10q10k10q10k.net

What changed in BeOne Medicines Ltd.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of BeOne Medicines Ltd.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+1102 added−1324 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-27)

Top changes in BeOne Medicines Ltd.'s 2023 10-K

1102 paragraphs added · 1324 removed · 876 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

411 edited+106 added−155 removed218 unchanged
Biggest changeThe programs also seek to support patients and caregivers by providing education and information about BRUKINSA and its approved indications, nurse advocates, and connecting patients to sources of support such as support groups and transportation/lodging assistance. 14 Table of Contents Our Pipeline Products The following table summarizes the status of our internally-discovered drug candidates as of February 27, 2023: ASSET PROGRAM PHASE 1 PHASE 2 PHASE 3 Zanubrutinib monotherapy R/R CLL/SLL + rituximab TN MCL and R/R MZL +/- venetoclax TN CLL/SLL + obinutuzumab R/R FL Tislelizumab monotherapy 2L advanced ESCC, 1L HCC, 2L/3L NSCLC Previously treated HCC, R/R cHL + chemotherapy 1L advanced ESCC, 1L GC/GEJC, 1L NPC + zanidatamab + chemotherapy 1L GEA + sitravatinib 2L NSCLC Solid tumors + fruquintinib Solid tumors Ociperlimab + tislelizumab 1L PD-L1 high NSCLC 2L PD-L1+ESCC, 2/3 L cervical cancer Solid tumors + tislelizumab + chemotherapy 1L NSCLC + tislelzumab + concurrent chemoradiotherapy LA NSCLC (PD-L!+) 1L LS-SCLC Surzebiclimab + tislelizumab +/- LBL-007 Solid tumors BGB-A445 + tislelizumab Solid tumors BGB-10188 + tislelizumab Solid tumors +/- zanubrutinib B-cell lymphoid malignancies +/- tislelizumab B-cell malignancies BGB-15025 + tislelizumab Solid tumors Pamiparib monotherapy 1L maintenance platinum-sensitive GC + temozolomide Solid tumors BGB-3245 monotherapy Solid tumors with BRAF mutations Lifirafenib + mirdametinib Solid tumors BGB-11417 monotherapy R/R MCL, R/R CLL/SLL +/- zanubrutinib Mature B-cell malignancies + azacitidine +/- posaconazole Myeloid malignancies + dexamethasone +/- carfilzomib R/R multiple myelome with t (11;14) BGB-16673 monotherapy B-cell malignancies BGB-23339 monotherapy Inflammation and immunology BGB-24714 +/- chemotherapy Solid tumors BGB-B167 +/- tislelizumab Solid tumors Abbreviations: cHL = classical Hodgkin lymphoma; CLL = chronic lymphocytic leukemia; ESCC = esophageal squamous-cell carcinoma; FL = follicular lymphoma; GC = gastric cancer; GEA = gastroesophageal adenocarcinoma; GEJC = gastroesophaegeal junction cancer; HCC = hepatocellular carcinoma; MCL = mantle cell lymphoma; MZL = marginal zone lymphoma; NPC = nasopharyngeal carcinoma; NSCLC = non-small cell lung cancer; R/R = relapsed/refractory; SCLC = small cell lung cancer; SLL = small lymphocytic lymphoma; TN = treatment treatment-naïve 15 Table of Contents The following table summarizes the status of our in-licensed drug candidates as of February 27, 2023: Partner Molecule / Asset Indications Phase Commercial Rights Sotorasib Solid tumors, CRC, NSCLC Phase 3 China tarlatamab ^^ SCLC Phase 2 China acapatamab ^^ Prostate cancer, NSCLC Phase 1 China AMG 176 Hematologic malignancies Phase 1 China AMG 427 ^^ AML Phase 1 China AMG 509 Prostate cancer Phase 1 China AMG 199 ^^ GC/GEJC Phase 1 China AMG 650 Solid tumors Phase 1 China AMG 256 Solid tumors Phase 1 China Sitravatinib † + Tislelizumab NSCLC Phase 3 Asia, Australia, New Zealand Sitravatinib † + Tislelizumab HCC, GC/GEJC Phase 2 Asia, Australia, New Zealand Sitravatinib † + Tislelizumab Solid tumors Phase 1 Asia, Australia, New Zealand Zanidatamab + chemo + Tislelizumab GEA Phase 3 Asia, Australia, New Zealand Zanidatamab (monotherapy) BTC Phase 2 Asia, Australia, New Zealand Zanidatamab BC, GC, GEA Phase 2 Asia, Australia, New Zealand ZW49 HER2 expressing cancers Phase 1 Asia, Australia, New Zealand BGB-3245 1 Solid tumors Phase 1 Asia SEA-CD70 MDS, AML Phase 1 Asia, Australia, New Zealand DKN-01 + Tislelizumab + Chemo GC/GEJC Phase 2 Asia, Australia, New Zealand LBL-007 + Tislelizumab Advanced solid tumors Phase 2 Ex-China ABI-H3733 Chronic hepatitis B virus Phase 1 China ^ BiTE ® molecule; ^^ Half-life extended BiTE ® ; † XmAb ® is a registered trademark of Xencor, Inc.
Biggest changeThe programs also seek to support patients and caregivers by providing education and information about BRUKINSA and its approved indications, nurse advocates, and connecting patients to sources of support such as support groups and transportation/lodging assistance. 15 Table of Contents Our Pipeline Products The following table summarizes the status of our internally-discovered drug candidates as of February 26, 2024: 16 Table of Contents The following table summarizes the status of our in-licensed drug candidates as of February 26, 2024: Partner Molecule / Asset Indications Phase Commercial Rights tarlatamab ^^ SCLC Phase 3 China Xaluritamig Prostate cancer Phase 1 China * Sitravatinib † + Tislelizumab NSCLC Phase 3 Asia, Australia, New Zealand Sitravatinib † + Tislelizumab ESCC Phase 2 China Zanidatamab + chemo + Tislelizumab GEA Phase 3 Asia, Australia, New Zealand Zanidatamab (monotherapy) BTC Phase 2 Asia, Australia, New Zealand Zanidatamab BC, GC, GEA Phase 2 Asia, Australia, New Zealand BGB-3245 1 Solid tumors Phase 1 Ex-Asia plus Japan SEA-CD70 MDS, AML Phase 1 Asia, Australia, New Zealand LBL-007 + Tislelizumab CRC, NSCLC, HNSCC, ESCC, Melanoma, NPC Phase 2 Ex-China BG-C9074/DB1312 BC, EC, OC, CCA, sqNSCLC Phase 1a Global CDK2i Breast cancer and other solid tumors Pre-clinical Global INOVA-1, INOVA-2, cancer vaccine LNP NSCLC TAA and KRAS neoantigen, liver-specific LNP, and cancer vaccine LNP Pre-clinical Global ^ BiTE ® molecule; ^^ Half-life extended BiTE ® ; † XmAb ® is a registered trademark of Xencor, Inc. *Mirati was acquired by Bristol Myers Squibb in January 2024; †† ZW25; 1 By MapKure, a JV with SpringWorks Abbreviations: AML = acute myelogenous leukemia; BC = breast cancer; BTC = biliary tract cancers; CRC = colorectal cancer; GC = gastric cancer; GEA = gastroesophageal adenocarcinoma; GEJC = gastroesophaegeal junction cancer; HCC = hepatocellular carcinoma; LNP= lipid nanoparticle; MDS = myelodysplastic syndromes; NSCLC = non-small cell lung cancer; SCLC = small cell lung cancer 17 Table of Contents Our Commercial- and Clinical-Stage Drug Candidates A description of our commercial- and clinical-stage drug candidates and clinical data from selected clinical trials is set forth below.
More than one company can win a given tender, and more guaranteed volume is awarded as more bidders win. The system is still evolving and, as such, the exact terms of how many bidders win and what amount of volume are won and at what price is also evolving.
More than one company can win a given tender, and more guaranteed volume is awarded as more bidders win. The system is still evolving and, as such, the exact terms of how many bidders win and what amount of volume is won and at what price are also evolving.
BGB-10188 (PI3K inhibitor) BGB-10188 is an investigational PI3Kδ inhibitor being evaluated in a Phase 1 clinical trial ( NCT04282018 ) as monotherapy or in combination with BRUKINSA in hematology malignancies, or in combination with tislelizumab in solid tumors.
BGB-10188, a PI3Kδ Inhibitor BGB-10188 is an investigational PI3Kδ inhibitor being evaluated in a Phase 1 clinical trial ( NCT04282018 ) as monotherapy or in combination with BRUKINSA in hematology malignancies, or in combination with tislelizumab in solid tumors.
The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between PBMs and manufacturers. Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2032.
The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between PBMs and manufacturers. Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation until January 1, 2032.
When an entity is determined to have violated the federal civil FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.
When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs.
The NMPA has granted waivers for all or part of trials, and has stated that it will accept data generated abroad (even if not part of a global study), including early phase data, that meets its requirements.
The NMPA has granted waivers for all or part of trials and stated that it will accept data generated abroad (even if not part of a global study), including early phase data, that meets its requirements.
However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we cannot assure you that we have obtained all the permits or licenses required for conducting our business in the PRC.
However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we cannot assure you that we have obtained all permits or licenses required for conducting our business in the PRC.
Pursuant to the Share Purchase Agreement, Amgen has agreed to (i) a lock-up on sales of its shares until the earliest of (a) the fourth anniversary of the closing, (b) the expiration or termination of the Collaboration Agreement and (c) a change of control of BeiGene, Ltd., (ii) a standstill until the date on which it holds less than 5% of our then outstanding shares, and (iii) a voting agreement to vote its shares on certain matters presented for shareholder approval until the later of (a) the fifth anniversary of the closing and (b) the expiration of the standstill period, all under specified circumstances and as set forth in the agreement.
Pursuant to the Share Purchase Agreement, Amgen agreed to (i) a lock-up on sales of its shares until the earliest of (a) the fourth anniversary of the closing, (b) the expiration or termination of the Collaboration Agreement and (c) a change of control of BeiGene, Ltd., (ii) a standstill until the date on which it holds less than 5% of our then outstanding shares, and (iii) a voting agreement to vote its shares on certain matters presented for shareholder approval until the later of (a) the fifth anniversary of the closing and (b) the expiration of the standstill period, all under specified circumstances and as set forth in the agreement.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including enforcement actions against illegal activities in the securities market, enhancing supervision over China-based companies listed outside of China using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
The PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including enforcement actions against illegal activities in the securities market, enhancing supervision over China-based companies listed outside of China using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
As a result, in February 2023, we entered into an amendment to the Collaboration Agreement to (i) stop sharing costs with Amgen for the further development of AMG 510 during the period starting January 1, 2023 and ending August 31, 2023; and (ii) cooperate in good faith to prepare a transition plan with the anticipated termination of AMG 510 from the Collaboration Agreement.
As a result, in February 2023, we entered into an amendment to the Amgen Collaboration Agreement to (i) stop sharing costs with Amgen for the further development of AMG 510 during the period starting January 1, 2023 and ending August 31, 2023; and (ii) cooperate in good faith to prepare a transition plan with the termination of AMG 510 from the Amgen Collaboration Agreement.
For example, the PRC government has recently published new policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect the business, financial condition and results of operations of our company.
For example, the PRC government has recently published policies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations or policies regarding any industry that could adversely affect the business, financial condition and results of operations of our company.
Tislelizumab, an anti-PD-1 Antibody Tislelizumab is a humanized monoclonal antibody against the immune checkpoint receptor PD-1 that is currently being evaluated in pivotal clinical trials globally and for which we plan to commence additional pivotal trials as a monotherapy and in combination with standard of care to treat various solid and hematological cancers.
TEVIMBRA (tislelizumab), an anti-PD-1 Antibody Tislelizumab is a humanized monoclonal antibody against the immune checkpoint receptor PD-1 that is currently being evaluated in pivotal clinical trials globally and for which we plan to commence additional pivotal trials as a monotherapy and in combination with standard of care to treat various solid and hematological cancers.
We rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection, including our manufacturing processes. We also rely on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen, and support our development programs.
We sometimes rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection, including our manufacturing processes. We also rely on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen, and support our development programs.
These regulations require that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an institutional review board ("IRB") must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually.
These regulations require that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an institutional review board (“IRB”) must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually.
New Policies on Expediting Approval of Imported Oncology Drugs The PRC government continues to establish measures and incentives to promote the development and swifter approval of marketing for oncology and other innovative drugs. Beginning in May 2018, the PRC eliminated tariffs on a significant number of imported innovative drugs, including oncology drugs, making the importation process more efficient.
Policies on Expediting Approval of Imported Oncology Drugs The PRC government continues to establish measures and incentives to promote the development and swifter approval of marketing for oncology and other innovative drugs. Beginning in May 2018, the PRC eliminated tariffs on a significant number of imported innovative drugs, including oncology drugs, making the importation process more efficient.
Additionally, following the option exercise, the companies have agreed to jointly develop ociperlimab in the Licensed Territory, with Novartis sharing development costs of global trials and responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals in the Licensed Territory.
Additionally, following the option exercise, the companies agreed to jointly develop ociperlimab in the Licensed Territory, with Novartis sharing development costs of global trials and responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals in the Licensed Territory.
Our manufacturing facilities and the facilities of the CMOs we use to manufacture our medicines and drug candidates operate under current good manufacturing practice regulations ("cGMP") conditions. cGMP regulations are requirements for the production of pharmaceuticals that will be used in humans.
Our manufacturing facilities and the facilities of the CMOs we use to manufacture our medicines and drug candidates operate under current good manufacturing practice regulations (“cGMP”) conditions. cGMP regulations are requirements for the production of pharmaceuticals that will be used in humans.
Further, implementation of this change and new safe harbors for point-of-sale reductions in price for prescription pharmaceutical products and PBM service fees are currently under review by the Biden administration and may be amended or repealed.
Implementation of this change and new safe harbors for point-of-sale reductions in price for prescription pharmaceutical products and PBM service fees are currently under review by the Biden administration and may be amended or repealed.
Furthermore, the PRC government has also recently indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted outside of China and over foreign investment in China-based companies.
Furthermore, the PRC government has also indicated an intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted outside of China and over foreign investment in China-based companies.
Specifically, the Final Rules require each Commission-Identified Issuer to submit documentation to the SEC annually on or before its annual report due date that establishes that it is not owned or controlled by a government entity in its public accounting firm’s foreign jurisdiction and require additional specified disclosures by “foreign issuers” as defined in Rule 3b-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Specifically, the Final Rules require each Commission-Identified Issuer to submit documentation to the SEC annually on or before its annual report due date that establishes that it is not owned or controlled by a government entity in its public accounting firm’s foreign jurisdiction and require additional specified disclosures by “foreign issuers” as defined in Rule 3b-4 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
QARZIBA ® ▼ QARZIBA (dinutuximab beta), a mouse-human chimeric monoclonal GD2 antibody, was granted conditional approval by the NMPA for the treatment of high-risk neuroblastoma in patients aged 12 months and above who have previously received induction chemotherapy and achieved at least a partial response, followed by myeloablative therapy and stem cell transplantation, as well as patients with a history of relapsed or refractory (R/R) neuroblastoma with or without residual disease.
QARZIBA ® ▼ QARZIBA (dinutuximab beta), a mouse-human chimeric monoclonal GD2 antibody, was granted conditional approval by the NMPA for the treatment of high-risk neuroblastoma in patients aged 12 months and above who have previously received induction chemotherapy and achieved at least a partial response, followed by myeloablative therapy and stem cell transplantation, as well as patients with a history of R/R neuroblastoma with or without residual disease.
In addition to the collaboration, BeiGene and SpringWorks formed a separate company, MapKure, LLC, to develop BGB-3245, an investigational, selective next-generation RAF kinase inhibitor discovered by BeiGene scientists. MapKure has an ongoing Phase 1 clinical trial of BGB-3245 (NCT04249843) in patients with advanced or refractory tumors harboring specific v-RAF murine sarcoma viral oncogene homolog B (B-RAF) genetic mutations.
In addition to the collaboration, BeiGene and SpringWorks formed a separate company, MapKure, LLC, to develop BGB-3245, an investigational, selective next-generation RAF kinase inhibitor discovered by BeiGene scientists. MapKure has an ongoing Phase 1 clinical trial of BGB-3245 (NCT04249843) in patients with advanced or refractory tumors harboring specific v-RAF murine sarcoma viral oncogene homolog B (“B-RAF”) genetic mutations.
Depending on various types of violations, the rDAL imposes different penalties, including warnings, confiscation of illegal gains, fines of up to RMB5 million (about $725,000) or up to 30 times of illegal gains, revocation of required business and operating licenses, certificates or approval documents for drugs, suspension of business, temporary (10 years) or permanent debarment of companies, institutions and responsible persons, and criminal liabilities in the case of serious violations.
Depending on various types of violations, the DAL imposes different penalties, including warnings, confiscation of illegal gains, fines of up to RMB5 million (about $725,000) or up to 30 times of illegal gains, revocation of required business and operating licenses, certificates or approval documents for drugs, suspension of business, temporary (10 years) or permanent debarment of companies, institutions and responsible persons, and criminal liabilities in the case of serious violations.
For example, in July 2021, the relevant PRC government authorities made public the Opinions on Intensifying Crack-Down on Illegal Securities Activities (the "Securities Opinions") which emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
For example, in July 2021, the relevant PRC government authorities made public the Opinions on Intensifying Crack-Down on Illegal Securities Activities (the “Securities Opinions”) which emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
In the future, if available, we intend to apply for restorations of patent term for some of our currently owned patents beyond their current expiration dates, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA; however, there can be no assurance that any such extension will be granted to us.
In the future, if available, we intend to apply for restorations of patent term for some of our patents beyond their current expiration dates, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA; however, there can be no assurance that any such extension will be granted to us.
For example, the Affordable Care Act (the "ACA") contains provisions that may reduce the profitability of drug products, including increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.
For example, the Affordable Care Act (the “ACA”) contains provisions that may reduce the profitability of drug products, including increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.
One exception is that the rDAL and relevant implementation rules allow the MAH to conduct wholesales of its drugs directly without holding a separate DDL for wholesale, however, a retail DDL would still be required if the MHA intends to conduct direct retail to patients. China has developed a “Two-Invoice System” to control distribution of prescription drugs.
