, Europe and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.
Even if we are able to commercialize our medicines and any approved drug candidates, the medicines may become subject to unfavorable pricing regulations or third-party reimbursement practices or healthcare reform initiatives, which could harm our business.
We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future and may not become profitable.
We have limited experience in obtaining regulatory approvals and commercializing pharmaceutical products, which may make it difficult to evaluate our current business and predict our future performance.
We may need to obtain additional financing to fund our operations, and if we are unable to obtain such financing, we may be unable to complete the development of our drug candidates or achieve profitability.
3

Table of Contents

If we are unable to obtain and maintain patent protection for our medicines and drug candidates through intellectual property rights, or if the scope of such intellectual property rights is not sufficiently broad, third parties may compete against us.
We rely on third parties to manufacture some of our commercial and clinical drug supplies. Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.
We have entered into licensing and collaboration arrangements and may enter into additional collaborations, licensing arrangements, or strategic alliances in the future, and we may not realize the benefits of such arrangements.
We have significantly increased and expect to continue to increase our research, development, manufacturing, and commercial capabilities, and we may experience difficulties in managing our growth.
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
Our business is subject to complex and evolving industry-specific laws and regulations regarding the collection and transfer of personal data. These laws and regulations can be complex and stringent, and many are subject to change and uncertain interpretation, which could result in claims, changes to our data and other business practices, significant penalties, increased cost of operations, or otherwise adversely impact our business.
We manufacture some of our medicines and intend to manufacture some of our drug candidates, if approved. Delays in completing and receiving regulatory approvals for our manufacturing facilities, or damage to, destruction of or interruption of production at such facilities, could delay our development plans or commercialization efforts.
Changes in the political and economic policies of the PRC government or in relations between China and the United States or other governments may materially and adversely affect our business, financial condition, and results of operations and may result in our inability to sustain our growth and expansion strategies.
The PRC government has significant oversight and discretion over the conduct of the business operations of our PRC subsidiaries or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, and may intervene with or influence our operations, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless, as the government deems appropriate to further regulatory, political and societal goals.
The audit reports included in our Annual Report on Form 10-K filed with the SEC have historically been prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board (the "PCAOB"), and as such, investors have previously been deprived of the benefits of such inspections.
Our ADSs may be delisted and our ADSs and ordinary shares prohibited from trading in the over-the-counter market under the Holding Foreign Companies Accountable Act, or the HFCAA. On December 16, 2021, PCAOB issued the HFCAA Determination Report, according to which our previous auditor is subject to the determinations that the PCAOB is unable to inspect or investigate it completely. Under current law, delisting and prohibition from over-the-counter trading in the U.S. could take place in 2024. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.
The trading prices of our ordinary shares, ADSs and/or RMB Shares can be volatile, which could result in substantial losses to you.
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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
  September 30,December 31, 
 Note20222021
  $$
  (unaudited)
Assets   
Current assets:   
Cash and cash equivalents 4,197,132 4,375,678 
Short-term restricted cash5191 328 
Short-term investments5871,998 2,241,962 
Accounts receivable, net10189,170 483,113 
Inventories6290,911 242,626 
Prepaid expenses and other current assets10199,766 270,173 
Total current assets 5,749,168 7,613,880 
Long-term restricted cash53,189 6,881 
Property, plant and equipment, net7681,914 587,605 
Operating lease right-of-use assets110,340 117,431 
Intangible assets, net840,849 46,679 
Deferred tax assets9— — 
Other non-current assets10140,553 163,049 
Total non-current assets 976,845 921,645 
Total assets 6,726,013 8,535,525 
Liabilities and shareholders' equity 
Current liabilities: 
Accounts payable 252,071 262,400 
Accrued expenses and other payables10410,255 558,055 
Deferred revenue, current portion4144,984 187,414 
Tax payable922,665 21,395 
Operating lease liabilities, current portion24,340 21,925 
Research and development cost share liability, current portion4115,721 120,801 
Short-term debt11441,275 427,565 
Total current liabilities 1,411,311 1,599,555 
Non-current liabilities: 
Long-term bank loans11208,058 202,113 
Deferred revenue, non-current portion4149,899 220,289 
Operating lease liabilities, non-current portion36,904 43,041 
Deferred tax liabilities915,249 14,169 
Research and development cost share liability, non-current portion4204,252 269,561 
Other long-term liabilities1045,169 54,234 
Total non-current liabilities 659,531 803,407 
Total liabilities 2,070,842 2,402,962 
Commitments and contingencies18
Equity: 
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,349,640,180 and 1,334,804,281 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
 135 133 
Additional paid-in capital 11,451,566 11,191,007 
Accumulated other comprehensive (loss) income 15(161,523)17,950 
Accumulated deficit (6,635,007)(5,076,527)
Total equity4,655,171 6,132,563 
Total liabilities and equity 6,726,013 8,535,525 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 EndedNine Months Ended
  September 30,September 30,
 Note2022202120222021
  $$
Revenues   
Product revenue, net12349,506 192,461 915,590 437,202 
Collaboration revenue438,122 13,979 120,236 525,102 
Total revenues 387,628 206,440 1,035,826 962,304 
Expenses 
Cost of sales - product 76,543 47,413 212,953 116,361 
Research and development 426,363 351,937 1,194,485 1,028,754 
Selling, general and administrative 322,892 269,227 948,868 683,622 
Amortization of intangible assets 187 188 563 563 
Total expenses 825,985 668,765 2,356,869 1,829,300 
Loss from operations (438,357)(462,325)(1,321,043)(866,996)
Interest income (expense), net 12,759 (2,230)34,261 (11,275)
Other (expense) income, net (125,640)31,477 (243,290)26,487 
Loss before income taxes (551,238)(433,078)(1,530,072)(851,784)
Income tax expense96,318 5,036 28,408 15,354 
Net loss (557,556)(438,114)(1,558,480)(867,138)
Net loss per share(0.41)(0.36)(1.16)(0.72)
Weighted-average shares outstanding—basic and diluted1,345,303,747 1,205,971,284 1,337,976,853 1,196,391,201 
Net loss per American Depositary Share ("ADS")(5.39)(4.72)(15.14)(9.42)
Weighted-average ADSs outstanding—basic and diluted103,484,904 92,767,022 102,921,296 92,030,092 
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Net loss(557,556)(438,114)(1,558,480)(867,138)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments(80,326)664 (168,411)6,528 
Pension liability adjustments— (111)— 250 
Unrealized holding loss, net1,253 (68)(11,062)(1,140)
Comprehensive loss(636,629)(437,629)(1,737,953)(861,500)
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
  Nine Months Ended September 30,
 Note20222021
  $$
Operating activities:   
Net loss (1,558,480)(867,138)
Adjustments to reconcile net loss to net cash used in operating activities: 
Depreciation and amortization expense 48,262 33,336 
Share-based compensation expenses14225,036 177,701 
Unrealized losses (gains) on equity investments516,413 (17,166)
Acquired in-process research and development20,000 53,500 
Amortization of research and development cost share liability4(70,389)(82,846)
Deferred income tax benefits 380 2,474 
Other items, net 7,762 17,719 
Changes in operating assets and liabilities: 
Accounts receivable 284,717 (69,174)
Inventories (75,632)(61,686)
Other assets 30,325 (92,489)
Accounts payable 4,203 (12,376)
Accrued expenses and other payables 1,628 (44)
Deferred revenue (112,820)124,898 
Other liabilities 167 2,407 
Net cash used in operating activities (1,178,428)(790,884)
Investing activities: 
Purchases of property, plant and equipment (204,076)(147,963)
Purchases of investments (14,735)(2,062,879)
Proceeds from sale or maturity of investments 1,352,398 2,758,391 
Purchase of in-process research and development(95,000)(8,500)
Other investing activities— (7,500)
Net cash provided by investing activities 1,038,587 531,549 
Financing activities: 
Proceeds from sale of ordinary shares, net of cost16— 50,000 
Proceeds from long-term loan1137,372 16,838 
Proceeds from short-term loans11163,774 143,456 
Repayment of short-term loans11(145,428)(40,229)
Proceeds from option exercises and employee share purchase plan 35,677 82,192 
Net cash provided by financing activities 91,395 252,257 
Effect of foreign exchange rate changes, net (133,929)6,769 
Net decrease in cash, cash equivalents, and restricted cash (182,375)(309)
Cash, cash equivalents, and restricted cash at beginning of period 4,382,887 1,390,005 
Cash, cash equivalents, and restricted cash at end of period 4,200,512 1,389,696 
Supplemental cash flow information: 
Cash and cash equivalents 4,197,132 1,383,310 
Short-term restricted cash 191 330 
Long-term restricted cash3,189 6,056 
Income taxes paid 25,006 15,214 
Interest paid 19,865 23,398 
Supplemental non-cash information: 
Acquisitions of equipment included in accounts payable 47,310 41,897 
Acquired in-process research and development included in accrued expenses— 45,000 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BEIGENE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)
(Unaudited)
 Ordinary SharesAdditional
Paid-In
Capital
Accumulated
Other Comprehensive Income (loss)
Accumulated
Deficit
Total
 SharesAmount
$$$$$
Balance at December 31, 20211,334,804,281 133 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 RSUs2,851,316 — 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, 20221,334,805,269 133 11,268,290 17,454 (5,511,725)5,774,152 
Use of shares reserved for share option exercises5,016,518 — — — — — 
Exercise of options, ESPP and release of RSUs9,817,938 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, 20221,349,639,725 134 11,356,686 (82,450)(6,077,451)5,196,919 
Use of shares reserved for share option exercises(3,971,942)— — — — — 
Exercise of options, ESPP and release of RSUs3,972,397 16,704 — — 16,705 
Share-based compensation— — 78,176 — — 78,176 
Other comprehensive income— — — (79,073)— (79,073)
Net loss— — — — (557,556)(557,556)
Balance at September 30, 20221,349,640,180 135 11,451,566 (161,523)(6,635,007)4,655,171 
Balance at December 31, 20201,190,821,941 118 7,414,932 6,942 (3,618,711)3,803,281 
Use of shares reserved for share option exercises(123,097)— — — — — 
Exercise of options, ESPP and release of RSUs6,623,773 25,753 — — 25,754 
Share-based compensation— — 45,833 — — 45,833 
Other comprehensive loss— — — (3,738)— (3,738)
Net income— — — — 55,580 55,580 
Balance at March 31, 20211,197,322,617 119 7,486,518 3,204 (3,563,131)3,926,710 
Use of shares reserved for share option exercises(1,599,676)— — — — — 
Exercise of options, ESPP and release of RSUs8,844,082 9,846 — — 9,847 
Share-based compensation— — 64,791 — — 64,791 
Other comprehensive income— — — 8,891 — 8,891 
Net loss— — — — (484,604)(484,604)
Balance at June 30, 20211,204,567,023 120 7,561,155 12,095 (4,047,735)3,525,635 
Proceeds from issuance of ordinary shares, net of cost2,151,877 — 50,000 — — 50,000 
Use of shares reserved for share option exercises and RSU releases(3,644,641)— — — — — 
Exercise of options, ESPP and release of RSUs10,159,942 46,590 — — 46,591 
Share-based compensation— — 67,077 — — 67,077 
Other comprehensive income— — — 485 — 485 
Net loss— — — — (438,114)(438,114)
Balance at September 30, 20211,213,234,201 121 7,724,822 12,580 (4,485,849)3,251,674 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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", "BeiGene", "it", "its") is a global biotechnology company focused on developing and commercializing innovative affordable oncology medicines to improve treatment outcomes and expand access for patients worldwide.
The Company currently has three approved medicines that were discovered and developed in its own labs, including BRUKINSA®, a small molecule inhibitor of Bruton’s Tyrosine Kinase (BTK) for the treatment of various blood cancers, tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers, and pamiparib, a selective small molecule inhibitor of PARP1 and PARP2. The Company has obtained approvals to market BRUKINSA® in the United States, the People's Republic of China (China or the PRC), the European Union (EU), the United Kingdom ("UK"), Canada, Australia and additional international markets, and tislelizumab and pamiparib in China. By leveraging its China commercial capabilities, the Company has in-licensed the rights to distribute 13 approved medicines for the China market. Supported by its global clinical development and commercial capabilities, the Company has entered into collaborations with world-leading biopharmaceutical companies such as Amgen Inc. ("Amgen") and Novartis Pharma AG ("Novartis") to develop and commercialize innovative medicines.
The Company is committed to advancing best and first-in-class clinical candidates internally or with like-minded partners to develop impactful and affordable medicines for patients across the globe. Its internal clinical development capabilities are deep, including a more than 2,500-person global clinical development and medical affairs team that is running close to 80 ongoing or planned clinical trials in over 40 medicines and drug candidates. This includes more than 30 pivotal or potentially registration-enabling trials across its portfolio, including three internally discovered, approved medicines. The Company has enrolled in its clinical trials more than 16,000 subjects, of which approximately one-half have been outside of China.
The Company has built, and is expanding, its internal manufacturing capabilities, through its state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of its medicines, and is building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey. The Company also works with high quality contract manufacturing organizations ("CMOs") to manufacture its internally developed clinical and commercial products.
Since its inception in 2010, the Company has become a fully integrated global organization of over 9,000 employees in 29 countries and regions, including the United States, China, Europe and Australia.
Basis of presentation and consolidation
The accompanying condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of shareholders' equity for the three and nine months ended September 30, 2022 and 2021, and the related footnote disclosures are unaudited. The accompanying unaudited interim condensed 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 on Form 10-K for the year ended December 31, 2021 (the "Annual Report").
The unaudited interim 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 operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.
10


