BeiGene Reports Fourth Quarter and Full Year 2017 Financial Results
Feb 28, 2018 4:05 PM
“We had a transformative year in 2017, highlighted by the collaboration with Celgene Corporation for our anti-PD1 antibody, tislelizumab, expansion of the commercial team in
“We also strengthened our balance sheet with an
Fourth Quarter 2017 and Recent Business Highlights
Clinical Programs:
Zanubrutinib (BGB-3111), an investigational small molecule inhibitor of Bruton’s tyrosine kinase (BTK)
- Presented preliminary clinical data from the Phase 1 trial of zanubrutinib in patients with non-Hodgkin’s lymphoma in an oral presentation at the 59th
American Society of Hematology (ASH) Annual Meeting inAtlanta ; - Presented updated Phase 1b data for the combination of zanubrutinib and GAZYVA® (obinutuzumab) in patients with chronic lymphocytic leukemia / small lymphocytic lymphoma (CLL/SLL) and follicular lymphoma (FL) at the ASH annual meeting;
- Presented initial Phase 1b data for the combination of zanubrutinib and the Company’s investigational anti-PD-1 antibody, tislelizumab (BGB-A317), in patients with B-cell malignancies at the ASH annual meeting;
- Completed enrollment in the Phase 2 pivotal trial in
China in patients with CLL/SLL; and - Initiated a Phase 1b/2 trial in
China of zanubrutinib in combination with rituximab in patients with diffuse large B-cell lymphoma, FL, and marginal zone lymphoma.
Tislelizumab (BGB-A317), an investigational humanized monoclonal antibody against the immune checkpoint receptor PD-1 under the collaboration with Celgene Corporation
- Presented preliminary results from the Phase 1 trial of tislelizumab in patients with urothelial carcinoma at the 2018 Genitourinary Cancers Symposium;
- Presented initial Phase 1b data for the combination of zanubrutinib and tislelizumab in patients with B-cell malignancies at the ASH annual meeting;
- Initiated the following trials:
-- Global Phase 3 trial of tislelizumab in patients with previously untreated advanced hepatocellular carcinoma (HCC); and
-- Global Phase 3 trial of tislelizumab in patients with advanced unresectable or metastatic esophageal squamous cell carcinoma.
Pamiparib (BGB-290), an investigational small molecule PARP inhibitor
- Initiated a Phase 2 pivotal trial in
China of pamiparib in patients with advanced ovarian cancer.
BGB-A333, an investigational humanized monoclonal antibody against the immune checkpoint receptor ligand PD-L1
- Initiated a global Phase 1/2 trial of BGB-A333 monotherapy and in combination with tislelizumab in advanced solid tumors.
Commercial Products
- Received approval in
China for a new indication for REVLIMID® (lenalidomide) in combination with dexamethasone as a treatment for adult patients with previously untreated multiple myeloma who are not eligible for transplant; and - Initiated commercialization of VIDAZA® (azacitidine) in
China .
Corporate Development:
- Entered an exclusive license agreement with Mirati Therapeutics for the development, manufacturing and commercialization of Mirati’s sitravatinib, an investigational tyrosine kinase inhibitor targeting TAM family receptors (TYRO3, Axl, MER), split family receptors (VEGFR2, KIT) and RET, in
Asia (excludingJapan ),Australia and New Zealand ; and - Entered into a commercial supply agreement for tislelizumab with
Boehringer Ingelheim .
Expected 2018 Milestones
Zanubrutinib
- Present updated Phase 1 and
China pivotal trial data; - Submit first NDA in
China for mantle cell lymphoma; - Complete enrollment in the global Phase 3 trial for Waldenstrom’s macroglobulinemia in Q3 2018; and
- Initiate a global head-to-head Phase 3 trial versus ibrutinib in relapsed/refractory CLL.
