BeOne Medicines Ltd. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Priorities Met: The company delivered on solidifying hematology franchise leadership, advancing the pipeline, and driving superior financial performance in Q1.
• BRUKINSA Leadership: BRUKINSA is the best-in-class BTK inhibitor, leading in U.S. new patient starts for CLL across all indications. It surpassed ibrutinib and acalabrutinib in U.S. quarterly revenue and has treated over 200,000 patients globally.
• Sonro Progress: Completed enrollment in Phase III CELESTIAL trial for treatment-naive CLL, submitted regulatory filing in China, and plans to submit a global filing in the second half of 2025.
• Pipeline Advancements: Over 10 proof-of-concept readouts expected in solid tumors this year. The CDK4 inhibitor has over 300 patients enrolled, the B7H4 program shows promising activity, and the BTK CDAC program has dosed over 600 patients.
• Financial Milestones: Achieved GAAP profitability for the first time, with Q1 revenue at $1.1 billion, up 49% Y/Y. Product gross margin increased to 85%.
• Redomiciling: Shareholders approved redomiciling to Switzerland and name change to BeOne Medicines, leveraging the Swiss biotech ecosystem.

Segment Performance

• BRUKINSA: Q1 2025 sales totaled $792 million, representing a 62% growth compared to Q1 2024. It contributes approximately 62% of the total revenue. It is the leader in the U.S. for new patient starts in CLL and has surpassed ibrutinib and acalabrutinib in U.S. quarterly revenue.
• TEVIMBRA: Sales were $171 million, achieving an 18% revenue growth Y/Y, contributing around 14.6% of total revenue. Driven primarily by its leading market position in China.
• Amgen in-licensed products: Generated $114 million, up 58% Y/Y, accounting for approximately 9.5% of total revenue.
• Other: Collaboration revenue from IMDELLTRA also contributed to growth, with global royalties adding to the performance.

Guidance

• Revenue: Full year 2025 revenue projected between $4.9 billion to $5.3 billion.
• Gross Margin: GAAP gross margin percentage expected to be in the mid-80s range, benefiting from mix and production efficiencies.
• Operating Expenses: GAAP operating expenses anticipated to be between $4.1 billion and $4.4 billion.
• Profitability: Aim for GAAP operating income breakeven and positive cash flow from operations for the full year.

Risks

• Supply Chain: Vulnerabilities due to global manufacturing and regional supply chain dependencies, exacerbated by trade policies and tariffs.
• Competition: Intense competition in the biopharmaceutical space, including from other BTK inhibitors (e.g., ibrutinib, acalabrutinib) and BCL-2 inhibitors (e.g., venetoclax).

Question and Answer

• Q: About CDK4 program difference from Pfizer's atirmociclib and BRUKINSA in autoimmune diseases A: Lai Wang stated the CDK4 molecule is designed to be more potent and selective than Pfizer's atirmociclib, moving aggressively with over 100 patients enrolled in the last couple of months, planning a Phase III trial in second-line HR-positive breast cancer with SERD. For BRUKINSA in autoimmune, there's a Phase III ongoing in membranous nephropathy.
• Q: BRUKINSA Q1 performance and TEVIMBRA sales breakdown A: Aaron Rosenberg and Matt Shaulis discussed Part D redesign impact on BRUKINSA, seasonality in Q1 sales, and TEVIMBRA's U.S. progress, noting initial experiences align with launch expectations.
• Q: CDK4 program data at R&D Day and BRUKINSA in autoimmune A: Lai Wang said CDK4 data at R&D Day includes efficacy/safety PK but durability data is limited. BRUKINSA has a Phase III ongoing in membranous nephropathy.
• Q: Top POC readouts and MANGROVE trial A: Lai Wang mentioned multiple exciting programs in the pipeline, with the MANGROVE trial's interim analysis expected in the second half of 2025.
• Q: BRUKINSA vs pirtobrutinib and mantle cell opportunity A: Matt Shaulis and Lai Wang discussed BRUKINSA's strong market share position, stating pirtobrutinib is not a significant threat to BRUKINSA in the CLL market.
• Q: IRA impact and R&D spending A: Matt Shaulis and Aaron Rosenberg talked about IRA impact on BRUKINSA, emphasizing disciplined R&D spending while maintaining a strong top line.
• Q: Sonro Phase II endpoints and China filing timeline A: Lai Wang said Phase II endpoints for sonro are ORR and DOR to support accelerated approval. Sonro's filing in China has priority review, anticipating approval in the first half of 2024.
• Q: BTK CDAC vs routine BTKs and BTK in PMN A: Lai Wang discussed confidence in the BTK CDAC, with early data in BTKi-naive patients, and BRUKINSA's Phase III ongoing in membranous nephropathy.
• Q: Sonro opportunity vs Venclexta and European expansion A: Lai Wang and Matt Shaulis talked about sonro's potential vs Venclexta, and European growth with BRUKINSA and TEVIMBRA, noting significant progress in multiple markets.
• Q: Sonro pricing, supply chain, and R&D redomiciling A: Aaron Rosenberg and John Oyler discussed early pricing thoughts for sonro, supply chain resiliency efforts, and the global expansion of R&D operations, including redomiciling to Switzerland.