The unaudited interim 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.
Use of estimates
The preparation of the 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. 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, identifying separate accounting units and determining the standalone selling price of each performance obligation in the Company’s revenue arrangements, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions, valuation of inventory, estimating the allowance for credit losses, determining defined benefit pension plan obligations, measurement of right-of-use assets and lease liabilities 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 and reported amounts of revenues and expenses. Actual results could differ from these estimates.
Revision of prior period financial statements
The Company evaluates the recoverability of its deferred tax assets on a jurisdiction-by-jurisdiction basis by assessing the adequacy of future expected taxable income from all sources, including reversal of temporary differences, forecasted operating earnings and available tax planning strategies in accordance with ASC 740. This assessment is subject to a high degree of subjectivity, as the sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts. A valuation allowance is provided when the Company determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.
Prior to the third quarter of 2022, the Company determined that the majority of its net deferred tax assets (primarily in the U.S.) were realizable on a more-likely-than-not basis, primarily due to cumulative pre-tax income at the taxpaying entity and the weighting of available positive and negative evidence. Accordingly, no valuation allowance was previously recorded related to those deferred tax assets. In October 2022, in connection with the preparation of its condensed consolidated financial statements for the three and nine months ended September 30, 2022, the Company reassessed its position on the realizability of its net deferred tax assets and determined that the negative evidence associated with cumulative losses at the consolidated financial statement level are not able to be overcome by other positive evidence, and therefore, a valuation allowance should be applied to its net deferred tax asset balance. The Company determined the previous conclusion to not apply a valuation allowance to certain net deferred tax assets was an error.
In accordance with Staff Accounting Bulletin (SAB) No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and determined that the related impact was not material to any of its previously issued financial statements, but that correcting the cumulative impact of the error would be significant to its statements of operations for the three and nine months ended September 30, 2022. Accordingly, the Company has revised the first and second quarters of 2022 and the quarterly and annual periods of fiscal year 2021 condensed consolidated financial statements and related notes included herein to record a valuation allowance against the Company’s net deferred tax asset balance for all periods presented. A summary of revisions to previously reported financial statements is presented in Note 2, Revision of Prior Period Financial Statements. Note 9, Income Taxes and Note 13, Loss Per Share have been updated to reflect the revision. The Company will also correct previously reported financial information for this error in its future filings, as applicable.
Recent accounting pronouncements
New accounting standards which have not yet been adopted
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This update is effective for annual periods beginning after December 15, 2021, and early application is permitted. This guidance should be applied either prospectively to all transactions that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or retrospectively to those transactions. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.
11


Significant accounting policies
For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited interim 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, 2021.
There have been no material changes to the Company’s significant accounting policies as of and for the nine months ended September 30, 2022, as compared to the significant accounting policies described in the Annual Report.
2. Revision of Prior Period Financial Statements
As discussed in Note 1, the Company revised certain prior period financial statements to correct an error related to the valuation of net deferred tax assets, the impact of which was immaterial to our previously filed financial statements in the first and second quarters of 2022 and the quarterly and annual periods of fiscal 2021 (See Note 1). Specifically, a valuation allowance should have been recorded on all net deferred tax assets and such a valuation allowance was not previously recorded. A summary of revisions to the Company’s previously reported financial statements for the comparative periods presented within this Quarterly Report on Form 10-Q is presented below.

