BEIGENE(BGNE.US)：STRONG SALES MOMENTUM MAINTAINED IN 3Q22

Strong sales growth continued. BeiGene continued strong sales momentum in 3Q22, similar to 2Q22, with the product revenue in 3Q22 reaching US$349.5mn (+15% QoQ in 3Q22 vs +16% QoQ in 2Q22). Sales of zanubrutinib (BTK) in 3Q22 increased to US$155.5mn with a QoQ growth rate of 21% (vs +23% QoQ in 2Q22), mainly driven by the strong sales in the overseas markets. Tislelizumab (PD-1) also maintained strong growth in 3Q22, with sales increased by 22% QoQ, reaching US$128.2mn (vs +20% QoQ growth rate in 2Q22). The gross margin on product sales increased to 78.1% in 3Q22 from 76.6% in 2Q22, mainly due to a proportionally higher sales mix of zanubrutinib and tislelizumab (73.2% in 3Q22 vs 68.4% in 2Q22), compared to lower margin sales of in-licensed products.
Continued to improve cost efficiency. BeiGene continued to improve its cost efficiency, with the SG&A expenses as a percentage of product sales significantly decreasing to 92% in 3Q22 (vs 109% in 2Q22, 113% in 1Q21, and 156% in FY2021). We believe the trend will continue thanks to the fast growing product sales and economies of scale. Net loss in 3Q22 was US$557.6mn, compared to US$571.4mn in the prior quarter. As of 3Q22, BeiGene has a sufficient cash balance of US$5.1bn, providing a strong support for the Company’s R&D activities and global expansion.
Near-term approval of zanubrutinib for large indications in the overseas markets. BeiGene recently reported superior PFS results of the Ph3 trial APLINE assessing zanubrutinib vs ibrutinib for the treatment of r/r CLL (CMBI report), which supports the best-in-class potential of the drug. The detailed data of the APLINE trial will be released at an upcoming conference. The BLA of zanubrutinib for CLL/SLL in Europe has received a positive CHMP option for approval, and in the US, we believe the sBLA will be approved by FDA in Jan 2023. Additionally, zanubrutinib was recently approved in Europe for MZL, which marks the first and only approved BTK inhibitor for MZL in Europe.
Tislelizumab may add new indications to NRDL with moderate price reduction. With five indications already covered by China NRDL, including large indications such as 1L nsq/sq-NSCLC and 2L HCC, we expect the Company to expand tislelizumab’s NRDL coverage via simplified renewal procedures with a relatively small price cut to add four additional indications (1L NPC, 2L ESCC, 2L NSCLC, MSI-H/dMMR solid tumors). The sBLA of 1L GC and 1L ESCC is under review by CDE, and the sBLA filing of 1L HCC is in discussion with CDE. For BLA of 2L ESCC in the US, BeiGene is scheduling with FDA regarding the site inspections. Additionally, we expect the Novartis and BeiGene to file US BLAs of tislelizumab for 1L GC, 1L ESCC and 1L HCC in 2023E.
Maintain BUY. We anticipate zanubrutinib and tislelizumab to maintain strong sales momentum in the rest of 2022 and beyond. For BGB-11417 (Bcl-2), one of the Company’s core clinical-stage assets, BeiGene has started Ph2 trials in r/r MCL and r/r CLL/SLL, and will release additional Ph1 data at the upcoming ASH meeting. We revised our DCF-based TP from US$253.13 to US$255.56 (WACC: 9.20%, terminal growth rate: 3.0%).
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。