Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 19, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | BeiGene, Ltd. | ||
Entity Central Index Key | 1,651,308 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 816 | ||
Entity Common Stock, Shares Outstanding | 696,342,730 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 239,602 | $ 87,514 |
Short-term investments | 597,914 | 280,660 |
Accounts receivable | 29,428 | |
Inventories | 10,930 | |
Prepaid expenses and other current assets | 35,623 | 6,225 |
Total current assets | 913,497 | 374,399 |
Property and equipment, net | 62,568 | 25,977 |
Land use right, net | 12,465 | |
Intangible assets, net | 7,250 | |
Goodwill | 109 | |
Deferred tax assets | 7,675 | 768 |
Other non-current assets | 42,915 | 4,669 |
Total non-current assets | 132,982 | 31,414 |
Total assets | 1,046,479 | 405,813 |
Current liabilities: | ||
Accounts payable | 69,779 | 11,957 |
Accrued expenses and other payables | 49,598 | 22,297 |
Deferred revenue, current portion | 12,233 | |
Tax payable | 9,156 | 804 |
Current portion of long-term bank loan | 9,222 | |
Total current liabilities | 149,988 | 35,058 |
Non-current liabilities: | ||
Long-term bank loan | 9,222 | 17,284 |
Shareholder loan | 146,271 | |
Deferred revenue, non-current portion | 24,808 | |
Other long-term liabilities | 31,959 | 564 |
Total non-current liabilities | 212,260 | 17,848 |
Total liabilities | 362,248 | 52,906 |
Commitments and contingencies | ||
Equity: | ||
Ordinary shares (par value of US$0.0001 per share; 9,500,000,000 shares authorized; 592,072,330 shares issued and outstanding as of December 31, 2017 (December 31, 2016: 515,833,609 shares)) | 59 | 52 |
Additional paid-in capital | 1,000,747 | 591,213 |
Accumulated other comprehensive loss | (480) | (946) |
Accumulated deficit | (330,517) | (237,412) |
Total BeiGene, Ltd. shareholders' equity | 669,809 | 352,907 |
Noncontrolling interest | 14,422 | |
Total equity | 684,231 | 352,907 |
Total liabilities and equity | $ 1,046,479 | $ 405,813 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Ordinary shares | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 9,500,000,000 | 9,500,000,000 |
Ordinary shares, shares issued | 592,072,330 | 515,833,609 |
Ordinary shares, shares outstanding | 592,072,330 | 515,833,609 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
Product revenue, net | $ 24,428 | ||
Collaboration revenue | 213,959 | $ 1,070 | $ 8,816 |
Total revenues | 238,387 | 1,070 | 8,816 |
Expenses | |||
Cost of sales - product | (4,974) | ||
Research and development | (269,018) | (98,033) | (58,250) |
Selling, general and administrative | (62,602) | (20,097) | (7,311) |
Amortization of intangible assets | (250) | 0 | 0 |
Total expenses | (336,844) | (118,130) | (65,561) |
Loss from operations | (98,457) | (117,060) | (56,745) |
Interest (expense) income, net | (4,108) | 383 | 559 |
Changes in fair value of financial instruments | (1,514) | (1,826) | |
Gain (loss) on sale of available-for-sale securities | 44 | (1,415) | (314) |
Other income, net | 11,457 | 443 | 1,224 |
Loss before income tax expense | (91,064) | (119,163) | (57,102) |
Income tax expense | 2,235 | 54 | 0 |
Net loss | (93,299) | (119,217) | (57,102) |
Less: net loss attributable to noncontrolling interests | (194) | ||
Net loss attributable to BeiGene, Ltd. | $ (93,105) | $ (119,217) | $ (57,102) |
Net loss per share attributable to BeiGene, Ltd. | |||
Basic and diluted (in dollars per share) | $ (0.17) | $ (0.30) | $ (0.52) |
Weighted-average shares used in net loss per share calculation | |||
Basic and diluted (in shares) | 543,185,460 | 403,619,446 | 110,597,263 |
Net loss per American Depositary Share (“ADS”) | |||
Basic and diluted (in dollars per share) | $ (2.23) | $ (3.84) | $ (6.71) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Net loss | $ (93,299) | $ (119,217) | $ (57,102) |
Other comprehensive loss, net of tax of nil: | |||
Foreign currency translation adjustments | 851 | (245) | (749) |
Unrealized holding (loss) gain, net | (296) | 1,108 | (1,160) |
Comprehensive loss | (92,744) | (118,354) | (59,011) |
Less: comprehensive loss attributable to noncontrolling interests | (105) | ||
Comprehensive loss attributable to BeiGene, Ltd. | $ (92,639) | $ (118,354) | $ (59,011) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities | |||
Net loss | $ (93,299) | $ (119,217) | $ (57,102) |
Adjustments to reconcile net loss to net cash from operating activities: | |||
Depreciation and amortization expense | 4,758 | 1,909 | 1,545 |
Share-based compensation expenses | 42,863 | 10,625 | 10,211 |
Changes in fair value of financial instruments | 1,514 | 1,826 | |
Loss on disposal of property and equipment | 85 | 5 | |
Non-cash interest expense | 7,035 | 121 | 1,095 |
Deferred income tax benefits | (5,845) | (768) | |
Other non-cash expenses | (44) | 1,415 | 314 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (29,428) | ||
Inventories | (10,930) | ||
Prepaid expenses and other current assets | (28,880) | (2,070) | (2,990) |
Other non-current assets | (29,701) | 112 | (565) |
Accounts payable | 55,298 | 2,707 | 6,186 |
Accrued expenses and other payables | 24,978 | 13,946 | 7,350 |
Tax payable | 7,426 | 804 | |
Deferred revenue | 37,041 | (1,070) | (7,836) |
Deferred rental | 182 | ||
Other long-term liabilities | 31,395 | 459 | (64) |
Net cash provided by (used in) operating activities | 12,752 | (89,513) | (39,843) |
Investing activities: | |||
Purchases of property and equipment | (46,374) | (23,502) | (5,314) |
Payment for the acquisition of land use right | (12,354) | ||
Cash acquired in business combination, net of cash paid | 19,916 | ||
Purchases of investments | (741,296) | (382,093) | (119,291) |
Proceeds from sale or maturity of available-for-sale securities | 423,789 | 183,743 | 65,698 |
Proceeds from disposal of property and equipment | 4 | 1 | |
Net cash used in investing activities | (356,319) | (221,848) | (58,906) |
Financing activities: | |||
Proceeds from public offering, net of underwriter discount | 189,191 | 368,877 | |
Payment of public offering cost | (674) | (2,218) | |
Proceeds from sale of ordinary shares, net of cost | 149,928 | ||
Proceeds from issuance of convertible preferred shares | 97,350 | ||
Proceeds from long-term loan | 12,048 | 6,175 | |
Proceeds from short-term loan | 2,470 | ||
Repayment of short-term loan | (2,470) | (322) | |
Capital contribution from noncontrolling interest | 14,527 | ||
Proceeds from shareholder loan | 132,757 | ||
Proceeds from exercise of warrants and rental deferral option | 2,115 | ||
Proceeds from option exercises | 4,627 | 80 | 77 |
Payment of convertible preferred shares issuance cost | (75) | ||
Net cash provided by financing activities | 490,356 | 380,902 | 103,205 |
Effect of foreign exchange rate changes, net | 5,299 | 104 | (485) |
Net increase in cash and cash equivalents | 152,088 | 69,645 | 3,971 |
Cash and cash equivalents at beginning of period | 87,514 | 17,869 | 13,898 |
Cash and cash equivalents at end of period | 239,602 | 87,514 | 17,869 |
Supplemental cash flow disclosures: | |||
Income taxes paid | 29,286 | 25 | |
Interest expense paid | 1,260 | 826 | 134 |
Non-cash activities: | |||
Discount provided on sale of ordinary shares for business combination | 23,606 | ||
Conversion of Senior Promissory Note | 14,693 | ||
Conversion of deferred rental | 980 | ||
Conversion of convertible preferred shares | 176,084 | ||
Exercise of warrants and option | 3,687 | ||
Follow-on public offering costs accrued in accounts payable | 269 | ||
Acquisitions of equipment included in accounts payable | $ 2,215 | $ 2,153 | $ 23 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Ordinary SharesInitial public offering | Ordinary SharesFollow-on public offering | Ordinary SharesConversion of Senior Promissory Note | Ordinary SharesExercise of warrants in connection with convertible promissory note | Ordinary SharesExercise of option to purchase shares by rental deferred | Ordinary SharesExercise of warrants by Baker Bros. | Ordinary SharesIssuance of shares reserved for share options exercise | Ordinary SharesConversion of preferred shares to ordinary shares | Ordinary SharesSecond Follow On Public Offering [Member] | Ordinary SharesPrivate PlacementCelgene Switzerland LLC | Ordinary Shares | Additional Paid-In CapitalInitial public offering | Additional Paid-In CapitalFollow-on public offering | Additional Paid-In CapitalConversion of Senior Promissory Note | Additional Paid-In CapitalExercise of warrants in connection with convertible promissory note | Additional Paid-In CapitalExercise of option to purchase shares by rental deferred | Additional Paid-In CapitalExercise of warrants by Baker Bros. | Additional Paid-In CapitalConversion of preferred shares to ordinary shares | Additional Paid-In CapitalPrivate Placement | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | BeiGene, Ltd. Shareholder's EquityInitial public offering | BeiGene, Ltd. Shareholder's EquityFollow-on public offering | BeiGene, Ltd. Shareholder's EquityConversion of Senior Promissory Note | BeiGene, Ltd. Shareholder's EquityExercise of warrants in connection with convertible promissory note | BeiGene, Ltd. Shareholder's EquityExercise of option to purchase shares by rental deferred | BeiGene, Ltd. Shareholder's EquityExercise of warrants by Baker Bros. | BeiGene, Ltd. Shareholder's EquityConversion of preferred shares to ordinary shares | BeiGene, Ltd. Shareholder's EquityPrivate Placement | BeiGene, Ltd. Shareholder's Equity | Non-controlling Interests | Initial public offering | Follow-on public offering | Conversion of Senior Promissory Note | Exercise of warrants in connection with convertible promissory note | Exercise of option to purchase shares by rental deferred | Exercise of warrants by Baker Bros. | Conversion of preferred shares to ordinary shares | Private Placement | Total |
Balance at the beginning of period at Dec. 31, 2014 | $ 11 | $ 7,941 | $ 100 | $ (61,093) | $ (53,041) | $ (53,041) | |||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2014 | 108,497,428 | ||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares | $ 1 | 75 | 76 | 76 | |||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares (in shares) | 7,676,666 | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 10,211 | 10,211 | 10,211 | ||||||||||||||||||||||||||||||||||||||
Net loss | (57,102) | (57,102) | (57,102) | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | (1,909) | (1,909) | (1,909) | ||||||||||||||||||||||||||||||||||||||
Balance at the end of period at Dec. 31, 2015 | $ 12 | 18,227 | (1,809) | (118,195) | (101,765) | (101,765) | |||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 116,174,094 | ||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares | $ 10 | $ 9 | $ 1 | $ 20 | $ 166,127 | $ 198,617 | $ 14,692 | $ 1,513 | $ 3,519 | $ 1,750 | $ 176,064 | $ 166,137 | $ 198,626 | $ 14,693 | $ 1,513 | $ 3,519 | $ 1,750 | $ 176,084 | $ 166,137 | $ 198,626 | $ 14,693 | $ 1,513 | $ 3,519 | $ 1,750 | $ 176,084 | ||||||||||||||||
Issuance of ordinary shares (in shares) | 98,670,000 | 86,206,250 | 7,942,314 | 621,637 | 1,451,586 | 2,592,593 | 271,284 | 199,990,641 | |||||||||||||||||||||||||||||||||
Share-based compensation | 10,704 | 10,704 | 10,704 | ||||||||||||||||||||||||||||||||||||||
Share-based compensation (in shares) | 1,913,210 | ||||||||||||||||||||||||||||||||||||||||
Net loss | (119,217) | (119,217) | (119,217) | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 863 | 863 | 863 | ||||||||||||||||||||||||||||||||||||||
Balance at the end of period at Dec. 31, 2016 | $ 52 | 591,213 | (946) | (237,412) | 352,907 | $ 352,907 | |||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2016 | 515,833,609 | 515,833,609 | |||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares | $ 4 | $ 3 | $ 188,513 | $ 149,925 | $ 188,517 | $ 149,928 | $ 188,517 | $ 149,928 | |||||||||||||||||||||||||||||||||
Issuance of ordinary shares (in shares) | 787,571 | 36,851,750 | 32,746,416 | ||||||||||||||||||||||||||||||||||||||
Share-based compensation | 42,863 | 42,863 | $ 42,863 | ||||||||||||||||||||||||||||||||||||||
Net loss | (93,105) | (93,105) | $ (194) | (93,299) | |||||||||||||||||||||||||||||||||||||
Exercise of options | 4,627 | 4,627 | 4,627 | ||||||||||||||||||||||||||||||||||||||
Exercise of options (in shares) | 5,852,984 | ||||||||||||||||||||||||||||||||||||||||
Contributions from shareholders (Note 8) | 14,527 | 14,527 | |||||||||||||||||||||||||||||||||||||||
Discount on the sale of ordinary shares | 23,606 | 23,606 | 23,606 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 466 | 466 | 89 | 555 | |||||||||||||||||||||||||||||||||||||
Balance at the end of period at Dec. 31, 2017 | $ 59 | $ 1,000,747 | $ (480) | $ (330,517) | $ 669,809 | $ 14,422 | $ 684,231 | ||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 592,072,330 | 592,072,330 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Organization | 1. Organization BeiGene, Ltd. (the “Company”) is a commercial-stage biopharmaceutical company focused on developing and commercializing innovative molecularly targeted and immuno-oncology drugs for the treatment of cancer . The Company was incorporated under the laws of the Cayman Islands as an exempted company with limited liability on October 28, 2010. The Company completed its initial public offering (“IPO”) on the NASDAQ Global Select Market on February 8, 2016 and has completed subsequent follow-on public offerings and a sale of ordinary shares to Celgene Switzerland LLC (“Celgene Switzerland”) in a business development transaction, as described in Note 22, Shareholders’ Equity. As at December 31, 2017, the Company’s subsidiaries are as follows: Percentage of Date of Ownership by Name of Company Place of Incorporation Incorporation the Company Principal Activities BeiGene (Hong Kong) Co., Limited. Hong Kong November 22, 2010 100 % Investment holding BeiGene (Beijing) Co., Ltd. ("BeiGene Beijing") The People’s Republic of China (“PRC” or “China”) January 24, 2011 100 % Medical and pharmaceutical research BeiGene AUS PTY LTD. Australia July 15, 2013 100 % Clinical trial activities BeiGene 101 Cayman Islands August 30, 2012 100 % Medical and pharmaceutical research BeiGene (Suzhou) Co., Ltd. (“BeiGene (Suzhou)”) PRC April 9, 2015 100 % Medical and pharmaceutical research and manufacturing BeiGene USA, Inc. ("BeiGene (USA)") United States July 8, 2015 100 % Clinical trial activities BeiGene Biologics Co., Ltd. ("BeiGene Biologics") PRC January 25, 2017 95 % Biologics manufacturing BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”)* PRC September 11, 2015 95 % Medical and pharmaceutical research BeiGene Guangzhou Biologics Manufacturing Co., Ltd. ("BeiGene Guangzhou Factory")* PRC March 3, 2017 95 % Biologics manufacturing BeiGene (Guangzhou) Co., Ltd. (“BeiGene Guangzhou”) PRC July 11, 2017 100 % Medical and pharmaceutical research BeiGene Pharmaceutical (Shanghai) Co., Ltd. ("BeiGene Pharmaceutical (Shanghai)") PRC December 15, 2009 100 % Medical and pharmaceutical consulting, BeiGene Switzerland GmbH (“BeiGene Switzerland”) Switzerland September 1, 2017 100 % Clinical trial activities and commercial BeiGene Ireland Limited Republic of Ireland August 11, 2017 100 % Clinical trial activities * Wholly-owned by BeiGene Biologics. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of presentation and principles of consolidation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its wholly-owned subsidiaries are eliminated upon consolidation. Noncontrolling interests are recognized to reflect the portion of the equity of subsidiaries which are not attributable, directly or indirectly, to the controlling shareholders. The Company consolidates its interests in its joint venture, BeiGene Biologics, under the voting model and recognizes the minority shareholder's equity interest as a noncontrolling interest in its consolidated financial statements (as described in Note 8). Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating sales rebates and returns allowance to arrive at net product revenues, identifying separate accounting units and the best estimate of selling price of each deliverable in the Company’s revenue arrangements, estimating the fair value of net assets acquired in business combinations, assessing the impairment of long-lived assets, share-based compensation expenses, inventory, realizability of deferred tax assets and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. Functional currency and foreign currency translation Functional currency The determination of the respective functional currency is based on the criteria of Accounting Standard Codification (“ASC”) 830, Foreign Currency Matters. The functional currency of the Company, BeiGene AUS PTY LTD., BeiGene Switzerland, BeiGene Ireland Limited, BeiGene (Hong Kong) Co., Limited, BeiGene 101, and BeiGene (USA) is the United States dollar (“$” or “U.S. dollar”). The Company’s PRC subsidiaries determined their functional currencies to be RMB. The Company uses the U.S. dollar as its reporting currency. Foreign currency translation For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive income/(loss), a component of shareholders’ equity/deficit. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the consolidated statements of comprehensive loss. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be cash equivalents. Cash equivalents which consist primarily of money market funds are stated at fair value. Accounts receivable Trade accounts receivable are recorded at their invoiced amounts, net of allowances for doubtful accounts. An allowance for doubtful accounts is recorded when the collection of the full amount is no longer probable. In evaluating the collectability of receivable balances, the Company considers specific evidence including aging of the receivable, the customer's payment history, its current creditworthiness and current economic trends. Accounts receivable are written off after all collection efforts have ceased. The Company regularly reviews the adequacy and appropriateness of any allowance for doubtful accounts. No allowance for doubtful accounts was recorded as of December 31, 2017. Inventory Inventories are stated at the lower of cost and net realizable value, with cost determined on a weighted-average basis. The Company periodically analyzes its inventory levels, and writes down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded in the consolidated statements of operations. There have been no write-downs or reserves against inventory to date. Short-term investments Short-term debt investments held to maturity are carried at amortized cost when the Company has the ability and positive intent to hold these securities until maturity. When the Company does not have the ability or positive intent to hold short-term debt investments until maturity, these securities are classified as available-for-sale. None of the Company’s fixed maturity securities met the criteria for held-to-maturity classification at December 31, 2017 and 2016. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income/loss. The net carrying value of debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is computed using the effective interest method and included in interest income. Interest and dividends are included in interest income. When the fair value of a debt security classified as available-for-sale is less than its amortized cost, the Company assesses whether or not: (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions is met, the Company must recognize an other-than-temporary impairment through earnings for the difference between the debt security’s amortized cost basis and its fair value. No impairment losses were recorded for any periods presented. The cost of securities sold is based on the specific identification method. