BeiGene (688235.SH): First quarter revenue exceeds 5 billion yuan, accelerating differentiated innovation.

On May 8, BEIGENE (688235.SH) released its first quarter financial report for 2024 for both its US and A-share performance. The financial report shows that BEIGENE's total revenue during the reporting period reached 5.359 billion yuan, a year-on-year increase of 74.8%. Thanks to the rapid increase in sales of its two core self-developed products, the company's global product revenue reached 5.325 billion yuan, an increase of 89.6% year-on-year and 17.8% compared to the previous quarter, surpassing market expectations. While experiencing significant revenue growth, BEIGENE's operating expenses growth slowed down due to strict cost management. The sales and management expenses for the period accounted for 57% of product revenue, a 23-percentage-point decrease from the same period last year, improving operational efficiency significantly and further narrowing losses. Under non-GAAP, the company's adjusted operating losses during the period decreased by 47% year-on-year, steadily moving towards sustainable profitability. With its strong internal capabilities established in commercialization, research and development, and production, BEIGENE has now entered the top 15 global innovative companies in terms of oncology treatment sales (according to 2024 Q1 oncology drug sales), bringing significant benchmark effects to the innovative drug industry. Continuously exploring global commercialization potential, the certainty of growth has steadily increased. Despite the uncertain global biopharmaceutical environment, BEIGENE is still able to achieve significant high growth, demonstrating strong internal growth capabilities and risk resistance. Following the milestone of "billion-dollar molecules" set last year, BEIGENE's core product Ze Jutinib (Bai Yuze) continues to show high growth momentum this year, with global sales in the first quarter reaching 3.476 billion yuan, a substantial increase of 140.2%. Notably, Ze Jutinib has become the first and only BTK inhibitor to demonstrate superior efficacy in ORR and PFS compared to Ibrutinib in patients with CLL. It also received the highest level of recommendation in the 2023 NCCN CLL/SLL treatment guidelines. Additionally, as the "best-in-class" BTK inhibitor globally, Ze Jutinib has now been approved for multiple indications in 70 markets worldwide. In the previously disclosed data from the ALPINE and ASCEND Phase 3 trials, Ze Jutinib has shown continuous efficacy in PFS, complete remission advantage, and safety characteristics compared to Ibrutinib and Acalabrutinib. Its status as the "best-in-class" has been confirmed once again. The financial report shows that Ze Jutinib has taken a leading market share among new patients in relapsed or refractory (R/R) CLL, and has been included in medical insurance in several European countries, such as France, for indications such as CLL, Waldenstrom macroglobulinemia, and marginal zone lymphoma. At the same time as achieving growth in both quantity and quality in BTK inhibitors, BEIGENE's global expansion in the PD-1 field is also steadily progressing. The financial report shows that BEIGENE's other core product Tislelizumab (Baizean) achieved a total sales of 1.044 billion yuan in the quarter, an increase of 32.8% year-on-year. It is understood that since its launch, Tislelizumab has made breakthroughs in indications and is leading in layout. In the domestic market, Tislelizumab has taken a leading market share in the PD-1 field. Recently, the drug was approved for use in combination with chemotherapy for the first-line treatment of locally advanced unresectable or metastatic gastric or gastroesophageal junction adenocarcinoma patients. Currently, Tislelizumab has been approved for 12 indications in China, with 11 included in the medical insurance drug list, covering a wide range of high-incidence cancers in China, such as lung cancer and liver cancer. In the US market, Tislelizumab received its first approval for the treatment of ESCC in the second line, and in this year's latest NCCN guidelines, it was listed as a preferred treatment for second-line or later-line treatment of ESCC. In addition, Tislelizumab has a new indication BLA accepted by the FDA for first-line treatment of gastric or gastroesophageal junction adenocarcinoma. In the reporting period, Tislelizumab gained approval for three first-line and second-line treatments for non-small cell lung cancer (NSCLC) in the EU. Currently, Tislelizumab has been approved in multiple markets, including the EU, the UK, the US, South Korea, and Switzerland. It is evident that while driving Ze Jutinib and Tislelizumab into the global market, BEIGENE has established a complete international commercialization system, paving the way for the international market entry of its subsequent heavy pipeline, with the scale effect becoming increasingly prominent. Continuous differentiation and innovation continue to raise the value curve. Backed by strong research and development, BEIGENE currently has a pipeline of over 60 investigational drugs, covering a variety of technology platforms and drug modalities, including monoclonal antibodies, bispecific/multispecific antibodies, ADC, cell therapy, and mRNA, and has built a complete lineup of potential FIC/BIC strength in the fields of hematologic and solid tumors. In addition to the three self-developed products that have been approved, BEIGENE has several self-developed products in the clinical stage pipeline, including Sonrutoclax, Obinutuzumab, BGB-A445, and BGB-16673, with Sonrutoclax and Obinutuzumab in Phase 3 clinical trials. Using the BCL-2 inhibitor Sonrutoclax as an example, BEIGENE has deployed it as a key anchor point in the progressive layout based on Ze Jutinib in the field of hematologic tumors. As a second-generation highly selective and potent BCL-2 inhibitor developed by BEIGENE, Sonrutoclax demonstrates significant advantages compared to existing BCL-2 inhibitors.With a shorter half-life and no drug accumulation, Sonrotoclax has demonstrated persistent therapeutic response at low doses in over 500 patients in clinical studies, showing good safety profiles when used alone or in combination with venetoclax.It is worth mentioning that Sonrotoclax showed more potent activity compared to the world's first Bcl-2 inhibitor Venclexta in early studies, and also had better inhibitory effects on the BCL2 G101V mutation. In terms of commercial potential, Venclexta's sales reached $2.288 billion in 2023, a year-on-year increase of 13.9%, and AbbVie expects peak sales to reach $6 billion. With the support of BEIGENE's product BIC attributes and global commercial layout, Sonrotoclax is expected to demonstrate tremendous potential in the global competitive market for Bcl-2 inhibitors. In order to further unleash the "best in class" potential of Sonrotoclax in the field of hematologic malignancies, BEIGENE has initiated four global registration trials, including a global Phase 3 registration trial for first-line treatment of chronic lymphocytic leukemia (CLL). The differentiated BTK CDAC project BGB-16673 has launched two global expansion cohort studies targeting BTK inhibitor-resistant patients and a broader patient population. BEIGENE is advancing potential differentiated projects, including ADCs, degrader platforms, and targeted therapies targeting key cancer types, covering areas such as lung cancer, breast cancer, and gastrointestinal cancer. According to the financial report, the company will continue to advance the registration and clinical progress of its proprietary research and development projects and collaborative drug candidates, and in 2024, is expected to launch multiple antibody-drug conjugate (ADC) molecules and bispecific molecules, including pan-KRAS inhibitors, MTA synergistic PRMT5 inhibitors, EGFR-CDAC, CEA-ADC, and FGFR2b-ADC, to accelerate the next wave of differentiated innovative research and development. Public information shows that in 2024, BEIGENE will continue to advance the global registration applications of its two core products and is expected to see further progress in its BCL-2 and BTK CDAC projects. Recently, multiple investment banks including Dongguan Securities, Lyon, and TD Cowen have given BEIGENE ratings of "hold" and "buy". Institutional research believes that as a leading innovative pharmaceutical company, BEIGENE has a rich product structure and strong research and development capabilities, its core products are accelerating, and its international layout is continuing to accelerate.