Condensed Consolidated Balance Sheet (unaudited)
 As of
 December 31, 2021
 As ReportedAdjustmentsAs Revised
 $$$
Deferred tax assets110,424 (110,424)— 
Total non-current assets1,032,069 (110,424)921,645 
Total assets8,645,949 (110,424)8,535,525 
Accumulated deficit(4,966,103)(110,424)(5,076,527)
Total equity6,242,987 (110,424)6,132,563 
Total liabilities and equity8,645,949 (110,424)8,535,525 

Condensed Consolidated Statements of Operations (unaudited)
Three Months EndedNine Months Ended
September 30, 2021September 30, 2021
As ReportedAdjustmentsAs RevisedAs ReportedAdjustmentsAs Revised
$$$$$$
Income tax expense (benefit)(19,223)24,259 5,036 (24,083)39,437 15,354 
Net loss(413,855)(24,259)(438,114)(827,701)(39,437)(867,138)
Net loss per share(0.34)(0.02)(0.36)(0.69)(0.03)(0.72)
Net loss per American Depositary Share ("ADS")(4.46)(0.26)(4.72)(8.99)(0.43)(9.42)

Condensed Consolidated Statements of Comprehensive Loss (unaudited)
Three Months EndedNine Months Ended
September 30, 2021September 30, 2021
As ReportedAdjustmentsAs RevisedAs ReportedAdjustmentsAs Revised
$$$$$$
Net loss(413,855)(24,259)(438,114)(827,701)(39,437)(867,138)
Comprehensive loss(413,370)(24,259)(437,629)(822,063)(39,437)(861,500)


12



Condensed Consolidated Statement of Cash Flows (unaudited)
Nine Months Ended
September 30, 2021
As ReportedAdjustmentsAs Revised
$$$
Operating activities:
Net loss(827,701)(39,437)(867,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income tax benefits(38,408)40,882 2,474 
Changes in operating assets and liabilities:
Other assets(92,938)449 (92,489)
Accrued expenses and other payables819 (863)(44)
Other liabilities3,438 (1,031)2,407 
Net cash used in operating activities(790,884)— (790,884)

Condensed Consolidated Statement of Stockholders' Equity (unaudited)
Accumulated DeficitTotal Equity
As ReportedAdjustmentsAs RevisedAs ReportedAdjustmentsAs Revised
$$$$$$
Balance at December 31, 2021(4,966,103)(110,424)(5,076,527)6,242,987 (110,424)6,132,563 
Net loss(434,274)(924)(435,198)(434,274)(924)(435,198)
Balance at March 31, 2022(5,400,377)(111,348)(5,511,725)5,885,500 (111,348)5,774,152 
Net loss(571,449)5,723 (565,726)(571,449)5,723 (565,726)
Balance at June 30, 2022(5,971,826)(105,625)(6,077,451)5,302,544 (105,625)5,196,919 
Balance at December 31, 2020(3,552,749)(65,962)(3,618,711)3,869,243 (65,962)3,803,281 
Net income66,495 (10,915)55,580 66,495 (10,915)55,580 
Balance at March 31, 2021(3,486,254)(76,877)(3,563,131)4,003,587 (76,877)3,926,710 
Net loss(480,341)(4,263)(484,604)(480,341)(4,263)(484,604)
Balance at June 30, 2021(3,966,595)(81,140)(4,047,735)3,606,775 (81,140)3,525,635 
Net loss(413,855)(24,259)(438,114)(413,855)(24,259)(438,114)
Balance at September 30, 2021(4,380,450)(105,399)(4,485,849)3,357,073 (105,399)3,251,674 
3. 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.
Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets 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.
13


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 September 30, 2022 and December 31, 2021:
 Quoted Price in Active Market for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
As of September 30, 2022(Level 1)(Level 2)(Level 3)
 $$$
Cash equivalents   
U.S. Treasury securities123,519 — — 
Money market funds373,370 — — 
Short-term investments (Note 5):
U.S. Treasury securities871,998 — — 
Other non-current assets (Note 5):
Equity securities with readily determinable fair values6,467 2,037 — 
Convertible debt instrument— — 5,000 
Total1,375,354 2,037 5,000 
 
 Quoted Price in Active Market for Identical AssetsSignificant Other Observable InputsSignificant Unobservable Inputs
As of December 31, 2021(Level 1)(Level 2)(Level 3)
 $$$
Cash equivalents   
U.S. Treasury securities107,855 — — 
Money market funds315,564 — — 
Short-term investments (Note 5):
U.S. Treasury securities2,241,962 — — 
Other non-current assets (Note 5):
Equity securities with readily determinable fair values23,809 10,306 — 
Total2,689,190 10,306 — 
The Company's cash equivalents are highly liquid investments with original maturities of 3 months or less. Short-term investments represent the Company's investments in available-for-sale debt securities. The Company determines the fair value of cash equivalents and available-for-sale debt securities using a market approach based on quoted prices in active markets.
The Company's equity securities carried at fair value consist of holdings in common stock and warrants to purchase additional shares of common stock of Leap Therapeutics, Inc. ("Leap"), which were acquired in connection with a collaboration and license agreement entered into in January 2020 and in Leap's underwritten public offering in September 2021. The common stock investment in Leap, a publicly-traded biotechnology company, is measured and carried at fair value and classified as Level 1. The warrants to purchase additional shares of common stock in Leap are classified as a Level 2 investment and are measured using the Black-Scholes option-pricing valuation model, which utilizes a constant maturity risk-free rate and reflects the term of the warrants, dividend yield and stock price volatility, that is based on the historical volatility of similar companies. Refer to Note 5, Restricted Cash and Investments for details of the determination of the carrying amount of private equity investments without readily determinable fair values and equity method investments.
The Company holds a convertible note of a private biotech company. The Company has elected the fair value option method of accounting for the convertible note. Accordingly, the convertible note is remeasured at fair value on a recurring basis using Level 3 inputs, with any changes in the fair value option recorded in other income (loss).