Tislelizumab
- Present updated Phase 1 data and
China pivotal trial data; - Submit first NDA in
China for Hodgkin’s lymphoma; - Complete enrollment in the Phase 2 pivotal trial in
China for urothelial carcinoma; and - Initiate additional global and
China -focused pivotal trials.
Pamiparib
- Present updated Phase 1 data;
- Initiate a global Phase 3 trial in gastric cancer in 1H 2018; and
- Initiate a Phase 3 trial in
China as a maintenance therapy in patients with platinum-sensitive recurrent ovarian cancer.
Commercial Products
- Expand provincial reimbursement for ABRAXANE® (nanoparticle albumin-bound paclitaxel) in
China .
Fourth Quarter and Full Year 2017 Financial Results
Cash, Cash Equivalents, and Short-Term Investments were $837.52 million as of December 31, 2017, compared to
- The increase of
$80.08 million in the in the fourth quarter of 2017 was primarily due to the receipt of$170.95 million from Celgene as part of upfront licensing fees from the tislelizumab collaboration, offset by increased research and development spending and capital expenditures as we continue to advance our pipeline. - The increase of
$469.35 million from the prior year period was primarily due to cash received from Celgene from the tislelizumab collaboration, including upfront licensing fees of$263.00 million and an equity investment of$150.00 million , and net proceeds of$188.52 million from ourAugust 2017 follow-on public offering, offset by increased cash used in operations and for capital expenditures. - Capital expenditures for the quarter and year ended December 31, 2017 were $18.93 million and
$58.73 million , compared to $8.06 million and$23.50 million , respectively, for the same periods in 2016, primarily attributable to increased investment in our manufacturing facilities inGuangzhou andSuzhou .
Revenue for the fourth quarter and year ended December 31, 2017 was
- Product revenue from sales of ABRAXANE and REVLIMID in
China totaled$15.61 million and$24.43 million for the fourth quarter and fromAugust 31, 2017 (the closing of the Celgene transaction) toDecember 31, 2017 , respectively. - Collaboration revenue totaled
$2.57 million and$213.96 million for the fourth quarter and year endedDecember 31, 2017 , respectively, reflecting recognition of the upfront licensing fees from Celgene in the third quarter and deferred upfront fees recognized in the fourth quarter.
Expenses for the fourth quarter and year ended
- Cost of sales for the fourth quarter and from
August 31 to December 31, 2017 were$3.03 million and$4.97 million , respectively. Cost of sales relates to the cost of acquiring ABRAXANE and REVLIMID for distribution inChina . - R&D Expenses for the fourth quarter and year ended December 31, 2017 were $91.34 million and
$269.02 million , respectively, compared to$28.93 million and$98.03 million in the same periods in 2016. The increase in R&D expenses was primarily attributable to increased spending on our ongoing late-stage clinical trials, increased manufacturing costs for our drug candidates due to expansion of ongoing clinical programs, and increased employee compensation expense as a result of increased headcount to support our clinical programs. Additionally, R&D-associated share-based compensation expense was $10.95 million and$30.61 million for the fourth quarter and year ended December 31, 2017, respectively, compared to$2.90 million and$8.08 million for the same periods in 2016, due to increased headcount and a higher share price. - SG&A Expenses for the fourth quarter and year ended December 31, 2017 were $27.42 million and
$62.60 million , respectively, compared to$8.34 million and$20.10 million in the same periods in 2016. The increase in SG&A expenses was primarily attributable to increased headcount, including employees transferred from Celgene China in connection with the license agreement for Celgene’s commercial products inChina , as well as higher professional service fees related to the Celgene transaction and patent prosecution activities, and costs to support our growing operations. In addition, SG&A-associated share-based compensation expense was $5.51 million and$12.25 million for the fourth quarter and year ended December 31, 2017, respectively, compared to$1.05 million and$2.55 million for the same periods in 2016.