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets as follows: Useful Life Office Equipment 5 years Electronic Equipment 3 years Manufacturing equipment 3 to 10 years Laboratory Equipment 3 to 5 years Computer Software 3 to 5 years Leasehold Improvements Lesser of useful life or lease term Land use right, net The land use right represents lease prepayments to the local Bureau of Land and Resources in Guangzhou. The land use right is carried at cost less accumulated amortization. The cost of the land use right is amortized on a straight-line basis over the shorter of the estimated usage periods or the terms of the land use right, which is currently 50 years. Business combination The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC topic 805 (“ASC 805”): Business Combinations. The acquisition method of accounting requires all of the following steps: (i) identifying the acquirer, (ii) determining the acquisition date, (iii) recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree and (iv) recognizing and measuring goodwill or a gain from a bargain purchase. The consideration transferred in a business combination is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) acquisition consideration, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations as a gain. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows from acquired assets, timing and probability of success of clinical events and regulatory approvals, and assumptions on useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Additional information, such as that related to income tax and other contingencies, existing as of the acquisition date but unknown to us may become known during the remainder of the measurement period, not to exceed one year from the acquisition date, which may result in changes to the amounts and allocations recorded. Goodwill and other intangible assets Goodwill is as asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company allocates the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events or changes in circumstances would indicate a potential impairment. We have elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, including goodwill. The qualitative assessment includes our evaluation of relevant events and circumstances affecting our single reporting unit, including macroeconomic, industry, and market conditions, our overall financial performance, and trends in the market price of our common stock. If qualitative factors indicate that it is more likely than not that our reporting unit’s fair value is less than its carrying amount, then we will perform the quantitative impairment test by comparing our reporting unit’s carrying amount, including goodwill, to its fair value. If the carrying amount of our reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess. For the year ended December 31, 2017, we determined that there were no indicators of impairment of our goodwill. Intangible assets acquired through business acquisitions are recognized as assets separate from goodwill and are measured at fair value upon acquisition. Acquired identifiable intangible assets consist of the distribution rights with respect to approved cancer therapies licensed from Celgene, ABRAXANE®, REVLIMID®, and VIDAZA®, and its investigational agent CC-122 and are amortized on a straight-line basis over the estimated useful lives of the assets, which is 10 years. Intangible assets with finite useful lives are tested for impairment when events or circumstances occur that could indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group evaluates the recoverability of the intangible assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. For the year ended December 31, 2017, we determined that there were no indicators of impairment of our other intangible assets. Impairment of long-lived assets Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the years ended December 31, 2017, 2016 and 2015, there was no impairment of the value of the Company’s long-lived assets. Fair value measurements Fair value of financial instruments Financial instruments of the Company primarily include cash and cash equivalents, short-term investments, accounts receivable, long-term bank loan, Shareholder Loan (as defined in Note 16) and accounts payable. As of December 31, 2017 and 2016, the carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated their fair values due to the short-term maturity of these instruments. The short-term investments represented the available-for-sale debt securities and time deposits. The available-for-sale debt securities are recorded at fair value based on quoted prices in active markets with unrealized gain or loss recorded in other comprehensive income or loss. The long-term bank loan and Shareholder Loan approximate their fair value due to the fact that the related interest rates approximate the rates currently offered by financial institutions for similar debt instrument of comparable maturities. The warrants were recorded at fair value as determined on the respective issuance dates and subsequently adjusted to the fair value at each reporting date. The warrants issued prior to the IPO relating to the convertible promissory notes and the option to purchase shares by rental deferral were exercised in 2016. The Company determined the exercise date fair value of the warrants and option using the intrinsic value, which equals to the difference between the share price at the IPO closing date and the exercise price, as the exercise dates were immediately prior to or very close to the IPO closing date. The Company applies ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial instruments measured at fair value on a recurring basis The following tables set forth assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016: Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2017 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. Treasury securities 561,327 — — U.S. agency securities 17,663 — — Time deposits 18,924 — — Cash equivalents Money market funds 44,730 — — Total 642,644 — — Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2016 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. treasury securities 280,660 — — Cash equivalents Money market funds 44,052 — — Total 324,712 — — Revenue recognition Product revenue Revenues from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has transferred to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured, and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, estimated product returns and other deductions. Provisions for estimated reductions to revenue are provided for in the same period the related sales are recorded and are based on the sales terms, historical experience and trend analysis. Rebates are offered to distributors, consistent with pharmaceutical industry practices. The Company records a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions used to establish the provision include the level of distributor inventories, sales volumes and contract pricing and estimated acceptance of government pricing or reimbursement amounts (such as provincial acceptance of the National Reimbursement Drug List pricing in the PRC). The Company regularly reviews the information related to these estimates and adjust the provision accordingly. The Company bases its sales returns allowance on estimated distributor inventories, customer demand as reported by third-party sources, and actual returns history, as well as other factors, as appropriate. If the historical data the Company uses to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. Any changes from the historical trend rates are considered in determining the current sales return allowance. To date, sales returns have not been significant. Collaboration revenue The Company recognizes revenues from research and development collaborative arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and there is reasonable assurance that the related amounts are collectible in accordance with ASC 605, Revenue Recognition (“ASC 605”). The Company’s collaborative arrangements may contain multiple elements, including grants of licenses to intellectual property rights, agreement to provide research and development services and other deliverables. The deliverables under such arrangements are evaluated under ASC 605-25, Multiple-Element Arrangements. Pursuant to ASC 605-25, each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The collaborative arrangements do not include a right of return for any deliverable. The arrangement’s consideration that is fixed or determinable, excluding contingent payments, is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The relative selling price for each deliverable is determined using vendor specific objective evidence (“VSOE”) of selling price or third-party evidence (“TPE”) of selling price if VSOE does not exist. If neither VSOE nor TPE exists, the Company uses the best estimate of the selling price (“BESP”) for the deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Non-refundable payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as advances from customers. Upfront non-refundable payments for licensing the Company’s intellectual property are evaluated to determine if the licensee can obtain stand-alone value from the license separate from the value of the research and development services and other deliverables in the arrangement to be provided by the Company. The Company acts as the principal under its arrangements and licensing intellectual property is part of its ongoing major or central operations. The license right is not contingent upon the delivery of additional items or meeting other specified performance conditions. Therefore, when stand-alone value of the license is determinable, the allocated consideration is recognized as collaboration revenue upon delivery of the license rights. The Company acts as the principal under its collaboration arrangements, and research and development services are also part of its ongoing major or central operations. The Company recognizes the deferred consideration allocated to research and development services as collaboration revenue when delivery or performance of such services occurs and R&D reimbursement revenue for revenue attributable to the clinical trials that Celgene has opted into. Product development, royalties and commercial event payments (collectively, “target payments”) under collaborative arrangements are triggered either by the results of the Company’s research and development efforts, achievement of regulatory goals or by specified sales results by a third-party collaborator. Under ASC 605-28, Milestone Method of Revenue Recognition, an accounting policy election can be made to recognize a payment that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The Company elected not to adopt the milestone method of revenue recognition under ASC 605-28. Targets related to the Company’s development-based activities may include initiation of various phases of clinical trials and applications and acceptance for product approvals by regulatory agencies. Due to the uncertainty involved in meeting these development-based targets, the Company would account for development-based targets as collaboration revenue upon achievement of the respective development target. Royalties based on reported sales of licensed products will be recognized as collaboration revenue based on contract terms when reported sales are reliably measurable and collectability is reasonably assured. Targets related to commercial activities may be triggered upon events such as first commercial sale of a product or when sales first achieve a defined level. Since these targets would be achieved after the completion of the Company’s development activities, the Company would account for the commercial event targets in the same manner as royalties, with collaboration revenue recognized upon achievement of the target. Research and development expenses Research and development expenses represent costs associated with the collaborative arrangements, which primarily include (i) payroll and related costs (including share-based compensation) associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of the Company’s technologies under development, (iii) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to the Company’s research and development services and have no alternative future uses. Clinical trial costs are a significant component of the Company’s research and development expenses. The Company has a history of contracting with third parties that perform various clinical trial activities on behalf of the Company in the ongoing development of the Company’s product candidates. Expenses related to clinical trials are accrued based on the Company’s estimates of the actual services performed by the third parties for the respective period. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), the Company will modify the related accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying consolidated financial statements for the years ended December 31, 2017, 2016 and 2015. Government grants Government financial incentives that involve no conditions or continuing performance obligations of the Company are recognized as other non-operating income upon receipt. In the event government grants or incentives involve continuing performance obligations, the Company will capitalize the payment as a liability and defer the related income over the performance period. Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Company assesses a lease to be a capital lease if any of the following conditions exist: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c) the lease term is at least 75% of the property’s estimated remaining economic life or (d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. The Company has no capital leases for the years presented. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective lease terms. The Company leases office space, employee accommodation and manufactory space under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on straight-line basis over the term of the lease. Comprehensive loss Comprehensive loss is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss includes net loss, foreign currency translation adjustments and unrealized holding losses associated with the available-for-sale securities, and is presented in the consolidated statements of comprehensive loss. Share-based compensation Awards granted to employees The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s grants of share-based awards to employees were classified as equity awards and are recognized in the financial statements based on their grant date fair values. Specifically, the grant date fair value of share options is calculated using an option pricing model. The fair value of restricted shares and restricted share units are based on the closing market price of our common stock on the NASDAQ Global Select Market on the date of grant. The Company has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting based on service conditions provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date. The Company uses the accelerated method for all awards granted with graded vesting based on performance conditions. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rates are estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those share-based awards that are expected to vest. To the extent the Company revises these estimates in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent third-party valuation firm, determined the estimated fair value of the stock options granted to employees using the binomial option pricing model. Awards granted to non-employees The Company has accounted for equity instruments issued to non-employees in accordance with the provisions of ASC 718 and ASC 505, Equity. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is completed as there is no associated performance commitment. The expense is recognized in the same manner as if the Company had paid cash for the services provided by the non-employees in accordance with ASC 505-50, Equity-based payments to non-employees. The Company estimated the fair value of share options granted to non-employees using the same method as emp |
Research and development collab
Research and development collaborative arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Research and development collaborative arrangements | 3. Research and development collaborative arrangements To date, the Company’s collaboration revenue has consisted of (1) upfront license fees and reimbursed research and development revenue from its collaboration agreement with Celgene on the Company’s investigational anti-programmed cell death protein1 (“PD-1”) inhibitor, tislelizumab, and (2) upfront license fees, reimbursed research and development expenses and milestone payments from its collaboration agreement with Merck KGaA, Darmstadt Germany on pamiparib and lifirafenib. The following table summarizes total collaboration revenue recognized for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 $ $ $ License revenue 211,391 — — Research and development service revenue 2,568 1,070 8,816 Total 213,959 1,070 8,816 Celgene and Celgene Switzerland On July 5, 2017, the Company entered into a license agreement with Celgene Switzerland pursuant to which the Company granted to the Celgene parties an exclusive right to develop and commercialize the Company’s investigational PD-1 inhibitor, tislelizumab, in all fields of treatment, other than hematology, in the United States, Europe, Japan and the rest of world other than Asia (the “PD-1 License Agreement”). In connection with the closing of the transactions on August 31, 2017, the Company, Celgene and Celgene Switzerland amended and restated the PD-1 License Agreement (the “A&R PD-1 License Agreement”) to, among other things, clarify the parties’ responsibilities relating to the conducting and funding of certain global registration clinical trials and clarify the scope of the regulatory materials transferred by BeiGene to Celgene. Under the terms of the A&R PD-1 License Agreement, Celgene agreed to pay the Company $263,000 in upfront non-refundable fees, of which $92,050 was paid in the third quarter of 2017 and the remaining $170,950 was paid in December 2017. In addition, subsequent to the completion of the research and development phase of the collaboration, the Company may be eligible to receive product development milestone payments based on the successful achievement of development and regulatory goals, commercial milestone payments based on the successful achievement of commercialization goals, and royalty payments based on a predetermined percentage of Celgene and Celgene Switzerland’s aggregate annual net sales of all products in their territory for a period not to exceed the latest of the expiration of the last valid patent claim, the expiration of regulatory exclusivity or 12 years from the date of the first commercial sale on a product-by-product and country-by-country basis. The Company allocated $13,000 of upfront fees to the fair value of assets related to the Company’s acquisition of Celgene Shanghai, a wholly-owned subsidiary of Celgene Holdings East Corporation established under the laws of China, which was completed contemporaneously with the A&R PD-1 License Agreement. In addition to the exclusive right to develop and commercialize tislelizumab, the terms of the A&R PD-1 License Agreement provide Celgene with the right to collaborate with the Company on the