As of September 30, 2022 and December 31, 2021, the fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and short-term debt approximated their carrying values due to their short-term nature. Long-term
14


bank loans approximate their fair value due to the fact that the related interest rates approximate the rates currently offered by financial institutions for similar debt instrument of comparable maturities.
4. Collaborative and Licensing Arrangements
The Company has entered into collaborative arrangements for the research and development, manufacture and/or commercialization of medicines and drug candidates. To date, these collaborative arrangements have included out-licenses of and options to out-license internally developed products and drug candidates to other parties, in-licenses of products and drug candidates from other parties, and profit- and cost-sharing arrangements. These arrangements may include non-refundable upfront payments, contingent obligations for potential development, regulatory and commercial performance milestone payments, cost-sharing and reimbursement arrangements, royalty payments, and profit sharing.
Out-Licensing Arrangements
For the three and nine months ended September 30, 2022 and 2021, the Company’s collaboration revenue consisted entirely of upfront license fees, research and development services revenue and right to access intellectual property revenue from its collaboration agreements with Novartis for tislelizumab and ociperlimab.
The following table summarizes total collaboration revenue recognized for the three and nine months ended September 30, 2022 and 2021:
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Revenue from Collaborators$$$$
License revenue— — 484,646 
Research and development service revenue9,83413,979 34,074 40,456 
Right to access intellectual property revenue26,249— 78,746 — 
Other2,039— 7,416 — 
Total38,12213,979 120,236 525,102 
Novartis
Tislelizumab Collaboration and License
In January 2021, the Company entered into a collaboration and license agreement with Novartis, granting Novartis rights to develop, manufacture and commercialize tislelizumab in North America, Europe, and Japan ("Novartis Territory"). The Company and Novartis have agreed to jointly develop tislelizumab in these licensed countries, with Novartis responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals. In addition, both companies may conduct clinical trials globally to explore combinations of tislelizumab with other cancer treatments, and the Company has an option to co-detail the product in North America, funded in part by Novartis.
Under the agreement the Company received an upfront cash payment of $650,000 from Novartis. The Company is eligible to receive up to $1,300,000 upon the achievement of regulatory milestones, $250,000 upon the achievement of sales milestones, and royalties on future sales of tislelizumab in the licensed territory. Under the terms of the agreement, the Company is responsible for funding ongoing clinical trials of tislelizumab, Novartis has agreed to fund new registrational, bridging, or post-marketing studies in its territory, and each party will be responsible for funding clinical trials evaluating tislelizumab in combination with its own or third party products. Each party retains the worldwide right to commercialize its propriety products in combination with tislelizumab.
The Company evaluated the Novartis agreement under ASC 606 as all the material units of account within the agreement represented transactions with a customer. The Company identified the following material components under the agreement: (1) exclusive license for Novartis to develop, manufacture, and commercialize tislelizumab in the Novartis Territory, transfer of know-how and use of the tislelizumab trademark; (2) conducting and completing ongoing trials of tislelizumab (“tislelizumab R&D services”); and (3) supplying Novartis with required quantities of the tislelizumab drug product, or drug substance, upon receipt of an order from Novartis.
The Company determined that the license, transfer of know-how and use of trademarks are not distinct from each other and represent a single performance obligation. The tislelizumab R&D services represent a material promise and were determined to be a separate performance obligation at the outset of the agreement as the promise is distinct and has standalone value to
15


Novartis. The Company evaluated the supply component of the contract and noted the supply will not be provided at a significant incremental discount to Novartis. The Company concluded that, for the purpose of ASC 606, the provision related to providing clinical and commercial supply of tislelizumab in the Novartis Territory was an option but not a performance obligation of the Company at the outset of the Novartis collaboration agreement. A performance obligation for the clinical and commercial supply will be established as quantities of drug product or drug substance are ordered by Novartis.
The Company determined that the transaction price as of the outset of the arrangement was the upfront payment of $650,000. The potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained due to uncertainty of achievement. The transaction price was allocated to the two identified performance obligations based on a relative fair value basis. The standalone selling price of the license, transfer of know-how and use of trademarks performance obligation was determined using the adjusted market assessment approach. Based on the valuation performed by the Company, the standalone selling price of the license, transfer of know-how and use of trademarks was valued at $1,231,000. The standalone selling price of the tislelizumab R&D services was valued at $420,000 using a cost plus margin valuation approach. Based on the relative standalone selling prices of the two performance obligations, $484,646 of the total transaction price was allocated to the license and $165,354 was allocated to the tislelizumab R&D services.
The Company satisfied the license performance obligation at a point in time when the license was delivered and the transfer of know-how completed which occurred during the nine months ended September 30, 2021. As such, the Company recognized the entire amount of the transaction price allocated to the license as collaboration revenue during the nine months ended September 30, 2021. The portion of the transaction price allocated to the tislelizumab R&D services was deferred and is being recognized as collaboration revenue as the tislelizumab R&D services are performed using a percentage-of-completion method. Estimated costs to complete are reassessed on a periodic basis and any updates to the revenue earned are recognized on a prospective basis. The Company recognized R&D service revenue of $8,043 and $28,699 during the three and nine months ended September 30, 2022, respectively, and $13,979 and $40,456 during the three and nine months ended September 30, 2021, respectively. The Company also recognized other collaboration revenue of $2,039 and $7,416 related to the sale of tislelizumab clinical supply to Novartis in conjunction with the collaboration during the three and nine months ended September 30, 2022, respectively.
Ociperlimab Option, Collaboration and License Agreement and China Broad Market Development Agreement
In December 2021, the Company expanded its collaboration with Novartis by entering into an option, collaboration and license agreement with Novartis to develop, manufacture and commercialize the Company's investigational TIGIT inhibitor ociperlimab in the Novartis Territory. In addition, the Company and Novartis entered into an agreement granting the Company rights to market, promote and detail five approved Novartis oncology products, TAFINLAR® (dabrafenib), MEKINIST® (trametinib), VOTRIENT® (pazopanib), AFINITOR® (everolimus), and ZYKADIA® (ceritinib), across designated regions of China referred to as “broad markets.” In the first quarter of 2022, the Company initiated marketing and promotion of these five products.
Under the terms of the option, collaboration and license agreement, the Company received an upfront cash payment of $300,000 in January 2022 from Novartis and will receive an additional payment of $600,000 or $700,000 in the event Novartis exercises its exclusive time-based option prior to mid-2023 or between then and late-2023, respectively. Following option exercise, the Company is eligible to receive up to $745,000 upon the achievement of regulatory approval milestones, $1,150,000 upon the achievement of sales milestones, and royalties on future sales of ociperlimab in the Novartis Territory. Subject to the terms of the option, collaboration and license agreement, during the option period, Novartis has agreed to initiate and fund additional global clinical trials with ociperlimab and the Company has agreed to expand enrollment in two ongoing trials. Following the option exercise, Novartis has agreed to share development costs of global trials. Following approval, the Company has agreed to provide 50 percent of the co-detailing and co-field medical efforts in the United States, and has an option to co-detail up to 25 percent in Canada and Mexico, funded in part by Novartis. Each party retains the worldwide right to commercialize its propriety products in combination with ociperlimab, as is the case with tislelizumab under the tislelizumab collaboration and license agreement. The existing tislelizumab collaboration and license agreement was not modified as a result of the ociperlimab option, collaboration and license agreement.
The Company evaluated the Novartis agreements under ASC 606 as the units of account within the agreement represented transactions with a customer. The Company identified the following material promises under the agreement: (1) exclusive option for Novartis to license the rights to develop, manufacture, and commercialize ociperlimab in the Novartis Territory; (2) Novartis' right to access ociperlimab in its own clinical trials during the option period; (3) initial transfer of BeiGene know-how; and (4) conducting and completing ongoing trials of ociperlimab during the option period ("ociperlimab R&D Services", together with "tislelizumab R&D services", "R&D services"). The market development activities are considered immaterial in the context of the contracts.
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The Company concluded that, at the inception of the agreement, the option for the exclusive product license constitutes a material right as it represents a significant and incremental discount to the fair value of the exclusive product license that Novartis would not have received without entering into the agreement and is therefore considered a distinct performance obligation. The Company determined that Novartis' right to access ociperlimab in its own trials over the option period and the initial transfer of know-how were not distinct from each other, as the right to access ociperlimab has limited value without the corresponding know-how transfer, and therefore should be combined into one distinct performance obligation. The ociperlimab R&D Services represent a material promise and were determined to be a separate performance obligation at the outset of the agreement as the promise is distinct and has standalone value to Novartis.
The Company determined the transaction price at the outset of the arrangement as the upfront payment of $300,000. The option exercise fee is contingent upon Novartis exercising its right and is considered fully constrained until the option is exercised. Additionally, the milestone and royalty payments are not applicable until after the option is exercised, at which point the likelihood of meeting milestones, regulatory approval and meeting certain sales thresholds will be assessed. The transaction price was allocated to the three identified performance obligations based on a relative fair value basis. The standalone selling price of the material right for the option to the exclusive product license was calculated as the incremental discount between (i) the value of the license determined using a discounted cash flow method adjusted for probability of the option being exercised and (ii) the expected option exercise fee using the most-likely-amount method at option exercise. The standalone selling price of the combined performance obligation for Novartis' right to access ociperlimab for its own clinical trials during the option period and the initial transfer of BeiGene know-how was determined using a discounted cash flow method. The standalone selling price of the ociperlimab R&D Services was determined using an expected cost plus margin approach. Based on the relative standalone selling prices of the three performance obligations, $71,980 of the total transaction price was allocated to the material right, $213,450 was allocated to Novartis' right to use ociperlimab in its own clinical trials during the option period and the transfer of BeiGene know-how, and $14,570 was allocated to the ociperlimab R&D Services.
The Company will satisfy the material right performance obligation at a point in time at the earlier of when Novartis exercises the option and the license is delivered or the expiration of the option period. As such, the entire amount of the transaction price allocated to the material right was deferred. The portion of the transaction price allocated to Novartis' right to access ociperlimab in its own clinical trials during the option period and the initial transfer of BeiGene know-how was deferred and is being recognized over the expected option period. The portion of the transaction price allocated to the ociperlimab R&D Services was deferred and is being recognized as collaboration revenue as the ociperlimab R&D Services are performed over the expected option period. The Company recognized collaboration revenue of $26,249 and $78,746 related to Novartis right to access ociperlimab in clinical trials and the transfer of know how performance obligation during the three and nine months ended September 30, 2022, respectively, and R&D service revenue of $1,791 and $5,375 during the three and nine months ended September 30, 2022, respectively.
In-Licensing Arrangements
Amgen
In October 2019, the Company entered into a global strategic oncology collaboration with Amgen ("Amgen Collaboration Agreement") for the commercialization and development in China, excluding Hong Kong, Taiwan and Macau, of Amgen’s XGEVA®, KYPROLIS®, and BLINCYTO®, and the joint global development of a portfolio of oncology assets in Amgen’s pipeline, with BeiGene responsible for development and commercialization in China. The agreement became effective on January 2, 2020, following approval by the Company's shareholders and satisfaction of other closing conditions.
Under the agreement, the Company is responsible for the commercialization of XGEVA®, KYPROLIS® and BLINCYTO® in China for five or seven years. Amgen is responsible for manufacturing the products globally and will supply the products to the Company at an agreed upon price. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. Following the commercialization period, the Company has the right to retain one product and is entitled to receive royalties on sales in China for an additional five years on the products not retained. XGEVA® was approved in China in 2019 for patients with giant cell tumor of the bone and in November 2020 for the prevention of skeletal-related events in cancer patients with bone metastases. In July 2020, the Company began commercializing XGEVA® in China. In December 2020, BLINCYTO® was approved in China for injection for the treatment of adult patients with relapsed or refractory (R/R) B-cell precursor acute lymphoblastic leukemia (ALL). In July 2021, KYPROLIS® was conditionally approved in China for injection in combination with dexamethasone for the treatment of adult patients with R/R multiple myeloma. In April 2022, BLINCYTO® was conditionally approved for injection for the treatment of pediatric patients with R/R CD19-positive B-cell precursor ALL.
Amgen and the Company are also jointly developing a portfolio of Amgen oncology pipeline assets under the collaboration. The Company is responsible for conducting clinical development activities in China and co-funding global
17


