BeOne Medicines Ltd. Q4 FY2024 earnings call

• John Oyler highlighted 2024 was a remarkable year with revenue growth, BRUKINSA's strong performance in the US and globally, and progress in R&D with 13 new molecular entities into the clinic. He also discussed the heme franchise, including BRUKINSA's superiority over competitors in efficacy, and the opportunity in the fixed - duration treatment landscape for CLL.
• Matt Shaulis focused on BRUKINSA's US commercial performance, noting its leadership in BTK market new patient starts in CLL and other approved indications, and its growth in the US and Europe.
• Lai Wang mentioned the portfolio transformation, R&D productivity with 13 new entities in 2024, and details of various pipeline assets like CDK4/6 inhibitor, KRAS mutation related molecules, B7H4 related assets, EGFR CDAC, MTAP deletions related molecules, and IRAK4 related molecule.
• Aaron Rosenberg reviewed 2024 financial results, including revenue growth, product gross margin, operating expenses, and discussed 2025 guidance, capital allocation, and operating leverage.

In 2024, BeiGene achieved $3.8 billion in full - year revenue and $1.1 billion in Q4. For BRUKINSA: In the US, Q4 2024 sales were $616 million, representing 97% growth compared to the prior year. For the full year 2024, US revenue was $1.95 billion, a 106% growth vs 2023. BRUKINSA is the BTKi class leader for new patient starts. TEVIMBRA had $154 million in Q4 2024 revenue, a 20% growth vs Q4 2023. Amgen in - license products had $101 million in Q4 2024 revenue, a 98% growth vs Q4 2023. BRUKINSA contributes significantly in the US, Europe, and China, with growth also expected in other rest - of - world markets like Brazil and Japan.

• Anticipate another strong year of revenue growth due to BRUKINSA's leadership. Project revenue to be between $4.9 billion to $5.3 billion in 2025.
• GAAP gross margin percentage is assumed to be in the mid - 80% range.
• Operating expenses on a GAAP basis are forecast to be between $4.1 billion and $4.4 billion.
• Affirm prior commitments to achieve full year GAAP operating breakeven in 2025 and generate positive cash flow from operations for the year.

• Clinical trials represent a large portion of the cost to develop and commercialize oncology medicines, and costs are rising.
• Market competition in the oncology space is intense, which may impact market share and pricing.
• Pricing pressures could affect revenue, especially in the context of competitive products.

Q: For 2025, it is guided full year revenue guidance is of $4.9 billion to $5.3 billion. Could you please walk us through the key assumptions for the initial guidance? And what could be the key factors that determine where the final number lands in the range of this guidance? And very quickly, I just want to confirm, now we have B7 - H4 ADC and CDK inhibitor moved up to first half of this year for data disclosure, just to confirm on that.

A: Aaron Rosenberg said they expect strong revenue growth due to BRUKINSA's leadership, gain of new patient share in the US, stable net pricing for BRUKINSA in the US, and growth from global expansion. Lai Wang confirmed that they plan to provide the first data disclosure for both the ADC as well as the CDK2 at ASCO in the first half of this year.

Q: You're surpassing Calquence now in terms of share. You're growing a lot faster than them, but they are still going -- still growing. The cadence of their grower seems to be plating a little bit over the last few quarters. Sort of wondering in the context of guidance what the feedback is that you get from clinicians on the viability of that drug longer term? And maybe a bit longer dated, but any thoughts around what impact there might be from potential -- any approval of the doublet we be?

A: Matt Shaulis said they see Calquence's growth rates as substantially less strong. John Oyler mentioned that the doublet study has issues in terms of MRD negativity, safety, and PFS data compared to BRUKINSA, and the data speaks clearly that BRUKINSA is more efficacious.

Q: Just wondering what you're looking for in ARM C [ph], what it could mean to the franchises? And also what's the company's commitment to breast cancer efforts that Jazz has embarked upon? And are you seeing or expecting to see BRUKINSA or to use off - label and fixed - duration regimens? Is there a chance to get a – can be endorsement ahead of the several data?

