has been said to "burn money" for so many years, and the innovative drug "first brother" has finally stood at the watershed of profit and loss.

On January 14, BeiGene (SH688235) announced that the company will participate in the 43rd annual J.P. Morgan Healthcare Conference (hereinafter referred to as "JPMorgan Medical Conference") on January 13 (Eastern Time) and present the report. At the meeting, it was revealed that the company expects to achieve a positive operating profit for the whole year of 2025, that is, the operating income is greater than the sum of operating costs, sales expenses, management expenses and R&D expenses.

The reporter of "National Business Daily" noted that BeiGene has achieved non-GAAP profitability from the second quarter of 2024, with operating profits of $48.464 million and $65.63 million in the second and third quarters, respectively.

On the 14th, BeiGene's stock price approached the daily limit in the A-share market. Why did an expected event trigger a company's stock price carnival? On the same day, a senior industry insider told the "Daily Economic News" reporter that this proves that China's innovative drug companies can rely on product commercialization to achieve profitability, which has specific practical significance for China's innovative drug industry.

From BeiGene to BeOne, BeiGene has reached a turning point

At 5:30 a.m. Beijing time on January 14, BeiGene co-founder, chairman and CEO John V. Oyler, presented the title of the company's report, "BeiGene→BeOne: An Inflection Point." (titled "From BeiGene to BeOne: A Turning Point") at JP Morgan Healthcare.

In 2024, the company, known as the "first brother" of China's innovative drugs, won the first "$1 billion molecule" in China (describing small molecule drugs with annual sales of more than $1 billion), changed its English name (that is, BeiGene became BeOne Medicines), and vowed to carry out "globalization" to the end, but it also experienced overseas patent disputes and the appointment of a new European head. Before the changes could be counted, Ou Leiqiang spoke on the stage on the 14th: according to the US generally accepted accounting principles, the company is expected to achieve a positive operating profit for the whole year of 2025.

For industry insiders, the news is not too surprising. According to BeiGene's 2024 semi-annual report, it turned losses into profits on a non-GAAP basis in the second quarter of 2024, with an adjusted operating profit of more than $48 million and a GAAP-based operating loss of 66% year-over-year. Adjusted operating profit for the third quarter of 2024 was $65.63 million, marking the second consecutive quarter of non-GAAP operating profit.

BeiGene's growth is now driven by two commercialized oncology drugs, of which zanubrutinib (trade name: BRUKINSA), the company's first domestically produced "billion-dollar molecule", is the company's flagship product. Its global sales in the third quarter of 2024 will be about 5 billion yuan, a year-on-year increase of 91.1%, and global sales in the first three quarters will exceed 12.9 billion yuan. The company's sales of tislelizumab (trade name: tislelizumab) reached 1.169 billion yuan in the third quarter, a year-on-year increase of 11.7%.

By region, BRUKINSA's sales in the U.S. were RMB3.584 billion, up 85% year-on-year, with more than 60% of the quarter-on-quarter demand growth coming from the expansion of its use in chronic lymphocytic leukemia (CLL) indications, while the product's market share in new patients in CLL continued to increase. The sales of this product in Europe totaled 693 million yuan, a year-on-year increase of 212.7%. Sales in China reached 485 million yuan, a year-on-year increase of 41.1%.

As a result, BeiGene's revenue performance in the first three quarters of 2024 exceeded that of the whole year of 2023, both in terms of total revenue and product revenue.

It proves that the business model of the innovative drug industry is viable

On January 14, a person in the innovative drug industry told the reporter of "National Business Daily" that BeiGene expects to have a positive operating profit in 2025, which is "a landmark event in the development stage of China's innovative drug industry", and the person is optimistic that domestic innovative drug companies such as Zai Lab and Akeso Biologics will also enter the profit stage one after another. He believes that this proves that the business model of the innovative drug industry is feasible, and it has more concrete practical significance in China's innovative drug industry than the profitability of MNCs (multinational pharmaceutical companies).

The person believes that now China's new generation of innovative pharmaceutical companies have officially entered the harvest stage, which is the first batch of truly global innovative product commercialization to bring value.

BeiGene, for example, initiated the "ALPINE" study in 2018, and the terminal analysis data outperformed its competitor at the time, ibrutinib, which significantly extended the progression-free survival of patients with CLL and significantly reduced the risk of disease progression. In retrospect, despite the high cost of the study, the positive results were one of the important factors supporting BeiGene's further promotion of BRUKINSA in the global market.

How can BeiGene replicate its success in the future? With the help of the Chinese scientist dividend, reinvesting in R&D may be a direction. The reporter of "Daily Economic News" noticed that at the JP Morgan Medical Conference, Ou Leiqiang focused on showing the company's 7 "high potential" early-stage R&D pipelines in the phase 1 clinical stage, including: BGB-43395, BGB-53038, BG-C9074, BGB-60366, BGB-58067 + MAT2A inhibitor, and BGB-45035. BeiGene believes they will play an important role in the treatment of lung, breast, and gastrointestinal cancers, as well as autoimmune diseases.

It is important to note that these are not all tumor lines. On January 7, at an internal networking event hosted by BeiGene, Wang Lai, senior vice president and head of global R&D, said, "BeiGene has made significant changes to its pipeline in the past three years."

Three years ago, BeiGene was generally regarded as an innovative pharmaceutical company in the immuno-oncology track for new drug development, but now it has achieved a "combination punch" in many important oncology fields such as lung cancer, digestive tract tumors, and gynecological tumors. Wang Lai introduced that the company's new drug discovery technology platform currently has about 70 preclinical projects, of which small molecules account for about 40%, half of which are CDAC (chimeric degradation activating compound) projects; Macromolecule projects account for about 50%, of which about half are ADC (antibody conjugate) drug projects. In addition, the company also has a presence in autoimmune diseases, cell therapy and mRNA (messenger ribonucleic acid).

Wang Lai also said that through "CRO de-CRO" (CRO refers to commissioned research institutions), the efficiency of clinical development can be improved, the whole process can be independent and controllable, and the application of AI and other technologies can be facilitated, which is an advantage that smaller companies cannot match. According to Wang, BeiGene's current development strategy focuses on the in-depth pipeline layout of key tumors, and the company's preclinical scientist team has reached 1,100 people, which is also a leading position among global peers.

Cover image source: Visual China