2025-08-06 10:05PART I. FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, and 2024, detailing financial performance, position, and cash flows, alongside the company's redomiciliation Condensed Consolidated Statements of Operations Highlights (Q2 & H1 2025 vs 2024) | Financial Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,315,300 | $929,166 | $2,432,579 | $1,680,818 | | Gross Profit | $1,150,694 | $791,034 | $2,102,971 | $1,417,751 | | Income (Loss) from Operations | $87,885 | $(107,161) | $98,987 | $(368,509) | | Net Income (Loss) | $94,320 | $(120,405) | $95,590 | $(371,555) | | Diluted EPS ($) | $0.06 | $(0.09) | $0.07 | $(0.27) | | Diluted EPS per ADS ($) | $0.84 | $(1.15) | $0.85 | $(3.56) | Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | As of June 30, 2025 (in thousands) | As of Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $4,310,221 | $3,991,593 | | Total Assets | $6,298,394 | $5,920,910 | | Total Current Liabilities | $2,209,837 | $2,214,899 | | Total Liabilities | $2,527,919 | $2,588,688 | | Total Shareholders' Equity | $3,770,475 | $3,332,222 | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Item | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | $307,680 | $(404,160) | | Net Cash Used in Investing Activities | $(188,546) | $(320,863) | | Net Cash Provided by Financing Activities | $1,248 | $185,310 | | Net Increase (Decrease) in Cash | $147,339 | $(568,053) | - The company redomiciled from the Cayman Islands to Switzerland during the second quarter of 2025, which did not change the accounting basis under U.S. GAAP2223 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q2 2025 performance to significant revenue growth, particularly from BRUKINSA, achieving GAAP profitability and improved operating leverage while maintaining strong liquidity - Key highlights for Q2 2025 include a 42% increase in total revenues to $1.3 billion, a 49% increase in global BRUKINSA revenues to $950 million, and a shift to profitability with GAAP diluted EPS per ADS of $0.8497 Q2 2025 vs Q2 2024 Net Product Revenue Breakdown (in thousands) | Product | Q2 2025 Revenue | Q2 2024 Revenue | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | BRUKINSA® | $949,840 | $637,399 | $312,441 | 49.0% | | TEVIMBRA® | $193,524 | $158,410 | $35,114 | 22.2% | | XGEVA® | $81,318 | $55,054 | $26,264 | 47.7% | | BLINCYTO® | $25,587 | $19,131 | $6,456 | 33.7% | | KYPROLIS® | $19,416 | $15,936 | $3,480 | 21.8% | | Total Product Revenue | $1,302,076 | $921,146 | $380,930 | 41.4% | - R&D expenses increased 15.5% to $524.9 million in Q2 2025, driven by advancing preclinical programs like Sonrotoclax (BCL2i) into later stages110112 - SG&A expenses rose 21.2% to $537.9 million due to global commercial expansion, but decreased as a percentage of product sales from 48.2% to 41.3%115 Contractual Obligations as of June 30, 2025 (in thousands) | Obligation | Total | Short Term (<1 Year) | Long Term (>1 Year) | | :--- | :--- | :--- | :--- | | Operating lease commitments | $79,054 | $10,608 | $68,446 | | Purchase commitments | $130,087 | $105,910 | $24,177 | | Debt obligations | $954,485 | $808,394 | $146,091 | | Interest on debt | $39,869 | $28,533 | $11,336 | | Co-development funding commitment | $242,916 | $220,869 | $22,047 | | Total | $1,515,180 | $1,238,641 | $276,539 | Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk on its floating-rate debt and significant foreign currency exchange risk, particularly from its RMB-denominated operations - The company is exposed to interest rate risk on $615.4 million of outstanding floating-rate debt, where a 100-basis point increase in interest rates would increase annual pre-tax interest expense by approximately $6.2 million159 - The company faces significant foreign currency exchange risk, particularly from its RMB-denominated operations and deposits, with a hypothetical 10% appreciation in the U.S. dollar against the RMB resulting in an increased foreign exchange loss of approximately $11.7 million as of June 30, 2025161 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025165 - There were no material changes in the company's internal control over financial reporting during the quarter ended June 30, 2025166 PART II. OTHER INFORMATION Legal Proceedings The company is involved in two significant legal matters: a patent infringement lawsuit from Pharmacyclics regarding BRUKINSA and a trade secret misappropriation lawsuit from AbbVie - In the Pharmacyclics litigation concerning BRUKINSA, the U.S. Patent and Trademark Office (USPTO) issued a Final Written Decision on April 29, 2025, invalidating all challenged claims of the patent in question, with Pharmacyclics' request for review subsequently denied170171 - The company is vigorously defending against a lawsuit filed by AbbVie Inc. in September 2024, which alleges misappropriation of trade secrets related to the company's BTK degrader program, including BGB-16673172 Risk Factors This section details comprehensive risks including commercialization, clinical development, regulatory hurdles, financial stability, intellectual property, third-party reliance, operational challenges, and specific risks related to China operations and Swiss redomiciliation - Commercial risks include potential failure of medicines to gain market acceptance, substantial competition from major pharmaceutical companies, and unfavorable pricing or reimbursement regulations from payors like Medicare or China's NRDL177181186 - The company faces significant regulatory risks, including the lengthy and unpredictable approval processes of the FDA, NMPA, and EMA, and the potential for clinical trials to fail to demonstrate safety and efficacy197212 - Financial risks include a history of significant net losses ($8.5 billion accumulated deficit as of June 30, 2025) and the potential need for additional financing to fund operations and development programs234236 - Risks related to doing business in China are substantial, including potential intervention by the PRC government, uncertainties in the interpretation and enforcement of Chinese laws (e.g., data security, overseas listings), and limitations on repatriating funds345346355 - The recent redomiciliation to Switzerland introduces new risks, including changes in shareholder rights, less flexibility in capital management due to stricter shareholder voting requirements, and potential Swiss withholding taxes on dividends426427431 Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities The company reported no unregistered sales of equity securities, no specific use of proceeds, and no issuer purchases of its equity securities for the period - None reported for the period433 Defaults Upon Senior Securities The company reported no defaults upon its senior securities during the period - None reported for the period434 Mine Safety Disclosures This item is not applicable to the company's business - Not applicable435 Other Information This section discloses the adoption and modification of Rule 10b5-1 trading arrangements by two executive officers during the quarter Director and Officer Trading Arrangements (Rule 10b5-1) | Name (Title) | Action (Date) | Nature of Arrangement | Duration | Aggregate Securities | | :--- | :--- | :--- | :--- | :--- | | Chan Lee (SVP, General Counsel) | Adoption (May 14, 2025) | Sale | August 13, 2026 | Up to 36,671 ADSs plus net ADSs from RSU vestings | | Dr. Xiaobin Wu (President, COO) | Modification (May 14, 2025) | Sale | August 13, 2026 | Up to 89,794 ADSs | Exhibits This section provides an index of all exhibits filed with the 10-Q, including corporate governance documents, executive agreements, and required certifications - Key exhibits filed include: - 3.1: Articles of Association of BeOne Medicines Ltd - 10.1-10.5: Executive Employment Agreements for key officers - 10.18: Fifth Amended and Restated 2018 Employee Share Purchase Plan - 31.1 & 31.2: Certifications of Principal Executive Officer and Principal Financial Officer441442443