Net Loss for the fourth quarter and year ended December 31, 2017 was $99.28 million and
Financial Summary
| Select Consolidated Balance Sheet Data ( | |||||
| (Amounts in thousands of (Audited) | |||||
| Cash, cash equivalents and short‑term investments | $ | 837,516 | $ | 368,174 | |
| Working capital | 763,509 | 339,341 | |||
| Property and equipment, net | 62,568 | 25,977 | |||
| Total assets | 1,046,479 | 405,813 | |||
| Total liabilities | 362,248 | 52,906 | |||
| Noncontrolling interest | 14,422 | — | |||
| Total equity | $ | 684,231 | $ | 352,907 | |
| Consolidated Statements of Operations ( | |||||||||
| (Amounts in thousands of | |||||||||
| Three Months Ended (Unaudited) | Twelve Months Ended (Audited) | ||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||
| Revenue | |||||||||
| Product revenue, net | $ | 15,606 | $ | — | $ | 24,428 | $ | — | |
| Collaboration revenue | 2,568 | — | 213,959 | 1,070 | |||||
| Total revenues | 18,174 | — | 238,387 | 1,070 | |||||
| Expenses | |||||||||
| Cost of sales – products | (3,030) | — | (4,974) | — | |||||
| Research and development | (91,340) | (28,933) | (269,018) | (98,033) | |||||
| Selling, general and administrative | (27,415) | (8,337) | (62,602) | (20,097) | |||||
| Amortization of intangible assets | (187) | — | (250) | — | |||||
| Total expenses | (121,972) | (37,270) | (336,844) | (118,130) | |||||
| Loss from operations | (103,798) | (37,270) | (98,457) | (117,060) | |||||
| Interest (expense) income, net | (527) | 47 | (4,108) | 383 | |||||
| Changes in fair value of financial instruments | — | — | — | (1,514) | |||||
| Gain (loss) on sale of available-for-sale securities | 34 | (338) | 44 | (1,415) | |||||
| Other income (expense), net | 9,926 | (289) | 11,457 | 443 | |||||
| Loss before income taxes | (94,365) | (37,850) | (91,064) | (119,163) | |||||
| Income tax (expense) benefit | (4,915) | 252 | (2,235) | (54) | |||||
| Net loss | $ | (99,280) | $ | (37,598) | $ | (93,299) | $ | (119,217) | |
| Less: Net loss attributable to noncontrolling interest | 43 | — | (194) | — | |||||
| Net loss attributable to | $ | (99,323) | $ | (37,598) | $ | (93,105) | (119,217) | ||
| Net Loss per ADS, basic and diluted | $ | (2.19) | $ | (1.05) | $ | (2.23) | $ | (3.84) | |
| Weighted-average number of ADSs outstanding – basic and diluted | 45,402,681 | 35,663,284 | 41,783,497 | 31,047,650 | |||||
| Consolidated Statements of Comprehensive Income (Loss) ( | ||||||||
| (Amounts in thousands of | ||||||||
| Three Months Ended (Unaudited) | Twelve Months Ended (Audited) | |||||||
| 2017 | 2016 | 2017 | 2016 | |||||
| Net loss | $ | (99,280) | $ | (37,598) | $ | (93,299) | $ | (119,217) |
| Other comprehensive (loss) income, net of tax of nil: | ||||||||
| Foreign currency translation adjustments | (134) | (232) | 851 | (245) | ||||
| Unrealized holding gain, net | (354) | 251 | (296) | 1,108 | ||||
| Comprehensive loss | (99,768) | (37,579) | (92,744) | (118,354) | ||||
| Less: Comprehensive loss attributable to noncontrolling interests | 73 | — | (105) | — | ||||
| Comprehensive loss attributable to | $ | (99,841) | $ | (37,579) | $ | (92,639) | $ | (118,354) |
About
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including statements regarding BeiGene’s advancement of, and anticipated clinical development, regulatory milestones and commercialization of its drugs and drug candidates, the potential for the Company’s drugs and drug candidates, and the expected milestones under the caption “Expected 2018 Milestones”. Actual results may differ materially from those indicated in the forward-looking statements as a result of various important factors, including
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