One exception is that the DAL and relevant implementation rules allow the MAH to conduct wholesales of its drugs directly without holding a separate DDL for wholesale, however, a retail DDL would still be required if the MHA intends to conduct direct retail to patients. China has developed a “Two-Invoice System” to control distribution of prescription drugs.
Industries not listed in these two categories are generally deemed “permitted” for foreign investments unless specifically restricted by other applicable PRC laws or regulations. Pursuant to the 2022 Encouraged Industry Catalogue, the research, development and manufacture of innovative oncology drugs and certain other types of pharmaceutical products belongs to the encouraged industries for foreign investment.
Industries not listed in these two categories are generally deemed “permitted” for foreign investments unless specifically restricted by other applicable PRC laws or regulations. Pursuant to the 2022 Encouraged Industry Catalogue, the research, development and manufacture of innovative oncology drugs, cell therapies, and certain other types of pharmaceutical products belongs to the encouraged industries for foreign investment.
Clinical Trial Approval All clinical trials conducted in China for the purpose of seeking marketing approvals must be approved by the NMPA and conducted at hospitals satisfying GCP requirements. In addition to a standalone China trial to support development, imported drug applicants may include Chinese clinical sites as part of an international multicenter trial ("IMCT").
Clinical Trial Approval All clinical trials conducted in China for the purpose of seeking marketing approvals must be approved by the NMPA and conducted at hospitals satisfying GCP requirements. In addition to a standalone China trial to support development, imported drug applicants may include Chinese clinical sites as part of an international multicenter trial (“IMCT”).
In addition to our broad-based equity award programs, we have used targeted equity-based grants with vesting conditions to facilitate retention of personnel. In addition to compensation and benefits, we provide our employees opportunities for growth through challenging job assignments, performance management and training opportunities. We seek to remain competitive in our compensation and benefits by routinely benchmarking against industry peers.
In addition to our broad-based equity award programs, we have used equity-based grants with vesting conditions to facilitate retention of key personnel. In addition to compensation and benefits, we provide our employees opportunities for growth through challenging job assignments, performance management and training opportunities. We seek to remain competitive in our compensation and benefits by routinely benchmarking against industry peers.
Under the DRR, drugs that meet one of the three criteria might be eligible for conditional approval: (1) drugs that treat life threatening illnesses for which there are no effective treatment or preventive methods, but their clinical trials already have the data to prove efficacy and their clinical value is predictable, (2) drugs that are urgently needed for public health reasons, and their clinical trials already have the data to prove efficacy and their clinical value is predictable; or (3) vaccines that are urgently needed for major public health emergencies or otherwise deemed by the National Health Commission to be urgently needed, and it is concluded upon evaluation that their benefits outweigh their risks.
Under the DRR, drugs that meet one of the three criteria might be eligible for conditional approval: (1) drugs that treat life threatening illnesses for which there are no effective treatment or preventive methods, but their clinical trials already have the data to prove efficacy and their clinical value is predictable, (2) drugs that are urgently needed for public health reasons, and their clinical trials already have the data to prove efficacy and their clinical value is predictable; or (3) vaccines that are urgently needed for major public health emergencies or otherwise deemed by the NHC to be urgently needed, and it is concluded upon evaluation that their benefits outweigh their risks.
Share Purchase Agreement In connection with the Amgen Collaboration Agreement, pursuant to a share purchase agreement dated October 31, 2019, as amended, by and between BeiGene, Ltd. and Amgen (as amended, the “Share Purchase Agreement”), we issued to Amgen 206,635,013 ordinary shares in the form of 15,895,001 American Depositary Shares ("ADSs") of BeiGene, Ltd. on January 2, 2020, representing approximately 20.5% of our then outstanding shares, for an aggregate purchase price of $2.78 billion, or $13.45 per ordinary share, or $174.85 per ADS.
Share Purchase Agreement In connection with the Amgen Collaboration Agreement, pursuant to a share purchase agreement dated October 31, 2019, as amended, by and between BeiGene, Ltd. and Amgen (as amended, the “Share Purchase Agreement”), we issued to Amgen 206,635,013 ordinary shares in the form of 15,895,001 ADSs of the Company on January 2, 2020, representing approximately 20.5% of our then outstanding shares, for an aggregate purchase price of $2.78 billion, or $13.45 per ordinary share, or $174.85 per ADS.
We are the first and only BTK inhibitor to demonstrate superior efficacy versus ibrutinib, and the data from the head-to-head ALPINE trial were selected for the prestigious late-breaker session at the American Society of Hematology ("ASH") meeting in late 2022, with simultaneous publication in The New England Journal of Medicine .
We are the first and only BTK inhibitor to demonstrate superior efficacy versus ibrutinib, and the data from the head-to-head ALPINE trial were selected for the prestigious late-breaker session at the American Society of Hematology (“ASH”) meeting in late 2022, with simultaneous publication in The New England Journal of Medicine .
The CDE has developed a list of drugs that meet these criteria. 45 Table of Contents Clinical Trial Process and Good Clinical Practices As in other parts of the world, clinical trials in China typically have three phases. Phase 1 refers to the initial clinical pharmacology and human safety evaluation studies.
The CDE has developed a list of drugs that meet these criteria. 46 Table of Contents Clinical Trial Process and Good Clinical Practices As in other parts of the world, clinical trials in China typically have three phases. Phase 1 refers to the initial clinical pharmacology and human safety evaluation studies.
Overview of Clinical Development Program and Regulatory Status In China, pamiparib received conditional approval in May 2021 for treatment of patients with germline BRCA (gBRCA) mutation-associated recurrent advanced ovarian, fallopian tube, or primary peritoneal cancer who have been treated with two or more lines of chemotherapy.
Overview of Clinical Development Program and Regulatory Status In China, pamiparib received conditional approval in May 2021 for treatment of patients with gBRCA mutation-associated recurrent advanced ovarian, fallopian tube, or primary peritoneal cancer who have been treated with two or more lines of chemotherapy.
Additionally, we are eligible to receive up to $1.3 billion upon the achievement of regulatory milestones, $250 million upon the achievement of sales milestones, and tiered royalties based on percentages of annual net sales of tislelizumab in the Licensed Territory ranging from the high-teens to high-twenties, with customary reductions in specified circumstances.
Additionally, we were eligible to receive up to $1.3 billion upon the achievement of regulatory milestones, $250 million upon the achievement of sales milestones, and tiered royalties based on percentages of annual net sales of tislelizumab in the Licensed Territory ranging from the high-teens to high-twenties, with customary reductions in specified circumstances.
The FDA may approve multiple "first" interchangeable products so long as they are all approved on the same first day of marketing.
The FDA may approve multiple “first” interchangeable products so long as they are all approved on the same first day of marketing.
The Centers for Medicare and Medicaid Services ("CMS") published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
The Centers for Medicare and Medicaid Services (“CMS”) published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
Our marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate 38 Table of Contents information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products and any future product candidates are subject to scrutiny under this law; • the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
Our marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products and any future product candidates are subject to scrutiny under this law. • The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
It is common in China for pharmaceutical companies to employ patient assistance programs to help patients afford their innovative medicines. Usually these programs have been offered to patients who are self-paying. A typical program provides a certain number of free doses to patients after a certain number of doses have been paid for.
It is common in China for pharmaceutical companies to employ patient assistance programs to help patients afford their innovative medicines. These programs have typically been offered to patients who are self-paying. A typical program provides a certain number of free doses to patients after a certain number of doses have been paid for.
The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation.
The sponsor must also include a protocol detailing, among other things, the objectives of the initial first-in-human clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation.
Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval. The NDA for zanubrutinib was granted priority review by the FDA for the treatment of adult patients with MCL who have received at least one prior therapy.
Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval. The NDA for BRUKINSA was granted priority review by the FDA for the treatment of adult patients with MCL who have received at least one prior therapy.
The rDAL creates an expanded access pathway for investigational drugs under which a company sponsor of a clinical trial in China can apply to establish an expanded access treatment program for patients with life-threatening disease who otherwise do not satisfy the inclusion criteria of a clinical trial.
The DAL creates an expanded access pathway for investigational drugs under which a company sponsor of a clinical trial in China can apply to establish an expanded access treatment program for patients with life-threatening disease who otherwise do not satisfy the inclusion criteria of a clinical trial.
All three types of programs usually have some type of coverage for pharmaceutical products. Often this is through a pharmacy benefit manager ("PBM"). The structure of the pharmacy benefit can be quite different for different beneficiaries depending on the negotiations between plan sponsors and plan purchasers.
All three types of programs usually have some type of coverage for pharmaceutical products. Often this is through a pharmacy benefit manager (“PBM”). The structure of the pharmacy benefit can be quite different for different beneficiaries depending on the negotiations between plan sponsors and plan purchasers.
If there is no national or professional standard available, companies may formulate and implement its own standards after obtaining the approval of the provincial administration for medical products or bureau of standards. Changes in such approved packaging standards need to be re-approved.
If there is no national or professional standard available, companies may formulate and implement their own standards after obtaining the approval of the provincial administration for medical products or bureau of standards. Changes in such approved packaging standards need to be re-approved.
As a result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use their RMB revenues to pay dividends to us. However, conversion of RMB to other currencies are permitted for the purpose of dividends according to the PRC’s regulations on Foreign Exchange Control.
As a result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to use their RMB revenues to pay dividends to us. However, conversion of RMB to other currencies are permitted for the purpose of dividends according to the PRC’s regulations on foreign exchange administration.
We continue to evaluate what effect, if any, these rules will have on our business; • the federal civil and criminal false claims and civil monetary penalty laws, such as the FCA, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent; knowingly making or causing a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
We continue to evaluate what effect, if any, these rules will have on our business. 39 Table of Contents • The federal civil and criminal false claims and civil monetary penalty laws, such as the FCA, which impose criminal and civil penalties and authorize civil whistleblower or qui tam actions, against individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent; knowingly making or causing a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
Pursuant to the Restated Second Amendment, Amgen has an option (the “Direct Purchase Option”) to subscribe for additional ADSs in an amount necessary to enable it to increase (and subsequently maintain) its ownership at approximately 20.6% of our outstanding shares.
Pursuant to the Restated Second Amendment, Amgen had an option (the “Direct Purchase Option”) to subscribe for additional ADSs in an amount necessary to enable it to increase (and subsequently maintain) its ownership at approximately 20.6% of our outstanding shares.
In 2018, the NMPA issued the Technical Guidance Principles on Accepting Foreign Drug Clinical Trial Data (the “Guidance Principles”), as one of the implementing rules for the Opinions on Deepening the Reform of the Evaluation and Approval Systems and Encouraging Innovation on Drugs and Medical Devices (the “Innovation Opinion”).
The NMPA issued the Technical Guidance Principles on Accepting Foreign Drug Clinical Trial Data (the “Guidance Principles”), as one of the implementing rules for the Opinions on Deepening the Reform of the Evaluation and Approval Systems and Encouraging Innovation on Drugs and Medical Devices (the “Innovation Opinion”).
(SpringWorks) in a global clinical collaboration and has initiated a Phase 1b clinical trial (NCT03905148) to evaluate the safety, tolerability, and preliminary efficacy of lifirafenib in combination with SpringWorks' investigational MEK inhibitor, mirdametinib (PD-0325901), in patients with advanced solid tumors.
(“SpringWorks”) in a global clinical collaboration and has initiated a Phase 1b clinical trial (NCT03905148) to evaluate the safety, tolerability, and preliminary efficacy of lifirafenib in combination with SpringWorks’ investigational MEK inhibitor, mirdametinib (PD-0325901), in patients with advanced solid tumors.
In addition, the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of up to 2% per fiscal year that will remain in effect through 2030 unless additional Congressional action is taken.
In addition, the Budget Control Act of 2011 and the Bipartisan Budget Act of 2015 led to aggregate reductions of Medicare payments to providers of up to 2% per fiscal year that will remain in effect through 2031 unless additional Congressional action is taken.
Under the Novartis Option, Collaboration and License Agreement, during the option period, Novartis has agreed to initiate, conduct and fund additional global clinical trials of ociperlimab in combination with tislelizumab in selected tumor types and we have agreed to expand enrollment in two ongoing trials.
Under the Novartis Option, Collaboration and License Agreement, during the option period, Novartis agreed to initiate, conduct and fund additional global clinical trials of ociperlimab in combination with tislelizumab in selected tumor types and we agreed to expand enrollment in two ongoing trials.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
Notwithstanding the foregoing, any limitation on the ability of our PRC subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.
Global revenues are projected to be more than $50 billion by 2025 according to published reports, driven by multiple factors including indication expansion, approvals and adoptions in earlier lines of therapies, further market penetration, and extension of duration of therapy. Pamiparib Pamiparib is a selective small molecule inhibitor of poly ADP-ribose polymerase 1 (PARP1) and PARP2 enzymes.
Global revenues are projected to be more than $50 billion by 2025 according to published reports, driven by multiple factors including indication expansion, approvals and adoptions in earlier lines of therapies, further market penetration, and extension of duration of therapy. PARTRUVIX (pamiparib) PARTRUVIX is a selective small molecule inhibitor of poly ADP-ribose polymerase 1 (“PARP1”) and PARP2 enzymes.
We have been developing lifirafenib for the treatment of cancers with aberrations in the mitogen-activated protein kinase (MAPK), pathway, including BRAF gene mutations and KRAS/NRAS gene mutations where first generation BRAF inhibitors are not effective.
We have been developing lifirafenib for the treatment of cancers with aberrations in the mitogen-activated protein kinase (“MAPK”), pathway, including BRAF gene mutations and KRAS/NRAS gene mutations where first generation BRAF inhibitors are not effective.
If we were deemed as an indirect overseas listed Chinese domestic company subject to the filing requirements under the Overseas Listing Trial Measures, our offering of equity securities on the NASDAQ Global Select Market or Hong Kong Stock Exchange in the future would be required to be filed with the CSRC within three working days after the offering is completed.
If we were deemed as an indirect overseas listed Chinese domestic company subject to the filing requirements under the Overseas Listing Trial Measures, our offering of equity securities on NASDAQ or Hong Kong Stock Exchange in the future would be required to be filed with the CSRC within three working days after the offering is completed.
Cash generated from BeiGene HK is used to fund operations of its subsidiaries, and no funds were transferred from BeiGene HK’s subsidiaries in mainland China to fund operations of other BeiGene subsidiaries outside of mainland China for the year ended on December 31, 2021 and December 31, 2022.
Cash generated from BeiGene HK is used to fund operations of its subsidiaries, and no funds were transferred from BeiGene HK’s subsidiaries in mainland China to fund operations of other BeiGene subsidiaries outside of mainland China for the year ended on December 31, 2022 and December 31, 2023.
Participation in the program requires a product to have passed a generic quality consistency evaluation, which in turn requires passing a bioequivalence comparison to the reference listed drug (RLD). The system offers a major portion of a market’s volume to winning bidders.
Participation in the program requires a product to have passed a generic quality consistency evaluation, which in turn requires passing a bioequivalence comparison to the reference listed drug (“RLD”). The system offers a major portion of a market’s volume to winning bidders.
Orphan drug exclusivity is described below under "Orphan Drugs." Biosimilars and Exclusivity The PHSA includes an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product.
Orphan drug exclusivity is described below under “Orphan Drugs.” Biosimilars and Exclusivity The PHSA includes an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act ("FCA") or federal civil money penalties statute.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act (“FCA”) or federal civil money penalties statute.
Under the rDAL, upon approval of the registration application, the NMPA will issue a drug registration certificate to the applicant which is in fact the marketing approval of the drug, and the applicant is no longer required to be equipped with relevant manufacturing capability.
Under the DAL, upon approval of the registration application, the NMPA will issue a drug registration certificate to the applicant which is in fact the marketing approval of the drug, and the applicant is no longer required to be equipped with relevant manufacturing capability.
Recently, in connection with our ongoing assessment of the Collaboration Agreement cost-share contributions, we determined that our further investment in the development of AMG 510 was no longer commercially viable for BeiGene.
In connection with our ongoing assessment of the Amgen Collaboration Agreement cost-share contributions, we determined that our further investment in the development of AMG 510 was no longer commercially viable for BeiGene.
It is uncertain whether or how these new laws, rules and regulations and the interpretation and implementation thereof may affect us, but among other things, our ability to obtain external financing through the issuance of equity securities in the United States, Hong Kong or other markets could be negatively affected, and as a result, the trading prices of our ADSs, ordinary shares and RMB Shares could significantly decline or become worthless.
It is uncertain whether or how these new laws, rules and regulations and the interpretation and implementation thereof may affect us, but among other things, our ability to obtain external financing through the issuance of equity securities in the U.S., Hong Kong or other markets could be negatively affected, and as a result, the trading prices of our ADSs, ordinary shares and RMB Shares could significantly decline or become worthless.
Under the Novartis Collaboration and License Agreement, we and Novartis have agreed to jointly develop tislelizumab in the Licensed Territory, with Novartis responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals. In addition, both companies may conduct clinical trials to explore potential combinations of tislelizumab with other cancer treatments.
Under the Novartis Collaboration and License Agreement, we and Novartis agreed to jointly develop tislelizumab in the Licensed Territory, with Novartis responsible for regulatory submissions after a transition period and for commercialization upon regulatory approvals. In addition, both companies could conduct clinical trials to explore potential combinations of tislelizumab with other cancer treatments.
Where a pharmaceutical company or its agent is listed in the adverse records on two or more occasions within five years, all public medical institutions in China are not permitted to purchase any products from that company for two years. Regulations Relating to Foreign Exchange The Foreign Exchange Administration Regulations are the principal regulations governing foreign currency exchange in China.
Where a pharmaceutical company or its agent is listed in the adverse records on two or more occasions within five years, all public medical institutions in China are not permitted to purchase any products from that company for two years. Regulations Relating to Foreign Exchange The Foreign Exchange Administration Regulations govern foreign currency exchange in China.
The HGR Regulation prohibits foreign parties from independently sampling or biobanking any China HGR in China and requires approval for the sampling of certain HGR and biobanking of all HGR by Chinese parties. Any cross-border transfer of the HGR materials, either under an international collaboration or as a direct export, must be on an as-needed basis and requires approval.
The HGR Regulation prohibits non-PRC parties from independently sampling or biobanking any China HGR in China and requires approval for the sampling of certain HGR and biobanking of all HGR by Chinese parties. Any cross-border transfer of the HGR materials, either under an international collaboration or as a direct export, must be on an as-needed basis and requires approval.