development of tislelizumab for specified indications, including required participation on a joint development committee and a joint steering committee as well as a joint commercialization committee upon achievement of commercialization. The joint development and joint steering committees are formed by an equal number of representatives from the Company and Celgene and are responsible for reviewing and approving the development plan and budget for the development of tislelizumab for clinical studies associated with specified indications. Celgene will reimburse the Company for certain research and development costs at a cost plus agreed upon markup for the development of tislelizumab related to the clinical trials that Celgene opts into, as outlined in the development plan. Under ASC 605, the Company identified the following deliverables of the collaboration agreement with stand-alone value, which are accounted for as separate units of accounting: (a) the license provided to Celgene for the exclusive right to develop and commercialize tislelizumab, in all fields of treatment, other than hematology, in the United States, Europe, Japan and the rest of world other than Asia (“the license”); and (b) the research and development services provided to Celgene to develop tislelizumab within specified indications (“R&D services”). For each deliverable, the Company determined the BESP and allocated the non-contingent consideration of $250,000 to the units of accounting using the relative selling price method. The consideration allocated to the license was recognized upon transfer of the license to Celgene at contract inception and the consideration allocated to the R&D services will be recognized over the term of the respective clinical studies for the specified indications. For the payments associated with the defined developmental, regulatory, and commercialization goals, the Company determined that upon achievement of the developmental, regulatory, and commercialization goals, such payments will be allocated to the separate deliverables using the initial allocation based on the relative selling price method. Further, the sales-based milestones and royalty payments will be recognized when reported sales are reliably measurable and collectability is reasonably assured. For the year ended December 31, 2017, the Company recognized $211,391 as license revenue within collaboration revenue in the Company’s consolidated statements of operations. The consideration allocated to the R&D services was $38,609 and will be recognized over the term of the respective clinical studies for the specified indications, of which $1,568 is recognized as research and development revenue in current period and $37,041 is recorded as deferred revenue in balance sheet as of December 31, 2017. Merck KGaA, Darmstadt Germany In 2013, the Company entered into a license agreement with Merck KGaA, Darmstadt Germany for lifirafenib, which was amended and restated in 2013 and 2015, in which it granted to Merck KGaA, Darmstadt Germany an exclusive license to develop, manufacture, and, in certain circumstances, commercialize lifirafenib outside of the PRC, and Merck KGaA Darmstadt Germany granted the Company an exclusive license to develop, manufacture and commercialize lifirafenib in the PRC (the “PRC Territory”). In March 2017, the Company regained the worldwide rights to lifirafenib after Merck KGaA, Darmstadt Germany informed the Company that it would not exercise a continuation option, and thus, the ex-PRC portion of the agreements terminated in their entirety, except for certain provisions that will survive the termination. In addition, the Company is eligible for $14,000 of additional payments upon the successful achievement of pre-specified milestones in the PRC Territory. In consideration for the licenses Merck KGaA, Darmstadt Germany granted to the Company, the Company has agreed to pay Merck KGaA, Darmstadt Germany a high single-digit royalty on aggregate annual net sales of lifirafenib products in the PRC for a period not to exceed ten years from the date of the first commercial sale. In 2013, the Company entered into a license agreement with Merck KGaA, Darmstadt Germany for pamiparib, in which it granted to Merck KGaA, Darmstadt Germany an exclusive license to develop, manufacture, and, in certain circumstances, commercialize pamiparib outside of the PRC, and Merck KGaA Darmstadt Germany granted the Company an exclusive license to develop, manufacture and commercialize pamiparib in the PRC Territory. On October 1, 2015, the Company entered into a purchase of rights agreement with Merck KGaA, Darmstadt Germany, pursuant to which the Company purchased from Merck KGaA, Darmstadt Germany all of its exclusive rights to pamiparib in the ex-PRC territories for a consideration of $10,000, and reduced the future milestone payments the Company is eligible to receive under the PRC license agreement. The repurchase consideration of $10,000 associated with the reacquisition of the rights to pamiparib was charged to research and development expenses as incurred because the rights have no alternative future use. As Merck KGaA, Darmstadt Germany has no further rights in the ex-PRC territory under the collaborative agreements, the deferred revenue previously received from Merck KGaA, Darmstadt Germany, amounting to $3,018, was offset against the aforementioned repurchase consideration. In December 2017, the Company achieved the milestone for dosing a patient in the first Phase 2 clinical trial of pamiparib in the PRC Territory, and the related $1,000 milestone payment received in January 2018, was recognized as research and development services revenue in year ended December 31, 2017. No other development based targets have been achieved and none of the products have been approved. Hence, no revenue has been recognized related to royalties or commercial event targets in any of the periods presented. In addition, no payments, except for the repurchase consideration of $10,000, have been made to the collaborator for any of the periods presented. |
Business combination
Business combination | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Business Combination | 4. Business combination On August 31, 2017, BeiGene HK acquired 100% of the equity interests of Celgene Shanghai, a wholly-owned subsidiary of Celgene Holdings East Corporation established under the laws of the PRC. Celgene Shanghai is in the business of, among other things, providing marketing and promotional services in connection with certain pharmaceutical products manufactured by Celgene. The name of Celgene Shanghai has been changed to BeiGene Pharmaceutical (Shanghai). On July 5, 2017, BeiGene and a wholly-owned subsidiary of Celgene, Celgene Logistics Sàrl (“Celgene Logistics”), entered into a license agreement pursuant to which BeiGene has been granted the right to exclusively distribute and promote Celgene’s approved cancer therapies, ABRAXANE®, REVLIMID®, and VIDAZA®, and its investigational agent CC-122 in clinical development (the “Distribution Rights”), in China excluding Hong Kong, Macau and Taiwan (the “Chinese License Agreement”). The China License Agreement became effective on August 31, 2017 contemporaneously with the closing of the acquisition of Celgene Shanghai and the A&R PD-1 License Agreement. The Company evaluated the acquisition of the Celgene Shanghai equity and the distribution rights acquired under ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business . Because substantially all of the value of the acquisition did not relate to a similar group of assets and the business contained both inputs and processes necessary to manage products and provide economic benefits directly to its owners, it was determined that the acquisition represents a business combination. Therefore, the transaction has been accounted for using the acquisition method of accounting. This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. Share subscription agreement On August 31, 2017, the Company issued 32,746,416 of its ordinary shares to Celgene Switzerland for an aggregate purchase price of $150,000, or $4.58 per ordinary share, or $59.55 per ADS, pursuant to a subscription agreement dated July 5, 2017 by and between the Company and Celgene Switzerland (the “Share Subscription Agreement”). See Note 22 for further discussion of the Share Subscription Agreement. Determination of purchase price The purchase price of Celgene Shanghai was calculated as $28,138, and is comprised of cash consideration of $4,532 and non-cash consideration of $23,606, related to the discount on ordinary shares issued to Celgene in connection with the Share Subscription Agreement. The discount was a result of the increase in fair value of the Company’s shares between the fixed price of $59.55 per ADS in the Share Subscription Agreement and the fair value per ADS as of August 31, 2017. The following summarizes the purchase price in the business combination (in thousands). Purchase Price Cash paid to acquire Celgene Shanghai $ 4,532 Discount on Share Subscription Agreement 23,606 Total purchase price $ 28,138 Purchase price allocation The following table summarized the estimated fair values of assets acquired and liabilities assumed (in thousands): Amount Cash and cash equivalents $ 24,448 Other current assets 518 Property and equipment, net 204 Intangible assets 7,500 Deferred tax asset 1,069 Total identifiable assets 33,739 Current liabilities (5,710) Total liabilities assumed (5,710) Goodwill 109 Total fair value of consideration transferred $ 28,138 The purchase price allocation for this acquisition is preliminary. The fair value estimates for the assets acquired and liabilities assumed are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. As of December 31, 2017, the Company made an adjustment on the fair value of the net assets acquired as a result of facts and circumstances existing at the time of the acquisition, which were not known to the Company. The adjustment resulted in a $1,875 increase in identifiable net assets and a corresponding decrease in goodwill. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The goodwill resulting from the business combination is primarily attributable to the assembled workforce of the acquired business. The goodwill attributable to the business combination is not deductible for tax purposes. The following summarizes the business combination as presented on the statement of cash flows (in thousands): Investing activities Cash acquired $ 24,448 Cash paid to acquire Celgene Shanghai (4,532) Cash acquired in business combination, net of cash paid $ 19,916 Non-cash activities Discount provided on sale of ordinary shares for business combination $ (23,606) |
Short-term investments
Short-term investments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Short-term investments | 5. Short-term investments Short-term investments as of December 31, 2017 consisted of the following available-for-sale debt securities and time deposits: Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) $ $ $ $ U.S. treasury securities 561,733 — 406 561,327 U.S. agency securities 17,651 12 — 17,663 Time deposits 18,924 — — 18,924 Total 598,308 12 406 597,914 Short-term investments as of December 31, 2016 consisted of the following available-for-sale debt securities: Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) $ $ $ $ U.S. treasury securities 280,757 — 97 280,660 Total 280,757 — 97 280,660 The Company does not consider the investments in U.S. treasury securities or U.S. agency securities to be other-than-temporarily impaired at December 31, 2017. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Inventories | 6. Inventories The Company’s inventory balance of $10,930 as of December 31, 2017 consisted entirely of finished goods product purchased from Celgene for distribution in the PRC. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Property and equipment, net | 7. Property and equipment, net Property and equipment consisted of the following: As of December 31, 2017 2016 $ $ Manufacturing equipment 15,737 — Laboratory equipment 15,596 7,536 Leasehold improvements 15,298 9,446 Electronic equipment 1,244 647 Office equipment 1,597 449 Computer software 598 317 Property and equipment, at cost 50,070 18,395 Less accumulated depreciation (13,627) (7,473) Construction in progress 26,125 15,055 Property and equipment, net 62,568 25,977 Construction in progress as of December 31, 2017 of $26,125 primarily related to the buildout of the Guangzhou manufacturing facility. Construction in progress as of December 31, 2016 primarily related to the BeiGene Suzhou manufacturing and laboratory facility that was put into service in the third quarter of 2017. In the year ended December 31, 2017, assets totaling $24,537 related to the Suzhou facilities were transferred to laboratory equipment, manufacturing equipment and leasehold improvements from construction in progress. Depreciation expense for the years ended December 31, 2017, 2016 and 2015 were $4,340, $1,909 and $1,545, respectively. |
Manufacturing facility in Guang
Manufacturing facility in Guangzhou | 12 Months Ended |
Dec. 31, 2017 | |
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Manufacturing facility in Guangzhou | 8.Manufacturing facility in Guangzhou On March 7, 2017, BeiGene HK, a wholly owned subsidiary of the Company, and Guangzhou GET Technology Development Co., Ltd. ("GET"), entered into a definitive agreement to establish a commercial scale biologics manufacturing facility in Guangzhou, Guangdong Province, PRC. On March 7, 2017, BeiGene HK and GET entered into an Equity Joint Venture Contract (the “JV Agreement”). Under the terms of the JV Agreement, BeiGene HK made an initial cash capital contribution of RMB200,000 and a subsequent contribution of one or more biologics assets in exchange for a 95% equity interest in BeiGene Biologics. GET made a cash capital contribution of RMB100,000 to BeiGene Biologics, representing a 5% equity interest in BeiGene Biologics. In addition, on March 7, 2017, BeiGene Biologics entered into a contract with GET, under which GET agreed to provide a RMB900,000 loan (the “Shareholder Loan”) to BeiGene Biologics (see Note 16). BeiGene Biologics is working to establish a biologics manufacturing facility in Guangzhou, through a wholly-owned subsidiary, the BeiGene Guangzhou Factory, to manufacture biologics for the Company and its subsidiaries. On April 11, 2017, BeiGene HK, GET and BeiGene Biologics amended the JV Agreement and the capital contribution agreement, among other things, to adjust the capital contribution schedules and adjust the initial term of the governing bodies and a certain management position. On April 13, 2017 and May 4, 2017, BeiGene HK made cash capital contributions of RMB137,830 and RMB2,415, respectively, into BeiGene Biologics. The remainder of the cash capital contribution from BeiGene HK to BeiGene Biologics will be paid by April 10, 2020. On April 14, 2017, GET made cash capital contributions of RMB100,000 into BeiGene Biologics. On April 14, 2017, BeiGene Biologics drew down the Shareholder Loan of RMB900,000 from GET (as further described in Note 16). On October 24, 2017, BeiGene HK and BeiGene Biologics entered into an Equity Transfer Agreement. Under the terms of the Equity Transfer Agreement, BeiGene HK agreed to transfer 100% equity interest of BeiGene Shanghai into BeiGene Biologics. The transfer consideration for the purchased interests under this Equity Transfer Agreement is the fair value of the 100% equity of BeiGene Shanghai appraised by a qualified Chinese valuation firm under the laws of PRC. On November 24, 2017, the 100% equity interest of BeiGene Shanghai was transferred to BeiGene Biologics. Upon the transfer of equity in BeiGene Shanghai, BeiGene HK fulfilled its contribution obligation to subscribe for registered capital in BeiGene Biologics and BeiGene HK's equity interest in BeiGene Shanghai became 95%. In connection with BeiGene Shanghai's equity transfer, BeiGene HK paid a capital tax of RMB169,750 to the Guangzhou local tax bureau. This tax expense resulted from the intercompany transfer of assets, and was deferred in accordance with ASC 810-10-45-8 and was included in other non-current assets in the Company’s consolidated balance sheet. As of December 31, 2017, the Company and GET held 95% and 5% equity interests in BeiGene Biologics, respectively. As of December 31, 2017, the Company's cash and cash equivalents and short-term investments included $139,505 of cash and cash equivalents and short-term investments held by BeiGene Biologics to be used to build the commercial scale biologics facility and to fund research and development of the Company's biologics drug candidates in China. |
Land use right, net
Land use right, net | 12 Months Ended |
Dec. 31, 2017 | |
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Land use right, net | 9. Land use right, net The land use right represents the land acquired for the purpose of constructing and operating the biologics manufacturing facility in Guangzhou. In 2017, the Company acquired the land use right from the local Bureau of Land and Resources in Guangzhou. The land use right is amortized over the remaining term of the right. The land use right asset as of December 31, 2017 and 2016 is summarized as follows: As of December 31, 2017 2016 $ $ Land use right, cost 12,633 — Accumulated amortization (168) — Land use right, net 12,465 — Amortization expense of the land use right for year ended December 31, 2017 was $168. Amortization expense of the land use right for the year ended December 31, 2016 and 2015 was both nil. As of December 31, 2017, expected amortization expense for the land use right is approximately $253 in 2018, $253 in 2019, $253 in 2020, $253 in 2021, $253 in 2022 and $11,200 in 2023 and thereafter. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
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Intangible assets | 10. Intangible assets Intangible assets outstanding as of December 31, 2017 and December 31, 2016 are summarized as follows: December 31, 2017 December 31, 2016 Gross Gross carrying Accumulated Intangible carrying Accumulated Intangible amount amortization assets, net amount amortization assets, net Finite-lived intangible assets: Product distribution rights 7,500 (250) 7,250 — — — Total finite-lived intangible assets 7,500 (250) 7,250 — — — Product distribution rights consist of distribution rights on the approved cancer therapies licensed from Celgene, ABRAXANE®, REVLIMID®, and VIDAZA®, and its investigational agent CC-122 acquired as part of the Celgene transaction. The Company is amortizing the product distribution rights over a period of 10 years. Amortization expense of intangible assets for the years ended December 31, 2017, 2016 and 2015 was $250, nil and nil, respectively. As of December 31, 2017, expected amortization expense for the unamortized finite-lived intangible assets is approximately $750 in 2018, $750 in 2019, $750 in 2020, $750 in 2021, $750 in 2022, and $3,500 in 2023 and thereafter. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