development costs by contributing cash and development services up to a total cap of $1,250,000. Amgen is responsible for all development, regulatory and commercial activities outside of China. For each pipeline asset that is approved in China, the Company will receive commercial rights for seven years from approval. The Company has the right to retain approximately one out of every three approved pipeline assets, other than LUMAKRAS (sotorasib), Amgen's KRAS G12C inhibitor, for commercialization in China. The Company and Amgen will share equally in the China commercial profits and losses during the commercialization period. The Company is entitled to receive royalties from sales in China for pipeline assets returned to Amgen for five years after the seven-year commercialization period. The Company is also entitled to receive royalties from global sales of each product outside of China (with the exception of LUMAKRAS™).
The Amgen Collaboration Agreement is within the scope of ASC 808, as both parties are active participants and are exposed to the risks and rewards dependent on the commercial success of the activities performed under the agreement. The Company is the principal for product sales to customers in China during the commercialization period and recognizes 100% of net product revenue on these sales. Amounts due to Amgen for its portion of net product sales will be recorded as cost of sales. Cost reimbursements due to or from Amgen under the profit share will be recognized as incurred and recorded to cost of sales; selling, general and administrative expense; or research and development expense, based on the underlying nature of the related activity subject to reimbursement. Costs incurred for the Company's portion of the global co-development funding are recorded to research and development expense as incurred.
On April 20, 2022, the parties entered into the First Amendment to Amgen Collaboration Agreement, which amends certain terms and conditions relating to the financial responsibilities of the parties in connections with the development and commercialization of certain Amgen proprietary products for the treatment of oncology-related diseases and conditions.
In connection with the Amgen Collaboration Agreement, a Share Purchase Agreement ("SPA") was entered into by the parties in October 2019. On January 2, 2020, the closing date of the transaction, Amgen purchased 15,895,001 of the Company's ADSs for $174.85 per ADS, representing a 20.5% ownership stake in the Company. Per the SPA, the cash proceeds shall be used as necessary to fund the Company's development obligations under the Amgen Collaboration Agreement. Pursuant to the SPA, Amgen also received the right to designate one member of the Company's board of directors, and Anthony Hooper joined the Company's board of directors as the Amgen designee in January 2020.
In determining the fair value of the common stock at closing, the Company considered the closing price of the common stock on the closing date of the transaction and included a lack of marketability discount because the shares are subject to certain restrictions. The fair value of the shares on the closing date was determined to be $132.74 per ADS, or $2,109,902 in the aggregate. The Company determined that the premium paid by Amgen on the share purchase represents a cost share liability due to the Company's co-development obligations. The fair value of the cost share liability on the closing date was determined to be $601,857 based on the Company's discounted estimated future cash flows related to the pipeline assets. The total cash proceeds of $2,779,241 were allocated based on the relative fair value method, with $2,162,407 recorded to equity and $616,834 recorded as a research and development cost share liability. The cost share liability is being amortized proportionately as the Company contributes cash and development services to its total co-development funding cap.
Amounts recorded related to the Company's portion of the co-development funding on the pipeline assets for the three and nine months ended September 30, 2022 and 2021 were as follows:
 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Research and development expense25,462 29,710 72,251 85,040 
Amortization of research and development cost share liability24,806 28,943 70,389 82,846 
Total amount due to Amgen for BeiGene's portion of the development funding50,268 58,653 142,640 167,886 
As of
September 30,
2022
Remaining portion of development funding cap 648,419 
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As of September 30, 2022 and December 31, 2021, the research and development cost share liability recorded in the Company's balance sheet was as follows:
 As of
 September 30,December 31,
 20222021
 $$
Research and development cost share liability, current portion115,721 120,801 
Research and development cost share liability, non-current portion204,252 269,561 
Total research and development cost share liability319,973 390,362 
The total reimbursement due under the commercial profit-sharing agreement for product sales is classified in the income statement for the three and nine months ended September 30, 2022 and 2021 as follows:

