20 November 2025 | 1:03AM EST Equity Research China Healthcare: Pharmaceuticals: Takeaways From Our China Biopharma Trip We hosted an investor trip to China (Nov 10-14) to meet local companies including 3SBio, Akeso (not covered), AbelZeta (private), BeOne, Duality (not covered), Eccogene (private), Everest Medicines, GenFleet (not covered), Grand Pharma (not covered), Hansoh, Hengrui, Henlius, InnoCare, Innovent, Kelun Biotech, Keymed (covered by Honglin Yan), Lepu Biopharma (not covered), Pyrotech (privat ...

Summary of BeOne Medicines FY Conference Call Company Overview - **Company**: BeOne Medicines (NasdaqGS:BGNE) - **Industry**: Biotechnology - **Key Achievement**: First year of profitability and recognized as one of the fastest-growing large biotech companies [3][4] Competitive Advantages - **Integrated Development**: Fully integrated CRO-free clinical development organization with over 3,600 professionals [4] - **Product Pipeline**: Deep product pipeline with 10 internally developed New Molecular Entities (NMEs) entering the clinic in 2024 and 16 to date [3] - **Cost Efficiency**: 70% of the cost to develop medicines is in clinical development; BeOne aims to reduce this through its integrated approach [4] Product Performance - **Brukinsa**: - Leading market share in the BTK inhibitor market with 47% year-over-year growth in the U.S. and 71% growth in Europe [6][8] - Demonstrated durable progression-free survival (PFS) with 74% landmark PFS at 72 months [6][7] - Significant real-world impact and prescription growth globally [8][9] Market Dynamics - **Fixed Duration Treatments**: - BeOne supports finite treatments that meet four criteria: deep response, sustained PFS, acceptable safety profile, and convenience [10][11] - Current market dynamics show continuous use BTK inhibitors capturing about 50% of the market, with opportunities for growth through fixed-duration offerings [11][12] Pipeline Developments - **Sonrotoclax**: - Designed to be more potent and selective than venetoclax, with a half-life of five hours [14][15] - Breakthrough designation in relapsed refractory MCL, with plans for global filing based on upcoming data [30] - Phase 3 study planned for multiple myeloma, targeting the translocation 11;14 population [32][33] - **BDK CDAC**: - A degrader molecule with a different mechanism, potentially effective against mutations that standard inhibitors cannot target [24][25] - Phase 2 cohort fully enrolled, with data expected in the first half of next year [26] Competitive Landscape - **Comparison with Competitors**: - BeOne's zanubrutinib shows superior response rates compared to pirtobrutinib and acalabrutinib in specific patient populations [20][21] - Ongoing head-to-head studies to validate BeOne's offerings against competitors [16][17] Future Outlook - **Clinical Trials**: - Upcoming data presentations at ASH for various products, including BDK CDAC and sonrotoclax [28][29] - Commitment to advancing solid tumor pipeline, particularly CDK4/6 inhibitors, with a focus on first-line breast cancer [34][36] Conclusion - BeOne Medicines is positioned strongly within the biotechnology sector with a robust product pipeline, innovative clinical development strategies, and a commitment to addressing patient needs through differentiated therapies. The company is actively pursuing growth opportunities in both hematology and solid tumors while maintaining a competitive edge against established players in the market.

Group 1 - The article discusses Stephen's background as a Registered Nurse (RN) and an MBA, highlighting his unique approach to analyzing healthcare and tech stocks through the "Dizzy Framework" [1] - The "Dizzy Framework" is designed to mitigate common behavioral errors in investing, such as reacting to market noise or adhering too rigidly to prior beliefs [1] - The framework emphasizes the importance of quality and timing of information, promoting a patient and disciplined investment strategy that translates complex scientific and market dynamics into actionable investment theses [1] Group 2 - Influences on Stephen's investment analysis include concepts from "Superforecasting" and "Fooled by Randomness," which inform his probabilistic approach to market predictions [1]

