Agile Securities | 2Q22A BeiGene (6160.HK) Earnings Update

$BEONE MEDICINES (06160.HK)$ In 2Q22A, the company achieved revenue of 340 million US dollars (up 127.7% year-over-year and 11.4% quarter-over-quarter), surpassing consensus estimates by 3.7%. Of this, total product revenue was 300 million US dollars (up 119.7% year-over-year and 16.4% quarter-over-quarter), while collaboration revenue reached 37.06 million US dollars (up 266.0% year-over-year but down 17.7% quarter-over-quarter).

Detailed product revenue:

1) Global sales of the BTK inhibitor zanubrutinib in Q2 2022A reached USD 130 million (a year-on-year increase of 203.5% and a quarter-on-quarter increase of 23.3%);

2) Revenue from the PD-1 antibody tislelizumab in Q2 2022A was USD 100 million (a year-on-year increase of 203.5% and a quarter-on-quarter increase of 23.3%). According to Eli Lilly and Co (LLY.US), competing product sintilimab achieved revenue of USD 74 million in Q2 2022A (a year-on-year decrease of 29.5% and a quarter-on-quarter decrease of 13.0%);

3) Products authorized by Amgen (AMGN.US) for commercialization in China, including Prolia (denosumab injection), Blincyto (blinatumomab), and Kyprolis (carfilzomib, a protease inhibitor), generated total revenue of USD 29.5 million in Q2 2022A (a year-on-year increase of 793.9% and a quarter-on-quarter increase of 16.4%), with Blincyto and Kyprolis launched in China in August 2021 and January 2022, respectively.

4) Three commercialized products distributed and promoted by the company in China under authorization from Celgene—Revlimid, Abraxane, and Vidaza—generated total revenue of USD 23.4 million in Q2 2022A (a year-on-year increase of 74.6% and a quarter-on-quarter decrease of 13.9%);

R&D expenses in Q2 2022A amounted to USD 380 million (a year-on-year increase of 6.2% and a quarter-on-quarter decrease of 3.0%), which was 6.2% below consensus expectations; selling expenses, general, and administrative expenses totaled USD 330 million (a year-on-year increase of 42.7% and a quarter-on-quarter increase of 12.5%), exceeding consensus expectations by 12.0%, primarily due to the continued expansion of the commercial team to support product industrialization across multiple global markets. The company's net loss attributable to shareholders in Q2 2022A was USD 570 million. Excluding non-operating expenses of USD 130 million caused by the strengthening of the US dollar, the net loss attributable to shareholders was USD 440 million, in line with consensus expectations.

Anticipated milestone events:

BTK inhibitor zanubrutinib: The FDA’s target decision date for the new CLL/SLL indication is January 2023; final analysis data from the global Phase 3 ALPINE trial expected to be released in FY22E;

PD-1 antibody tislelizumab: The FDA extended the review period for the BLA of the 2L ESCC indication due to the pandemic; the new resolution date has not been determined;

Ociperlimab (TIGIT antibody): FY22E announced Phase 1 trial data for cohorts with various solid tumors and initiated a new pivotal clinical trial;

BGB-11417 (BCL-2 inhibitor): FY22E initiated a pivotal trial.

Valuation and Ratings. The company's closing price on August 4, 2022 was HKD 104.0, under review for new target price.

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