 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Cost of sales - product319 380 3,797 1,058 
Research and development(1,125)(373)(227)(310)
Selling, general and administrative(13,854)(12,552)(40,496)(28,469)
Total(14,660)(12,545)(36,926)(27,721)
The Company purchases commercial inventory from Amgen to distribute in China. Inventory purchases amounted to $29,269 and $59,330 during the three and nine months ended September 30, 2022, respectively, and $32,129 and $50,983 during the three and nine months ended September 30, 2021, respectively. Net amounts payable to Amgen as of September 30, 2022 and December 31, 2021 were $95,087 and $106,790, respectively.
5. Restricted Cash and Investments
Restricted Cash
The Company’s restricted cash balance of $3,380 and $7,209 as of September 30, 2022 and December 31, 2021, respectively, primarily consists of RMB-denominated cash deposits held in designated bank accounts for collateral for letters of credit. The Company classifies restricted cash as current or non-current based on the term of the restriction.
In addition to the restricted cash balances above, the Company is required by the PRC securities law to use the proceeds from the STAR offering in strict compliance with the planned uses as disclosed in the PRC prospectus as well as those disclosed in the Company's proceeds management policy approved by the board of directors.
Short-Term Investments
Short-term investments as of September 30, 2022 consisted of the following available-for-sale debt securities:
  GrossGrossFair Value
 AmortizedUnrealizedUnrealized(Net Carrying
 CostGainsLossesAmount)
 $$$$
U.S. Treasury securities883,126 — 11,128 871,998 
Total883,126 — 11,128 871,998 
 Short-term investments as of December 31, 2021 consisted of the following available-for-sale debt securities:
  Gross Gross Fair Value
 AmortizedUnrealizedUnrealized(Net Carrying
 CostGainsLossesAmount)
 $$$$
U.S. Treasury securities2,245,662 — 3,700 2,241,962 
Total2,245,662 — 3,700 2,241,962 
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As of September 30, 2022, the Company's available-for-sale debt securities consisted entirely of short-term U.S. treasury securities, which were determined to have zero risk of expected credit loss. Accordingly, no allowance for credit loss was recorded as of September 30, 2022.
Equity Securities with Readily Determinable Fair Values
Leap Therapeutics, Inc. (Leap)
In January 2020, the Company purchased $5,000 of Series B mandatorily convertible, non-voting preferred stock of Leap in connection with a strategic collaboration and license agreement the Company entered into with Leap. The Series B shares were subsequently converted into shares of Leap common stock and warrants to purchase additional shares of common stock upon approval of Leap's shareholders in March 2020. In September 2021, the Company purchased $7,250 of common stock in Leap's underwritten public offering. As of September 30, 2022, the Company's ownership interest in the outstanding common stock of Leap was 7.4% based on information from Leap. Inclusive of the shares of common stock issuable upon the exercise of the currently exercisable warrants, the Company's interest is approximately 11.7% based on information from Leap. The Company measures the investment in the common stock and warrants at fair value, with changes in fair value recorded to other income (expense), net. The Company recorded unrealized losses of $2,950 and $25,611 for the three and nine months ended September 30, 2022, respectively, and unrealized gains of $23,764 and $18,388 for the three and nine months ended September 30, 2021, respectively, in the consolidated statements of operations. As of September 30, 2022 and December 31, 2021, the fair value of the common stock and warrants was as follows:
 As of
 September 30,December 31,
 20222021
 $$
Fair value of Leap common stock6,467 23,809 
Fair value of Leap warrants2,037 10,306 

Private Equity Securities without Readily Determinable Fair Values
The Company invests in equity securities of certain companies whose securities are not publicly traded and fair value is not readily determinable and where the Company has concluded it does not have significant influence based on its ownership percentage and other factors. These investments are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company held investments of $56,789 and $43,722 in equity securities without readily determinable fair values as of September 30, 2022 and December 31, 2021, respectively. The Company recorded gains of $4,699 and $5,065 related to observable price changes in orderly transactions for similar investments of the same issuer for the three and nine months ended September 30, 2022, respectively, to other income (expense), net in the consolidated statements of operations.
Equity-Method Investments
The Company records equity-method investments at cost and subsequently adjusts the basis based on the Company's ownership percentage in the investee's income and expenses, as well as dividends, if any. The Company holds equity-method investments totaling $25,787 and $22,955 as of September 30, 2022 and December 31, 2021, respectively, that it does not consider to be individually significant to its financial statements. The Company recorded unrealized losses of $1,357 and $2,591 for the three and nine months ended September 30, 2022, respectively, and $564 and $1,221 for the three and nine months ended September 30, 2021, respectively, to other income (expense), net in the consolidated statements of operations.
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6. Inventories
The Company’s inventory balance consisted of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Raw materials88,953 78,140 
Work in process22,737 9,397 
Finished goods179,221 155,089 
Total inventories290,911 242,626 
7. Property, plant and equipment
Property, plant and equipment are recorded at cost and consisted of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Land65,485 65,485 
Laboratory equipment137,990 118,203 
Leasehold improvements50,005 50,288 
Building170,243 144,083 
Manufacturing equipment147,433 119,585 
Software, electronics and office equipment38,257 27,404 
Property, plant and equipment, at cost609,413 525,048 
Less: accumulated depreciation(149,692)(124,286)
Construction in progress222,193 186,843 
Property, plant and equipment, net681,914 587,605 
In November 2021, the Company purchased a 42-acre site located in Hopewell, NJ for $75,197. The total purchase price was allocated between the land and an existing building on the property based on their relative fair values. The Company is constructing a biologics manufacturing facility and research and development center on the land.
Depreciation expense was $15,214 and $45,255 for the three and nine months ended September 30, 2022, respectively, and $11,773 and $32,440 for the three and nine months ended September 30, 2021, respectively.
8. Intangible Assets
Intangible assets as of September 30, 2022 and December 31, 2021 are summarized as follows:
 As of
 September 30, 2022December 31, 2021
 Gross  Gross  
 carryingAccumulatedIntangiblecarryingAccumulatedIntangible
 amountamortizationassets, netamountamortizationassets, net
 $$$$$$
Finite-lived intangible assets:      
Product distribution rights7,500 (3,813)3,687 7,500 (3,250)4,250 
Developed product40,432 (3,270)37,162 43,394 (965)42,429 
Trading license816 (816)— 816 (816)— 
Total finite-lived intangible assets48,748 (7,899)40,849 51,710 (5,031)46,679 
 Product distribution rights consist of distribution rights on the approved cancer therapies licensed from Bristol Myers Squibb Company ("BMS") as part of the BMS collaboration. The Company is amortizing the product distribution rights, as a
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single identified asset, over a period of 10 years from the date of acquisition. Developed products represent the post-approval milestone payments under license and commercialization agreements. The Company is amortizing the developed products over the remainder of the respective product patent or the term of the commercialization agreements. Trading license represents the Guangzhou drug distribution license acquired in September 2018. The Company amortized the drug distribution trading license over the remainder of the initial license term through February 2020. The trading license has been renewed through February 2024.
Amortization expense for developed product is included in cost of sales - product in the accompanying consolidated statements of operations. Amortization expense for product distribution rights and the trading licenses is included in operating expenses in the accompanying consolidated statements of operations.
The weighted-average life for each finite-lived intangible assets is approximately 12 years. Amortization expense was as follows:
 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Amortization expense - Cost of sales - product
800 216 2,444 333 
Amortization expense - Operating expense
187 188 563 563 
987 404 3,007 896 
Estimated amortization expense for each of the five succeeding years and thereafter, as of September 30, 2022 is as follows:
Year Ending December 31,Cost of Sales - ProductOperating ExpensesTotal
 $$$
2022 (remainder of year)
779 188 967 
20233,117 750 3,867 
20243,117 750 3,867 
20253,117 750 3,867 
20263,117 750 3,867 
2027 and thereafter23,915 499 24,414 
Total37,162 3,687 40,849 
9. Income Taxes
Income tax expense was $6,318 and $28,408 for the three and nine months ended September 30, 2022, respectively. Income tax expense was $5,036 and $15,354 for the three and nine months ended September 30, 2021, respectively. The income tax expense for the three and nine months ended September 30, 2022 was primarily attributable to current China tax expense for certain subsidiaries determined after certain non-deductible expenses and current U.S. tax expense determined after other special tax deductions and research and development tax credits. The income tax expense for the three and nine months ended September 30, 2021 was primarily attributable to current China tax expense for certain subsidiaries determined after certain non-deductible expenses.
On a quarterly basis, the Company evaluates the realizability of deferred tax assets by jurisdiction and assesses the need for a valuation allowance. In assessing the realizability of deferred tax assets, the Company considers historical profitability, evaluation of scheduled reversals of deferred tax liabilities, projected future taxable income and tax-planning strategies. Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, as of September 30, 2022 and September 30, 2021, the Company will maintain a full valuation allowance against its net deferred tax assets.
As of September 30, 2022, the Company had gross unrecognized tax benefits of $12,725. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months. The Company’s reserve for uncertain tax positions increased by $960 and $2,800, respectively, in the three and nine months ended September 30, 2022 primarily due to U.S. federal and state tax credits and incentives.
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The Company has elected to record interest and penalties related to income taxes as a component of income tax expense. As of September 30, 2022 and December 31, 2021, the Company's accrued interest and penalties, where applicable, related to uncertain tax positions were not material.
The Company conducts business in a number of tax jurisdictions and, as such, is required to file income tax returns in multiple jurisdictions globally. As of September 30, 2022, Australia tax matters are open to examination for the years 2013 through 2022, China tax matters are open to examination for the years 2012 through 2022, Switzerland tax matters are open to examination for the years 2018 through 2022, and U.S. federal tax matters are open to examination for years 2015 through 2022. Various U.S. states and other non-US tax jurisdictions in which the Company files tax returns remain open to examination for 2012 through 2022.
10. Supplemental Balance Sheet Information
The roll-forward of the allowance for credit losses related to trade accounts receivable for the nine months ended September 30, 2022 and 2021 consists of the following activity:
Nine Months Ended
September 30,
20222021
$$
Balance at beginning of the period415 112 
Current period provision for expected credit losses (161)(7)
Amounts written-off— — 
Exchange rate changes(2)
Balance at end of the period252 108 
Prepaid expenses and other current assets consist of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Prepaid research and development costs74,575 87,239 
Prepaid manufacturing cost60,971 78,538 
Prepaid taxes11,494 58,579 
Other receivables11,272 12,010 
Interest receivable2,203 5,052 
Prepaid insurance6,465 1,695 
Short-term deposit10,917 2,982 
Other current assets21,869 24,078 
Total199,766 270,173 