Specifically, in 2018, the NMPA established a program permitting drugs that have been approved within the last ten years in the United States, EU or Japan to be approved in China without local clinical trials if they (1) prevent or treat orphan diseases, (2) prevent or treat serious life-threatening illnesses for which there is either no effective therapy in China, or for which the foreign-approved drug would have clear clinical advantages.
Specifically, in 2018, the NMPA established a program permitting drugs that have been approved within the last ten years in the U.S., EU or Japan to be approved in China without local clinical trials if they (1) prevent or treat orphan diseases, (2) prevent or treat serious life-threatening illnesses for which there is either no effective therapy in China, or for which the foreign-approved drug would have clear clinical advantages.
As of the date of this annual report, our PRC subsidiaries have obtained all requisite licenses and permits from the PRC government authorities that are material for their business operations in the PRC, including, among others, business licenses issued by local counterparts of the SAMR, drug manufacturing licenses, drug trade license, CTAs, drug registration certificates, licenses for use of experimental animals, pollutant discharge licenses and permits for urban sewage discharge into drainage pipe network.
As of the date of this annual report, our PRC subsidiaries have obtained all requisite licenses and permits from the PRC government authorities that are material for their business operations in the PRC, including, among others, business licenses issued by local counterparts of the SAMR, drug manufacturing licenses, drug trade license, clinical trial applications, drug registration certificates, licenses for use of experimental animals, pollutant discharge licenses and permits for urban sewage discharge into drainage pipe network.
In China, as of February 1, 2023, there are nine other approved PD-1 antibodies: OPDIVO ® (nivolumab) and KEYTRUDA ® (pembrolizumab), Junshi’s TUOYI ® (toripalimab), Innovent’s TYVYT ® (sintilimab), Hengrui’s AIRUIKA ® (camrelizumab), Akeso's ANNIKE ® (penpulimab), Gloria's YUTUO ® (zimberelimab), Henlius's HANSIZHUANG ® (serplulimab) and Lepu's PUYOUHENG ® (pucotenlimab).
In China, as of December 25, 2023, there are nine other approved PD-1 antibodies: OPDIVO ® (nivolumab) and KEYTRUDA ® (pembrolizumab), Junshi’s TUOYI ® (toripalimab), Innovent’s TYVYT ® (sintilimab), Hengrui’s AIRUIKA ® (camrelizumab), Akeso’s ANNIKE ® (penpulimab), Gloria’s YUTUO ® (zimberelimab), Henlius’s HANSIZHUANG ® (serplulimab) and Lepu’s PUYOUHENG ® (pucotenlimab).
The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the 34 Table of Contents product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory requirements and test each product batch or lot prior to its release.
The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory requirements and test each product batch or lot prior to its release.
Some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General 39 Table of Contents Compliance Program Guidance for Pharmaceutical Manufacturers and/or other voluntary industry codes of conduct that restrict the payments made to healthcare providers and other potential referral sources.
Some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or other voluntary industry codes of conduct that restrict the payments made to healthcare providers and other potential referral sources.
An 46 Table of Contents MAH for a drug that is currently under the new drug monitoring period has to report all adverse drug reactions (as opposed to just serious adverse reactions) for that period. Advertising and Promotion of Pharmaceutical Products China has a strict regime for the advertising of approved medicines. No unapproved medicines may be advertised.
An MAH for a drug that is currently under the new drug monitoring period has to report all adverse drug reactions (as opposed to just serious adverse reactions) for that period. Advertising and Promotion of Pharmaceutical Products China has a strict regime for the advertising of approved medicines. No unapproved medicines may be advertised.
Their efforts have been validated by commercial approvals, clinical data, and collaborations that have secured $1.4 billion in collaboration payments to the company. We have successfully developed three commercially approved medicines from our internal discovery engine, including BRUKINSA and tislelizumab. We design each research program with a differentiated biological hypothesis or a first-in-class mechanism of action.
Their efforts have been validated by commercial approvals, clinical data, and collaborations that have secured $1.5 billion in collaboration payments to the company. We have successfully developed three commercially approved medicines from our internal discovery engine, including BRUKINSA and TEVIMBRA. We design each research program with a differentiated biological hypothesis or a first-in-class mechanism of action.
The property, located strategically in the Interstate 95 21 Table of Contents corridor of New Jersey, with a deep and rich talent pool, has more than one million square feet of developable real estate for potential future expansion to cover our existing medicines and pipeline.
The property, located strategically in the Interstate 95 corridor of New Jersey, with a deep and rich talent pool, has more than one million square feet of developable real estate for potential future expansion to cover our existing medicines and pipeline.
Manufacturing and Distribution All facilities that manufacture drugs in China must receive a drug manufacturing license with an appropriate “scope of manufacturing” from the local drug regulatory authority. This license must be renewed every five years, and the manufacturing facility is also required to be in compliance with GMP.
Manufacturing and Distribution All facilities that manufacture drugs in China must receive a Drug Manufacturing License (“DML”) with an appropriate “scope of manufacturing” from the local drug regulatory authority. This license must be renewed every five years, and the manufacturing facility is also required to comply with GMP.
The Direct Purchase Option is exercisable on a monthly basis, but only if Amgen’s interest in our outstanding shares at the monthly reference date is less than 20.4%.
The Direct Purchase Option was exercisable on a monthly basis, but only if Amgen’s interest in our outstanding shares at the monthly reference date was less than 20.4%.
Since its enactment, some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial, Congressional, and Executive challenges. As a result, it is unclear how such efforts to challenge, repeal or replace the ACA, will impact our business.
Some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial, Congressional, and Executive challenges. As a result, it is unclear how such efforts to challenge, repeal or replace the ACA, will impact our business.
Information about the exclusivity term will be included in a Marketed Drug List (similar to the Orange Book in the US) at the time of approval. Some mechanics of these proposed rules are not yet clear, and it is not certain when the proposed rules will be finalized.
Information about the exclusivity term will be included in a Marketed Drug List (similar to the Orange Book in the U.S.) at the time of approval. Some mechanics of these proposed rules are not yet clear, and it is not certain when the proposed rules will be finalized.
Since 2016, special consideration has been given to, among others, innovative drugs with high clinical value and drugs for serious diseases. In addition, the government has also been negotiating with manufacturers of exclusive drugs with high clinical demands and proven effectiveness for price cuts in exchange for inclusion into the NRDL.
Historically, special consideration has been given to, among others, innovative drugs with high clinical value and drugs for serious diseases. In addition, the government has also been negotiating with manufacturers of exclusive drugs with high clinical demands and proven effectiveness for price cuts in exchange for inclusion into the NRDL.
We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 57 Table of Contents
We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 58 Table of Contents

… 592 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

380 edited+67 added−202 removed409 unchanged
Biggest changeWe may experience numerous unexpected events during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize our drug candidates, including but not limited to: regulators, institutional review boards ("IRBs"), or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; our inability to reach agreements on acceptable terms with CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly; manufacturing issues, including problems with manufacturing, supply quality, compliance with GMP, or obtaining sufficient quantities of a drug candidate for use in a clinical trial or for commercialization; clinical trials of our drug candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs; the number of patients required for clinical trials of our drug candidates may be larger than we anticipate, enrollment may be insufficient or slower than we anticipate or patients may drop out at a higher rate than we anticipate; our third-party contractors, including clinical investigators, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; we might have to suspend or terminate clinical trials of our drug candidates for various reasons, including a finding of a lack of clinical response or other unexpected characteristics or a finding that participants are being exposed to unacceptable health risks; regulators, IRBs or ethics committees may require that we or our investigators suspend or terminate clinical research or not rely on the results of clinical research for various reasons, including noncompliance with regulatory requirements; the cost of clinical trials of our drug candidates may be greater than we anticipate; and the supply or quality of our medicines and drug candidates, companion diagnostics or other materials necessary to conduct clinical trials of our drug candidates or commercialization of our medicines may be insufficient or inadequate.
Biggest changeWe may experience numerous unexpected events during clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize our drug candidates, including but not limited to: regulators, institutional review boards (“IRBs”), or ethics committees may not authorize us to conduct a clinical trial or may require us or our investigators to suspend or terminate clinical research or not rely on the results of our clinical research for various reasons, including noncompliance with regulatory requirements; our inability to reach agreements on acceptable terms with contract research organizations (“CROs”) and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly; manufacturing issues, including problems with supply quality, compliance with good manufacturing practice (“GMP”), or obtaining sufficient quantities of a drug candidate for use in a clinical trial; clinical trials of our drug candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon drug development programs; the number of patients required for clinical trials may be larger than we anticipate, enrollment may be insufficient or slower than we anticipate or patients may drop out at a higher rate than we anticipate; our third-party contractors, including clinical investigators, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; we might have to suspend or terminate clinical trials for various reasons, including a finding of a lack of clinical response or other unexpected characteristics or a finding that participants are being exposed to unacceptable health risks; the cost of clinical trials of our drug candidates may be greater than we anticipate; and the supply or quality of our medicines and drug candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate.
Because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites.
Because the number of qualified clinical investigators and clinical trial sites is limited, we expect to conduct some of our clinical trials at the same sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such sites.
In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such as inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations, and the imposition of any such penalties on our business could cause a material adverse effect on our business, financial condition, results of operations, prospects and the trading price of our ordinary shares, ADSs and RMB Shares, and could lead to our delisting from the Nasdaq.
China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations, and the imposition of any such penalties on our business could cause a material adverse effect on our business, financial condition, results of operations, prospects and the trading price of our ordinary shares, ADSs and RMB Shares, and could lead to our delisting from NASDAQ.
Under current PRC laws and regulations, our ADSs and ordinary shares listed on the Nasdaq and the HKEx are not interchangeable or fungible with the RMB Shares listed on the STAR Market, and there is no trading or settlement between either the Nasdaq or the HKEx on the one hand, and the STAR Market on the other hand.
Under current PRC laws and regulations, our ADSs and ordinary shares listed on NASDAQ and the HKEx are not interchangeable or fungible with the RMB Shares listed on the STAR Market, and there is no trading or settlement between either NASDAQ or the HKEx on the one hand, and the STAR Market on the other hand.
Our ADSs are traded on the Nasdaq, our existing ordinary shares maintained on our Cayman register in Cayman Islands and Hong Kong register in Hong Kong, are traded on the HKEx, and our RMB Shares are traded on the STAR Market.
Our ADSs are traded on NASDAQ, our existing ordinary shares maintained on our Cayman register in Cayman Islands and Hong Kong register in Hong Kong, are traded on the HKEx, and our RMB Shares are traded on the STAR Market.
Temporary delays in the cancellation of ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its transfer books or we have closed our transfer books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting or we are paying a dividend on our ordinary shares.
Temporary delays in the cancellation of ADSs and withdrawal of the underlying ordinary shares may arise because the depositary has closed its books or we have closed our books, the transfer of ordinary shares is blocked to permit voting at a shareholders’ meeting or we are paying a dividend on our ordinary shares.
To facilitate ADS to ordinary share conversion and trading between the Nasdaq and the HKEx, we moved a portion of our issued ordinary shares from our Cayman share register to our Hong Kong share register.
To facilitate ADS to ordinary share conversion and trading between NASDAQ and the HKEx, we moved a portion of our issued ordinary shares from our Cayman share register to our Hong Kong share register.
The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary.
The depositary is not responsible for making a distribution available to holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary.
The trading price of our ordinary shares, ADSs, and/or RMB Shares can be volatile and fluctuate widely in response to a variety of factors, many of which are beyond our control, including: announcements of regulatory approval or a complete response letter, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; announcements of therapeutic innovations, new products, acquisitions, strategic relationships, joint ventures or capital commitments by us or our competitors; adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; any adverse changes to our relationship with manufacturers or suppliers; the results of our testing and clinical trials; the results of our efforts to acquire or license additional medicines or drug candidates; variations in the level of expenses related to our existing medicines and drug candidates or preclinical, clinical development and commercialization programs; any intellectual property infringement actions in which we may become involved; announcements concerning our competitors or the pharmaceutical industry in general; the performance and fluctuation of the market prices of other companies with significant business operations in China that have listed their securities in Hong Kong, Shanghai or the United States; fluctuations in product revenue, sales and marketing expenses and profitability; manufacture, supply or distribution shortages; variations in our results of operations; announcements about our results of operations that are not in line with analyst expectations, the risk of which is enhanced because it is our policy not to give guidance on results of operations; publication of operating or industry metrics by third parties, including government statistical agencies, that differ from expectations of industry or financial analysts; changes in financial estimates by securities research analysts; media reports, whether or not true, about our business, our competitors or our industry; additions to or departures of our management; fluctuations of exchange rates between the RMB, the U.S. dollar and Hong Kong dollar; release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or RMB Shares; sales or perceived potential sales of additional ordinary shares, ADSs or RMB Shares by us, our executive officers and directors or our shareholders; general economic and market conditions and overall fluctuations in the United States, Hong Kong or Shanghai equity markets; changes in accounting principles; trade disputes or U.S.-China government relations; and changes or developments in the United States, PRC, EU or global regulatory environment.
The trading price of our ordinary shares, ADSs, and/or RMB Shares can be volatile and fluctuate widely in response to a variety of factors, many of which are beyond our control, including: announcements of regulatory approval or a complete response letter, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; announcements of therapeutic innovations, new products, acquisitions, strategic relationships, joint ventures or capital commitments by us or our competitors; adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; any adverse changes to our relationship with manufacturers or suppliers; the results of our testing and clinical trials; the results of our efforts to acquire or license additional medicines or drug candidates; variations in the level of expenses related to our existing medicines and drug candidates or preclinical, clinical development and commercialization programs; any intellectual property infringement actions in which we may become involved; announcements concerning our competitors or the pharmaceutical industry in general; the performance and fluctuation of the market prices of other companies with significant business operations in China that have listed their securities in Hong Kong, Shanghai or the U.S.; fluctuations in product revenue, sales and marketing expenses and profitability; manufacture, supply or distribution shortages; variations in our results of operations; announcements about our results of operations that are not in line with analyst expectations, the risk of which is enhanced because it is our policy not to give guidance on results of operations; publication of operating or industry metrics by third parties, including government statistical agencies, that differ from expectations of industry or financial analysts; changes in financial estimates by securities research analysts; media reports, whether or not true, about our business, our competitors or our industry; additions to or departures of our management; fluctuations of exchange rates between the RMB, the U.S. dollar and Hong Kong dollar; release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares, ADSs or RMB Shares; sales or perceived potential sales of additional ordinary shares, ADSs or RMB Shares by us, our executive officers and directors or our shareholders; general economic and market conditions and overall fluctuations in the U.S., Hong Kong or Shanghai equity markets; changes in accounting principles; trade disputes or U.S.-China government relations; and changes or developments in the U.S., PRC, the EU or global regulatory environment.
Each “Ten Percent Shareholder” (as defined below) in a non-U.S. corporation that is classified as a “controlled foreign corporation” ("CFC"), for U.S. federal income tax purposes is generally required to include in income for U.S. federal tax purposes such Ten Percent Shareholder’s pro rata share of the CFC’s “Subpart F income” and investment of earnings in U.S. property, even if the CFC has made no distributions to its shareholders.
Each “Ten Percent Shareholder” (as defined below) in a non-U.S. corporation that is classified as a “controlled foreign corporation” (“CFC”), for U.S. federal income tax purposes is generally required to include in income for U.S. federal tax purposes such Ten Percent Shareholder’s pro rata share of the CFC’s “Subpart F income” and investment of earnings in U.S. property, even if the CFC has made no distributions to its shareholders.
Also, a number of immune-related adverse events ("IRAEs") have been associated with treatment with checkpoint inhibitors such as tislelizumab, including immune-mediated pneumonitis, colitis, hepatitis, endocrinopathies, nephritis and renal dysfunction, skin adverse reactions, and encephalitis. These IRAEs may be more common in certain patient populations (potentially including elderly patients) and may be exacerbated when checkpoint inhibitors are combined with other therapies.
Also, a number of immune-related adverse events (“IRAEs”) have been associated with treatment with checkpoint inhibitors such as tislelizumab, including immune-mediated pneumonitis, colitis, hepatitis, endocrinopathies, nephritis and renal dysfunction, skin adverse reactions, and encephalitis. These IRAEs may be more common in certain patient populations (potentially including elderly patients) and may be exacerbated when checkpoint inhibitors are combined with other therapies.
For additional information, please see the section of this Annual Report titled “Part I —Item 1 — Business — Government Regulation — Pharmaceutical Coverage, Pricing, and Reimbursement.” A primary trend in the global healthcare industry is cost containment. Government authorities and these third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
For additional information, please see the section of this Annual Report titled “Part I—Item 1—Business—Government Regulation—Pharmaceutical Coverage, Pricing, and Reimbursement.” A primary trend in the global healthcare industry is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders, or disrupt our management and business. In August 2017, we acquired Celgene's commercial operations in China and an exclusive license to Celgene's (now BMS’s) commercial cancer portfolio in China, REVLIMID, VIDAZA and ABRAXANE.
Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders, or disrupt our management and business. In 2017, we acquired Celgene’s commercial operations in China and an exclusive license to Celgene’s (now BMS’s) commercial cancer portfolio in China, REVLIMID, VIDAZA and ABRAXANE.
Additionally, tax rules governing cross-border activities are continually subject to modification intended to address concerns over base erosion and profit shifting (BEPS) and other perceived international tax avoidance techniques as a result of both coordinated actions by governments, such as the OECD/G20 Inclusive Framework on BEPS, and unilateral measures designed by individual countries.
Additionally, tax rules governing cross-border activities are continually subject to modification intended to address concerns over base erosion and profit shifting (“BEPS”) and other perceived international tax avoidance techniques as a result of both coordinated actions by governments, such as the OECD/G20 Inclusive Framework on BEPS, and unilateral measures designed by individual countries.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.” Recently enacted and future legislation may increase the difficulty and cost for us to obtain regulatory approval of and commercialize our medicines and drug candidates and affect the prices we may obtain.
Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.” Recently enacted and future legislation and regulations may increase the difficulty and cost for us to obtain regulatory approval of and commercialize our medicines and drug candidates and affect the prices we may obtain.
In addition, the interpretation and application of data protection laws in China and elsewhere are often uncertain and in flux. We expect that these areas will receive greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection.
In addition, the interpretation and application of data protection laws in China are often uncertain and in flux. We expect that these areas will receive greater and continued attention and scrutiny from regulators and the public going forward, which could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection.
