It burned nearly 30 billion in 4 years and has yet to make a profit. Why did BeiGene get IPO approval?

TextGrey Soybeans

On November 16, 2021, the China Securities Regulatory Commission issued an announcement stating that it agreed to the registration of BeiGene's initial public offering on the Science and Technology Innovation Board in accordance with legal procedures
.

Soon after the Beijing Stock Exchange opened its news screen, the circle of friends became lively again because of BeiGene
.

In economics, there is a concept called "expectation", which describes people's current behavior and is based on expectations for the future
.

Baekje is selling expectations
.

BeiGene was established in 2010.
In 2016, it raised US$182 million and successfully IPO.
It became the first Chinese biotech company to be listed on the Nasdaq.
In 2018, it raised US$902 million and landed on the Hong Kong Stock Exchange.
In 2021, It is about to land in the domestic A-share market
.

But so far, Baekje has not yet made a profit.
Not only that.
When we look back at Baekje’s financial statements, the situation is not optimistic
.

In the first three quarters of 2021, BeiGene's revenue was 6.
227 billion yuan, an increase of 326.
88% from 1.
459 billion yuan in the same period last year, and a net loss of 5.
5 billion yuan
.

In this large loss, the proportion of R&D expenditure remains high.
BeiGene’s R&D expenditure has risen from 4.
6 billion yuan in 2018 to 8.
5 billion yuan in 2020.
During this period, many people have issued questions.
Whether the business model is deformed and whether there is extravagance and waste
.

The market's expectations for BeiGene remain positive
.

Since its establishment, BeiGene has 3 independent research and development products approved for the market——

BRUKINSA (BRUKINSA, Zebutinib Capsules, zanubrutinib) is the first Chinese self-developed anti-cancer drug approved by the US FDA and the first to be recognized as a breakthrough therapy, thus laying the foundation for the company's anti-cancer drug in China Position as a leader in the field of medicine
.

The anti-PD-1 monoclonal antibody Bezean® (tislelizumab injection, tislelizumab) and Novartis are the first cooperation in China with the highest down payment and the highest total transaction amount for drug authorization transactions in China so far.
Approved products, (conditional approval 17) for the treatment of patients with relapsed or refractory classic Hodgkin’s lymphoma (cHL) who have undergone at least second-line system chemotherapy and PD-L1 high expression platinum-containing chemotherapy failure including neoadjuvant or Adjuvant chemotherapy for patients with locally advanced or metastatic urothelial cancer (UC, bladder cancer) who progressed within 12 months, and approved combined two chemotherapy regimens for the treatment of first-line advanced squamous non-small cell lung cancer (Sq NSCLC) patients)
.

On December 28, 2020, the two conditional approved indications of Baiyueze® and the two conditional approved indications of Baizean® were included in the National Medical Insurance Catalog, which will take effect on March 1, 2021
.

And Baihuize® (pamiparib) is the first approved in China for the treatment of polyadenosine diphosphate ribose polymerization in patients with platinum-sensitive and platinum-resistant relapsed ovarian cancer with germline BRCA mutations.
Enzyme inhibitors
.

Baekje's response to high R&D costs is the progress of its global Phase III clinical trials——

As of September 2021, BeiGene is currently implementing 95 planned or ongoing clinical trials globally, in more than 40 countries and regions, including 38 phase III or potential registration available clinical trials.
The total number of patients and healthy subjects in the group exceeds 13,000, and the number of people enrolled in the group overseas has exceeded half
.

Among them, many research projects have the potential of differentiation and even "first-in-class", such as Ociperlimab (TIGIT antibody), BGB-11417 (Bcl-2 small molecule inhibitor), BGB-10188 (PI3Kδ inhibitor), BGB- A445 (OX40 antibody), BGB-15025 (HPK- 1 inhibitor) and BGB-A425 (TIM3 antibody) and the like
.

Seeing that the innovative pharmaceutical companies that were quickly built up by the capital reserve can’t wait to get money for listing, but are falling short of the increasingly stringent IPO approval threshold, people are more willing to pay for the Baekje >
.

Of the 20 billion yuan raised in the BeiGene Science and Technology Innovation Board IPO, 13.
2 billion yuan is mainly used for drug clinical trial research and development projects, and 6 billion yuan will be used to supplement working capital
.

In addition, BeiGene is accelerating the expansion of its own production capacity globally to support global business operations
.

In the future, with the further expansion of the pipeline and the progress of the international business layout, the funding gap will further expand.
According to related reports, this gap is about 10 billion yuan.
In order to support related development, Baekje will continue to "raise money.
"
.

There will be more problems in the future, and the road to a global pharmaceutical company has never been smooth
.

But people are looking forward to the future of "the youth of the world"
.

It is hoped that Baekje can "100 innovative drugs, benefit the world and benefit the people", such as his vision "to be a revolutionizer in the biopharmaceutical industry and provide effective, accessible and affordable good medicines for cancer patients all over the world
.
"

Reference materials:

1.
https://t.
10jqka.
com.
cn/pid_186120353.
shtml

2.
https://mp.
weixin.
qq.
com/s/92y1k7TG2apkmsRnlgkqxA

3.
https://mp.
weixin.
qq.
com/s/YyIRtaYIHNTtA2VzgH_s7g

4.
BeiGene Prospectus