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Income taxes | 11. Income taxes Cayman Islands The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income tax. Hong Kong BeiGene HK is incorporated in Hong Kong. Companies registered in Hong Kong are subject to Hong Kong Profits Tax on the taxable income as reported in their respective statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong for any of the periods presented. Under the Hong Kong tax law, BeiGene (Hong Kong) Co., Limited is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. China BeiGene Beijing, BeiGene Suzhou, BeiGene Shanghai, BeiGene Biologics, BeiGene Guangzhou Factory, BeiGene Guangzhou and BeiGene Pharmaceutical (Shanghai) are subject to the statutory tax rate of 25% in accordance with the EIT Law, which was effective since January 1, 2008. Under the EIT Law, all enterprises are subject to the 25% enterprise income tax rate, except for certain entities that enjoyed the tax holidays or preferential tax treatments. Under the EIT Law and its relevant regulations, dividends paid by China enterprises out of profits earned post-2007 to non-China tax resident investors are subject to China withholding tax of 10%. A lower withholding tax rate may be applied based on applicable tax treaty with certain jurisdictions. Australia BeiGene AUS Pty Ltd., incorporated in Australia is subject to corporate income tax at a rate of 30%. BeiGene AUS Pty Ltd. has no taxable income for all periods presented and therefore, no provision for income taxes is required. United States BeiGene (USA), which was incorporated in Delaware, United States on July 8, 2015, is subject to statutory U.S. Federal corporate income tax at a rate of 35% for the years ended December 31, 2017, 2016 and 2015. BeiGene (USA) is also subject to the state income tax in New Jersey, California and Massachusetts, at a rate of 9.0%, 8.8% and 8.0%, respectively, for the year ended December 31, 2017. Switzerland BeiGene Switzerland, incorporated in Switzerland on September 1, 2017, is subject to corporate income tax at a rate of 10.0%. BeiGene Switzerland had no taxable income for year ended December 31, 2017, and therefore, no provision for income taxes is required. The components of income ( loss) before income taxes are as follows: Year Ended December 31, 2017 2016 2015 $ $ $ PRC (59,590) (7,352) (5,253) U.S. 6,928 678 35 Other (38,402) (112,489) (51,884) Total (91,064) (119,163) (57,102) The current and deferred components of the income tax expense (benefit) from continuing operations are as follows: Year Ended December 31, 2017 2016 2015 $ $ Current Tax Expense (Benefit): PRC 2,477 — — U.S. 5,695 822 — Total 8,172 822 — Deferred Tax Expense (Benefit): PRC 115 — — U.S. (6,052) (768) — Total (5,937) (768) — Income Tax Expense 2,235 54 — The reconciliation of the statutory tax rate to our effective income tax rate is as follow: Year Ended December 31, 2017 2016 2015 $ $ $ Loss before tax (91,064) (119,163) (57,102) China statutory tax rate Expected taxation at China statutory tax rate (22,766) (29,791) (14,275) Foreign tax rate differential 23,275 27,830 12,686 Non-deductible expenses 3,597 593 576 Impact of U.S. statutory tax rate change 2,642 — — Deductible intellectual property from intercompany transfer (29,438) — — Change in valuation allowance 30,356 1,627 1,013 Research and orphan drug tax credits (5,431) (205) — Taxation for the year 2,235 54 — Effective tax rate -2.5% -0.1% Significant components of deferred tax assets (liabilities) are as follows: Year Ended December 31, 2017 2016 2015 $ $ $ Deferred Tax Assets: Accruals and reserves 7,756 1,102 — Net operating losses carryforward 29,801 6,987 7,146 Stock compensation 4,639 — — Research and orphan drug tax credits 2,449 — — Gross deferred tax assets 44,645 8,089 7,146 Less valuation allowance (36,600) (7,307) (7,146) Total deferred tax assets 8,045 782 — Deferred tax liabilities: Depreciation and amortization (370) (14) — Total deferred tax liabilities (370) (14) — Net deferred tax asset 7,675 768 — Valuation allowances have been provided on deferred tax assets where, based on all available evidence, it was considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. After consideration of all positive and negative evidence, the Company believes that as of December 31, 2017 it is more likely than not the deferred tax assets will not be realized for our subsidiaries in Australia, China and Switzerland. For the years ended December 31, 2017 and 2016, there were increases in the valuation allowance by $30,356 and $1,627, respectively, which included the effect of expired net operating losses of $1,637 and $1,466, respectively. Adjustments could be required in the future if the Company estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded. As of December 31, 2017 and 2016, the Company had net operating losses of approximately $209,979 and $27,948, respectively, of which net operating losses as of December 31, 2017 included $57,507 derived from entities in the PRC which expire in years 2018 through 2022, and $152,431 derived from an entity in Switzerland that expires in 2026. The Company has approximately $2,449 of U.S. research and orphan drug credits which will expire in 2037 if not utilized. The gross unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 were as follows: Year Ended December 31, 2017 2016 2015 $ $ $ Beginning balance, as of January 1 110 — — Additions based on tax positions related to prior tax years 234 — — Reductions based on tax positions related to prior tax years (91) — — Additions based on tax positions related to the current tax year 665 110 — Ending balance, as of December 31 918 110 — Current year and prior year additions include assessment of potential global transfer pricing adjustments, and U.S. federal and state tax credits and incentives. $751 of unrecognized tax benefits as of December 31, 2017 would impact the consolidated income tax rate if ultimately recognized. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly change within the next 12 months. The Company has elected to record interest and penalties related to income taxes as a component of income tax expense. For the years ended December 31, 2017, 2016 and 2015, the Company's accrued interest and penalties, where applicable, related to uncertain tax positions were not material. The Company conducts business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. As of December 31, 2017, China tax matters are open for the years 2012 through 2017, and U.S. federal tax matters are open to examination for years 2015 through 2017. Various U.S. states and other non-US tax jurisdictions in which the Company file tax returns remain open for examination for 2010 through 2017 . |
Accrued expenses and other paya
Accrued expenses and other payables | 12 Months Ended |
Dec. 31, 2017 | |
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Accrued expenses and other payables | 12. Accrued expenses and other payables Accrued expenses and other payables consisted of the following: As of December 31, 2017 2016 $ $ Compensation related 17,051 3,980 External research and development activities related 18,721 14,198 Sales rebates and returns related 3,997 — Professional fees and other 9,829 4,119 Total accrued expenses and other payables 49,598 22,297 The following table presents the rollforward of accrued sales rebates and returns for the year ended December 31, 2017. Sales Rebates and Returns $ Balance as of December 31, 2016 — Accrual 4,000 Payment Balance as of December 31, 2017 |
Warrants and option liabilities
Warrants and option liabilities | 12 Months Ended |
Dec. 31, 2017 | |
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Warrants and option liabilities | 13. Warrants and option liabilities Option to purchase shares by rental deferral On September 1, 2012, in conjunction with a lease agreement of one of its premises, the Company granted the landlord an option to purchase the Company's ordinary shares (the “Option”) in exchange for the deferral of the payment of one year's rental expense. The Option was a freestanding instrument and was recorded as a liability in accordance with ASC480, Distinguishing Liabilities from Equity. The Option was initially recognized at fair value with subsequent changes in fair value recorded in losses. Prior to its IPO, the Company determined the fair value of the Option with the assistance of an independent third-party valuation firm. On February 8, 2016, immediately prior to its IPO, the landlord exercised the Option to purchase 1,451,586 ordinary shares of the Company. As the exercise date was the IPO closing date, the exercise date fair value of the Option of $2,540 was determined based on its intrinsic value, which equaled the difference between the share price at the IPO closing date and the exercise price of such purchased ordinary shares. During the years ended December 31, 2017, 2016 and 2015, the Company recognized a loss from the increase in fair value of the Option of nil, $1,151 and $1,263, respectively. Warrants in connection with the convertible promissory notes During the years ended December 31, 2012 to 2014, the Company entered into agreements with several investors to issue convertible promissory notes, and related warrants to purchase the Company's preferred shares up to 10% of the convertible promissory notes' principal amount concurrently, for an aggregate principal amount of $2,410. The warrants were freestanding instruments and were recorded as liabilities in accordance with ASC480. The warrants were initially recognized at fair value with subsequent changes in fair value recorded in losses. In January 2016 and February 2016, the warrants issued in connection with the promissory notes were exercised for 621,637 preferred shares, which were then converted into 621,637 ordinary shares. As the exercise dates were very close to the IPO closing date, the respective exercise date fair value of the warrants of $1,148 was determined based on the intrinsic value, which equaled the difference between the share price at the IPO closing date and the exercise price of the issued warrants. For the years ended December 31, 2017, 2016 and 2015, the Company recognized a loss from the increase in fair value of nil, $363 and $563, respectively. |
Short-term loan
Short-term loan | 12 Months Ended |
Dec. 31, 2017 | |
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Short-term loan | 14. Short-term bank loan On March 28, 2017, BeiGene Biologics borrowed a RMB denominated short-term loan with a principal amount of $2,470 from GET. The loan was interest-free and was a temporary borrowing for the payment of a land auction deposit. The land was expected to be acquired for building the biologics manufacturing facility in Guangzhou. On April 14, 2017, the short-term loan was fully settled. |
Long-term bank loan
Long-term bank loan | 12 Months Ended |
Dec. 31, 2017 | |
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Long-term bank loan | 15. Long-term bank loan On September 2, 2015, BeiGene Suzhou entered into a loan agreement with Suzhou Industrial Park Biotech Development Co., Ltd. and China Construction Bank to borrow $18,444 at a 7% fixed annual interest rate. As of December 31, 2017, the Company has drawn down the entire amount, which is secured by BeiGene Suzhou's equipment with a carrying amount of $23,788 and the Company's rights to a PRC patent on a drug candidate. The loan principal amounts of $9,222 and $9,222 are repayable on September 30, 2018 and 2019, respectively. Interest expense recognized for the years ended December 31, 2017, 2016 and 2015 amounted to $1,260, $851 and $140, respectively. |
Shareholder Loan
Shareholder Loan | 12 Months Ended |
Dec. 31, 2017 | |
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Shareholder Loan | 16. Shareholder Loan On March 7, 2017, BeiGene Biologics entered into the Shareholder Loan Contract with GET, pursuant to which GET agreed to provide the Shareholder Loan of RMB900,000 to BeiGene Biologics. The Shareholder Loan has a conversion feature, settled in a variable number of shares of common stock upon conversion (the “debt-to-equity conversion”). On April 14, 2017, BeiGene Biologics drew down the entire Shareholder Loan of RMB900,000 from GET. Key features of the Shareholder Loan The Shareholder Loan bears simple interest at a fixed rate of 8% per annum. No interest payment is due or payable prior to the repayment of the principal or the debt-to-equity conversion. The term of the Shareholder Loan is 72 months, commencing from the actual drawdown date of April 14, 2017 and ending on April 13, 2023, unless converted earlier. The Shareholder Loan may be repaid or converted, either partially or in full, to an additional mid-single digit percentage equity interest in BeiGene Biologics prior to its maturity date, pursuant to the terms of the JV Agreement. BeiGene Biologics has the right to make early repayment at any time; provided, however, that if repayment is to occur before the debt-to-equity conversion it would require written approval of both BeiGene Biologics and GET. Upon conversion of the shareholder loan, GET will receive an additional equity interest in BeiGene Biologics, which will be based on the formula outlined in the JV Agreement. The Shareholder Loan can only be used for BeiGene Biologics, including the construction and operation of the biologics manufacturing facility and research and development and clinical trials to be carried out by BeiGene Biologics. If BeiGene Biologics does not use the Shareholder Loan proceeds for the specified purposes, GET may be entitled to certain liquidated damages. In the event of an early termination of the JV Agreement, the Shareholder Loan will become due and payable at the time of termination of the JV Agreement. Accounting for the Shareholder Loan The Shareholder Loan is classified as a long-term liability and initially measured at the principal of RMB900,000. Interest will be accrued based on the interest rate of 8% per annum. As the Shareholder Loan may be share-settled by a number of shares with a fair value equal to a fixed settlement amount, the settlement is not viewed as a conversion feature, but as a redemption feature because the settlement amount does not vary with the share price. This in-substance redemption feature does not require bifurcation because it is clearly and closely related to the debt host that does not involves a substantial premium or discount. Since there is no conversion feature embedded in the Shareholder Loan, no beneficial conversion feature was recorded. There are no other embedded derivatives that are required to be bifurcated. The portion of interest accrued on the Shareholder Loan related to borrowings used to construct the BeiGene factory in Guangzhou is being capitalized in accordance with ASC 835-20, Interest – Capitalization of Interest. For the year ended December 31, 2017, total interest expense generated from the Shareholder Loan was $7,649, among which, $614 was capitalized. |
Other long-term liabilities
Other long-term liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Other long-term liabilities | 17. Other long-term liabilities Other long-term liabilities consisted of the following: As of December 31, 2017 2016 $ $ Government grants or incentives received and deferred 31,804 564 Others 155 — Total other long-term liabilities 31,959 564 |
Product revenue, net
Product revenue, net | 12 Months Ended |
Dec. 31, 2017 | |
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Product revenue, net | 18. Product revenue, net The Company’s product sales are derived from the sale of ABRAXANE® and REVLIMID® in China under a distribution license from Celgene. The table below presents the Company’s net product sales for the years ended December 31, 2017, 2016 and 2015. Year Ended December 31, 2017 2016 2015 $ $ $ Product revenue - gross 28,428 — — Less: Rebate and sales return (4,000) — — Product revenue - net 24,428 — — |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2017 | |
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Loss per share | 19. Loss per share Loss per share was calculated as follows: Year Ended December 31, 2017 2016 2015 $ $ $ Numerator: Net loss attributable to BeiGene, Ltd. (93,105) (119,217) (57,102) Denominator: Weighted average shares outstanding for computing basic and diluted loss per share 543,185,460 403,619,446 110,597,263 Net loss per share attributable to BeiGene, Ltd., basic and diluted (0.17) (0.30) (0.52) For the year ended December 31, 2017, 2016 and 2015, the computation of basic loss per share using the two-class method was not applicable as the Company was in a net loss position. The effects of all share options and restricted share units were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive during the year ended December 31, 2017. The effects of all convertible preferred shares, share options, warrants and options to purchase ordinary or preferred shares were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive during the years ended December 31, 2016 and 2015. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block | |
Share-based compensation | 20. Share-based compensation General On January 14, 2016, in connection with the IPO, the board of directors and shareholders of the Company approved the 2016 Share Option and Incentive Plan (the “2016 Plan”), which became effective on February 2, 2016. The Company initially reserved 65,029,595 ordinary shares for the issuance of awards under the 2016 Plan, plus any shares available under the 2011 Option Plan (the “2011 Plan”), and not subject to any outstanding options as of the effective date of the 2016 Plan, along with underlying share awards under the 2011 Plan that are cancelled or forfeited without issuance of ordinary shares. As of December 31, 2017, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 4,893,601. The 2016 Plan provides for an annual increase in the shares available for issuance, to be added on the first day of each fiscal year, beginning on January 1, 2017 and continuing until the expiration of the 2016 Plan, equal to the lesser of (i) five percent (5%) of the outstanding shares of the Company's ordinary shares on the last day of the immediately preceding fiscal year or (ii) such number of shares determined by the Company’s board of directors or the compensation committee. On January 1, 2017, 25,791,680 ordinary shares were added to the 2016 Plan under this provision. The number of shares available for issuance under the 2016 Plan is subject to adjustment in the event of a share split, share dividend or other change in the Company’s capitalization. During the year ended December 31, 2015, the Company granted 15,663,600 options to employees and 1,950,000 options to non-employees under the 2011 Plan. In January 2016, the Company granted 1,685,152 options to employees and 732,000 options to consultants, with a weighted-average exercise price of $1.85 per ordinary share under the 2011 Plan. For the year ended December 31, 2016, the Company granted an aggregate of 35,317,139 options to employees, 3,604,080 options to consultants, and 1,075,000 restricted ordinary shares to employees, under the 2016 Plan, with an exercise price per ordinary share equal to 1 / 13 of the closing price of the Company's ADS quoted on the NASDAQ Stock Market on the respective grant dates. During the year ended December 31, 2017, the Company granted 61,921,249 options, with an exercise price per ordinary share equal to 1/13 of the closing price of the Company's ADS quoted on the NASDAQ Stock Market on the applicable grant dates, 1,469,442 restricted share units and 300,000 restricted ordinary shares under the 2016 Plan, which restricted ordinary shares were forfeited prior to year-end. During the years ended December 31, 2017 and 2016, no grants to employees and non-employees were made outside of the Company's 2011 Plan and 2016 Plan. During the year ended December 31, 2015, the Company granted 11,400,500 options to employees and 3,800,167 options to non-employees outside of the Company’s 2011 Plan and 2016 Plan. Generally, options have a contractual term of 10 years and vest over a three- to five-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a monthly basis thereafter. Restricted shares and restricted share units vest over a four-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a yearly basis thereafter. As of December 31, 2017, share-based awards to purchase 2,090,472 ordinary shares were available for future grant under the 2016 Plan. Share options The following table summarizes the Company’s share option activities under the 2011 Plan and 2016 Plan: Weighted Weighted Weighted Average Average Average Grant Remaining Number of Exercise Date Fair Contractual Aggregate Options Price Value Term Intrinsic Value $ $ Years $ Outstanding at December 31, 2014 21,779,991 0.03 Granted* 32,814,267 0.49 0.28 Exercised (7,757,383) 0.01 12,496 Forfeited (2,726,885) 0.28 Outstanding at December 31, 2015 44,109,990 0.35 Granted 38,921,219 2.32 1.60 Exercised (610,116) 0.10 1,353 Forfeited (5,341,350) 0.92 Outstanding at December 31, 2016 77,079,743 1.31 Granted 62,085,462 3.73 2.65 Exercised (5,887,193) 0.82 24,723 Forfeited (6,275,115) 2.52 Outstanding at December 31, 2017 127,002,897 2.45 8.50 643,396 Exercisable as of December 31, 2017 32,504,762 1.01 7.20 211,537 Vested and expected to vest at December 31, 2017 117,553,084 2.68 8.46 600,210 * Includes options granted outside the 2011 Plan and 2016 Plan. As of December 31, 2017, the unrecognized compensation cost related to 85,048,322 unvested share options expected to vest was $166,355. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.5 years. The total fair value of employee share option awards vested during the years ended December 31, 2017, 2016 and 2015 was $20,440, $2,821 and $72, respectively. Fair value of options The binomial option-pricing model was applied in determining the estimated fair value of the options granted. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility and, the exercise multiple for which employees are likely to exercise share options. For expected volatilities, the trading history and observation period of the Company’s own share price movement has not been long enough to match the life of the share option. Therefore, the Company has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Company. For the exercise multiple, the Company was not able to develop an exercise pattern as reference, thus the exercise multiple is based on management’s estimation, which the Company believes is representative of the future exercise pattern of the options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield curve in effect at the time of grant. Prior to the completion of the Company’s initial public offering, the estimated fair value of the ordinary shares, at the option grant dates, was determined with assistance from an independent third-party valuation firm, and the Company’s management was ultimately responsible for the determination of the estimated fair value of its ordinary shares. With the completion of the Company’s initial public offering, a public trading market for the ADSs has been established, and it is no longer necessary for the Company to estimate the fair value of ordinary shares at the option grant dates. The following table presents the assumptions used to estimate the fair values of the share options granted in the years presented: Year Ended December 31, 2017 2016 2015 Fair value of ordinary share 2.39 ~ 8.71 1.85 ~ 2.84 0.33 ~ 1.62 Risk-free interest rate 2.2% ~ 2.6% 1.5% ~ 2.6% 1.5% ~ 2.4% Expected exercise multiple 2.2 ~ 2.8 2.2 ~ 2.8 2.2 ~ 2.8 Expected volatility 99% ~ 100% 98% ~ 102% 94% ~ 106% Expected dividend yield 0% 0% 0% Contractual life 10 years 10 years 10 years Restricted shares The following table summarizes the Company’s employee restricted share activities under the 2016 Plan: Numbers Weighted Average of Shares Grant Date Fair Value $ Outstanding at December 31, 2014 577,778 0.05 Granted — — Vested (533,333) 0.05 Forfeited — — Outstanding at December 31, 2015 44,445 0.05 Granted 1,075,000 2.16 Vested (44,445) 0.05 Forfeited — — Outstanding at December 31, 2016 1,075,000 2.16 Granted 300,000 2.95 Vested (268,750) 2.04 Forfeited (300,000) 2.95 Outstanding at December 31, 2017 806,250 2.16 Expected to vest at December 31, 2017 725,625 2.16 The Company had no non-employee restricted share activities during the year ended December 31, 2017. As of December 31, 2017, the unrecognized compensation cost related to unvested restricted shares expected to vest was $1,465. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.5 years. Restricted share units The following table summarizes the Company's employee restricted share unit activities under the 2016 Plan: Numbers Weighted Average of Shares Grant Date Fair Value $ Outstanding at December 31, 2016 — — Granted 1,469,442 7.55 Vested — — Forfeited — — Outstanding at December 31, 2017 1,469,442 7.55 Expected to vest at December 31, 2017 1,322,498 7.55 As of December 31, 2017, the unrecognized compensation cost related to unvested restricted shares expected to vest was $10,418. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.8 years. The following table summarizes total share-based compensation cost recognized for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 $ $ $ Research and development 30,610 8,076 9,593 Selling, general and administrative 12,253 2,549 618 Total 42,863 10,625 10,211 |
Accumulated other comprehensive
Accumulated other comprehensive income | 12 Months Ended |
Dec. 31, 2017 | |
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Accumulated other comprehensive income | 21. Accumulated other comprehensive income The movement of accumulated other comprehensive income is as follows: Unrealized Foreign Currency Losses on Translation Available-for-Sale Adjustments Securities Total $ $ $ Balance as of December 31, 2015 (602) (1,207) (1,809) Other comprehensive loss before reclassifications (245) (307) (552) Amounts reclassified from accumulated other comprehensive income — 1,415 1,415 Net-current period other comprehensive (loss) income (245) 1,108 863 Balance as of December 31, 2016 (847) (99) (946) Other comprehensive income (loss) before reclassifications 762 (252) 510 Amounts reclassified from accumulated other comprehensive loss — (44) (44) Net-current period other comprehensive income (loss) 762 (296) 466 Balance as of December 31, 2017 (85) (395) (480) |
Shareholders' equity
Shareholders' equity | 12 Months Ended |
Dec. 31, 2017 | |
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Shareholders' equity | 22. Shareholders’ equity Initial public offering On February 8, 2016, the Company completed its IPO on the NASDAQ Global Select Market. 6,600,000 ADSs representing 85,800,000 ordinary shares were sold at $24.00 per ADS, or $1.85 per ordinary share. Additionally, the underwriters exercised their option to purchase an additional 990,000 ADSs representing 12,870,000 ordinary shares from the Company. Net proceeds from the IPO, including the underwriter option, after deducting underwriting discounts and offering expenses were $166,197. Follow-on public offerings On November 23, 2016, the Company completed a follow-on public offering at a price of $32.00 per ADS, or $2.46 per ordinary share. In this offering, the Company sold 5,781,250 ADSs representing 75,156,250 ordinary shares. Additionally, the underwriters exercised their option to purchase an additional 850,000 ADSs representing 11,050,000 ordinary shares from the Company. The selling shareholders sold 468,750 ADSs representing 6,093,750 ordinary shares. Net proceeds from this offering, including the underwriter option, after deducting the underwriting discounts and offering expenses were $198,625. The Company did not receive any proceeds from the sale of the shares by the selling shareholders. On August 16, 2017, the Company completed a follow-on public offering at a price of $71.00 per ADS, or $5.46 per ordinary share. In this offering, the Company sold 2,465,000 ADSs representing 32,045,000 ordinary shares. Additionally, the underwriters exercised their option to purchase an additional 369,750 ADSs representing 4,806,750 ordinary shares from the Company. Net proceeds from this offering, including the underwriter option, after deducting the underwriting discounts and offering expenses were $188,517. Share Subscription Agreement On August 31, 2017, the Company sold 32,746,416 of its ordinary shares to Celgene Switzerland for an aggregate cash price of $150,000, or $4.58 per ordinary share, or $59.55 per ADS, pursuant to a Share Subscription Agreement in connection with the entry into the A&R PD-1 License Agreement. Proceeds from the issuance are recorded net of $72 of fees related to the share issuance. The offer and sale of the shares issued pursuant to the Share Subscription Agreement was made in a private placement in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, for transactions by an issuer not involving a public offering, and/or Regulation D under the Securities Act. Conversion of preferred shares and senior promissory note Upon completion of the IPO, all outstanding preferred shares were converted into 199,990,641 ordinary shares and the related carrying value of $176,084 was reclassified from mezzanine equity to shareholders’ equity. The outstanding unpaid principal and interest of the Senior Promissory Note were converted into 7,942,314 ordinary shares, computed at the initial public offering price of $1.85 per ordinary share and the related carrying value of $14,693 was reclassified from current liability to shareholders’ equity. Exercise of warrants and option In January 2016 and February 2016, certain warrants in connection with the convertible promissory notes and short term notes were exercised to purchase 621,637 preferred shares, which were converted into 621,637 ordinary shares. On the IPO closing date, (i) the Company’s landlord exercised its option to purchase 1,451,586 ordinary shares of the Company; (ii) Baker Bros. exercised their warrants to purchase 2,592,593 ordinary shares at an exercise price of $0.68 per share; and (iii) a senior executive exercised warrants to purchase 57,777 preferred shares at an exercise price of $0.68 per share, which were converted into 57,777 ordinary shares. Upon the exercise of the aforementioned option and warrants, except for Baker Bros.’ warrants, which were initially classified in equity, the related carrying value totaling $3,687 was reclassified from current liabilities to shareholders’ equity. |
Restricted net assets
Restricted net assets | 12 Months Ended |
Dec. 31, 2017 | |
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Restricted net assets | 23. Restricted net assets The Company’s ability to pay dividends may depend on the Company receiving distributions of funds from its PRC subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. In accordance with the company law of the PRC, a domestic enterprise is required to provide statutory reserves of at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the Board of Directors, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Company’s PRC subsidiaries were established as domestic invested enterprises and therefore were subject to the above-mentioned restrictions on distributable profits. During the years ended December 31, 2017, 2016 and 2015, no appropriation to statutory reserves was made because the PRC subsidiaries had substantial losses during such periods. As a result of these PRC laws and regulations including the requirement to make annual appropriations of at least 10% of after-tax income and set aside as general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict the Company’s PRC subsidiaries from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2017 and 2016, amounts restricted are the net assets of the Company’s PRC subsidiaries, which amounted to $29,920 and $9,955, respectively. |
Employee defined contribution p
Employee defined contribution plan | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Employee defined contribution plan | 24. Employee defined contribution plan Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Company’s PRC subsidiaries make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $4,103, $2,148 and $1,443 for the years ended December 31, 2017, 2016 and 2015, respectively. During the year ended December 31, 2016, the Company implemented a defined contribution 401(k) savings plan (the "401(k) Plan") for U.S. employees. The 401(k) Plan covers all U.S. employees, and allows participants to defer a portion of their annual compensation on a pretax basis. In addition, the Company implemented a matching contribution to the 401(k) Plan, matching 50% of an employee's contribution up to a maximum of 3% of the participant's compensation. Company contributions to the 401(k) plan totaled $455 and $79 in the years ended December 31, 2017 and 2016, respectively. The Company did not have a 401(k) matching contribution in 2015. Employee benefits for the remaining subsidiaries were immaterial. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2017 | |
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Commitments and contingencies | 25. Commitments and contingencies Operating lease commitments The Company leases office and manufacturing facilities under non-cancelable operating leases expiring on different dates in the United States and China. Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases, and the terms of the leases do not contain rent escalation, contingent rent, renewal, or purchase options. There are no restrictions placed upon the Company by entering into these leases. Total expenses under these operating leases were $3,810, $1,974 and $1,136 for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum payments under non-cancelable operating leases consist of the following as of December 31, 2017: $ Year ending December 31: 2018 7,346 2019 9,120 2020 7,880 2021 4,755 2022 and thereafter 4,078 Total 33,179 Capital commitments The Company had capital commitments amounting to $43,175 for the acquisition of property, plant and equipment as of December 31, 2017, which were mainly for BeiGene Guangzhou Factory's manufacturing facility in Guangzhou, China. |
Selected quarterly financial da
Selected quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
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Selected quarterly financial data (unaudited) | 26. Selected quarterly financial data (unaudited) The following table summarizes the unaudited statements of operations for each quarter of 2017 and 2016 (in thousands except share and per share amounts). The unaudited quarterly information has been prepared on a basis consistent with the audited financial statements and includes all adjustments that the Company considers necessary for a fair presentation of the information shown. The operating results for any fiscal quarter are not necessarily indicative of the operating results for a full fiscal year or for any future period and there can be no assurances that any trend reflected in such results will continue in the future. Quarter Ended March 31, June 30, September 30, December 31, 2017 $ $ $ $ Revenue — — 220,213 18,174 (Loss) /income from operations (51,542) (58,022) 114,905 (103,798) Net (loss) /income (50,623) (60,680) 117,284 (99,280) Net (loss) /income attributable to ordinary shareholders (50,623) (60,545) 117,386 (99,323) Basic net (loss) /income per share(1) (0.10) (0.12) 0.21 (0.17) Diluted net (loss) /income per share(1) (0.10) (0.12) 0.20 (0.17) Quarter Ended March 31, June 30, September 30, December 31, 2016 $ $ $ $ Revenue 677 393 — — Loss from operations (20,334) (24,628) (34,828) (37,270) Net loss (22,001) (24,124) (35,494) (37,598) Net loss attributable to ordinary shareholders (22,001) (24,124) (35,494) (37,598) Basic and diluted loss per share(1) (0.07) (0.06) (0.08) (0.08) (1) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average common shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. |
Segment and geographic informat
Segment and geographic information | 12 Months Ended |
Dec. 31, 2017 | |
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Segment and geographic information | 27. Segment and geographic information The Company operates in one segment. Its chief operating decision maker is the Chief Executive Officer, who makes operating decisions, assesses performance and allocates resources on a consolidated basis. The Company’s long-lived assets are substantially located in the PRC. Net product revenues by geographic area are based upon the location of the customer, and net collaboration revenue is recorded in the jurisdiction in which the related income is expected to be sourced from. Total net revenues by geographic area are presented as follows: Year Ended December 31, 2017 2016 2015 $ $ $ PRC 24,428 — — U.S. 138,423 — — Other 75,536 1,070 8,816 Total 238,387 1,070 8,816 |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2017 | |
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Subsequent event | 28. Subsequent events On January 22, 2018, the Company completed a follow-on public offering at a price of $101.00 per ADS, or $7.77 per ordinary share. In this offering, the Company sold 7,425,750 ADSs representing 96,534,750 ordinary shares. Additionally, the underwriters exercised their option to purchase an additional 495,050 ADSs representing 6,435,650 ordinary shares from the Company. The net proceeds from the offering, including the underwriter option, were approximately $758.0 million after deducting the underwriting discounts. On January 1, 2018, the number of shares authorized to be issued under the 2016 Plan was increased by 29,603,617 ordinary shares, which represents the amount automatically added pursuant to provisions of the 2016 Plan (see Note 20). |
Summary of significant accoun36
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its wholly-owned subsidiaries are eliminated upon consolidation. Noncontrolling interests are recognized to reflect the portion of the equity of subsidiaries which are not attributable, directly or indirectly, to the controlling shareholders. The Company consolidates its interests in its joint venture, BeiGene Biologics, under the voting model and recognizes the minority shareholder's equity interest as a noncontrolling interest in its consolidated financial statements (as described in Note 8). |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating sales rebates and returns allowance to arrive at net product revenues, identifying separate accounting units and the best estimate of selling price of each deliverable in the Company’s revenue arrangements, estimating the fair value of net assets acquired in business combinations, assessing the impairment of long-lived assets, share-based compensation expenses, inventory, realizability of deferred tax assets and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. |
Functional currency and foreign currency translation | Functional currency and foreign currency translation Functional currency The determination of the respective functional currency is based on the criteria of Accounting Standard Codification (“ASC”) 830, Foreign Currency Matters. The functional currency of the Company, BeiGene AUS PTY LTD., BeiGene Switzerland, BeiGene Ireland Limited, BeiGene (Hong Kong) Co., Limited, BeiGene 101, and BeiGene (USA) is the United States dollar (“$” or “U.S. dollar”). The Company’s PRC subsidiaries determined their functional currencies to be RMB. The Company uses the U.S. dollar as its reporting currency. Foreign currency translation For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive income/(loss), a component of shareholders’ equity/deficit. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the consolidated statements of comprehensive loss. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be cash equivalents. Cash equivalents which consist primarily of money market funds are stated at fair value. |