As a result, in February 2023, we entered into an amendment to the Collaboration Agreement to (i) stop sharing costs with Amgen for the further development of AMG 510 during the period starting January 1, 2023 and ending August 31, 2023; and (ii) cooperate in good faith to prepare a transition plan with the anticipated termination of AMG 510 from the Collaboration Agreement.
As a result, in February 2023, we entered into an amendment to the collaboration agreement to (i) stop sharing costs with Amgen for the further development of AMG 510 during the period starting January 1, 2023 and ending August 31, 2023; and (ii) cooperate in good faith to prepare a transition plan with the termination of AMG 510 from the Amgen Collaboration Agreement.
For example, in connection with our transaction with Amgen, we issued to Amgen a total of 206,635,013 ordinary shares in the form of ADSs in January 2020, representing 20.5% of the then issued share capital of the Company after giving effect to the share issuance, which resulted in Amgen becoming our largest shareholder and the ownership of our existing shareholders being diluted.
For example, in connection with our transaction with Amgen, we issued to Amgen a total of 206,635,013 ordinary shares in the form of ADSs in 2020, representing 20.5% of the then issued share capital of the Company after giving effect to the share issuance, which resulted in Amgen becoming our largest shareholder and the ownership of our existing shareholders being diluted.
If the PRC tax authorities make adjustments to the taxable income of the transactions under these regulations, our income tax costs associated with such potential acquisitions or disposals will increase, which may have an adverse effect on our financial condition and results of operations. Restrictions on currency exchange may limit our ability to utilize our revenue effectively.
If the PRC tax authorities make adjustments to the taxable income of the transactions under these regulations, our income tax costs associated with such potential acquisitions or disposals will increase, which may have an adverse effect on our financial condition and results of operations. Regulations on currency exchange may limit our ability to utilize our revenue effectively.
The timing, amount and criteria of government financial incentives are determined within the sole discretion of the local government authorities and cannot be predicted with certainty before we actually receive any financial incentive. We generally do not have the ability to influence local governments in making these decisions. Local governments may decide to reduce or eliminate incentives at any time.
The timing, amount and criteria of government financial incentives are determined within the discretion of the local government authorities and cannot be predicted with certainty before we actually receive any financial incentive. We generally do not have the ability to influence local governments in making these decisions. Local governments may decide to reduce or eliminate incentives at any time.
As is typical in the development of pharmaceutical products, drug-related AEs and serious AEs ("SAEs") have been reported in our clinical trials. Some of these events have led to patient deaths. Drug-related AEs or SAEs could affect patient recruitment or the ability of enrolled subjects to complete the trial and could result in product liability claims.
As is typical in the development of pharmaceutical products, drug-related AEs and serious AEs (“SAEs”) have been reported in our clinical trials. Some of these events have led to patient deaths. Drug-related AEs or SAEs could affect patient recruitment or the ability of enrolled subjects to complete the trial and could result in product liability claims.
While we believe alternative distributors are readily available, there is a risk that, if the distribution of our medicines is interrupted, our sales volumes and business prospects could be adversely affected. If third-party manufacturers fail to comply with manufacturing regulations, our financial results and financial condition could be adversely affected.
While we believe alternative distributors are readily available, there is a risk that, if the distribution of our medicines is interrupted, our sales volumes and business prospects could be adversely affected. If third-party manufacturers fail to comply with manufacturing regulations, our financial results could be adversely affected.
We have relied upon and plan to continue to rely to some extent upon third-party CROs to monitor and manage data and provide other services for our ongoing preclinical and clinical programs. We rely on these parties for execution of our preclinical studies and clinical trials, and control only certain aspects of their activities.
We have relied upon and plan to continue to rely to some extent upon third-party CROs to monitor and manage data and provide other services for our ongoing preclinical and clinical programs. We may rely on these parties for execution of our preclinical studies and clinical trials, and control only certain aspects of their activities.
The depositary of the ADSs has agreed to ADS holders the cash dividends or other distributions it or the custodian for the ADSs receives on our ordinary shares or other deposited securities after deducting its fees and expenses. ADS holders will receive these distributions in proportion to the number of our ordinary shares that their ADSs represent.
The depositary of the ADSs has agreed to distribute to ADS holders the cash dividends or other distributions it or the custodian for the ADSs receives on our ordinary shares or other deposited securities after deducting its fees and expenses. ADS holders will receive these distributions in proportion to the number of our ordinary shares that their ADSs represent.
Our contractors and collaborators have and in the future may face similar risks, and service disruptions or security breaches of their systems could adversely affect our security, leave us without access to important systems, products, raw materials, components, services or information or expose our confidential data.
Our contractors and collaborators have faced, and in the future may face, similar risks, and service disruptions or security breaches of their systems could adversely affect our security, leave us without access to important systems, products, raw materials, components, services or information or expose our confidential data.
The principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare and Medicaid Services (the "CMS"). They decide whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.
The principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare and Medicaid Services (the “CMS”). They decide whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.
The timing and full impact of such reforms is uncertain and could prevent us from commercializing our medicines and drug candidates in a timely manner. The process of obtaining regulatory approvals and compliance with appropriate laws and regulations require the expenditure of substantial time and financial resources.
The timing and full impact of such reforms is uncertain and could prevent us from commercializing our medicines and drug candidates in a timely manner. The process of obtaining regulatory approvals and compliance with laws and regulations require the expenditure of substantial time and financial resources.
The Food and Drug Omnibus Reform Act of 2022 (“FDORA”) recently granted the FDA the authority to require, as appropriate, that a post-approval confirmatory study or studies be underway prior to granting accelerated approval or within a specified time period after the date accelerated approval is granted.
The Food and Drug Omnibus Reform Act of 2022 (“FDORA”) granted the FDA the authority to require, as appropriate, that a post-approval confirmatory study or studies be underway prior to granting accelerated approval or within a specified time period after the date accelerated approval is granted.
These laws and regulations can be complex and stringent, and many are subject to change and uncertain interpretation, which could result in claims, changes to our data and other business practices, significant penalties, increased cost of operations, or otherwise adversely impact our business.
These laws and regulations can be stringent and many are subject to change and uncertain interpretation, which could result in claims, changes to our data and other business practices, significant penalties, increased cost of operations, or otherwise adversely impact our business.
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in drug candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction. 67 Table of Contents Our medicines and any future approved drug candidates will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our medicines and drug candidates.
If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in drug candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction. 70 Table of Contents Our medicines and any future approved drug candidates will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our medicines and drug candidates.
In the case of ADSs issued by the depositary into The Depository Trust Company ("DTC"), the fees will be charged by the DTC participant to the account of the applicable beneficial owner in accordance with the procedures and practices of the DTC participant as in effect at the time.
In the case of ADSs issued by the depositary into The Depository Trust Company (“DTC”), the fees will be charged by the DTC participant to the account of the applicable beneficial owner in accordance with the procedures and practices of the DTC participant as in effect at the time.
We did not win the bid for VIDAZA, which has resulted in the drug being restricted from use in public hospitals, which account for a large portion of the market, and a decline in sales revenue.
We did not win the bid for VIDAZA, which resulted in the drug being restricted from use in public hospitals, which account for a large portion of the market, and a decline in sales revenue.
It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our or our collaborators’ practices, potentially resulting in suspension of relevant ongoing clinical trials or the initiation of new trials, confiscation of HGR samples and associated data and administrative fines, disgorgement of illegal gains, or temporary or permanent debarment of our or our collaborators’ entities and responsible persons from further HGR projects and, consequently, a de-facto ban on the debarred entities from initiating new clinical trials in China.
It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our or our collaborators’ practices, potentially resulting in suspension of relevant ongoing clinical trials or the initiation of new trials, confiscation of HGR samples and associated data and administrative fines, disgorgement of illegal gains, or temporary or permanent debarment of our or our collaborators’ entities and responsible persons from further HGR projects and, consequently, a de-facto ban from initiating new clinical trials in China.
For example, the M&A Rules require that the Ministry of Commerce of the PRC (the "MOFCOM") be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
For example, the M&A Rules require that the Ministry of Commerce of the PRC (the “MOFCOM”) be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remediate in a timely manner, the market price of our shares could decline if investors and others lose confidence in the reliability of our financial statements, we could be subject to sanctions or investigations by the SEC, HKEx, China Securities Regulatory Commission (the "CSRC"), SSE or other applicable regulatory authorities, and our business could be harmed.
In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remediate in a timely manner, the market price of our shares could decline if investors and others lose confidence in the reliability of our financial statements, we could be subject to sanctions or investigations by the SEC, HKEx, China Securities Regulatory Commission (the “CSRC”), SSE or other applicable regulatory authorities, and our business could be harmed.
For example, the PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
For example, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity (“VIE”) structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
If we are a PFIC for any taxable year during a U.S. shareholder’s holding period of the ordinary shares or ADSs, then such U.S. shareholder may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the ordinary shares or ADSs and on the receipt of distributions on the ordinary shares or ADSs to the extent such distribution is treated as an “excess distribution” under the United States federal income tax rules.
If we are a PFIC for any taxable year during a U.S. shareholder’s holding period of the ordinary shares or ADSs, then such U.S. shareholder may incur significantly increased U.S. income tax on gain recognized on the sale or other disposition of the ordinary shares or ADSs and on the receipt of distributions on the ordinary shares or ADSs to the extent such distribution is treated as an “excess distribution” under the U.S. federal income tax rules.
Our drug candidates could be delayed or fail to receive regulatory approval for many reasons, including: • failure to begin or complete clinical trials due to disagreements with regulatory authorities; • failure to demonstrate that a drug candidate is safe and effective or that a biologic candidate is safe, pure, and potent for its proposed indication; • failure of clinical trial results to meet the level of statistical significance required for approval; • reporting or data integrity issues related to our clinical trials; • disagreement with our interpretation of data from preclinical studies or clinical trials; • changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval or require us to amend our clinical trial protocols; • regulatory requests for additional analyses, reports, data, nonclinical studies and clinical trials, or questions regarding interpretations of data and results and the emergence of new information regarding our drug candidates or other products; • failure to satisfy regulatory conditions regarding endpoints, patient population, available therapies and other requirements for our clinical trials in order to support marketing approval on an accelerated basis or at all; 66 Table of Contents • a delay in or the inability of health authorities to complete regulatory inspections of our development activities, regulatory filings or manufacturing operations, whether as a result of the COVID-19 pandemic or other reasons, or our failure to satisfactorily complete such inspections; • our failure to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and • clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial.
Our drug candidates could be delayed or fail to receive regulatory approval for many reasons, including: • failure to begin or complete clinical trials due to disagreements with regulatory authorities; • failure to demonstrate that a drug candidate is safe and effective or that a biologic candidate is safe, pure, and potent for its proposed indication; • failure of clinical trial results to meet the level of statistical significance required for approval; • reporting or data integrity issues related to our clinical trials; • disagreement with our interpretation of data from preclinical studies or clinical trials; 69 Table of Contents • changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval or require us to amend our clinical trial protocols; • regulatory requests for additional analyses, reports, data, nonclinical studies and clinical trials, or questions regarding interpretations of data and results and the emergence of new information regarding our drug candidates or other products; • failure to satisfy regulatory conditions regarding endpoints, patient population, available therapies and other requirements for our clinical trials in order to support marketing approval on an accelerated basis or at all; • a delay in or the inability of health authorities to complete regulatory inspections of our development activities, regulatory filings or manufacturing operations, whether as a result of a global pandemic or other reasons, or our failure to satisfactorily complete such inspections; • our failure to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and • clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial.
In addition, if the FDA, NMPA, EMA or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements including, for example, submissions of safety and other post-marketing information and reports, establishment registration, as well as continued compliance with GMP and good clinical practice ("GCP") for any clinical trials that we conduct post-approval.
In addition, if the FDA, NMPA, EMA or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements including, for example, submissions of safety and other post-marketing information and reports, establishment registration, as well as continued compliance with GMP and GCP for any clinical trials that we conduct post-approval.
In addition, PRC regulations specify that certain Chinese-controlled offshore incorporated enterprises, defined as enterprises incorporated under the laws of foreign countries or territories and that have PRC enterprises 103 Table of Contents or enterprise groups as their primary controlling shareholders, will be classified as resident enterprises if all of the following are located or resident in China: (i) senior management personnel and departments that are responsible for daily production, operation and management; (ii) financial and personnel decision-making bodies; (iii) key properties, accounting books, company seal, and minutes of board meetings and shareholders’ meetings; and (iv) half or more of senior management or directors having voting rights.
In addition, PRC regulations specify that certain Chinese-controlled offshore incorporated enterprises, defined as enterprises incorporated under the laws of foreign countries or territories and that have PRC enterprises or enterprise groups as their primary controlling shareholders, will be classified as resident enterprises if all of the following are located or resident in China: (i) senior management personnel and departments that are responsible for daily production, operation and management; (ii) financial and personnel decision-making bodies; (iii) key properties, accounting books, company seal, and minutes of board meetings and shareholders’ meetings; and (iv) half or more of senior management or directors having voting rights.
As a result, shareholders may be limited in their ability to protect their interests if they are harmed in a manner that would otherwise enable them to sue in a United States federal court. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder derivative action in Hong Kong, mainland China or U.S. federal courts.
As a result, shareholders may be limited in their ability to protect their interests if they are harmed in a manner that would otherwise enable them to sue in a U.S. federal court. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder derivative action in Hong Kong, mainland China or U.S. federal courts.
Failure to comply with the applicable requirements at any time during the product development process, approval process, or after approval, may subject us to administrative or judicial sanctions.
Failure to comply with requirements at any time during the product development process, approval process, or after approval, may subject us to administrative or judicial sanctions.
If a third-party manufacturer with whom we or our collaborators' contract is unable to comply with manufacturing regulations, we may also be subject to fines, unanticipated compliance expenses, recall or seizure of our drugs, product liability claims, total or partial suspension of production and/or enforcement actions, including injunctions, and criminal or civil prosecution.
If a third-party manufacturer with whom we or our collaborators contract is unable to comply with manufacturing regulations, we may also be subject to fines, unanticipated compliance expenses, recall or seizure of our drugs, product liability claims, total or partial suspension of production and/or enforcement actions, including injunctions, and criminal or civil prosecution.
A non-U.S. corporation will be classified as a “passive foreign investment company” ("PFIC") for any taxable year if either (1) 75% or more of its gross income consists of certain types of passive income or (2) 50% or more of the average quarterly value of its assets during such year produce or are held for the production of passive income.
A non-U.S. corporation will be classified as a “passive foreign investment company” (“PFIC”) for any taxable year if either (1) 75% or more of its gross income consists of certain types of passive income or (2) 50% or more of the average quarterly value of its assets during such year produce or are held for the production of passive income.
Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative expenses associated with our operations. We expect to continue to incur losses for the foreseeable future, although we expect these losses to decrease in the near term as product sales growth exceeds expense growth.
Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative expenses associated with our operations. We expect to continue to incur losses in the future, although we expect these losses to decrease in the near term as product sales growth exceeds expense growth.
Foreign Corrupt Practices Act or other anti-bribery and corruption laws, our reputation may be harmed and we could be subject to penalties and significant expenses that have a material adverse effect on our business, financial condition and results of operations. We are subject to the U.S. Foreign Corrupt Practices Act (the "FCPA").
Foreign Corrupt Practices Act or other anti-bribery and corruption laws, our reputation may be harmed and we could be subject to penalties and significant expenses that have a material adverse effect on our business, financial condition and results of operations. We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”).
Our ability to obtain supplies of our medicines and drug candidates could be disrupted if the operations of these suppliers are affected by man-made or natural disasters, public health epidemics or other business interruptions which could cause us to delay or cease development or commercialization of some or all of our medicines and drug candidates.
Our ability to obtain supplies of our medicines and drug candidates could be disrupted if the operations of these suppliers are affected by man-made or natural disasters, public health crises or other business interruptions which could cause us to delay or cease development or commercialization of some or all of our medicines and drug candidates.
The audit reports included in our previous annual reports on Form 10-K filed with the SEC have historically been prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board (the "PCAOB"), and as such, investors have previously been deprived of the benefits of such inspections.
The audit reports included in our previous annual reports on Form 10-K filed with the SEC have historically been prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board (the “PCAOB”), and as such, investors have previously been deprived of the benefits of such inspections.
This evaluation would require new testing and GMP-compliance inspections by regulatory authorities; • our manufacturers may have little or no experience with manufacturing our medicines and drug candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our medicines and drug candidates; 79 Table of Contents • our third-party manufacturers might be unable to timely manufacture our medicines and drug candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any.
This evaluation would require new testing and GMP-compliance inspections by regulatory authorities; • our manufacturers may have little or no experience with manufacturing our medicines and drug candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our medicines and drug candidates; • our third-party manufacturers might be unable to timely manufacture our medicines and drug candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any.
Since a portion of our revenue is denominated in RMB, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in RMB to fund our business activities outside of the PRC or pay dividends in foreign currencies to holders of our ordinary shares and the ADSs.
Since a portion of our revenue is denominated in RMB, any existing and future regulations on currency exchange may limit our ability to utilize revenue generated in RMB to fund our business activities outside of the PRC or pay dividends in foreign currencies to holders of our ordinary shares and the ADSs.
However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." If the PRC tax authorities determine that our Cayman Islands holding company is a resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow and we may be subject to enterprise income tax at a rate of 25% on our worldwide taxable income, as well as to PRC enterprise income tax reporting obligations.
However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that our Cayman Islands holding company is a resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow and we may be subject to enterprise income tax at a rate of 25% on our worldwide taxable income, as well as to PRC enterprise income tax reporting obligations.
Undesirable adverse events ("AEs") caused by our medicines and drug candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval, or could result in limitations or withdrawal following approvals.
Undesirable adverse events (“AEs”) caused by our medicines and drug candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval, or could result in limitations or withdrawal following approvals.
There could be changes in the laws of foreign jurisdictions that may impact the value of our patent rights or our other intellectual property rights. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
There could be changes in the laws of the U.S. or foreign jurisdictions that may impact the value of our patent rights or our other intellectual property rights. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they or our 83 Table of Contents clinical investigators obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our drug candidates.
If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they or our clinical investigators obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our drug candidates.
This may, in the future, require us to transfer manufacturing technology to a different manufacturer or use a different process, each of which would be both time consuming and costly and potentially require us to conduct comparative studies to determine bioequivalence of the new and prior manufacturers' products or the new and old processes; • manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies in the United States to ensure strict compliance with good manufacturing practice ("GMP") requirements and other government regulations and by other comparable regulatory authorities for corresponding non-U.S. requirements.
