Event:

Recently, the company released the main financial data for the third quarter of 2024: total revenue in the first three quarters of 2024 was US$2.682 billion, a year-on-year increase of 47%, and a net loss of US$493 million, a year-on-year decrease of 4%; Total revenue for the third quarter of 2024 was $1,002 million, up 28% year-over-year, and net loss was $121 million, turning from profit to loss year-on-year, mainly due to lower non-operating income. Adjusted operating profit for the third quarter of 2024 was $65.6 million, marking the second consecutive quarter of non-GAAP operating profit.

The sales and administrative expense ratio decreased quarter-on-quarter, and the non-GAAP operating profit was profitable for two consecutive quarters. R&D expenses in Q3 2024 were $496 million, with a R&D expense ratio of 50%, a decrease of 8 pct year-on-year and a slight increase of 1 pct quarter-on-quarter. 2024 Q3 selling and administrative expenses were $455 million, corresponding to an expense ratio of 45%, a decrease of 1 pct year-on-year and a decrease of 3 pct sequentially. The company reduced costs and increased efficiency, and further improved its operating efficiency. Adjusted R&D expenses in Q3 2024 were US$406 million, with a R&D expense ratio of 40%, a decrease of 10 pct year-on-year and 1 pct quarter-on-quarter; Adjusted 2024 Q3 selling and administrative expenses were $381 million, corresponding to an expense ratio of 38%, a decrease of 1 pct year-over-year and sequentially. Compared with the GAAP measure, the adjusted measures for 2024Q3 subtract the equity incentive cost of $47.67 million and $66.93 million from the R&D expense and the selling and administrative expense, respectively, and the depreciation expense of $42.96 million and $7.48 million, respectively, and the amortization expense of intangible assets of $78,000 from the selling and administrative expenses.

2024Q3 core product zanubrutinib growth in the United States and rapid growth in Europe2024 Q1-Q3 global sales revenue of zanubrutinib was US$1.816 billion, a year-on-year increase of 107%; 2024Q3 revenue was $690 million, up 93% year-on-year and 8% sequentially. In 2024Q3, the U.S. region continued to maintain a high growth rate, with revenue of US$504 million, up 87% year-on-year and 5% sequentially, mainly benefiting from its continued market share in the initial treatment of new patients for CLL; Europe Area revenue of $97 million increased 217% year-over-year and 20% sequentially, primarily due to increased market share in all major European markets.

Tislelizumab's sales in the market continued to grow, and the global footprint continued to expand2024 Q1-Q3 The total revenue of tislelizumab was US$466 million, a year-on-year increase of 13%; Q3 2024 was $163 million, up 13% year-over-year and 3% sequentially. The indications of HCC, GC/GEJ, and ES-SCLC approved before June 30, 2024 will participate in the negotiation of the 2024 medical insurance catalog. In addition, in October 2024, tislelizumab was newly approved in China for neoadjuvant therapy in combination with platinum-containing chemotherapy, and continued monotherapy for the adjuvant treatment of NSCLC after surgery. It has also been newly approved for NSCLC, ESCC and other tumor indications in Brazil, Singapore, Thailand and Israel.

Sonrotoclax, BGB-16673 in hematological malignancies with excellent clinical trial data BGB-16673 Data from CaDAnCe-101, a Phase I clinical trial of R/R CLL/SLL (and must have received cBTKi), will be presented at the 2024 ASH Annual Meeting, with an abstract showing an overall ORR of 78%. CR/CR with incomplete hematologic recovery rate was 4% and mTTR was 2.8 months. In the 200 mg dose group, the ORR was 94% (15/16), including two CRs.

In addition, data from the Phase I trial BGB-11417-101 in combination with zanubrutinib for the first-line treatment of CLL will be presented at the 2024 ASH Annual Meeting, with a summary showing high MRD clearance and good tolerability, with an overall ORR of 100% and CR of 41% and 42% in the Sonrotoclax 160mg and 320mg arms, respectively, with mTTR of 2.6 months in both arms.

Earnings Forecast and Investment Rating

Considering that the company's revenue growth exceeds expectations, we will raise our revenue from 2024 to 2026 from 256.99, 32.587 and 39.287 billion yuan to 26.503, 33.804 and 41.011 billion yuan; The net profit attributable to the parent company in 2025-2026 will be raised from -303 million yuan and 1.197 billion yuan to -54 million and 1.403 billion yuan. Taking into account the advancement of a number of research projects to the critical stage of clinical development, the net profit attributable to the parent company in 2024 will be lowered from -3.217 billion yuan to -4.001 billion yuan. Maintain "Buy" rating.

Risk warning: policy change risk, global market risk, R&D progress is less than expected