Accounts Receivable | Accounts receivable Trade accounts receivable are recorded at their invoiced amounts, net of allowances for doubtful accounts. An allowance for doubtful accounts is recorded when the collection of the full amount is no longer probable. In evaluating the collectability of receivable balances, the Company considers specific evidence including aging of the receivable, the customer's payment history, its current creditworthiness and current economic trends. Accounts receivable are written off after all collection efforts have ceased. The Company regularly reviews the adequacy and appropriateness of any allowance for doubtful accounts. No allowance for doubtful accounts was recorded as of December 31, 2017. |
Inventory | Inventory Inventories are stated at the lower of cost and net realizable value, with cost determined on a weighted-average basis. The Company periodically analyzes its inventory levels, and writes down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded in the consolidated statements of operations. There have been no write-downs or reserves against inventory to date. |
Short-term investments | Short-term investments Short-term debt investments held to maturity are carried at amortized cost when the Company has the ability and positive intent to hold these securities until maturity. When the Company does not have the ability or positive intent to hold short-term debt investments until maturity, these securities are classified as available-for-sale. None of the Company’s fixed maturity securities met the criteria for held-to-maturity classification at December 31, 2017 and 2016. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income/loss. The net carrying value of debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is computed using the effective interest method and included in interest income. Interest and dividends are included in interest income. When the fair value of a debt security classified as available-for-sale is less than its amortized cost, the Company assesses whether or not: (i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If either of these conditions is met, the Company must recognize an other-than-temporary impairment through earnings for the difference between the debt security’s amortized cost basis and its fair value. No impairment losses were recorded for any periods presented. The cost of securities sold is based on the specific identification method. |
Property and equipment | Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets as follows: Useful Life Office Equipment 5 years Electronic Equipment 3 years Manufacturing equipment 3 to 10 years Laboratory Equipment 3 to 5 years Computer Software 3 to 5 years Leasehold Improvements Lesser of useful life or lease term |
Land use right, net | Land use right, net The land use right represents lease prepayments to the local Bureau of Land and Resources in Guangzhou. The land use right is carried at cost less accumulated amortization. The cost of the land use right is amortized on a straight-line basis over the shorter of the estimated usage periods or the terms of the land use right, which is currently 50 years. |
Business combination | Business combination The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC topic 805 (“ASC 805”): Business Combinations. The acquisition method of accounting requires all of the following steps: (i) identifying the acquirer, (ii) determining the acquisition date, (iii) recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree and (iv) recognizing and measuring goodwill or a gain from a bargain purchase. The consideration transferred in a business combination is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) acquisition consideration, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations as a gain. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets may include, but are not limited to, future expected cash flows from acquired assets, timing and probability of success of clinical events and regulatory approvals, and assumptions on useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Additional information, such as that related to income tax and other contingencies, existing as of the acquisition date but unknown to us may become known during the remainder of the measurement period, not to exceed one year from the acquisition date, which may result in changes to the amounts and allocations recorded. |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill is as asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company allocates the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the purchase price for acquisitions over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is not amortized, but is tested for impairment at least annually or more frequently if events or changes in circumstances would indicate a potential impairment. We have elected to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount, including goodwill. The qualitative assessment includes our evaluation of relevant events and circumstances affecting our single reporting unit, including macroeconomic, industry, and market conditions, our overall financial performance, and trends in the market price of our common stock. If qualitative factors indicate that it is more likely than not that our reporting unit’s fair value is less than its carrying amount, then we will perform the quantitative impairment test by comparing our reporting unit’s carrying amount, including goodwill, to its fair value. If the carrying amount of our reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess. For the year ended December 31, 2017, we determined that there were no indicators of impairment of our goodwill. Intangible assets acquired through business acquisitions are recognized as assets separate from goodwill and are measured at fair value upon acquisition. Acquired identifiable intangible assets consist of the distribution rights with respect to approved cancer therapies licensed from Celgene, ABRAXANE®, REVLIMID®, and VIDAZA®, and its investigational agent CC-122 and are amortized on a straight-line basis over the estimated useful lives of the assets, which is 10 years. Intangible assets with finite useful lives are tested for impairment when events or circumstances occur that could indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group evaluates the recoverability of the intangible assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available. For the year ended December 31, 2017, we determined that there were no indicators of impairment of our other intangible assets. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the years ended December 31, 2017, 2016 and 2015, there was no impairment of the value of the Company’s long-lived assets. |
Fair value measurements | Fair value measurements Fair value of financial instruments Financial instruments of the Company primarily include cash and cash equivalents, short-term investments, accounts receivable, long-term bank loan, Shareholder Loan (as defined in Note 16) and accounts payable. As of December 31, 2017 and 2016, the carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated their fair values due to the short-term maturity of these instruments. The short-term investments represented the available-for-sale debt securities and time deposits. The available-for-sale debt securities are recorded at fair value based on quoted prices in active markets with unrealized gain or loss recorded in other comprehensive income or loss. The long-term bank loan and Shareholder Loan approximate their fair value due to the fact that the related interest rates approximate the rates currently offered by financial institutions for similar debt instrument of comparable maturities. The warrants were recorded at fair value as determined on the respective issuance dates and subsequently adjusted to the fair value at each reporting date. The warrants issued prior to the IPO relating to the convertible promissory notes and the option to purchase shares by rental deferral were exercised in 2016. The Company determined the exercise date fair value of the warrants and option using the intrinsic value, which equals to the difference between the share price at the IPO closing date and the exercise price, as the exercise dates were immediately prior to or very close to the IPO closing date. The Company applies ASC topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial instruments measured at fair value on a recurring basis The following tables set forth assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016: Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2017 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. Treasury securities 561,327 — — U.S. agency securities 17,663 — — Time deposits 18,924 — — Cash equivalents Money market funds 44,730 — — Total 642,644 — — Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2016 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. treasury securities 280,660 — — Cash equivalents Money market funds 44,052 — — Total 324,712 — — |
Revenue recognition | Revenue recognition Product revenue Revenues from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has transferred to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured, and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, estimated product returns and other deductions. Provisions for estimated reductions to revenue are provided for in the same period the related sales are recorded and are based on the sales terms, historical experience and trend analysis. Rebates are offered to distributors, consistent with pharmaceutical industry practices. The Company records a provision for rebates at the time of sale based on contracted rates and historical redemption rates. Assumptions used to establish the provision include the level of distributor inventories, sales volumes and contract pricing and estimated acceptance of government pricing or reimbursement amounts (such as provincial acceptance of the National Reimbursement Drug List pricing in the PRC). The Company regularly reviews the information related to these estimates and adjust the provision accordingly. The Company bases its sales returns allowance on estimated distributor inventories, customer demand as reported by third-party sources, and actual returns history, as well as other factors, as appropriate. If the historical data the Company uses to calculate these estimates do not properly reflect future returns, then a change in the allowance would be made in the period in which such a determination is made and revenues in that period could be materially affected. Any changes from the historical trend rates are considered in determining the current sales return allowance. To date, sales returns have not been significant. Collaboration revenue The Company recognizes revenues from research and development collaborative arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and there is reasonable assurance that the related amounts are collectible in accordance with ASC 605, Revenue Recognition (“ASC 605”). The Company’s collaborative arrangements may contain multiple elements, including grants of licenses to intellectual property rights, agreement to provide research and development services and other deliverables. The deliverables under such arrangements are evaluated under ASC 605-25, Multiple-Element Arrangements. Pursuant to ASC 605-25, each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting based on whether the deliverable has “stand-alone value” to the customer. The collaborative arrangements do not include a right of return for any deliverable. The arrangement’s consideration that is fixed or determinable, excluding contingent payments, is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The relative selling price for each deliverable is determined using vendor specific objective evidence (“VSOE”) of selling price or third-party evidence (“TPE”) of selling price if VSOE does not exist. If neither VSOE nor TPE exists, the Company uses the best estimate of the selling price (“BESP”) for the deliverable. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Non-refundable payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as advances from customers. Upfront non-refundable payments for licensing the Company’s intellectual property are evaluated to determine if the licensee can obtain stand-alone value from the license separate from the value of the research and development services and other deliverables in the arrangement to be provided by the Company. The Company acts as the principal under its arrangements and licensing intellectual property is part of its ongoing major or central operations. The license right is not contingent upon the delivery of additional items or meeting other specified performance conditions. Therefore, when stand-alone value of the license is determinable, the allocated consideration is recognized as collaboration revenue upon delivery of the license rights. The Company acts as the principal under its collaboration arrangements, and research and development services are also part of its ongoing major or central operations. The Company recognizes the deferred consideration allocated to research and development services as collaboration revenue when delivery or performance of such services occurs and R&D reimbursement revenue for revenue attributable to the clinical trials that Celgene has opted into. Product development, royalties and commercial event payments (collectively, “target payments”) under collaborative arrangements are triggered either by the results of the Company’s research and development efforts, achievement of regulatory goals or by specified sales results by a third-party collaborator. Under ASC 605-28, Milestone Method of Revenue Recognition, an accounting policy election can be made to recognize a payment that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The Company elected not to adopt the milestone method of revenue recognition under ASC 605-28. Targets related to the Company’s development-based activities may include initiation of various phases of clinical trials and applications and acceptance for product approvals by regulatory agencies. Due to the uncertainty involved in meeting these development-based targets, the Company would account for development-based targets as collaboration revenue upon achievement of the respective development target. Royalties based on reported sales of licensed products will be recognized as collaboration revenue based on contract terms when reported sales are reliably measurable and collectability is reasonably assured. Targets related to commercial activities may be triggered upon events such as first commercial sale of a product or when sales first achieve a defined level. Since these targets would be achieved after the completion of the Company’s development activities, the Company would account for the commercial event targets in the same manner as royalties, with collaboration revenue recognized upon achievement of the target. |
Research and development expenses | Research and development expenses Research and development expenses represent costs associated with the collaborative arrangements, which primarily include (i) payroll and related costs (including share-based compensation) associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of the Company’s technologies under development, (iii) costs to develop the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to the Company’s research and development services and have no alternative future uses. Clinical trial costs are a significant component of the Company’s research and development expenses. The Company has a history of contracting with third parties that perform various clinical trial activities on behalf of the Company in the ongoing development of the Company’s product candidates. Expenses related to clinical trials are accrued based on the Company’s estimates of the actual services performed by the third parties for the respective period. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), the Company will modify the related accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying consolidated financial statements for the years ended December 31, 2017, 2016 and 2015. |
Government grants | Government grants Government financial incentives that involve no conditions or continuing performance obligations of the Company are recognized as other non-operating income upon receipt. In the event government grants or incentives involve continuing performance obligations, the Company will capitalize the payment as a liability and defer the related income over the performance period. |
Leases | Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Company assesses a lease to be a capital lease if any of the following conditions exist: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c) the lease term is at least 75% of the property’s estimated remaining economic life or (d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. The Company has no capital leases for the years presented. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective lease terms. The Company leases office space, employee accommodation and manufactory space under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on straight-line basis over the term of the lease. |
Comprehensive loss | Comprehensive loss Comprehensive loss is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss includes net loss, foreign currency translation adjustments and unrealized holding losses associated with the available-for-sale securities, and is presented in the consolidated statements of comprehensive loss. |
Stock-based compensation | Share-based compensation Awards granted to employees The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s grants of share-based awards to employees were classified as equity awards and are recognized in the financial statements based on their grant date fair values. Specifically, the grant date fair value of share options is calculated using an option pricing model. The fair value of restricted shares and restricted share units are based on the closing market price of our common stock on the NASDAQ Global Select Market on the date of grant. The Company has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting based on service conditions provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date. The Company uses the accelerated method for all awards granted with graded vesting based on performance conditions. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rates are estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those share-based awards that are expected to vest. To the extent the Company revises these estimates in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent third-party valuation firm, determined the estimated fair value of the stock options granted to employees using the binomial option pricing model. Awards granted to non-employees The Company has accounted for equity instruments issued to non-employees in accordance with the provisions of ASC 718 and ASC 505, Equity. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is completed as there is no associated performance commitment. The expense is recognized in the same manner as if the Company had paid cash for the services provided by the non-employees in accordance with ASC 505-50, Equity-based payments to non-employees. The Company estimated the fair value of share options granted to non-employees using the same method as employees. Modification of awards A change in any of the terms or conditions of the awards is accounted for as a modification of the award. Incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the fair value of the awards and other pertinent factors at the modification date. For vested awards, the Company recognizes incremental compensation cost in the period the modification occurs. For unvested awards, the Company recognizes over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Company recognizes is the cost of the original award. |