This may, in the future, require us to transfer manufacturing technology to a different manufacturer or use a different process, each of which would be both time consuming and costly and potentially require us to conduct comparative studies to determine bioequivalence of the new and prior manufacturers’ products or the new and old processes; • manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies in the U.S. to ensure strict compliance with GMP requirements and other government regulations and by other comparable regulatory authorities for corresponding non-U.S. requirements.
If we or our CROs or contract manufacturing organizations (CMOs) fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business.
If we or our CROs or contract manufacturing organizations (“CMOs”) fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business.
For example, in July 2021, the relevant PRC government authorities made public the Opinions on Intensifying Crack Down on Illegal Securities Activities (the "Securities Opinions"), which emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas listed companies.
For example, in July 2021, the relevant PRC government authorities made public the Securities Opinions, which emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas listed companies.
Although to our knowledge we have not experienced any material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our research, development, manufacturing, regulatory and commercialization efforts and our business operations. 89 Table of Contents In the ordinary course of our business, we collect and store sensitive data, including, among other things, legally protected patient health information, personally identifiable information about our employees, intellectual property, and proprietary business information.
Although to our knowledge we have not experienced any material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our research, development, manufacturing, regulatory and commercialization efforts and our business operations. 88 Table of Contents In the ordinary course of our business, we collect and store sensitive data, including, among other things, legally protected patient health information, personally identifiable information about our employees, banking information of our vendors, intellectual property, and proprietary business information.
As a result, we might obtain regulatory approval for a drug in a particular country, but then be subject to price regulations that delay our commercial launch of the drug and negatively impact our revenues and results of operations.
As a result, we might obtain regulatory approval for a medicine in a particular country, but then be subject to price regulations that delay our commercial launch of the medicine and negatively impact our revenues and results of operations.
The legal and regulatory landscape around data privacy is rapidly changing with countries and states passing new laws and regulations every year. Tracking and complying with these laws and regulations requires significant time and expenses and could materially affect our business.
The legal and regulatory landscape around data privacy is rapidly changing with countries, states and other localities passing new laws and regulations every year. Tracking and complying with these laws and regulations requires significant time and expenses and could materially affect our business.
Furthermore, if the interpretation or implementation of existing laws and regulations change, or new regulations come into effect, requiring us or parties on whom we rely to obtain any additional permits, licenses or certificates that were previously not required to operate our business, there can be no assurance that we or parties on whom we rely will successfully obtain such permits, licenses or certificates. 93 Table of Contents Our financial and operating performance may be adversely affected by public health crises, natural catastrophes, or other disasters outside of our control.
Furthermore, if the interpretation or implementation of existing laws and regulations change, or new regulations come into effect, requiring us or parties on whom we rely to obtain any additional permits, licenses or certificates that were previously not required to operate our business, there can be no assurance that we or parties on whom we rely will successfully obtain such permits, licenses or certificates. 93 Table of Contents Our financial and operating performance may be adversely affected by government shutdowns, public health crises, natural catastrophes, or other business interruptions outside of our control.
The FDA will generally not consider the data from a foreign clinical trial not conducted under an IND unless (i) the trial was well-designed and well-conducted in accordance with GCP requirements, including requirements for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials in a way that provides assurance that the data and reported results are credible and accurate and that the rights, safety, and well-being of trial subjects are protected, and (ii) the FDA is able to validate the data from the trial through an onsite inspection, if necessary.
The FDA will generally not consider the data from a foreign clinical trial not conducted under an IND unless (i) the trial was well-designed and well-conducted in accordance with good clinical practice (“GCP”) requirements, including requirements for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical trials in a way that provides assurance that the data and reported results are credible and accurate and that the rights, safety, and well-being of trial subjects are protected, and (ii) the FDA is able to validate the data from the trial through an onsite inspection, if necessary.
There may also be third-party patents or patent applications of which we are currently unaware, and given the dynamic area in which we operate, additional patents are likely to issue that relate to aspects of our business.
There may also be third-party patents or patent applications of which we are currently unaware, and given the dynamic area in which we operate, additional patents are likely to be issued that relate to aspects of our business.
Moreover, the legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital in the U.S. and other markets in the future.
Moreover, the legal uncertainty created by the Data Security Law and the actions taken by the Chinese government could materially adversely affect our ability, on favorable terms, to raise capital in the U.S. and other markets in the future.
If it is determined in the future that the filing or other procedure with the CSRC or any other regulatory authority is required for issuing our equity securities on the Nasdaq Global Select Market or Hong Kong Stock Exchange, it is uncertain whether we will be able to and how long it would take for us to complete the filing or other procedure, despite our best efforts.
If it is determined in the future that the filing or other procedure with the CSRC or any other regulatory authority is required for issuing our equity securities on NASDAQ or Hong Kong Stock Exchange, it is uncertain whether we will be able to and how long it would take for us to complete the filing or other procedure, despite our best efforts.
In addition, if the CSRC or other regulatory authorities later promulgate new rules requiring that we obtain their approvals or complete filing or other procedures for any future public offerings on the Nasdaq Global Select Market or Hong Kong Stock Exchange, we may be unable to obtain a waiver of such requirements, if and when procedures are established to obtain such a waiver.
In addition, if the CSRC or other regulatory authorities later promulgate new rules requiring that we obtain their approvals or complete filing or other procedures for any future public offerings on NASDAQ or Hong Kong Stock Exchange, we may be unable to obtain a waiver of such requirements, if and when procedures are established to obtain such a waiver.
Moreover, we may not be successful in our efforts to establish a strategic collaboration or other alternative arrangements for our medicines and drug candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our medicines and drug candidates as having the requisite potential to demonstrate safety and efficacy or commercial viability.
Moreover, we may not be successful in our efforts to establish a strategic collaboration for our medicines and drug candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our medicines and drug candidates as having the requisite potential to demonstrate safety and efficacy or commercial viability.
Additionally, undesirable side effects caused by our medicines and drug candidates, or caused by our medicines and drug candidates when used in combination with other drugs, could potentially cause significant negative consequences, including: • regulatory authorities could delay or halt pending clinical trials; • we may suspend, delay or alter development of the drug candidate or marketing of the medicine; • regulatory authorities may withdraw approvals or revoke licenses of the medicine, or we may determine to do so even if not required; • regulatory authorities may require additional warnings on the label; • we may be required to implement a Risk Evaluation Mitigation Strategy ("REMS") for the drug, as is the case with REVLIMID, or, if a REMS is already in place, to incorporate additional requirements under the REMS, or to develop a similar strategy as required by a regulatory authority; • we may be required to conduct post-marketing studies; and • we could be sued and held liable for harm caused to subjects or patients.
Additionally, undesirable side effects caused by our medicines and drug candidates, or caused by our medicines and drug candidates when used in combination with other drugs, could potentially cause significant negative consequences, including: • regulatory authorities could delay or halt pending clinical trials; • we may suspend, delay or alter development of the drug candidate or marketing of the medicine; 72 Table of Contents • regulatory authorities may withdraw approvals or revoke licenses of the medicine, or we may determine to do so even if not required; • regulatory authorities may require additional warnings on the label; • we may be required to implement a REMS for the drug, as is the case with REVLIMID, or, if a REMS is already in place, to incorporate additional requirements under the REMS, or to develop a similar strategy as required by a regulatory authority; • we may be required to conduct post-marketing studies; and • we could be sued and held liable for harm caused to subjects or patients.
The PRC government has recently indicated its intent to exert more oversight and control over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies.
The PRC government has indicated its intent to exert more oversight over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based companies.
As of the date of this report, we have not received any inquiry, notice, warning or sanction regarding completing filing or other procedures in connection with offering our equity securities on the Nasdaq Global Select Market or Hong Kong Stock Exchange from the CSRC or any other Chinese regulatory authorities that have jurisdiction over our operations.
As of the date of this report, we have not received any inquiry, notice, warning or sanction regarding completing filing or other procedures in connection with offering our equity securities on NASDAQ or Hong Kong Stock Exchange from the CSRC or any other Chinese regulatory authorities that have jurisdiction over our operations.
Even if we are able to enroll a sufficient number of patients in our 63 Table of Contents clinical trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could delay or prevent completion of these trials and adversely affect our ability to advance the development of our drug candidates.
Even if we are able to enroll a sufficient number of patients in our clinical trials, delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could delay or prevent completion of these trials and adversely affect our ability to advance the development of our drug candidates.
Any of these occurrences may harm our reputation, business, financial condition and prospects significantly. In our periodic and current 70 Table of Contents reports filed with the SEC and our press releases and scientific and medical presentations released from time to time we disclose clinical results for our drug candidates, including the occurrence of AEs and SAEs.
Any of these occurrences may harm our reputation, business, financial condition and prospects significantly. In our periodic and current reports filed with the SEC and our press releases and scientific and medical presentations released from time to time, we disclose clinical results for our drug candidates, including the occurrence of AEs and SAEs.
Numerous laws and regulations, including, without limitation, privacy laws (such as the European Union's General Data Protection Regulation ("GDPR") or similar laws), security breach notification laws (such as Australia's amendment to the Privacy Act), health information privacy laws (such as the United States' Health Insurance Portability and Accountability Act ("HIPAA") and the Human Genetic Resources Administration of China's rules), and consumer protection laws (such as the United States' Federal Trade Commission's unfair or deceptive practices rules or California's Consumer Privacy Act and California's Privacy Rights Act), govern the collection, use, disclosure and protection of health-related and other personal information.
Numerous laws and regulations, including, without limitation, privacy laws (such as the European Union’s General Data Protection Regulation (“GDPR”) or similar laws), security breach notification laws (such as Australia’s amendment to the Privacy Act), health information privacy laws (such as the United States’ Health Insurance Portability and Accountability Act (“HIPAA”) and the Human Genetic Resources Administration of China’s rules), and consumer protection laws (such as the United States’ Federal Trade Commission’s unfair or deceptive practices rules or California’s Consumer Privacy Act and California’s Privacy Rights Act), govern the collection, use, disclosure and protection of health-related and other personal information.
For severe violations, in some countries these laws even allow courts and government agencies to delay or halt transfer of personal information, require deletion of personal information, or even order we stop collection of personal information in that country. All of these could materially harm our business, prospects, and financial condition or even disrupt our operations.
For severe violations, in some countries these laws even allow courts and government agencies to delay or halt transfer of personal information, require deletion of personal information, or even order we stop collection, use or other processing of personal information in that country. All of these could materially harm our business, prospects, and financial condition or even disrupt our operations.
Specifically, it expressly excludes an agent or a designated payee from being considered as a “beneficial owner.” We own the PRC subsidiaries through BeiGene (Hong Kong) Co., Limited ("BeiGene HK"), a company incorporated under the laws of Hong Kong on November 22, 2010 and a wholly owned subsidiary of the Company.
Specifically, it expressly excludes an agent or a designated payee from being considered as a “beneficial owner.” We own the PRC subsidiaries through BeiGene (Hong Kong) Co., Limited (“BeiGene HK”), a company incorporated under the laws of Hong Kong on November 22, 2010 and a wholly owned subsidiary of the Company.
The PRC government has the ability to exert substantial control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, and, as a result, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.
The PRC government has the ability to exert oversight over any offering of securities conducted overseas and/or foreign investment in China-based issuers, and, as a result, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.
Collaborations involving our medicines and drug candidates are subject to numerous risks, which may include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our drug candidates and medicines or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive drugs, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; 81 Table of Contents • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a drug candidate, repeat or conduct new clinical trials, or require a new formulation of a drug candidate for clinical testing; • collaborators could independently develop, or develop with third parties, drugs that compete directly or indirectly with our medicines or drug candidates; • a collaborator with marketing and distribution rights to one or more medicines may not commit sufficient resources to their marketing and distribution or may set prices that reduce the profitability of the medicines; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our medicines and drug candidates, or that result in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable medicines and drug candidates; and • collaborators may own or co-own intellectual property covering our medicines and drug candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
Collaborations involving our medicines and drug candidates are subject to numerous risks, which may include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; • collaborators may not pursue development and commercialization of our drug candidates and medicines or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive drugs, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a drug candidate, repeat or conduct new clinical trials, or require a new formulation of a drug candidate for clinical testing; • collaborators could independently develop, or develop with third parties, drugs that compete directly or indirectly with our medicines or drug candidates; • a collaborator with marketing and distribution rights to one or more medicines may not commit sufficient resources to their marketing and distribution or may set prices that reduce the profitability of the medicines; • collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our medicines and drug candidates, or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborators may own or co-own intellectual property covering our medicines and drug candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property.
Sales of our medicines will depend substantially, both domestically and abroad, on the extent to which the costs of our medicines will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.
Sales of our medicines will depend substantially, on the extent to which the costs of our medicines will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.
If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.
Our future clinical trial results may not be favorable. If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

… 569 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Properties We lease all of our facilities, other than the following facilities that we own: our offices and laboratories in Changping, Beijing, our manufacturing facility in Guangzhou, China, and the site for our planned manufacturing facility and clinical R&D center at the Princeton Innovation Park in Hopewell, New Jersey.
Biggest changeItem 2. Properties We lease all of our facilities, other than the following facilities that we own: our offices and laboratories in Changping, Beijing, our manufacturing facility in Guangzhou, China, and our manufacturing facility and clinical R&D center currently under construction at the Princeton Innovation Park in Hopewell, New Jersey.
Please refer to “Note 9: Leases” in the notes to our consolidated financial statements in this Annual Report for further information on our real property leases.
Please refer to “Note 7: Leases” in the notes to our consolidated financial statements in this Annual Report for further information on our real property leases.
We lease an aggregate of approximately 91,000 square meters of office space at approximately 42 other locations across the United States, China, and Europe, in cities such as Cambridge, Massachusetts; Ridgefield Park, New Jersey; and Emeryville and San Mateo, California in the United States; Beijing, Shanghai, Suzhou, and Guangzhou in China; and Basel, Switzerland, primarily for our offices and for our manufacturing facility in Suzhou, China, pursuant to leases with various expiration dates, with the latest expiring in 2027.
We lease an aggregate of approximately 107,000 square meters of office space at approximately 45 other locations across the U.S., China, and Europe, in cities such as Cambridge, Massachusetts; Ridgefield Park, New Jersey; and Emeryville and San Mateo, California in the U.S.; Beijing, Shanghai, Suzhou, and Guangzhou in China; and Basel, Switzerland, primarily for our offices and for our manufacturing facility in Suzhou, China, pursuant to leases with various expiration dates, with the latest expiring in 2027.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

7 edited+9 added−3 removed0 unchanged
Biggest changeWe believe that the reasons stated in the notice do not provide a valid basis for terminating the BMS-Celgene License with respect to ABRAXANE, and that the notice is a tactical maneuver on the part of BMS-Celgene to reduce its damages in the arbitration proceedings, and we have amended our claims to add a claim for wrongful termination of the BMS-Celgene License with respect to ABRAXANE.
Biggest changeThereafter, we amended our claims to add a claim for wrongful termination of the BMS-Celgene License with respect to ABRAXANE. A hearing was held in the Arbitration in June 2022.
On October 6, 2021, BMS-Celgene delivered a notice to us purporting to terminate the BMS-Celgene License with respect to ABRAXANE and providing 180-days' notice that it was withdrawing ABRAXANE from the range of products for sale or distribution in China pursuant to Section 2.6 of the BMS-Celgene License.
In October 2021, BMS-Celgene delivered a notice to us purporting to terminate the BMS-Celgene License with respect to ABRAXANE ® and providing 180-days’ notice that it was withdrawing ABRAXANE from the range of products for sale or distribution in China pursuant to Section 2.6 of the BMS-Celgene License.
Under the BMS-Celgene License, we allege that BMS-Celgene is obligated, among other things, to ensure the continuity and adequacy of its supply of ABRAXANE to us.
Under the BMS-Celgene License, we alleged that BMS-Celgene was obligated, among other things, to ensure the continuity and adequacy of its supply of ABRAXANE to us.
In the arbitration proceeding, we are seeking (i) a declaration that BMS-Celgene was and is in breach of the BMS-Celgene License, (ii) a declaration that BMS-Celgene acted with gross negligence and/or willful misconduct, (iii) an award of damages, and (iv) such other relief as the arbitrators deem appropriate.
In the Arbitration, we sought (i) a declaration that BMS-Celgene was and continued to be in breach of the BMS-Celgene License, (ii) a declaration that BMS-Celgene acted with gross negligence and/or willful misconduct, (iii) an award of damages, and (iv) such other relief as the arbitrators deemed appropriate.
On June 26, 2020, following the suspension and recall of ABRAXANE ® in China supplied to us by Celgene Logistics Sàrl, a Bristol Myers Squibb Company (referred to elsewhere in this report as BMS, but for this paragraph only, "BMS-Celgene"), we initiated an arbitration proceeding at the International Chamber of Commerce (the ICC) against BMS-Celgene asserting that it had breached and continues to breach the terms and conditions of the License and Supply Agreement entered into by BeiGene and BMS-Celgene in July 2017 and a related quality agreement (collectively, the “BMS-Celgene License”).
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 114 Table of Contents ABRAXANE ® On June 26, 2020, following the suspension and recall of ABRAXANE in China supplied to us by Celgene Logistics Sàrl, a Bristol-Myers Squibb Company (referred to elsewhere in this report as BMS, but for this paragraph only, “BMS-Celgene”), we initiated an arbitration proceeding at the International Chamber of Commerce against BMS-Celgene (the “Arbitration”) asserting that it had breached and continued to breach the terms and conditions of the License and Supply Agreement entered into by BeiGene and BMS-Celgene in July 2017 (the “LSA”) and the Amended and Restated Quality Agreement (the “QA” and collectively with the LSA, the “BMS-Celgene License”).
BMS-Celgene responded in part by submitting a counterclaim against us seeking to recover approximately $30 million in costs that it contends it incurred 113 Table of Contents as part of the ABRAXANE recall. We believe that the allegations contained in the counterclaim are without merit and are defending the counterclaim vigorously.
BMS-Celgene responded in part by submitting a counterclaim against us seeking to recover approximately $30 million in costs that it contends it incurred as part of the ABRAXANE recall.