Summary of BeOne Medicines (ONC/688235.SS) Earnings Review Company Overview - BeOne Medicines is a global oncology company based in Switzerland, focusing on innovative cancer treatments, particularly in hematology and solid tumors, with key products including Brukinsa and Tevimbra [13][14]. Key Financial Highlights - **2Q Product Sales**: Achieved US$1.3 billion, a 41% year-over-year increase, surpassing expectations (GSe: US$1.23 billion) [1] - **Brukinsa Sales**: Contributed US$684 million, reflecting a 43% year-over-year growth and a 21% quarter-over-quarter increase [1] - **Tevimbra Sales**: Reported US$194 million, a 22% year-over-year increase, with strong performance in China [1] - **China Sales**: Reached US$83 million, a 31% year-over-year increase [1] Guidance and Profitability - **FY25 Guidance**: Raised from US$4.9 billion to a range of US$5.0 billion to US$5.3 billion [1] - **Net Income**: Increased to US$94 million in 2Q, compared to US$1 million in 1Q, driven by strong topline growth and a gross profit margin (GPM) of 87.4% [2] - **Operating Expenses**: SG&A expenses were US$538 million (+21% y/y), and R&D expenses were US$525 million (+15% y/y) [2] Market Position and Competitive Landscape - **Market Share**: Brukinsa continues to gain market share among BTK inhibitors, with a 38% share in the US [1][11] - **1L CLL Position**: Management expressed confidence in maintaining a strong position against competition from pirtobrutinib, citing the need for head-to-head trials for new entrants [7] Future Catalysts - **Upcoming Milestones**: Key trials and data readouts expected in the next 12 months include: - Brukinsa: Phase 3 MANGROVE trial readout in TN MCL in 2H25 - Sonrotoclax: First global registrational filing in R/R MCL in 2H25 - BTK CDAC: Phase 3 initiation in R/R CLL in 2H25 [8] Valuation and Price Target - **Earnings Estimates**: Adjusted FY2025-2027 earnings estimates to US$2.77, US$6.61, and US$8.04 respectively [9] - **Target Prices**: Updated 12-month target prices to US$378.20 for ONC and Rmb328.65 for A-share [9][14] Risks and Considerations - **Key Risks**: Include uncertainties in R&D and regulatory approvals, competition in the BTK/PD-1 space, and potential market access bottlenecks [13][14]. Conclusion - BeOne Medicines is positioned for growth with strong sales performance, raised guidance, and a robust pipeline. The company is well-placed to navigate competitive pressures and capitalize on upcoming clinical milestones [13][14].

Investment Rating - The investment rating for BeiGene is "Buy" with a target price of US$345.00, indicating an expected share price return of 48.5% [2][4]. Core Insights - BeiGene is transitioning to a global pharmaceutical player, officially changing its name to BeOne Medicines on May 23, 2025. The product Brukinsa has outperformed competitors Calquence and Imbruvica in quarterly sales in the US, contributing significantly to the overall growth of the BTKi class [1][2]. - The company achieved GAAP profitability in Q1 2025 and reiterated its FY25 guidance, projecting revenues between US$4.9 billion and US$5.3 billion, with GAAP operating expenses between US$4.1 billion and US$4.4 billion. The company has a robust pipeline of late- and early-stage catalysts that are expected to drive future growth [1][2]. Summary by Sections Financial Performance - In Q1 2025, BeiGene achieved positive GAAP operating income of US$11 million, marking a significant milestone for the company [1]. - The company has set a revenue guidance for FY25 between US$4.9 billion and US$5.3 billion, with operating expenses projected between US$4.1 billion and US$4.4 billion [1]. Market Position - Brukinsa has surpassed both Calquence and Imbruvica in US quarterly sales, driving over 100% of the net 11% year-over-year growth in the BTKi class, while Imbruvica saw a contraction of approximately 13% and Calquence only a 3% growth [1]. - The transformation into a global pharmaceutical entity is expected to enhance BeiGene's market position and investor appeal [1]. Valuation - The target price of US$345.00 is derived from a discounted cash flow (DCF) analysis, utilizing a weighted average cost of capital (WACC) of 9% and a terminal growth rate of 2.5% post-2032 [4].

Core Viewpoint - Eli Lilly's BTK inhibitor, Jaypirca, has received a positive opinion from the European Medicines Agency's CHMP for treating relapsed or refractory chronic lymphocytic leukemia (CLL) in previously treated patients, with the decision expected from the European Commission in a couple of months [1][2]. Group 1: Regulatory Approvals - Jaypirca is already conditionally approved in the EU for adult patients with relapsed or refractory mantle cell lymphoma (MCL) who have been previously treated with a BTK inhibitor [2]. - The approval for CLL is based on data from the phase III BRUIN CLL-321 study [1]. Group 2: Sales Performance - Jaypirca recorded $337.0 million in sales in 2024, contributing to Eli Lilly's top-line growth [5]. - The drug is also being studied for earlier lines of therapy to expand its use for CLL and MCL indications [5]. Group 3: Market Competition - Current BTK inhibitors for CLL include AbbVie/J&J's Imbruvica, AstraZeneca's Calquence, and BeiGene's Brukinsa, with Imbruvica experiencing declining sales due to rising competition [6]. - None of the existing BTK inhibitors are approved for relapsed or refractory CLL in the post-BTK inhibitor setting [6]. Group 4: Stock Performance - Eli Lilly's shares have increased by 16.2% over the past year, contrasting with a 0.9% decline in the industry [3].