Income taxes | Income taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using enacted tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In accordance with Accounting Standards Update (“ASU”) 2015-17, all deferred income tax assets and liabilities are classified as non-current on the consolidated balance sheets. The Company evaluates its uncertain tax positions using the provisions of ASC 740, Income Taxes, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company recognizes in the financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. |
Loss per share | Loss per share Loss per share is calculated in accordance with ASC 260, Earnings per Share . Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible preferred shares and restricted shares are participating securities because they have contractual rights to share in the profits of the Company. However, both the convertible preferred shares and restricted shares do not have contractual rights and obligations to share in the losses of the Company. For the periods presented herein, the computation of basic loss per share using the two-class method is not applicable as the Company is in a net loss position. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the Company’s convertible preferred shares using the if-converted method, and ordinary shares issuable upon the conversion of the share options and unvested restricted shares, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Basic and diluted loss per ordinary share is presented in the Company’s consolidated statements of operations. |
Segment information | Segment information In accordance with ASC 280, Segment Reporting, the Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. |
Concentration of risks | Concentration of risks Concentration of credit risk Financial instruments that are potentially subject to credit risk consist of cash and cash equivalents and short-term investments. The carrying amounts of cash and cash equivalents and short-term investments represent the maximum amount of loss due to credit risk. As of December 31, 2017 and 2016, $239,602 and $87,514 were deposited with various major reputable financial institutions located in the PRC and international financial institutions outside of the PRC. The deposits placed with financial institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions, the Company may be unlikely to claim its deposits back in full. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. As of December 31, 2017 and 2016, the Company had short-term investments amounting to $597,914 and $280,660, respectively. At December 31, 2017, the Company’s short-term investments comprised primarily of U.S. treasury securities, U.S. agency securities and time deposits. The Company believes that U.S. treasury securities, U.S. agency securities and time deposits are of high credit quality and continually monitor the credit worthiness of these institutions. Customer concentration risk For the year ended December 31, 2017, substantially all of the Company's revenue has been generated from Celgene and our product distributor in China. For the year ended December 31, 2016 and 2015, substantially all of the Company’s revenue has been generated solely from one customer, Merck KGaA, Darmstadt Germany. Business, customer, political, social and economic risks The Company participates in a dynamic biopharmaceuticals industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: changes in the overall demand for services and products; competitive pressures due to new entrants; advances and new trends in new drugs and industry standards; changes in clinical research organizations; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Company’s ability to attract and retain employees necessary to support its growth. The Company’s operations could be also adversely affected by significant political, economic and social uncertainties in the PRC. Currency convertibility risk A significant portion of the Company’s expenses, assets and liabilities are denominated in RMB. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the “PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into U.S. dollar or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approvals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was appreciation of approximately 6.5%, depreciation of approximately 6.3% and depreciation of approximately 4.4%, in the year ended December 31, 2017, 2016 and 2015. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. To the extent that the Company needs to convert U.S. dollar into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. In addition, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company’s earnings or losses. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the Financial Accouting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), or ASU 2014-09. Subsequently, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which adjusted the effective date of ASU 2014-09; ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09; ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies identifying performance obligations and licensing implementation guidance and illustrations in ASU 2014-09; ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which addresses implementation issues and is intended to reduce the cost and complexity of applying the new revenue standard in ASU 2014-09; ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (SEC Update) , which codifies recent announcements by the Securities and Exchange Commission, or SEC, staff; and ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update) , which adds ASC 606-10-S25-1 as a result of SEC Release 33-10403, or collectively, the Revenue ASUs. The Revenue ASUs provide an accounting standard for a single comprehensive model for use in accounting for revenue arising from contracts with customers, and supersedes most current revenue recognition guidance. The accounting standard is effective for interim and annual periods beginning after December 15, 2017, with an option to early adopt for interim and annual periods beginning after December 15, 2016. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We adopted the new standard effective January 1, 2018 under the modified retrospective method. During the fourth quarter of 2017, we substantially completed our assessment over the impact that this new standard will have on our consolidated balance sheets and in particular, the variable consideration related to our collaboration agreements with Celgene and Merck KGaA, Darmstadt Germany. We preliminarily expect to recognize an adjustment of approximately $16,300 to accumulated deficit on January 1, 2018 to reflect the cumulative effect of the accounting changes made upon the adoption of the standard related to the Celgene collaboration. The finalization of our assessment may result in significant changes to our estimates that may materially impact our preliminary estimate of the cumulative effect. In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize assets and liabilities related to lease arrangements longer than 12 months on the balance sheet. This standard also requires additional disclosures by lessees and contains targeted changes to accounting by lessors. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous GAAP. The Company is currently evaluating the financial statement impact of adoption. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Key provisions of the new standard include requiring excess tax benefits and shortfalls to be recorded as income tax benefit or expense in the income statement, rather than in equity, and permitting an election to record the impact of pre-vesting forfeitures as they occur. The Company adopted ASU 2016-09 on January 1, 2017. The Company assessed and determined that the impact from adoption was not material. Furthemore, the Company did not change its method for estimating and applying forfeiture rates for its share-based awards. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The Company will adopt ASU 2016-16 in its first quarter of 2018 utilizing the modified retrospective adoption method. The ultimate impact of adopting ASU 2016-16 will depend on the balance of intellectual property transferred between its subsidiaries as of the adoption date. The Company will recognize incremental deferred income tax expense thereafter as these deferred tax assets are utilized. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business . The new standard requires an entity to evaluate if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the set would not be considered a business. The new standard also requires a business to include at least one substantive process and narrows the definition of outputs. The new standard is effective for interim and annual periods beginning on January 1, 2018, and may be adopted earlier. The Company elected to early adopt the updated guidance. The standard is applied prospectively to any transaction occurring on or after the adoption date. The Company evaluated the acquisition of 100% of the equity interests of Celgene Pharmaceutical (Shanghai) Co., Ltd. (“Celgene Shanghai”) under the new guidance, and determined that the transaction represents a business combination, as disclosed further in Note 4. In January 2017, the FASB issued ASU No. 2017-04, Intangibles -- Goodwill and Other: Simplifying the Test for Goodwill Impairment . This ASU simplifies the test for goodwill impairment by removing Step 2 from the goodwill impairment test. Companies will now perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value not to exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments in this update are effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted for goodwill impairment tests performed after January 1, 2017. The Company elected to early adopt this ASU, and there was no material impact to the Company's consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting . This standard provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of a share-based payment award. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The adoption of this ASU in the first quarter of 2018 is not expected to have a material impact on the Company’s consolidated financial statements. |
Organization (Tables)
Organization (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of the Company's subsidiaries | Percentage of Date of Ownership by Name of Company Place of Incorporation Incorporation the Company Principal Activities BeiGene (Hong Kong) Co., Limited. Hong Kong November 22, 2010 100 % Investment holding BeiGene (Beijing) Co., Ltd. ("BeiGene Beijing") The People’s Republic of China (“PRC” or “China”) January 24, 2011 100 % Medical and pharmaceutical research BeiGene AUS PTY LTD. Australia July 15, 2013 100 % Clinical trial activities BeiGene 101 Cayman Islands August 30, 2012 100 % Medical and pharmaceutical research BeiGene (Suzhou) Co., Ltd. (“BeiGene (Suzhou)”) PRC April 9, 2015 100 % Medical and pharmaceutical research and manufacturing BeiGene USA, Inc. ("BeiGene (USA)") United States July 8, 2015 100 % Clinical trial activities BeiGene Biologics Co., Ltd. ("BeiGene Biologics") PRC January 25, 2017 95 % Biologics manufacturing BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”)* PRC September 11, 2015 95 % Medical and pharmaceutical research BeiGene Guangzhou Biologics Manufacturing Co., Ltd. ("BeiGene Guangzhou Factory")* PRC March 3, 2017 95 % Biologics manufacturing BeiGene (Guangzhou) Co., Ltd. (“BeiGene Guangzhou”) PRC July 11, 2017 100 % Medical and pharmaceutical research BeiGene Pharmaceutical (Shanghai) Co., Ltd. ("BeiGene Pharmaceutical (Shanghai)") PRC December 15, 2009 100 % Medical and pharmaceutical consulting, BeiGene Switzerland GmbH (“BeiGene Switzerland”) Switzerland September 1, 2017 100 % Clinical trial activities and commercial BeiGene Ireland Limited Republic of Ireland August 11, 2017 100 % Clinical trial activities * Wholly-owned by BeiGene Biologics. |
Summary of significant accoun38
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of property and equipment estimated useful lives | Useful Life Office Equipment 5 years Electronic Equipment 3 years Manufacturing equipment 3 to 10 years Laboratory Equipment 3 to 5 years Computer Software 3 to 5 years Leasehold Improvements Lesser of useful life or lease term |
Summary of assets and liabilities measured at fair value on a recurring basis | Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2017 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. Treasury securities 561,327 — — U.S. agency securities 17,663 — — Time deposits 18,924 — — Cash equivalents Money market funds 44,730 — — Total 642,644 — — Quoted Price in Active Significant Market for Other Significant Identical Observable Unobservable Assets Inputs Inputs As of December 31, 2016 (Level 1) (Level 2) (Level 3) $ $ $ Short-term investment (note 5): U.S. treasury securities 280,660 — — Cash equivalents Money market funds 44,052 — — Total 324,712 — — |
Research and development coll39
Research and development collaborative arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of total collaboration revenue recognized | Year Ended December 31, 2017 2016 2015 $ $ $ License revenue 211,391 — — Research and development service revenue 2,568 1,070 8,816 Total 213,959 1,070 8,816 |
Business combination (Tables)
Business combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Summary of purchase price | The following summarizes the purchase price in the business combination (in thousands). Purchase Price Cash paid to acquire Celgene Shanghai $ 4,532 Discount on Share Subscription Agreement 23,606 Total purchase price $ 28,138 |
Schedule of assets acquired and liabilities assumed in the acquisition at estimated fair values as of the closing date of the transaction | The following table summarized the estimated fair values of assets acquired and liabilities assumed (in thousands): Amount Cash and cash equivalents $ 24,448 Other current assets 518 Property and equipment, net 204 Intangible assets 7,500 Deferred tax asset 1,069 Total identifiable assets 33,739 Current liabilities (5,710) Total liabilities assumed (5,710) Goodwill 109 Total fair value of consideration transferred $ 28,138 |
Summary of business combination as presented on statement of cash flows | The following summarizes the business combination as presented on the statement of cash flows (in thousands): Investing activities Cash acquired $ 24,448 Cash paid to acquire Celgene Shanghai (4,532) Cash acquired in business combination, net of cash paid $ 19,916 Non-cash activities Discount provided on sale of ordinary shares for business combination $ (23,606) |
Short-term investments (Tables)
Short-term investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of short-term investments | Short-term investments as of December 31, 2017 consisted of the following available-for-sale debt securities and time deposits: Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) $ $ $ $ U.S. treasury securities 561,733 — 406 561,327 U.S. agency securities 17,651 12 — 17,663 Time deposits 18,924 — — 18,924 Total 598,308 12 406 597,914 Short-term investments as of December 31, 2016 consisted of the following available-for-sale debt securities: Gross Gross Fair Value Amortized Unrealized Unrealized (Net Carrying Cost Gains Losses Amount) $ $ $ $ U.S. treasury securities 280,757 — 97 280,660 Total 280,757 — 97 280,660 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of components of property and equipment | As of December 31, 2017 2016 $ $ Manufacturing equipment 15,737 — Laboratory equipment 15,596 7,536 Leasehold improvements 15,298 9,446 Electronic equipment 1,244 647 Office equipment 1,597 449 Computer software 598 317 Property and equipment, at cost 50,070 18,395 Less accumulated depreciation (13,627) (7,473) Construction in progress 26,125 15,055 Property and equipment, net 62,568 25,977 |
Land use right, net (Tables)
Land use right, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of land use rights | As of December 31, 2017 2016 $ $ Land use right, cost 12,633 — Accumulated amortization (168) — Land use right, net 12,465 — |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of Intangible assets outstanding | December 31, 2017 December 31, 2016 Gross Gross carrying Accumulated Intangible carrying Accumulated Intangible amount amortization assets, net amount amortization assets, net Finite-lived intangible assets: Product distribution rights 7,500 (250) 7,250 — — — Total finite-lived intangible assets 7,500 (250) 7,250 — — — |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of loss before income taxes | Year Ended December 31, 2017 2016 2015 $ $ $ PRC (59,590) (7,352) (5,253) U.S. 6,928 678 35 Other (38,402) (112,489) (51,884) Total (91,064) (119,163) (57,102) |
Schedule of the current and deferred components of the income tax expense | Year Ended December 31, 2017 2016 2015 $ $ Current Tax Expense (Benefit): PRC 2,477 — — U.S. 5,695 822 — Total 8,172 822 — Deferred Tax Expense (Benefit): PRC 115 — — U.S. (6,052) (768) — Total (5,937) (768) — Income Tax Expense 2,235 54 — |
Schedule of reconciliation of the actual income taxes to the amount of tax computed by applying the PRC statutory income tax rate to pre-tax income | Year Ended December 31, 2017 2016 2015 $ $ $ Loss before tax (91,064) (119,163) (57,102) China statutory tax rate Expected taxation at China statutory tax rate (22,766) (29,791) (14,275) Foreign tax rate differential 23,275 27,830 12,686 Non-deductible expenses 3,597 593 576 Impact of U.S. statutory tax rate change 2,642 — — Deductible intellectual property from intercompany transfer (29,438) — — Change in valuation allowance 30,356 1,627 1,013 Research and orphan drug tax credits (5,431) (205) — Taxation for the year 2,235 54 — Effective tax rate -2.5% -0.1% |
Significant components of deferred tax assets | Year Ended December 31, 2017 2016 2015 $ $ $ Deferred Tax Assets: Accruals and reserves 7,756 1,102 — Net operating losses carryforward 29,801 6,987 7,146 Stock compensation 4,639 — — Research and orphan drug tax credits 2,449 — — Gross deferred tax assets 44,645 8,089 7,146 Less valuation allowance (36,600) (7,307) (7,146) Total deferred tax assets 8,045 782 — Deferred tax liabilities: Depreciation and amortization (370) (14) — Total deferred tax liabilities (370) (14) — Net deferred tax asset 7,675 768 — |
Schedule of gross unrecognized tax benefits | Year Ended December 31, 2017 2016 2015 $ $ $ Beginning balance, as of January 1 110 — — Additions based on tax positions related to prior tax years 234 — — Reductions based on tax positions related to prior tax years (91) — — Additions based on tax positions related to the current tax year 665 110 — Ending balance, as of December 31 918 110 — |
Accrued expenses and other pa46
Accrued expenses and other payables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of accrued expenses and other payables | As of December 31, 2017 2016 $ $ Compensation related 17,051 3,980 External research and development activities related 18,721 14,198 Sales rebates and returns related 3,997 — Professional fees and other 9,829 4,119 Total accrued expenses and other payables 49,598 22,297 |