Item 3. Legal Proceedings From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Item 3. Legal Proceedings From time to time, we may become involved in legal proceedings or be subject to claims of a nature considered ordinary course in our business, including the intellectual property litigation described herein. Most of the issues raised by such claims are highly complex and subject to substantial uncertainties.
Removed
We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows.
Added
For a description of risks relating to these legal proceedings, see “Part I—Item 1A—Risk Factors” of this Annual Report, including the discussion under the headings entitled “Risks Related to Our Intellectual Property.” The outcome of any such proceedings, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment.
Removed
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Added
Prior to a decision being issued in the Arbitration, on August 1, 2023, we entered into a Settlement and Termination Agreement (the “Settlement Agreement”) with BMS-Celgene and certain of its affiliates relating to the termination of the parties’ ongoing contractual relationship, the Arbitration, the LSA, the QA, and the Share Subscription Agreement (the “SSA”), entered into by the parties in 2017 and 2018.
Removed
A hearing was held in the arbitration in June 2022, and no decision has been issued. Item 4. Mine Safety Disclosures Not applicable. 114 Table of Contents PART II
Added
Pursuant to the Settlement Agreement, the parties agreed to mutually dismiss the Arbitration and BMS-Celgene and its affiliates agreed to transfer 23,273,108 of our ordinary shares originally purchased in 2017, in each case subject to and in accordance with the terms and conditions of the Settlement Agreement.
Added
We have no payment obligation in exchange for the transferred shares pursuant to the Settlement Agreement. Furthermore, the parties agreed to terminate the LSA and QA on December 31, 2023, subject to our right to continue selling all inventory of REVLIMID ® and VIDAZA ® until sold out or December 31, 2024, whichever is earlier.
Added
The Settlement Agreement provides for a settlement and release by each party of claims arising from or relating to the Arbitration, the LSA, the QA and the SSA, as well as other disputes and potential disputes between the parties, in each case subject to and in accordance with the terms and conditions of the Agreement.
Added
The settlement closed on August 15, 2023, and the matter is concluded. BRUKINSA ® On June 13, 2023, Pharmacyclics LLC (“Pharmacyclics”) filed a complaint in the U.S.
Added
District Court for the District of Delaware (the “Court”) against the Company and its subsidiary, BeiGene USA, Inc., alleging that BRUKINSA infringes Pharmacyclics’ U.S Patent No. 11,672,803 issued on June 13, 2023 (the “‘803 patent”). Pharmacyclics seeks a declaration of infringement, unspecified monetary damages and other relief. The Company intends to vigorously defend against the claims.
Added
On October 12, 2023, the Court entered a joint stipulation filed by the parties to stay the infringement suit pending resolution of a petition for post-grant review (“PGR”) of the ‘803 Patent with the U.S. Patent and Trademark Office (“USPTO”) to be filed by the Company by November 3, 2023.
Added
On November 1, 2023, the Company filed a PGR petition against the ‘803 Patent with the USPTO. Item 4. Mine Safety Disclosures Not applicable. 115 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

14 edited+0 added−3 removed18 unchanged
Biggest changeSubject to applicable law and our amended and restated articles of association, any future determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors may deem relevant.
Biggest changeSubject to applicable law and our amended and restated articles of association, any future determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our board of directors may deem relevant. 116 Table of Contents Performance Comparison Graph This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
In addition, the Notice Regarding the Determination of Chinese‑Controlled Offshore Incorporated Enterprise as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (“Circular 82)”, issued by the State Administration of Taxation, which provides guidance on the determination of the tax residence status of a Chinese‑controlled offshore incorporated enterprise, defines Chinese-controlled offshore incorporated enterprise as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder.
In addition, the Notice Regarding the Determination of Chinese‑Controlled Offshore Incorporated Enterprise as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies (“Circular 82)”, issued by the State Taxation Administration, which provides guidance on the determination of the tax residence status of a Chinese‑controlled offshore incorporated enterprise, defines Chinese-controlled offshore incorporated enterprise as an enterprise that is incorporated under the laws of a foreign country or territory and that has a PRC enterprise or enterprise group as its primary controlling shareholder.
Our ordinary shares have been publicly traded on the Stock Exchange of Hong Kong Limited under the stock code “06160” since August 8, 2018. Our ordinary shares traded in Renminbi (the “RMB Shares”) have been publicly traded on the Science and Technology Innovation Board of the Shanghai Stock Exchange in China under the stock code "688235" since December 15, 2021.
Our ordinary shares have been publicly traded on the Stock Exchange of Hong Kong Limited under the stock code “06160” since August 8, 2018. Our ordinary shares traded in Renminbi (the “RMB Shares”) have been publicly traded on the Science and Technology Innovation Board of the Shanghai Stock Exchange in China under the stock code “688235” since December 15, 2021.
According to Circular 82, a Chinese‑controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: • the primary location of the enterprise’s senior executives of the day‑to‑day operational management and senior management departments performing their duties is in the PRC; • decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; • the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder meeting minutes are located or maintained in the PRC; and • 50% or more of voting board members or senior executives habitually reside in the PRC.
According to Circular 82, a Chinese‑controlled offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: • the primary location of the enterprise’s senior executives of the day‑to‑day operational management and senior management departments performing their duties is in the PRC; • decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; • the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder meeting minutes are located or maintained in the PRC; and • 50% or more of voting board members or senior executives habitually reside in the PRC. 119 Table of Contents Currently, some of the members of our management team are located in China.
However, as the tax residency status of an enterprise is subject to determination by 117 Table of Contents the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.
However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.
It is also unclear whether, if we are considered a PRC resident enterprise, holders of our shares or ADSs would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. Item 6. Reserved Not applicable. 118 Table of Contents
It is also unclear whether, if we are considered a PRC resident enterprise, holders of our shares or ADSs would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. Item 6. Reserved Not applicable. 120
The following graph shows the total shareholder return of an investment of $100 in cash at market close on December 31, 2017 through December 31, 2022 for our ADSs, the NASDAQ Composite Index (U.S.), and the NASDAQ Biotechnology Index.
The following graph shows the total shareholder return of an investment of $100 in cash at market close on December 31, 2018 through December 31, 2023 for our ADSs, the NASDAQ Composite Index (U.S.), and the NASDAQ Biotechnology Index.
Recent Sales of Unregistered Securities None. 116 Table of Contents Issuer Purchases of Equity Securities None.
Recent Sales of Unregistered Securities None. 118 Table of Contents Issuer Purchases of Equity Securities None.
Currently, some of the members of our management team are located in China. However, we do not believe that we meet all of the conditions outlined in the immediately preceding paragraph. BeiGene, Ltd. and its offshore subsidiaries are incorporated outside the PRC.
However, we do not believe that we meet all of the conditions outlined in the immediately preceding paragraph. BeiGene, Ltd. and its offshore subsidiaries are incorporated outside the PRC.
Shareholders As of January 31, 2023, we had approximately 47,084 holders of record of our ordinary shares, 46,932 of which are holders of record of our RMB Shares, and 8 holders of record of our ADSs. These number do not include beneficial owners whose ordinary shares or ADSs are held by nominees in street name.
Shareholders As of January 31, 2024, we had approximately 39,817 holders of record of our ordinary shares, 39,708 of which are holders of record of our RMB Shares, and 8 holders of record of our ADSs. These numbers do not include beneficial owners whose ordinary shares or ADSs are held by nominees in street name.
Dividend Policy Our board of directors has adopted a dividend policy which provides that we currently intend to retain all available funds and earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
We currently intend to retain all available funds and earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future.
Because many ordinary shares and ADSs are held by broker nominees, we are unable to estimate the total number of beneficial holders represented by these record holders.
Because many ordinary shares and ADSs are held by broker nominees, we are unable to estimate the total number of beneficial holders represented by these record holders. Dividend Policy We have never declared or paid any dividends on our ordinary shares or any other securities.
The shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future shareholder returns. 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 BeiGene, Ltd. 100.00 143.53 169.63 264.42 277.25 225.07 NASDAQ Composite 100.00 97.16 132.81 192.47 235.15 158.65 NASDAQ Biotechnology 100.00 91.14 114.02 144.15 144.18 129.59 Equity Compensation Plan Information Our equity compensation plan information required by this item is incorporated by reference to the information in “Part III—Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report.
The shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future shareholder returns. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 BeiGene, Ltd. 100.00 118.18 184.22 193.16 156.81 128.59 NASDAQ Composite 100.00 136.69 198.10 242.03 163.28 236.17 NASDAQ Biotechnology 100.00 125.11 158.17 158.20 142.19 148.72 117 Table of Contents Equity Compensation Plan Information Our equity compensation plan information required by this item is incorporated by reference to the information in “Part III—Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report.
We have never declared or paid any dividends on our ordinary shares or any other securities. If we pay dividends in the future, in order for us to distribute dividends to our shareholders and holders of ADSs, we may rely to some extent on dividends distributed by our PRC subsidiaries.
If we pay dividends in the future, in order for us to distribute dividends to our shareholders and holders of ADSs, we may rely to some extent on dividends distributed by our PRC subsidiaries. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us, and such distributions will be subject to PRC withholding tax.
Removed
This dividend policy reflects our board of directors’ current views on our financial and cash flow position. We intend to continue to review our dividend policy from time to time, and there can be no assurance that dividends will be paid in any particular amount, if at all, for any given period.
Removed
PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us, and such distributions will be subject to PRC withholding tax.
Removed
Investors should not purchase our ordinary shares, RMB Shares, or ADSs with the expectation of receiving cash dividends. 115 Table of Contents Performance Comparison Graph This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+43 added−83 removed29 unchanged
Biggest changeLiquidity and Capital Resources The following table represents our cash, short-term investments, and debt balances as of December 31, 2022: Year Ended December 31, 2022 2021 (in thousands) Cash, cash equivalents and restricted cash $ 3,875,037 $ 4,382,887 Short-term investments $ 665,251 $ 2,241,962 Total debt $ 538,117 $ 629,678 127 Table of Contents We have incurred annual net losses and negative cash flows from operations since inception, resulting from the funding of our research and development programs and selling, general and administrative expenses associated with our operations, as well as to support the commercialization of our products globally.
Biggest changeDiscussions of 2021 items and year-to-year comparisons between 2022 and 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 127 Table of Contents Non-GAAP Reconciliation Year Ended December 31, 2023 2022 ( in thousands) Reconciliation of GAAP to adjusted cost of sales - products: GAAP cost of sales - products $ 379,920 $ 286,475 Less: Depreciation 8,578 — Less: Amortization of intangibles 3,739 3,225 Adjusted cost of sales - products $ 367,603 $ 283,250 Reconciliation of GAAP to adjusted research and development: GAAP research and development $ 1,778,594 $ 1,640,508 Less: Share-based compensation expenses 163,550 139,348 Less: Depreciation 56,084 26,241 Adjusted research and development $ 1,558,960 $ 1,474,919 Reconciliation of GAAP to adjusted selling, general and administrative: GAAP selling, general and administrative $ 1,504,501 $ 1,277,852 Less: Share-based compensation expenses 204,038 163,814 Less: Depreciation 15,774 36,061 Adjusted selling, general and administrative $ 1,284,689 $ 1,077,977 Reconciliation of GAAP to adjusted operating expenses GAAP operating expenses $ 3,286,595 $ 2,919,111 Less: Share-based compensation expenses 367,588 303,162 Less: Depreciation 71,858 62,302 Less: Amortization of intangibles 3,500 751 Adjusted operating expenses $ 2,843,649 $ 2,552,896 Reconciliation of GAAP to adjusted loss from operations: GAAP loss from operations $ (1,207,736) $ (1,789,665) Plus: Share-based compensation expenses 367,588 303,162 Plus: Depreciation 80,436 62,302 Plus: Amortization of intangibles 7,239 3,976 Adjusted loss from operations $ (752,473) $ (1,420,225) Liquidity and Capital Resources The following table represents our cash, short-term investments, and debt balances as of December 31, 2023: Year Ended December 31, 2023 2022 (in thousands) Cash, cash equivalents and restricted cash $ 3,185,984 $ 3,875,037 Short-term investments $ 2,600 $ 665,251 Total debt $ 885,984 $ 538,117 We have incurred annual net losses and negative cash flows from operations since inception, resulting from the cost of funding our research and development programs and selling, general and administrative expenses associated with our operations, as well as supporting the commercialization of our products globally.
To date, we have not made any material adjustments to our prior estimates of research and development expenses. Income Taxes Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
To date, we have not made any material adjustments to our prior estimates of research and development expenses. Measurement of Deferred Tax Assets Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in future years.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.
The majority of our service providers invoice us in arrears for services performed, on a pre‑determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our expenses as of each balance sheet date in our financial statements based on facts and circumstances known to 132 Table of Contents us at that time.
The majority of our service providers invoice us in arrears for services performed, on a pre‑determined schedule or when contractual milestones are met; however, some require advanced payments. We make estimates of our expenses as of each balance sheet date in our financial statements based on facts and circumstances known to us at that time.
Our material cash requirements in the short- and long-term consist of the following operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations.
Future Liquidity and Material Cash Requirements Our material cash requirements in the short- and long-term consist of the following operational, capital, and manufacturing expenditures, a portion of which contain contractual or other obligations.
Funding obligations under the defined benefit pension plan are equivalent to $2.6 million per year based on annual funding contributions in effect as of December 31, 2022 to achieve fully funded status where the market value of plan assets equals the projected benefit obligations.
Funding contributions under the defined benefit pension plan are equivalent to $3.6 million per year based on annual funding contributions in effect as of December 31, 2023 to achieve fully funded status where the market value of plan assets equals the projected benefit obligations.
Based on our current operating plan, we expect that our existing cash, cash equivalents and short-term investments as of December 31, 2022 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months after the date that the financial statements included in this report are issued.
Based on our current operating plan, we expect that our existing cash and cash equivalents as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months after the date that the financial statements included in this report are issued.
Financing Activities Cash flows from financing activities consist primarily of sale of ordinary shares, RMB Shares, and ADSs through equity offerings, issuance and repayment of short-term and long-term debt, and proceeds from the sale of ADSs through employee equity compensation plans.
Financing Activities Cash flows from financing activities consist primarily of issuance and repayment of short-term and long-term debt, and proceeds from the sale of ADSs through employee equity compensation plans.
Significant judgments are required in making these estimates. We include variable consideration in the transaction price to the extent it is probable that a significant reversal will not occur and estimate variable consideration from rebates, chargebacks, trade discounts and allowances, sales returns allowances, and other incentives using the expected value method.
We include variable consideration in the transaction price to the extent it is probable that a significant reversal will not occur and estimate variable consideration from rebates, chargebacks, trade discounts and allowances, sales returns allowances, and other incentives using the expected value method.
Capital Commitments We had capital commitments amounting to $404.9 million for the acquisition of property, plant and equipment as of December 31, 2022, which were mainly for our manufacturing and clinical R&D campus in Hopewell, NJ, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and new building for Beijing Innerway Bio-tech Co., Ltd.
Capital Commitments We had capital commitments amounting to $333.5 million for the acquisition of property, plant and equipment as of December 31, 2023, which were mainly for our manufacturing and clinical R&D campus in Hopewell, New Jersey, additional capacity at the Guangzhou and Suzhou manufacturing facilities, and a new building for Beijing Innerway Bio-tech Co., Ltd.
Full year 2021 sales of tislelizumab included two negative adjustments totaling $45.6 million for distributor channel inventory compensation as a result of inclusion in the March 2021 and January 2022 NRDL lists.
Full year 2023 sales of tislelizumab included two negative adjustments totaling $13.2 million for distributor channel inventory compensation as a result of inclusion in the March 2023 and January 2024 NRDL lists.
The non-cash charges and adjustments were primarily driven by share-based compensation expense, charges for acquired in-process research and development costs, and depreciation and amortization expense, offset by amortization of the research and development cost share liability.
The non-cash charges and adjustments were primarily driven by share-based compensation expense, charges for acquired in-process research and development costs, and depreciation and amortization expense, offset by two non-cash gains related to the share settlement from the BMS arbitration and amortization of the research and development cost share liability.
Operating activities used $1.3 billion of cash for the year ended December 31, 2021, which resulted principally from our net loss of $1.5 billion and an increase in our net operating assets and liabilities of $118.3 million, partially offset by non-cash charges and adjustments of $277.4 million.
Operating activities used $1.2 billion of cash for the year ended December 31, 2023, which resulted principally from our net loss of $881.7 million, and by an increase in our net operating assets and liabilities of $370.5 million, partially offset by non-cash charges and adjustments of $94.8 million.
Research and Development Expense Research and development expense increased by $181.3 million, or 12.4%, to $1.6 billion for the year ended December 31, 2022, from $1.5 billion for the year ended December 31, 2021.
Research and Development Expense Research and development expense increased by $138.1 million, or 8.4%, to $1.8 billion for the year ended December 31, 2023, from $1.6 billion for the year ended December 31, 2022.
We are funding our portion of the co-development costs by contributing cash and/or development services. As of December 31, 2022, our remaining co-development funding commitment was $0.6 billion. 130 Table of Contents Funding Commitment Funding commitment represents our committed capital related to two of our equity method investments in the amount of $19.0 million.
We are funding our portion of the co-development costs by contributing cash and/or development services. As of December 31, 2023, our remaining co-development funding commitment was $483.7 million. Funding Commitment Funding commitment represents our committed capital related to two of our equity method investments in the amount of $15.1 million.
Purchase Commitments As of December 31, 2022, purchase commitments amounted to $117.3 million, of which $55.3 million related to minimum purchase requirements for supply purchased from CMOs and $61.9 million related to binding purchase order obligations of inventory from BMS and Amgen. We do not have any minimum purchase requirements for inventory from BMS or Amgen.
Purchase Commitments As of December 31, 2023, purchase commitments amounted to $169.2 million, of which $41.2 million related to minimum purchase requirements for supply purchased from CMOs and $128.0 million related to binding purchase order obligations of inventory from BMS and Amgen. We do not have any minimum purchase requirements for inventory from BMS or Amgen.
We generate revenue from product sales and revenue transactions with our collaboration partners. 131 Table of Contents Product Revenue To determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we estimate any rebates, chargebacks or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts.
Product Revenue To determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we estimate any rebates, chargebacks or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts. Significant judgments are required in making these estimates.
Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the year ended December 31, 2022 totaled $195.4 million, of which $99.0 million was recorded as R&D expense. The remaining $96.4 million was recorded as a reduction for the R&D cost share liability.