A: Aaron Rosenberg said the trial in ARM C is an events - driven trial for broadening the label of tisle in gastric cancer, readout in second half of 2025. Matt Shaulis talked about spontaneous use of BRUKINSA, noting no BTK plus been approved in the US and not yet listed in NCCN guidelines, but mentioned data from the BOVIN study.

Q: Question about how you're thinking about the upcoming pirto readouts, both in frontline CLL and the data they're generating against IMBRUVICA? What are you going to be watching for there? And what will be the appropriate BRUKINSA cross trial to arise, i.e., should investors line those other ratios up with your trial? Or why or why not?

A: Aaron Rosenberg said pirto's trials in frontline CLL may not change practice significantly as chemoimmunotherapy is no longer standard care. Believes pirto is more positioned as a BTK inhibitor after patients finish covalent BTK inhibitor. Excited about BRUKINSA's degrader head - to - head against pirto.

Q: For the strong quarter. Hope you can hear me. I had a question regarding the comment on the patent settlement for BRUKINSA. First of all, was that in keeping with your expectations for 2037, but then more importantly, assuming you get combo data with zanro approved, is there any way that could protect you from a generic if you were to work on a fixed dose oral combo? And are you working on that strategy?

A: Aaron Rosenberg said publicly disclosed BRUKINSA patent protection with 2037 as a starting point. Sees the franchise as durable with assets beyond BRUKINSA having patent protection well beyond that point, and believes the combination strategy can help in the market.

Q: Great. Good morning and congrats on the strong guidance. Question about how you're thinking about the upcoming pirto readouts, both in frontline CLL and the data they're generating against IMBRUVICA? What are you going to be watching for there? And what will be the appropriate BRUKINSA cross trial to arise, i.e., should investors line those other ratios up with your trial? Or why or why not?

A: Aaron Rosenberg said pirto's trials in frontline CLL may not change practice significantly as chemoimmunotherapy is no longer standard care. Believes pirto is more positioned as a BTK inhibitor after patients finish covalent BTK inhibitor. Excited about BRUKINSA's degrader head - to - head against pirto.

Q: Congratulations on -- great 2024. Can you guys hear me? My question is on the completion of enrollment of the CELESTIAL study. Can you talk a little bit about how you're thinking about the event rates going forward? When we might expect top line data and a potential NDA submission?

A: John Oyler said the study finished enrollment in about 14 months, demonstrating clinical trial execution, but the study is event - driven PFS with endpoints and will take time for readout.

Q: Thank you very much for taking my question. Very great quarter in fourth quarter 2024. My question is really regarding the venetoclax because in the first line CLL, how do you see the potential patient preference? Are they going to prefer dose duration or it's going to be still more BTK monotherapies?

A: John Oyler said fixed duration means different things, BRUKINSA monotherapy has a strong role, and the combination of Sonro plus BRUKINSA looks like a better option for fixed duration, and BRUKINSA monotherapy can work its way more broadly into some patients.

Q: Hi. Thanks, it’s [indiscernible]. Thanks for taking my question. Congrats on a great quarter and 2025 guidance. Just a few quick ones from me. Number one, what are you expecting on TEVIMBRA in the US and EU for your 2025 guidance? And number two, on your degrader, I know you're evaluating some chemo free combinations, such as with BRUKINSA, sonro or CD20 bispecific. Of these, what are you most excited about? And how confident are you that you can maybe move your degrader up into earlier lines in CLL?

A: John Oyler said TEVIMBRA continues strong growth in China, with new indications NRDL eligible in 2025, and launches in US and Europe are in early days. Lai Wang said they are excited about all three combinations with sonro, BRUKINSA, and CD20 bispecific, and see utility of the degrader outside CLL, eagerly waiting for data readout from the platform trial