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Other non-current assets consist of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Goodwill109 109 
Prepayment of property and equipment17,951 14,140 
Prepayment of facility capacity expansion activities (1)19,676 24,237 
Prepaid VAT217 17,162 
Rental deposits and other6,520 6,609 
Long-term investments 96,080 100,792 
Total140,553 163,049 
(1) Represents payments for facility expansions under commercial supply agreements. The payments are providing future benefit to the Company through credits on commercial supply purchases.
Accrued expenses and other payables consist of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Compensation related142,837 139,966 
External research and development activities related114,008 213,922 
Commercial activities34,646 71,560 
Employee tax withholdings25,879 45,661 
Sales rebates and returns related49,890 59,639 
Professional fees and other42,995 27,307 
Total410,255 558,055 
Other long-term liabilities consist of the following:
 As of
 September 30,December 31, 
 20222021
 $$
Deferred government grant income37,700 46,352 
Pension liability7,330 7,814 
Other139 68 
Total45,169 54,234 

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11. Debt
The following table summarizes the Company's short-term and long-term debt obligations as of September 30, 2022 and December 31, 2021:
LenderAgreement DateLine of CreditTermMaturity DateInterest RateAs of
September 30, 2022December 31, 2021
$RMB$RMB
China Construction BankApril 4, 2018RMB580,000
9-year
April 4, 2027(1)4,077 29,000 1,255 8,000 
China Merchants BankJanuary 22, 2020(2)
 9-year
January 20, 2029(2)1,406 10,000 1,569 10,000 
China Merchants BankNovember 9, 2020RMB378,000
9-year
November 8, 2029(3)3,866 27,500 — — 
China Minsheng Bank (the "Senior Loan")September 24, 2020$200,000(4)4.5 %200,000 1,422,677 200,000 1,274,535 
Zhuhai Hillhouse (the "Related Party Loan")September 24, 2020RMB500,000(5)4.5 %14,058 100,000 15,693 100,000 
Shanghai Pudong Development BankFebruary 25, 2022$50,000
1-year
February 25, 20232.2 %50,000 355,669 — — 
Other short-term debt (6)167,868 1,194,115 209,048 1,332,197 
Total short-term debt441,275 3,138,961 427,565 2,724,732 
China Construction BankApril 4, 2018RMB580,000
 9-year
April 4, 2027(1)76,616 545,000 89,444 570,000 
China Merchants BankJanuary 22, 2020(2)
 9-year
January 20, 2029(2)49,273 350,500 53,353 340,000 
China Merchants BankNovember 9, 2020RMB378,000
9-year
November 8, 2029(3)46,743 332,500 59,316 378,000 
China CITIC BankJuly 29, 2022RMB480,000
10-year
July 28, 2032(7)35,426 252,000 — — 
Total long-term bank loans208,058 1,480,000 202,113 1,288,000 
1.The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 4.9% as of September 30, 2022. The loan is secured by BeiGene Guangzhou Factory's land use right and certain Guangzhou Factory fixed assets in the first phase of the Guangzhou manufacturing facility's build out. The Company repaid $598(RMB4,000) during the nine months ended September 30, 2022.
2.On January 22, 2020, BeiGene Guangzhou Biologics Manufacturing Co., Ltd.("BeiGene Guangzhou Factory") entered into a nine-year bank loan with China Merchants Bank to borrow up to RMB1,100,000 at a floating interest rate benchmarked against prevailing interest rates of certain PRC financial institutions. The loan is secured by Guangzhou Factory's second land use right and fixed assets placed into service upon completion of the second phase of the Guangzhou manufacturing facility's build out. In connection with the Company's short-term loan agreements with China Merchants Bank entered into during the year ended December 31, 2020, the borrowing capacity was reduced from RMB1,100,000 to RMB350,000. The loan interest rate was 4.4% as of September 30, 2022. The Company repaid $1,142 (RMB7,500) during the nine months ended September 30, 2022. BeiGene Guangzhou Biologics Manufacturing Co., Ltd. is a company incorporated under the laws of the PRC on March 3, 2017 and a wholly owned subsidiary of BeiGene Biologics.
3.The outstanding borrowings bear floating interest rates benchmarking RMB loan interest rates of financial institutions in the PRC. The loan interest rate was 4.3% as of September 30, 2022. The loan is secured by fixed assets placed into service upon completion of the third phase of the Guangzhou manufacturing facility's build out.
4.In September 2020, the Company entered into a loan agreement with China Minsheng Bank for a total loan facility of up to $200,000 ("Senior Loan"), of which $120,000 was designated to fund the purchase of noncontrolling equity interest in BeiGene Biologics Co., Ltd. ("BeiGene Biologics") from Guangzhou GET Technology Development Co., Ltd. (now Guangzhou High-tech Zone Technology Holding Group Co., Ltd.) ("GET") and repayment of the loan provided by GET ("Shareholder Loan") and $80,000 was designated for general working capital purposes. The Senior Loan had an original maturity date of October 8, 2021, which was the first anniversary of the first date of utilization of the loan. The Company may extend the original maturity date for up to two additional 12 month periods. On October 8, 2021, the Company extended the maturity date for twelve months to October 8, 2022 and repurposed the Senior Loan for general working capital purposes. BeiGene Biologics Co., Ltd. is a company incorporated under the laws of the PRC on January 25, 2017 and an indirectly wholly owned subsidiary of the Company.
5.In September 2020, the Company entered into a loan agreement with Zhuhai Hillhouse Zhaohui Equity Investment Partnership (Zhuhai Hillhouse) for a total loan facility of $73,640 (RMB500,000) ("Related Party Loan"), of which $14,728 (RMB100,000) can be used for general corporate purposes and $58,912 (RMB400,000) can only be applied towards the repayment of the Senior Loan facility, including principal, interest and fees. The loan maturity was the earlier of: (i) November 9, 2021, which is one month after the Senior Loan maturity date, if not extended, or (ii) 10 business days after the Senior Loan is fully repaid. On October 8, 2021, the Company extended the maturity date of the Related Party Loan to the earlier of: (i) November 9, 2022, which is one month after the Senior Loan maturity date, if not extended, or (ii) 10 business days after the Senior Loan is fully repaid. Zhuhai Hillhouse is a related party of the Company, as it is an affiliate of Hillhouse Capital. Hillhouse Capital is a shareholder of the Company, and a Hillhouse Capital employee is a member of the Company's board of directors.
6.During the nine months ended September 30, 2022 and the years ended December 31, 2021 and 2020, the Company entered into additional short-term working capital loans with China Industrial Bank and China Merchants Bank to borrow up to RMB2,435,000 in aggregate, with maturity dates ranging from January 19, 2021 to September 18, 2023. The Company drew down $113,774 (RMB792,000) and repaid $143,688 (RMB930,082) of the short-term
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loans in the nine months ended September 30, 2022. The weighted average interest rate for the short-term working capital loans was approximately 3.1% as of September 30, 2022.
7.In July 2022, the Company entered into a 10-year bank loan agreement with China CITIC Bank to borrow up to RMB480,000 at a floating interest rate benchmarked against prevailing interest rates of certain PRC financial institutions. The loan interest rate was 4.2% as of September 30, 2022. The loan is secured by BeiGene Suzhou Co., Ltd.'s land use right. The Company drew down $37,372(RMB252,000) during the nine months ended September 30, 2022.
Interest Expense
Interest expense recognized for the three and nine months ended September 30, 2022 was $5,596 and $16,580, respectively, among which, $527 and $2,462 was capitalized, respectively. Interest expense recognized for the three and nine months ended September 30, 2021 was $7,609 and $22,186, respectively, among which, $275 and $526 was capitalized, respectively.