Our co-funding obligation for the development of the pipeline assets under the Amgen collaboration for the year ended December 31, 2023 totaled $108.6 million, of which $53.3 million was recorded as R&D expense. The remaining $55.3 million was recorded as a reduction for the R&D cost share liability. 2.
If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we will modify the related accruals accordingly on a prospective basis.
Expenses related to clinical trials are accrued based on our estimates of the actual services performed by the third parties for the respective period. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we will modify the related accruals accordingly on a prospective basis.
These inflows were partially offset by $321.8 million of repayment of short-term loans. Effects of Exchange Rates on Cash We have substantial operations in the PRC, which generate a significant amount of RMB-denominated cash from product sales and require a significant amount of RMB-denominated cash to pay our obligations.
Effects of Exchange Rates on Cash We have substantial operations in the PRC, which generate a significant amount of RMB-denominated cash from product sales and require a significant amount of RMB-denominated cash to pay our obligations.
On December 15, 2021, we completed the initial public offering on the SSE. The shares offered in the STAR Offering were issued to and subscribed for by permitted investors in the People’s Republic of China ("PRC") in Renminbi ("RMB Shares"). The public offering price of the RMB Shares was RMB192.60 per ordinary share, or $391.68 per ADS.
The shares offered in the STAR Offering were issued to and subscribed for by permitted investors in the People’s Republic of China (“PRC”) in Renminbi (“RMB Shares”). The public offering price of the RMB Shares was RMB192.60 per ordinary share, or $391.68 per ADS. In this offering, we sold 115,055,260 ordinary shares.
Collaboration revenue totaled $161.3 million for the year ended December 31, 2022, of which $46.8 million was recognized from deferred revenue for R&D services performed during the year ended December 31, 2022 under both the tislelizumab and ociperlimab collaborations, $105.0 million was recognized from deferred revenue for Novartis' right to access ociperlimab over the option period, and $9.5 million was recognized related to the sale of tislelizumab clinical supply to Novartis.
Collaboration revenue totaled $161.3 million for the year ended December 31, 2022, of which $46.8 million was recognized from deferred revenue for R&D services performed during the year ended December 31, 2022 under both the tislelizumab and ociperlimab collaborations, $105.0 million was recognized from deferred revenue for Novartis’ right to access ociperlimab over the option period, and $9.5 million was recognized related to the sale of tislelizumab clinical supply to Novartis (see Note 3 to our consolidated financial statements included in this Annual Report on Form 10-K).We expect collaboration revenue to decrease for the year ended December 31, 2024 due to the recent terminations with Novartis.
Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, channel inventory levels, specific known market events and trends, industry data and forecasted customer buying and payment patterns.
Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, channel inventory levels, specific known market events and trends, industry data and forecasted customer buying and payment patterns. 132 Table of Contents We base our sales returns allowance on estimated distributor inventories, customer demand as reported by third-party sources, and actual returns history, as well as other factors, as appropriate.
The income tax expense for the year ended December 31, 2022 was primarily attributable to current China tax expense for certain subsidiaries determined after certain non-deductible expenses and current U.S. tax expense, as a result of amendments to Internal Revenue Code (IRC) Section 174 pursuant to the 2017 Tax Cuts and Jobs Act, which took effect January 1, 2022, and eliminates the ability to fully deduct research and development expenditures in the year incurred, and requires capitalization and amortization.
The income tax expense for the year ended December 31, 2023, was primarily attributable to current China tax expense for certain subsidiaries determined after non-deductible expenses and current U.S. tax expense, as a result of capitalization and amortization of research and development expenditures required pursuant to Internal Revenue Code Section 174.
The increase in expense for the year ended December 31, 2022 was primarily related to foreign exchange losses resulting from the strengthening of the U.S. dollar and the revaluation impact of foreign currencies held in U.S. functional currency subsidiaries. Also contributing to the increase in expense was an increase in the unrealized loss on our equity investments.
For the year ended December 31, 2022, other expense, net was $223.9 million primarily related to foreign exchange losses resulting from the strengthening of the U.S. dollar and the revaluation impact of foreign currencies held in U.S. functional currency subsidiaries and unrealized losses on our equity investments. These losses were partially offset by increased income from government subsidies.
The following table provides information regarding our cash flows for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (in thousands) Cash, cash equivalents and restricted cash at beginning of period $ 4,382,887 $ 1,390,005 Net cash used in operating activities (1,496,619) (1,298,723) Net cash provided by investing activities 1,077,123 640,659 Net cash (used in) provided by financing activities (18,971) 3,636,911 Net effect of foreign exchange rate changes (69,383) 14,035 Net (decrease) increase in cash, cash equivalents and restricted cash (507,850) 2,992,882 Cash, cash equivalents and restricted cash at end of period $ 3,875,037 $ 4,382,887 Operating Activities Cash flows from operating activities is net loss adjusted for certain non-cash items and changes in assets and liabilities.
The following table provides information regarding our cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (in thousands) Cash, cash equivalents and restricted cash at beginning of period $ 3,875,037 $ 4,382,887 Net cash used in operating activities (1,157,453) (1,496,619) Net cash provided by investing activities 60,004 1,077,123 Net cash provided by (used in) financing activities 416,478 (18,971) Net effect of foreign exchange rate changes (8,082) (69,383) Net decrease in cash, cash equivalents and restricted cash (689,053) (507,850) Cash, cash equivalents and restricted cash at end of period $ 3,185,984 $ 3,875,037 Operating Activities Cash flows from operating activities is determined indirectly by taking net loss and adjusting for certain non-cash items and changes in assets and liabilities related to operations.
To date, we have financed our operations principally through proceeds from public and private offerings of our securities and proceeds from our collaborations, together with product sales since September 2017.
As of December 31, 2023, we had an accumulated deficit of $8.0 billion. 128 Table of Contents To date, we have financed our operations principally through proceeds from public and private offerings of our securities, proceeds from debt, sales of marketable securities and proceeds from our collaborations, together with product sales since September 2017.
We incurred net losses of $2.0 billion and $1.5 billion for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $7.1 billion.
We incurred net losses of $0.9 billion and $2.0 billion for the years ended December 31, 2023 and 2022, respectively.
The increase in working capital was driven 128 Table of Contents largely by increases in accounts receivable, inventory and prepaid expenses, offset by increases in accounts payable, accrued expenses and other liabilities and deferred revenue resulting from the upfront option payment from Novartis.
The increase in working capital was driven largely by increases in accounts receivable and inventory and a decrease in deferred revenue, partially offset by increases in accounts payable and accrued expenses and other current liabilities.
Sales of tislelizumab in China totaled $422.9 million for the year ended December 31, 2022, representing a 65.8% increase compared to the prior year. During the year ended December 31, 2022, new patient demand from broader reimbursement and further expansion of our salesforce and hospital listings continued to drive increased market penetration and market share for tislelizumab.
During the year ended December 31, 2023, new patient demand on account of broader reimbursement in NRDL listing and further expansion of our salesforce and hospital listings continued to drive increased market penetration and market share for tislelizumab.
We base our sales returns allowance on estimated distributor inventories, customer demand as reported by third-party sources, and actual returns history, as well as other factors, as appropriate. For newly launched products where actual returns history is not yet available, the sales returns allowance is initially calculated based on benchmarking data from similar products and industry experience.
For newly launched products where actual returns history is not yet available, the sales returns allowance is initially calculated based on benchmarking data from similar products and industry experience.
We have a history of contracting with third parties that perform various clinical trial activities on behalf of us in the ongoing development of our product candidates. Expenses related to clinical trials are accrued based on our estimates of the actual services performed by the third parties for the respective period.
Measurement of Research and Development Expenses Clinical trial costs are a significant component of our research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on behalf of us in the ongoing development of our product candidates.
U.S. sales accelerated in the period, driven by increased uptake in MCL, WM and MZL. BRUKINSA sales in China totaled $150.3 million for the year ended December 31, 2022, representing growth of 48.6% compared to the prior year, driven by a significant increase in all approved indications, including CLL/SLL.
BRUKINSA sales in the EU and rest of world totaled $122.2 million and $28.8 million, respectively, for the year ended December 31, 2023, representing growth of 722.3% and 194.8%, respectively, compared to the prior-year period, driven by a significant increase in all approved indications, specifically in CLL, SLL and WM.
These sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
These sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts.
Investing activities provided $640.7 million of cash for the year ended December 31, 2021, consisting of $2.1 billion in purchases of short-term investment securities, $262.9 million of capital expenditures, $43.4 million in purchases of intangible assets, $43.5 million in purchases of long-term investments and $8.5 million upfront collaboration payments, all of which were offset by sales and maturities of investment securities of $3.1 billion.
Investing Activities Cash flows from investing activities consist primarily of capital expenditures, investment purchases, sales, maturities, and disposals, and upfront payments related to our collaboration agreements. 129 Table of Contents Investing activities provided $60.0 million of cash for the year ended December 31, 2023, consisting of $673.2 million in sales and maturities of investment securities, partially offset by $561.9 million of capital expenditures, $15.0 million upfront collaboration payments, $19.4 million in purchases of intangible assets, $14.9 million in purchases of long-term investments and $2.1 million in purchases of short-term investment securities.
In this offering, we sold 115,055,260 ordinary shares. Net proceeds after deducting underwriting commissions and offering expenses were $3.4 billion.
Net proceeds after deducting underwriting commissions and offering expenses were $3.4 billion (RMB 21.7 billion).
Financing activities provided $3.6 billion of cash for the year ended December 31, 2021, consisting primarily of $3.4 billion of net proceeds from our STAR Offering in December 2021, $406.4 million from proceeds of short-term loans, $92.8 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan, $50.0 million from the sale of our shares to Amgen, and $16.8 million from proceeds of long-term bank loans.
Financing activities provided $416.5 million of cash for the year ended December 31, 2023, consisting primarily of $661.5 million from proceeds of short-term loans, $55.7 million from the exercise of employee share options and proceeds from the issuance of shares through our employee share purchase plan and $22.5 million from proceeds of long-term bank loans, partially offset by $309.6 million of repayments on short-term loans and $13.7 million of repayments on long-term bank loans.
Additionally, on December 15, 2021, we received RMB21.7 billion in net proceeds from the STAR Offering. Since the reporting currency of the Company is the U.S. dollar, periods of volatility in exchange rates may have a significant impact on our consolidated cash balances.
Since the reporting currency of the Company is the U.S. dollar, periods of volatility in exchange rates may have a significant impact on our consolidated cash balances denominated in U.S. dollar but do not affect the ability to pay our RMB-denominated liabilities.
These losses were partially offset by increased income from government subsidies. Income Tax Expense Income tax expense was $42.8 million for the year ended December 31, 2022 compared with $19.2 million for the year ended December 31, 2021.
Income Tax Expense Income tax expense was $55.9 million for the year ended December 31, 2023 compared with $42.8 million for the year ended December 31, 2022.
Debt Obligations and Interest Total debt obligations coming due in the next twelve months is $329.0 million. Total long-term debt obligations are $209.1 million. See Note 14 in the Notes to the Financial Statements for further detail of our debt obligations. Interest on bank loans is paid quarterly until the respective loans are fully settled.
As of December 31, 2023, we are in compliance with all covenants of our material debt agreements. See Note 12 in the Notes to the Financial Statements for further detail of our debt obligations. Interest on bank loans is paid quarterly until the respective loans are fully settled.
Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included in this Annual Report for information regarding recent accounting pronouncements.
For the years ended December 31, 2023, 2022 and 2021, we determined there was no impairment of the value of our long-lived assets. Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included in this Annual Report for information regarding recent accounting pronouncements.
The following table summarizes the external cost of development programs, upfront license fees, and internal research and development expense for the years ended December 31, 2022 and 2021: Year Ended December 31, Changes 2022 2021 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 469,497 $ 477,761 $ (8,264) (1.7) % Upfront license fees 68,665 83,500 (14,835) (17.8) % Amgen co-development expenses 1 98,955 115,464 (16,509) (14.3) % Total external research and development expenses 637,117 676,725 (39,608) (5.9) % Internal research and development expenses 1,003,391 782,514 220,877 28.2 % Total research and development expenses $ 1,640,508 $ 1,459,239 $ 181,269 12.4 % 1.
The following table summarizes the external cost of development programs, upfront license fees, and internal research and development expense for the years ended December 31, 2023 and 2022: 125 Table of Contents Year Ended December 31, Changes 2023 2022 $ % (dollars in thousands) External research and development expense: Cost of development programs $ 551,417 $ 469,497 $ 81,920 17.4 % Upfront license fees 46,800 68,665 (21,865) (31.8) % Amgen co-development expenses 1 53,315 98,955 (45,640) (46.1) % Total external research and development expenses 651,532 637,117 14,415 2.3 % Internal research and development expenses 1,127,062 1,003,391 123,671 12.3 % Total research and development expenses $ 1,778,594 $ 1,640,508 $ 138,086 8.4 % Adjusted research and development expense 2 $ 1,558,960 $ 1,474,919 $ 84,041 5.7 % 1.
Global sales of BRUKINSA totaled $564.7 million for the year ended December 31, 2022, representing a 159.0% increase compared to the prior year; U.S. sales of BRUKINSA totaled $389.7 million for the year ended December 31, 2022 compared to $115.7 million in the prior year, representing growth of 237.0%.
Sales of tislelizumab in China totaled $536.6 million for the year ended December 31, 2023, representing a 26.9% increase compared to the prior year.
Gross Margin Gross margin on global product sales increased to $968.1 million for the year ended December 31, 2022, compared to $469.1 million for the year ended December 31, 2021, primarily due to increased product revenue in the current year period.
Gross Margin Gross margin on global product sales increased to $1.8 billion, or 82.7% as a percentage of sales, for the year ended December 31, 2023, compared to $1.0 billion, or 77.2% as a percentage of sales, for the year ended December 31, 2022, primarily due to increased revenue volume, regional price mix in the current year period and slightly lower per unit costs due to higher production volumes.
As of December 31, 2022, the total research and development commitment amounted to $22.3 million. Pension Plan We maintain a defined benefit pension plan in Switzerland.
As of December 31, 2023, our remaining capital commitment was $8.9 million and is expected to be paid from time to time over the investment period. 131 Table of Contents Pension Plan We maintain a defined benefit pension plan in Switzerland.
The decrease in external research and development expenses for the year ended December 31, 2022 was primarily attributable to lower upfront license fees under collaboration agreements, lower external spending related to fees paid to CROs as we internalize previously outsourced activities, and a decrease in the expense recognized on co-development fees to Amgen.
The increase was partially offset by lower external clinical trial costs for TEVIMBRA (tislelizumab) and ociperlimab due to certain studies winding down, lower upfront license fees under collaboration agreements and a decrease in the expense recognized on co-development fees to Amgen.
Interest Income (Expense), Net Interest income (expense), net increased by $68.2 million, or 433.1%, to $52.5 million of net interest income for the year ended December 31, 2022, from $15.8 million of net interest expense for the year ended December 31, 2021.
The increase was primarily attributable to the expansion of our commercial organizations primarily in the U.S. and Europe. Interest Income, Net Interest income, net increased by $21.5 million, or 41.0%, to $74.0 million for the year ended December 31, 2023, compared to $52.5 million for the year ended December 31, 2022.
Contractual and Other Obligations The following table summarizes our significant contractual obligations as of December 31, 2022: Payments Due by Period Total Short-term Long-term (in thousands) Contractual obligations: Operating lease commitments $ 63,024 $ 26,278 $ 36,746 Purchase commitments 117,293 74,449 42,844 Debt obligations 538,117 328,969 209,148 Interest on debt 45,947 16,632 29,315 Co-development funding commitment 595,702 231,697 364,005 Funding commitment 16,000 7,000 9,000 Research and development commitment 22,327 5,829 16,498 Pension plan 7,760 2,553 5,207 Capital commitments 404,914 404,914 — Total $ 1,811,084 $ 1,098,321 $ 712,763 Operating Lease Commitments We lease office or manufacturing facilities in Beijing, Shanghai, Suzhou and Guangzhou in China; office facilities in California, Massachusetts, Maryland, and New Jersey in the United States; and in Basel, Switzerland under non-cancelable operating leases expiring on various dates.
We plan to fund our material cash requirements with cash on hand. 130 Table of Contents Contractual and Other Obligations The following table summarizes our significant contractual obligations as of December 31, 2023: Payments Due by Period Total Short-term Long-term (in thousands) Contractual obligations: Operating lease commitments $ 49,156 $ 23,499 $ 25,657 Purchase commitments 169,212 140,775 28,437 Debt obligations 885,984 688,366 197,618 Interest on debt 32,101 8,939 23,162 Co-development funding commitment 483,651 137,809 345,842 Funding commitment 8,905 2,213 6,692 Pension plan 14,995 3,577 11,418 Capital commitments 333,498 333,498 — Total $ 1,977,502 $ 1,338,676 $ 638,826 Operating Lease Commitments We lease office or manufacturing facilities in Beijing, Shanghai, Suzhou and Guangzhou in China; office facilities in California, Massachusetts, Maryland, and New Jersey in the U.S.; and in Basel, Switzerland under non-cancelable operating leases expiring on various dates.
Internal research and development expense increased $220.9 million, or 28.2%, to $1.0 billion and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities, and included the following: • $114.7 million increase of employee salary and benefits, primarily attributable to hiring more research and development personnel to support our expanding research and development activities; • $57.6 million increase of materials and reagent expenses, primarily in connection with the in-house manufacturing of drug candidates used for clinical purposes; • $47.6 million increase of facilities, depreciation, office expense, rental fees, and other expenses to support the growth of our organization; • $25.0 million increase of share-based compensation expense, primarily attributable to our increased headcount of research and development employees, resulting in more awards being expensed; and • $24.0 million decrease of consulting fees, including decreased meeting expense related to scientific, regulatory and development consulting activities, in connection with the advancement of our drug candidates. 126 Table of Contents Selling, General and Administrative Expense Selling, general and administrative expense increased by $287.7 million, or 29.1%, to $1,277.9 million for the year ended December 31, 2022, from $990.1 million for the year ended December 31, 2021.
Internal research and development expense increased $123.7 million, or 12.3%, to $1.1 billion from $1.0 billion for the year ended December 31, 2022, and was primarily attributable to the expansion of our global development organization and our clinical and preclinical drug candidates, as well as our continued efforts to internalize research and clinical trial activities.
Removed
Overview We are a global biotechnology company that is developing and commercializing innovative and affordable oncology medicines to improve treatment outcomes and access for patients worldwide.