12. Product Revenue
The Company’s product revenue is primarily derived from the sale of its internally developed products BRUKINSA® in the United States and China, and tislelizumab and pamiparib in China; REVLIMID® and VIDAZA® in China under a license from BMS; XGEVA®, BLINCYTO® and KYPROLIS® in China under a license from Amgen; and POBEVCY® in China under a license from Bio-Thera.
The table below presents the Company’s net product sales for the three and nine months ended September 30, 2022 and 2021.
 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Product revenue – gross398,379 206,029 1,036,652 497,823 
Less: Rebates and sales returns(48,873)(13,568)(121,062)(60,621)
Product revenue – net349,506 192,461 915,590 437,202 
The following table disaggregates net product sales by product for the three and nine months ended September 30, 2022 and 2021:
 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
BRUKINSA®
155,495 65,832 388,567 130,345 
Tislelizumab128,206 76,980 320,728 200,738 
REVLIMID®
19,046 20,209 60,622 46,984 
XGEVA®
18,148 15,699 47,156 33,491 
POBEVCY®
9,873 — 29,671 — 
KYPROLIS®
2,820 — 11,225 — 
BLINCYTO®
6,214 5,040 27,610 5,040 
VIDAZA®
3,314 5,810 12,260 12,771 
Pamiparib1,266 1,516 5,843 3,737 
Other5,124 1,375 11,908 4,096 
Total product revenue – net349,506 192,461 915,590 437,202 
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The following table presents the roll-forward of accrued sales rebates and returns for the nine months ended September 30, 2022 and 2021:
Nine Months Ended
September 30,
 20222021
 $$
Balance at beginning of the period59,639 11,874 
Accrual121,062 60,621 
Payments(130,811)(52,305)
Balance at end of the period49,890 20,190 
13. Loss Per Share
The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share:
 Three Months EndedNine Months Ended
 September 30,September 30,
 2022202120222021
 $$$$
Numerator:  
Net loss(557,556)(438,114)(1,558,480)(867,138)
Denominator:
Weighted average shares outstanding—basic and diluted1,345,303,747 1,205,971,284 1,337,976,853 1,196,391,201 
For the three and nine months ended September 30, 2022 and 2021, the computation of basic loss per share using the two-class method was not applicable as the Company was in a net loss position, and the effects of all share options, restricted shares, restricted share units and ESPP shares were excluded from the calculation of diluted loss per share, as their effect would have been anti-dilutive.
14. Share-Based Compensation Expense
2016 Share Option and Incentive Plan
In January 2016, in connection with the Company's initial public offering ("IPO") on the Nasdaq Stock Market, the board of directors and shareholders of the Company approved the 2016 Share Option and Incentive Plan (the “2016 Plan”), which became effective in February 2016. The Company initially reserved 65,029,595 ordinary shares for the issuance of awards under the 2016 Plan, plus any shares available under the 2011 Option Plan (the “2011 Plan”), and not subject to any outstanding options as of the effective date of the 2016 Plan, along with underlying share awards under the 2011 Plan that are cancelled or forfeited without issuance of ordinary shares. As of September 30, 2022, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 5,166,627. In December 2018, the shareholders approved an amended and restated 2016 Plan to increase the number of shares authorized for issuance by 38,553,159 ordinary shares, as well as amend the cap on annual compensation to independent directors and make other changes. In June 2020, the shareholders approved an Amendment No. 1 to the 2016 Plan to increase the number of shares authorized for issuance by 57,200,000 ordinary shares and to extend the term of the plan through April 13, 2030. The number of shares available for issuance under the 2016 Plan is subject to adjustment in the event of a share split, share dividend or other change in the Company’s capitalization.
During the nine months ended September 30, 2022, the Company granted options for 12,437,373 ordinary shares and restricted share units for 37,043,877 ordinary shares under the 2016 Plan. As of September 30, 2022, options and restricted share units for ordinary shares outstanding under the 2016 Plan totaled 63,928,723 and 56,502,940, respectively. As of September 30, 2022, share-based awards to acquire 74,429,673 ordinary shares were available for future grant under the 2016 Plan.
In order to continue to provide incentive opportunities under the 2016 Plan, the Board of Directors and shareholders of the Company approved an amendment to the 2016 Plan (the "Amendment No. 2"), which became effective as of June 22, 2022, to increase the number of authorized shares available for issuance under the 2016 Plan by 66,300,000 ordinary shares, or 5% of the Company's outstanding shares as of March 31, 2022.
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2018 Inducement Equity Plan
In June 2018, the board of directors of the Company approved the 2018 Inducement Equity Plan (the "2018 Plan") and reserved 12,000,000 ordinary shares to be used exclusively for grants of awards to individuals that were not previously employees of the Company or its subsidiaries, as a material inducement to the individual’s entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2018 Plan was approved by the board of directors upon recommendation of the compensation committee, without shareholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2018 Plan, and the forms of award agreements to be used thereunder, are substantially similar to the 2016 Plan and the forms of award agreements thereunder. In August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated 2018 Plan to implement changes required by the listing rules of the Stock Exchange of Hong Kong Limited ("HKEX").
During the nine months ended September 30, 2022, the Company did not grant any options or restricted share units under the 2018 Plan. As of September 30, 2022, options and restricted share units for ordinary shares outstanding under the 2018 Plan totaled 27,846 and 223,028, respectively.
Upon the effectiveness of Amendment No. 2 to the 2016 Plan, on June 22, 2022, the 2018 Plan was terminated to the effect that no new equity awards shall be granted under the plan but the outstanding equity awards under the plan shall continue to vest and/or be exercisable in accordance with their terms.
2018 Employee Share Purchase Plan
In June 2018, the shareholders of the Company approved the 2018 Employee Share Purchase Plan (the “ESPP”). Initially, 3,500,000 ordinary shares of the Company were reserved for issuance under the ESPP. In December 2018, the board of directors of the Company approved an amended and restated ESPP to increase the number of shares authorized for issuance by 3,855,315 ordinary shares to 7,355,315 ordinary shares. In June 2019, the board of directors adopted an amendment to revise the eligibility criteria for enrollment in the plan. In June 2021, the board of directors of the Company adopted the third amended and restated ESPP to include certain technical amendments under U.S. tax rules and to consolidate the changes in the prior amendment, effective on September 1, 2021. The ESPP allows eligible employees to purchase the Company’s ordinary shares (including in the form of ADSs) at the end of each offering period, which will generally be six months, at a 15% discount to the market price of the Company’s ADSs at the beginning or the end of each offering period, whichever is lower, using funds deducted from their payroll during the offering period. Eligible employees are able to authorize payroll deductions of up to 10% of their eligible earnings, subject to applicable limitations.
As of September 30, 2022, 3,666,071 ordinary shares were available for future issuance under the ESPP.
The following tables summarizes the shares issued under the ESPP:
Market Price