Added
Non-GAAP Financial Measures We provide certain financial measures that are not defined under accounting principals generally accepted in the United States of America (“GAAP”), commonly referred to as non-GAAP financial measures, including Adjusted Operating Expenses and Adjusted Income (Loss) from Operations and certain other non-GAAP measures, each of which include adjustments to GAAP figures.
Removed
We currently have three approved medicines that were discovered and developed in our own labs, including BRUKINSA ® , a small molecule inhibitor of Bruton’s Tyrosine Kinase (BTK) for the treatment of various blood cancers; tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers; and pamiparib, a selective small molecule inhibitor of PARP1 and PARP2.
Added
These non-GAAP measures are intended to provide additional information on our operating performance. Adjustments to our GAAP figures exclude, as applicable, non-cash items such as share-based compensation, depreciation and amortization. Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred.
Removed
We have obtained approvals to market BRUKINSA in the United States, China, EU, the UK, Canada, Australia and additional international markets, and tislelizumab in China. By leveraging our China commercial capabilities, we have in-licensed the rights to distribute 13 approved medicines for the China market.
Added
We maintain an established non-GAAP policy that guides the determination of what items may be excluded in non-GAAP financial measures. We believe that these non-GAAP measures, when considered together with the GAAP figures, can enhance an overall understanding of our operating performance.
Removed
Supported by our global clinical development and commercial capabilities, we have entered into collaborations with world-leading biopharmaceutical companies such as Amgen Inc. ("Amgen") and Novartis Pharma AG ("Novartis") to develop and commercialize innovative medicines. We are committed to advancing best and first-in-class clinical candidates internally or with like-minded partners to develop impactful and affordable medicines for patients across the globe.
Added
The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of our historical and expected financial results and trends and to facilitate comparisons between periods and with respect to projected information. In addition, these non-GAAP financial measures are among the indicators BeiGene’s management uses for planning and forecasting purposes and measuring our performance.
Removed
Our internal clinical development capabilities are deep, including a more than 2,700-person global clinical development team that is running close to 80 ongoing or planned clinical trials in over 50 medicines and drug candidates. This includes more than 30 pivotal or potentially registration-enabling trials across our portfolio, including our three internally discovered, approved medicines.
Added
These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, GAAP financial measures. The non-GAAP financial measures used by BeiGene may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.
Removed
We have enrolled in our clinical trials more than 18,000 subjects, of which approximately one-half have been outside of China.
Added
Overview BeiGene made great progress in the fourth quarter and full year of 2023 toward our goal to become an impactful next-generation oncology innovator. We have solidified our leadership in hematology with the continued success of BRUKINSA’s global launch, led by U.S. and Europe.
Removed
We have built, and are expanding, our internal manufacturing capabilities through our state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of our medicines, and are building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey.
Added
Our cost advantaged research and development and manufacturing have enabled us to build one of the largest and most exciting oncology pipelines in the industry. We look forward to a transformative year for BeiGene as we continue to deliver on operational excellence propelled by outstanding growth in revenue across new and existing geographies.
Removed
We also work with high quality contract manufacturing organizations (CMOs) to manufacture our internally developed clinical and commercial products. Since our inception in 2010, we have become a fully integrated global organization of over 9,000 employees in 29 countries and regions, including the United States, China, Europe, and Australia.
Added
Key highlights for the full year 2023 are as follows: • Continued rapid global growth with record total revenues of $634.4 million and $2.5 billion, respectively, in the fourth quarter and full year, an increase of 66.9% and 73.7% from the prior year periods; • Strengthened leadership in hematology with global BRUKINSA® (zanubrutinib) sales of $413.0 million and $1.3 billion for the fourth quarter and full year 2023, increases of 134.6% and 128.5%; • Progressed innovative hematology pipeline with initiation of four registrational trials for sonrotoclax, including global Phase 3 study in treatment-naïve CLL, and two global expansion cohorts for BTK CDAC in R/R CLL, R/R MCL; and • Sustained growth with diverse product and geographic revenue mix and improved operating leverage.
Removed
Recent Business Developments On February 24, 2023, we announced that the China National Medical Products Administration ("NMPA") granted approval for our PD-1 inhibitor, tislelizumab, in combination with fluoropyrimidine and platinum chemotherapy, for the first-line treatment of patients with locally advanced unresectable or metastatic gastric or gastroesophageal junction adenocarcinoma with high PD-L1 expression.
Added
Recent Business Developments On December 22, 2023, we announced the U.S. Food and Drug Administration (“FDA”) has approved a label update for BRUKINSA to include superior progression-free survival (“PFS”) results from the Phase 3 ALPINE trial comparing BRUKINSA against IMBRUVICA ® (ibrutinib) in previously treated patients with relapsed or refractory (“R/R”) chronic lymphocytic leukemia (“CLL”).
Removed
On January 19, 2023, we announced that the U.S. Food and Drug Administration ("FDA") approved our Bruton’s tyrosine kinase inhibitor BRUKINSA (zanubrutinib) for the treatment of adult patients with chronic lymphocytic leukemia ("CLL") or small lymphocytic lymphoma ("SLL").
Added
On November 21, 2023, we announced an agreement to acquire an exclusive global license to Ensem Therapeutics, Inc.’s (“Ensem”) Investigational New Drug (“IND”) application-ready oral cyclin-dependent kinase 2 (“CDK2”) inhibitor.
Removed
On January 19, 2023, we announced that the Medicines and Healthcare products Regulatory Agency granted marketing authorizations for BRUKINSA in Great Britain for both the treatment of adult patients with CLL and the treatment of adult patients with marginal zone lymphoma ("MZL") who have received at least one prior anti-CD20-based therapy.
Added
Ensem will receive an upfront payment, and will be eligible for additional payments upon the achievement of certain development, regulatory, and commercial milestones, in addition to tiered royalties. 121 Table of Contents On November 17, 2023, we announced that the European Commission (“EC”) granted marketing authorization for BRUKINSA in combination with obinutuzumab for the treatment of adult patients with R/R follicular lymphoma (“FL”) who have received at least two prior lines of systemic therapy.
Removed
On January 18, 2023, we announced that the National Reimbursement Drug List ("NRDL") released by China’s National Healthcare Security Administration ("NHSA") was updated to include four new indications for our PD-1 inhibitor tislelizumab.
Added
In the first quarter of 2024, we incurred $35.0 million related to milestone payments in connection with business development transactions. 122 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 $ % (dollars in thousands) Revenues Product revenue, net $ 2,189,852 $ 1,254,612 $ 935,240 74.5 % Collaboration revenue 268,927 161,309 107,618 66.7 % Total revenues 2,458,779 1,415,921 1,042,858 73.7 % Cost of sales - product 379,920 286,475 93,445 32.6 % Gross profit 2,078,859 1,129,446 949,413 84.1 % Operating expenses Research and development 1,778,594 1,640,508 138,086 8.4 % Selling, general and administrative 1,504,501 1,277,852 226,649 17.7 % Amortization of intangible assets 3,500 751 2,749 366.0 % Total operating expenses 3,286,595 2,919,111 367,484 12.6 % Loss from operations (1,207,736) (1,789,665) 581,929 (32.5) % Interest income (expense), net 74,009 52,480 21,529 41.0 % Other income (expense), net 307,891 (223,852) 531,743 (237.5) % Loss before income tax expense (825,836) (1,961,037) 1,135,201 (57.9) % Income tax expense 55,872 42,778 13,094 30.6 % Net loss $ (881,708) $ (2,003,815) $ 1,122,107 (56.0) % Revenue Total revenue increased by $1.0 billion to $2.5 billion for the year ended December 31, 2023, from $1.4 billion for the year ended December 31, 2022, primarily due to increased sales of our internally developed products, BRUKINSA and tislelizumab, as well as increased sales of in-licensed products, most notably from the Amgen products and POBEVCY.
Removed
KYPROLIS ® (carfilzomib), a proteosome inhibitor licensed-in from Amgen, is included for the first time and XGEVA ® (denosumab), a RANKL inhibitor and another Amgen asset, successfully renewed this year.
Added
Additionally, collaboration revenue increased due to the recognition of the remaining deferred revenue associated with the Novartis collaborations upon termination of the agreements.
Removed
The updated NRDL will officially take effect on March 1, 2023. 119 Table of Contents On December 30, 2022, we announced that the Center for Drug Evaluation of the China National Medical Products Administration accepted a supplemental biologics license application for tislelizumab in patients with first-line unresectable or metastatic hepatocellular carcinoma.
Added
The following table summarizes the components of revenue for the year ended December 31, 2023 and 2022, respectively: Year Ended December 31, Changes 2023 2022 $ % (dollars in thousands) Product revenue $ 2,189,852 $ 1,254,612 $ 935,240 74.5 % Collaboration revenue: Material rights revenue 71,980 — 71,980 NM Research and development service revenue 79,431 46,822 32,609 69.6 % Right to access intellectual property revenue 104,477 104,994 (517) (0.5) % Other 13,039 9,493 3,546 37.4 % Total collaboration revenue 268,927 161,309 107,618 66.7 % Total Revenue $ 2,458,779 $ 1,415,921 $ 1,042,858 73.7 % 123 Table of Contents Total revenue by geographic area is presented as follows (amounts in thousands of U.S. dollars) 1 : Three Months Ended December 31, Twelve Months Ended December 31, 2023 % 2022 % 2023 % 2022 % United States total revenue $ 313,160 49.4 % $ 155,446 40.9 % $ 1,128,219 45.9 % $ 502,626 35.5 % Product revenue $ 313,160 49.4 % $ 125,337 33.0 % $ 945,551 38.5 % $ 389,710 27.5 % Collaboration revenue — — % 30,109 7.9 % 182,668 7.4 % 112,916 8.0 % China total revenue 270,552 42.6 % 203,791 53.6 % 1,101,951 44.8 % 840,032 59.3 % Product revenue 267,282 42.1 % 203,791 53.6 % 1,093,091 44.5 % 840,032 59.3 % Collaboration revenue 3,270 0.5 % — — % 8,860 0.3 % — — % Europe total revenue 45,741 7.2 % 16,623 4.4 % 202,014 8.2 % 63,257 4.5 % Product revenue 45,741 7.2 % 5,659 1.5 % 122,228 5.0 % 14,864 1.0 % Collaboration revenue — — % 10,964 2.9 % 79,786 3.2 % 48,393 3.5 % ROW total revenue 4,956 0.8 % 4,235 1.1 % 26,595 1.1 % 10,006 0.7 % Product revenue 4,343 0.7 % 4,235 1.1 % 28,982 1.2 % 10,006 0.7 % Collaboration revenue 613 0.1 % — — % (2,387) (0.1) % — — % Total Revenue 634,409 100.0 % 380,095 100.0 % 2,458,779 100.0 % 1,415,921 100.0 % 1 Net product revenues by geographic area are based upon the location of the customer, and net collaboration revenue is recorded in the jurisdiction in which the related income is expected to be sourced from.
Removed
On November 17, 2022, we announced that the European Commission approved BRUKINSA for the treatment of adult patients with treatment-naïve or relapsed/refractory ("R/R") CLL. On November 10, 2022, we announced that BRUKINSA was approved in Brazil for the treatment of adult patients with Waldenström’s macroglobulinemia ("WM") and adult patients with R/R MZL who have received at least one anti-CD20-based regimen.
Added
Net product revenue consisted of the following: Year Ended December 31, Changes 2023 2022 $ % (dollars in thousands) BRUKINSA ® $ 1,290,396 $ 564,651 $ 725,745 128.5 % Tislelizumab 536,620 422,885 113,735 26.9 % REVLIMID ® 76,018 79,049 (3,031) (3.8) % XGEVA ® 92,828 63,398 29,430 46.4 % POBEVCY ® 56,547 38,124 18,423 48.3 % BLINCYTO ® 54,342 36,107 18,235 50.5 % VIDAZA ® 13,960 15,213 (1,253) (8.2) % KYPROLIS ® 39,799 13,696 26,103 190.6 % Pamiparib 6,668 5,460 1,208 22.1 % Other 22,674 16,029 6,645 41.5 % Total product revenue $ 2,189,852 $ 1,254,612 $ 935,240 74.5 % Net product revenue was $2.2 billion for the year ended December 31, 2023, compared to $1.3 billion in the prior year, primarily due to increased sales volume of BRUKINSA in the U.S., Europe and China and increased sales volume of tislelizumab in China slightly offset by lower selling price due to expansion in NRDL listing.
Removed
Components of Operating Results Revenue Product Revenue We generate product revenue through the sale of our three internally developed products and our in-licensed medicines from our partners. Revenues from product sales are recognized when there is a transfer of control from the Company to the customer.

… 95 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+1 added−2 removed7 unchanged
Biggest changeAdditionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. Foreign Currency Exchange Rate Risk We are exposed to foreign exchange risk arising from various currency exposures.
Biggest changeApprovals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. 134 Table of Contents Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market.
Accounts receivable at December 31, 2021 included the upfront fee from Novartis of $300.0 million under the ociperlimab agreement. Accounts receivable, net represent amounts arising from product sales and amounts due from the our collaboration partners. We monitor economic conditions to identify facts or circumstances that may indicate receivables are at risk of collection.
Accounts receivable at December 31, 2021 included the upfront fee from Novartis of $300.0 million under the ociperlimab agreement. Accounts receivable, net represent amounts arising from product sales and amounts due from our collaboration partners. We monitor economic conditions to identify facts or circumstances that may indicate receivables are at risk of collection.
In 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the PBOC). However, the unification of exchange rates does not imply that the RMB may be readily convertible into U.S. dollars or other foreign currencies.
In 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of exchange rates does not imply that the RMB may be readily convertible into U.S. dollars or other foreign currencies.
The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significant increasing risk. Our primary exposure to market risk relates to fluctuations in the interest rates, which are affected by changes in the general level of PRC and U.S. interest rates.
The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significantly increasing risk. Our primary exposure to market risk relates to fluctuations in the interest rates, which are affected by changes in the general level of PRC and U.S. interest rates.
The RMB compared to the U.S. dollar depreciated approximately 8.2%, appreciated approximately 2.3%, and appreciated approximately 6.3% for the years ended December 31, 2022, 2021 and 2020, respectively. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.
The RMB compared to the U.S. dollar depreciated approximately 2.8%, depreciated approximately 8.2%, and appreciated approximately 2.3% for the years ended December 31, 2023, 2022 and 2021, respectively. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.
We have not used derivative financial instruments to hedge exposure to foreign exchange risk. Effects of Inflation Inflation generally affects us by increasing our cost of labor and clinical development costs. We do not believe that inflation has had a material effect on our results of operations during the year ended December 31, 2022. Item 8.
We have not used derivative financial instruments to hedge exposure to foreign exchange risk. Effects of Inflation Inflation generally affects us by increasing our cost of labor and clinical development costs. We do not believe that inflation has had a material effect on our results of operations during the year ended December 31, 2023.
While we believe our cash, cash equivalents, and short-term investments do not contain excessive risk, we cannot provide absolute assurance that in the future investments will not be subject to adverse changes in market value. We had accounts receivable, net of $173.2 million, $483.1 million and $60.4 million at December 31, 2022, 2021 and 2020, respectively.
While we believe our cash, cash equivalents, and short-term investments do not contain excessive risk, we cannot provide absolute assurance that in the future investments will not be subject to adverse changes in market value. We had accounts receivable, net of $358.0 million, $173.2 million and $483.1 million at December 31, 2023, 2022 and 2021, respectively.
Our reporting currency is the U.S. dollar, but a portion of our operating transactions and assets and liabilities are in other currencies, such as RMB, Euro, and Australian dollar. RMB is not freely convertible into foreign currencies for capital account transactions.
Foreign Currency Exchange Rate Risk We are exposed to foreign exchange risk arising from various currency exposures. Our reporting currency is the U.S. dollar, but a portion of our operating transactions and assets and liabilities are in other currencies, such as RMB, Euro, and Australian dollar. RMB is not freely convertible into foreign currencies for capital account transactions.
Our cash and cash equivalents are deposited with various major reputable financial institutions located within or without the PRC. The deposits placed with these financial institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions, we may be unlikely to claim our deposits back in full.
The deposits placed with these financial institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions, we may be unlikely to claim our deposits back in full. We believe that these financial institutions are of high credit quality, and we continually monitor the credit worthiness of these financial institutions.
We had cash and cash equivalents of $3.9 billion, $4.4 billion and $1.4 billion, restricted cash of $5.5 million, $7.2 million and $8.1 million, and short-term investments of $0.7 billion, $2.2 billion and $3.3 billion, at December 31, 2022, 2021 and 2020, respectively.
We had cash and cash equivalents of $3.2 billion, $3.9 billion and $4.4 billion, restricted cash of $14.2 million, $5.5 million and $7.2 million, and short-term investments of $2.6 million, $0.7 billion and $2.2 billion, at December 31, 2023, 2022 and 2021, respectively. Our cash and cash equivalents are deposited with various major reputable global financial institutions.
We estimate that a hypothetical 100‑basis point increase or decrease in market interest rates would result in a decrease of $2.1 million or increase of $2.1 million, respectively, in the fair value of our investment portfolio as of December 31, 2022. We do not believe that our cash, cash equivalents, and short‑term investments have significant risk of default or illiquidity.
We estimate that a hypothetical 100‑basis point increase or decrease in market interest rates would result in a decrease of $0.1 million or increase of $0.1 million, respectively, in the fair value of our investment portfolio as of December 31, 2023. We are exposed to risk related to changes in interest rates on our outstanding borrowings.
All foreign exchange transactions continue to take place either through the PBOC or other banks 133 Table of Contents authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approvals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.
All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC.
Removed
We believe that these financial institutions are of high credit quality, and we continually monitor the credit worthiness of these financial institutions. At December 31, 2022, our short-term investments consisted primarily of U.S. treasury securities. We believe that U.S. treasury securities are of high credit quality and continually monitor the credit worthiness of these institutions.
Added
We had $574.1 million of outstanding floating rate debt as of December 31, 2023. A 100-basis point increase in interest rates as of December 31, 2023 would increase our annual pre-tax interest expense by approximately $5.7 million. We do not believe that our cash, cash equivalents, and short‑term investments have significant risk of default or illiquidity.
Removed
Financial Statements and Supplementary Data The financial statements required to be filed pursuant to this item are appended to this Annual Report. An index of those financial statements is in “Part IV—Item 15—Exhibits, Financial Statement Schedules.” Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Other ONC 10-K year-over-year comparisons