Accrued Liabilities And Other Payables of Sales Rebates And Returns | Sales Rebates and Returns $ Balance as of December 31, 2016 — Accrual 4,000 Payment Balance as of December 31, 2017 |
Other long-term liabilities (Ta
Other long-term liabilities (Tables) | 12 Months Ended |
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Schedule of other long-term liabilities | As of December 31, 2017 2016 $ $ Government grants or incentives received and deferred 31,804 564 Others 155 — Total other long-term liabilities 31,959 564 |
Product revenue, net (Tables)
Product revenue, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of the company's net product sales | Year Ended December 31, 2017 2016 2015 $ $ $ Product revenue - gross 28,428 — — Less: Rebate and sales return (4,000) — — Product revenue - net 24,428 — — |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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Schedule of the calculation of basic and diluted loss per ordinary share | Year Ended December 31, 2017 2016 2015 $ $ $ Numerator: Net loss attributable to BeiGene, Ltd. (93,105) (119,217) (57,102) Denominator: Weighted average shares outstanding for computing basic and diluted loss per share 543,185,460 403,619,446 110,597,263 Net loss per share attributable to BeiGene, Ltd., basic and diluted (0.17) (0.30) (0.52) |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Table Text Blocks | |
Summary of the Company’s share option activities | Weighted Weighted Weighted Average Average Average Grant Remaining Number of Exercise Date Fair Contractual Aggregate Options Price Value Term Intrinsic Value $ $ Years $ Outstanding at December 31, 2014 21,779,991 0.03 Granted* 32,814,267 0.49 0.28 Exercised (7,757,383) 0.01 12,496 Forfeited (2,726,885) 0.28 Outstanding at December 31, 2015 44,109,990 0.35 Granted 38,921,219 2.32 1.60 Exercised (610,116) 0.10 1,353 Forfeited (5,341,350) 0.92 Outstanding at December 31, 2016 77,079,743 1.31 Granted 62,085,462 3.73 2.65 Exercised (5,887,193) 0.82 24,723 Forfeited (6,275,115) 2.52 Outstanding at December 31, 2017 127,002,897 2.45 8.50 643,396 Exercisable as of December 31, 2017 32,504,762 1.01 7.20 211,537 Vested and expected to vest at December 31, 2017 117,553,084 2.68 8.46 600,210 * Includes options granted outside the 2011 Plan and 2016 Plan. |
Schedule of assumptions used to estimate the fair values of the share options granted | Year Ended December 31, 2017 2016 2015 Fair value of ordinary share 2.39 ~ 8.71 1.85 ~ 2.84 0.33 ~ 1.62 Risk-free interest rate 2.2% ~ 2.6% 1.5% ~ 2.6% 1.5% ~ 2.4% Expected exercise multiple 2.2 ~ 2.8 2.2 ~ 2.8 2.2 ~ 2.8 Expected volatility 99% ~ 100% 98% ~ 102% 94% ~ 106% Expected dividend yield 0% 0% 0% Contractual life 10 years 10 years 10 years |
Summary of total compensation cost recognized | Year Ended December 31, 2017 2016 2015 $ $ $ Research and development 30,610 8,076 9,593 Selling, general and administrative 12,253 2,549 618 Total 42,863 10,625 10,211 |
Restricted shares | |
Table Text Blocks | |
Summary of the Company’s employee restricted shares activities and restricted share units activities | Numbers Weighted Average of Shares Grant Date Fair Value $ Outstanding at December 31, 2014 577,778 0.05 Granted — — Vested (533,333) 0.05 Forfeited — — Outstanding at December 31, 2015 44,445 0.05 Granted 1,075,000 2.16 Vested (44,445) 0.05 Forfeited — — Outstanding at December 31, 2016 1,075,000 2.16 Granted 300,000 2.95 Vested (268,750) 2.04 Forfeited (300,000) 2.95 Outstanding at December 31, 2017 806,250 2.16 Expected to vest at December 31, 2017 725,625 2.16 |
Restricted Share Units (RSUs) | |
Table Text Blocks | |
Summary of the Company’s employee restricted shares activities and restricted share units activities | Numbers Weighted Average of Shares Grant Date Fair Value $ Outstanding at December 31, 2016 — — Granted 1,469,442 7.55 Vested — — Forfeited — — Outstanding at December 31, 2017 1,469,442 7.55 Expected to vest at December 31, 2017 1,322,498 7.55 |
Accumulated other comprehensi51
Accumulated other comprehensive income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Table Text Blocks | |
Schedule of accumulated other comprehensive income | Unrealized Foreign Currency Losses on Translation Available-for-Sale Adjustments Securities Total $ $ $ Balance as of December 31, 2015 (602) (1,207) (1,809) Other comprehensive loss before reclassifications (245) (307) (552) Amounts reclassified from accumulated other comprehensive income — 1,415 1,415 Net-current period other comprehensive (loss) income (245) 1,108 863 Balance as of December 31, 2016 (847) (99) (946) Other comprehensive income (loss) before reclassifications 762 (252) 510 Amounts reclassified from accumulated other comprehensive loss — (44) (44) Net-current period other comprehensive income (loss) 762 (296) 466 Balance as of December 31, 2017 (85) (395) (480) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Table Text Blocks | |
Schedule of future minimum payments under non-cancelable operating leases | Future minimum payments under non-cancelable operating leases consist of the following as of December 31, 2017: $ Year ending December 31: 2018 7,346 2019 9,120 2020 7,880 2021 4,755 2022 and thereafter 4,078 Total 33,179 |
Selected quarterly financial 53
Selected quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Table Text Blocks | |
Schedule of selected quarterly financial data (unaudited) | Quarter Ended March 31, June 30, September 30, December 31, 2017 $ $ $ $ Revenue — — 220,213 18,174 (Loss) /income from operations (51,542) (58,022) 114,905 (103,798) Net (loss) /income (50,623) (60,680) 117,284 (99,280) Net (loss) /income attributable to ordinary shareholders (50,623) (60,545) 117,386 (99,323) Basic net (loss) /income per share(1) (0.10) (0.12) 0.21 (0.17) Diluted net (loss) /income per share(1) (0.10) (0.12) 0.20 (0.17) Quarter Ended March 31, June 30, September 30, December 31, 2016 $ $ $ $ Revenue 677 393 — — Loss from operations (20,334) (24,628) (34,828) (37,270) Net loss (22,001) (24,124) (35,494) (37,598) Net loss attributable to ordinary shareholders (22,001) (24,124) (35,494) (37,598) Basic and diluted loss per share(1) (0.07) (0.06) (0.08) (0.08) (1) Per common share amounts for the quarters and full years have been calculated separately. Accordingly, the sum of quarterly amounts may not equal the annual amount because of differences in the weighted average common shares outstanding during each period, principally due to the effect of share issuances by the Company during the year. |
Segment and geographic inform54
Segment and geographic information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Table Text Blocks | |
Schedule of net product revenues by geographic area | Year Ended December 31, 2017 2016 2015 $ $ $ PRC 24,428 — — U.S. 138,423 — — Other 75,536 1,070 8,816 Total 238,387 1,070 8,816 |
Organization - Tabular Disclosu
Organization - Tabular Disclosure (Details) | Dec. 31, 2017 |
BeiGene (Hong Kong) Co., Limited.(“BeiGene HK”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene (Beijing) Co., Ltd. ("BeiGene (Beijing)") | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene AUS PTY LTD. | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene 101 | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene (Suzhou) Co., Ltd. (“BeiGene (Suzhou)”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene USA, Inc.(“BeiGene (USA)”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 95.00% |
BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 95.00% |
BeiGene Guangzhou Biologics Manufacturing Co., Ltd. (“BeiGene Guangzhou Factory”) | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 95.00% |
BeiGene (Guangzhou) Co Ltd. | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene Pharmaceutical (Shanghai) Co., Ltd. ("BeiGene Pharmaceutical (Shanghai)") | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene Switzerland | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
BeiGene Ireland | |
Organization | |
Percentage of Ownership by the Company (as a percent) | 100.00% |
Organization - Additional Infor
Organization - Additional Information (Details) - BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”) | Dec. 31, 2017 | Nov. 24, 2017 |
Organization | ||
Percentage of Ownership by the Company (as a percent) | 95.00% | |
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | ||
Organization | ||
Percentage of Ownership by the Company (as a percent) | 100.00% | 100.00% |
Summary of significant accoun57
Summary of significant accounting policies - Short-term investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Short-term investments | |||
Impairment loss on short-term investments | $ 0 | $ 0 | $ 0 |
Summary of significant accoun58
Summary of significant accounting policies - Property and Equipment and Impairment of Long-Lived Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Office Equipment | |
Property and equipment | |
Estimated useful lives (in years) | 5 years |
Electronic Equipment | |
Property and equipment | |
Estimated useful lives (in years) | 3 years |
Manufacturing Equipment | Minimum | |
Property and equipment | |
Estimated useful lives (in years) | 3 years |
Manufacturing Equipment | Maximum | |
Property and equipment | |
Estimated useful lives (in years) | 10 years |
Laboratory Equipment | Minimum | |
Property and equipment | |
Estimated useful lives (in years) | 3 years |
Laboratory Equipment | Maximum | |
Property and equipment | |
Estimated useful lives (in years) | 5 years |
Computer Software | Minimum | |
Property and equipment | |
Estimated useful lives (in years) | 3 years |
Computer Software | Maximum | |
Property and equipment | |
Estimated useful lives (in years) | 5 years |
Summary of significant accoun59
Summary of significant accounting policies - Land Use Right, Net (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Land use right, net | |
Land use right, term | 50 years |
Summary of significant accoun60
Summary of significant accounting policies - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Product distribution rights | |
Other intangible assets | |
Useful life | 10 years |
Summary of significant accoun61
Summary of significant accounting policies - Impairment of Long-lived Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impairment of long-lived assets | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Summary of significant accoun62
Summary of significant accounting policies - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets at fair value on a recurring basis | ||
Time deposits | $ 18,924 | |
U.S. Treasury Securities | ||
Assets at fair value on a recurring basis | ||
Available-for-sale securities | 561,327 | $ 280,660 |
U.S. Agency Securities | ||
Assets at fair value on a recurring basis | ||
Available-for-sale securities | 17,663 | |
Recurring basis | Level 1 | ||
Assets at fair value on a recurring basis | ||
Available-for-sale securities | 324,712 | |
Total | 642,644 | |
Recurring basis | Level 1 | Money market funds | ||
Assets at fair value on a recurring basis | ||
Money market funds | 44,730 | |
Recurring basis | Level 1 | U.S. Treasury Securities | ||
Assets at fair value on a recurring basis | ||
Available-for-sale securities | 561,327 | 280,660 |
Recurring basis | Level 1 | U.S. Treasury Securities | Money market funds | ||
Assets at fair value on a recurring basis | ||
Money market funds | $ 44,052 | |
Recurring basis | Level 1 | U.S. Agency Securities | ||
Assets at fair value on a recurring basis | ||
Available-for-sale securities | 17,663 | |
Recurring basis | Level 1 | Time Deposits | ||
Assets at fair value on a recurring basis | ||
Time deposits | $ 18,924 |
Summary of significant accoun63
Summary of significant accounting policies - Segment Information (Details) - segment | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment information | |||
Number of reportable segments | 1 | 1 | 1 |
Summary of significant accoun64
Summary of significant accounting policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Concentration of risks | ||||
Cash and cash equivalents | $ 239,602 | $ 87,514 | $ 17,869 | $ 13,898 |
Short-term investments | $ 597,914 | $ 280,660 |
Summary of significant accoun65
Summary of significant accounting policies - Customer Concentration Risk (Details) - Sales Revenue, Net - Customer Concentration Risk - customer | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Celgene Corporation | |||
Concentration of risks | |||
Number of customers | 1 | ||
Product Distributor in China | |||
Concentration of risks | |||
Number of customers | 1 | ||
Merck KGaA | |||
Concentration of risks | |||
Number of customers | 1 | 1 |
Summary of significant accoun66
Summary of significant accounting policies - Foreign Currency Exchange Rate Risk (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
China, Yuan Renminbi | |||
Concentration of risks | |||
Percentage appreciation (depreciation) against the US Dollar | 6.50% | (6.30%) | (4.40%) |
Summary of significant accoun67
Summary of significant accounting policies - Recent Accounting Pronouncements - Revenue (Details) $ in Thousands | Jan. 01, 2018USD ($) |
Pro Forma Adjustment | Accounting Standards Update 2014-09 | |
Recent accounting pronouncements | |
Cumulative effect of the accounting changes, adjustment to accumulated deficit | $ 16,300 |
Summary of significant accoun68
Summary of significant accounting policies - Recent Accounting Pronouncements - Business Combinations (Details) | Aug. 31, 2017 |
Celgene Shanghai | |
Business Combination | |
Equity interests (as a percent) | 100.00% |
Research and development coll69
Research and development collaborative arrangements - Tabular Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | |||
License revenue | $ 211,391 | ||
Research and development revenue | 2,568 | $ 1,070 | $ 8,816 |
Total | $ 213,959 | $ 1,070 | $ 8,816 |
Research and development coll70
Research and development collaborative arrangements - General Information (Details) - Collaborative arrangement - Celgene Switzerland LLC - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 31, 2017 | |
Research and development collaborative arrangements | ||||
Upfront license fee receivable | $ 263,000 | |||
Upfront license fees received | $ 170,950 | $ 92,050 | ||
Period of payment made (in years) | 12 years | |||
Upfront license fee receivable, allocated to acquisition | 13,000 | |||
Non-contingent consideration | $ 250,000 |
Research and development coll71
Research and development collaborative arrangements - Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2017 | |
Revenue | ||||
License revenue | $ 211,391 | |||
Research and development revenue | 2,568 | $ 1,070 | $ 8,816 | |
Collaborative arrangement | Celgene Switzerland LLC | ||||
Revenue | ||||
License revenue | 211,391 | |||
Research and development revenue | 1,568 | |||
Deferred revenue | $ 37,041 | $ 38,609 |
Research and development coll72
Research and development collaborative arrangements - Additional Information (Details) - USD ($) $ in Thousands | Oct. 01, 2015 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 |
Collaborative arrangement | BRAF | |||||||
Research and development collaborative arrangements | |||||||
Additional payments upon successful achievement of pre-specified milestones | $ 14,000 | ||||||
Product development, commercial event, and royalty revenue | $ 0 | $ 0 | $ 0 | ||||
Payments to collaborator | $ 0 | $ 0 | $ 0 | ||||
Collaborative arrangement | BRAF | Maximum | |||||||
Research and development collaborative arrangements | |||||||
Period of payment made (in years) | 10 years | ||||||
Collaborative arrangement | Merck KGaA | |||||||
Research and development collaborative arrangements | |||||||
Advances received | $ 3,018 | ||||||
Purchase of rights agreement | Merck KGaA | |||||||
Research and development collaborative arrangements | |||||||
Repurchase consideration | $ 10,000 | ||||||
China | BRAF | |||||||
Research and development collaborative arrangements | |||||||
Additional payments upon successful achievement of pre-specified milestones | $ 1,000 |
Business combination - General
Business combination - General Information (Details) | Aug. 31, 2017 |
Celgene Shanghai | |
Business Combination | |
Equity interests (as a percent) | 100.00% |
Business combination - Share Su
Business combination - Share Subscription Agreement (Details) - Private Placement $ / shares in Units, $ in Thousands | Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2017USD ($)$ / sharesshares |
Business Combination | ||
Shares issued (in shares) | shares | 32,746,416 | 32,746,416 |
Aggregate purchase price | $ | $ 150,000 | $ 150,000 |
Share price (in dollars per share) | $ 4.58 | $ 4.58 |
Share price, ADS (in dollars per share) | $ 59.55 | $ 59.55 |
Business combination - Determin
Business combination - Determination of Purchase Price - General Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended |
Aug. 31, 2017USD ($)$ / shares | |
Celgene Shanghai | |
Determination of Purchase Price | |
Purchase price | $ 28,138 |
Cash paid to acquire Celgene Shanghai | 4,532 |
Discount on Share Subscription Agreement | $ 23,606 |
Celgene Switzerland LLC | |
Determination of Purchase Price | |
Share price, ADS (in dollars per share) | $ / shares | $ 59.55 |
Business combination - Determ76
Business combination - Determination of Purchase Price - Tabular Disclosure (Details) - Celgene Shanghai $ in Thousands | 1 Months Ended |
Aug. 31, 2017USD ($) | |
Determination of Purchase Price | |
Cash paid to acquire Celgene Shanghai | $ 4,532 |
Discount on Share Subscription Agreement | 23,606 |
Total purchase price | $ 28,138 |
Business combination - Purchase
Business combination - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Aug. 31, 2017 |
Purchase Price Allocation | ||
Goodwill | $ 109 | |
Celgene Shanghai | ||
Purchase Price Allocation | ||
Cash and cash equivalents | $ 24,448 | |
Other current assets | 518 | |
Property and equipment, net | 204 | |
Intangible assets | 7,500 | |
Deferred tax asset | 1,069 | |
Total identifiable assets | 33,739 | |
Current liabilities | (5,710) | |
Total liabilities assumed | (5,710) | |
Goodwill | 109 | |
Total fair value of consideration transferred | $ 28,138 |
Business combination - Purcha78
Business combination - Purchase Price Allocation Adjustments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Aug. 31, 2017 |
Purchase Price Allocation | ||
Goodwill | $ 109 | |
Celgene Shanghai | ||
Purchase Price Allocation | ||
Goodwill | $ 109 | |
Celgene Shanghai | Pro Forma Adjustment | ||
Purchase Price Allocation | ||
Goodwill | (1,875) | |
Identifiable net assets | $ 1,875 |
Business combination - Cash flo
Business combination - Cash flow Presentation (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Aug. 31, 2017 | Dec. 31, 2017 | |
Investing activities: | ||
Cash acquired in business combination, net of cash paid | $ 19,916 | |
Non-cash activities: | ||
Discount provided on sale of ordinary shares for business combination | $ (23,606) | |
Celgene Shanghai | ||
Investing activities: | ||
Cash acquired | $ 24,448 | |
Cash paid to acquire Celgene Shanghai | (4,532) | |
Cash acquired in business combination, net of cash paid | 19,916 | |
Non-cash activities: | ||
Discount provided on sale of ordinary shares for business combination | $ (23,606) |
Short-term investments (Details
Short-term investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Short-term investments | ||
Time deposits, amortized cost | $ 18,924 | |
Time deposits | 18,924 | |
Short-term investments, amortized cost | 598,308 | $ 280,757 |
Short-term investments, gross unrealized gains | 12 | |
Short-term investments, gross unrealized losses | 406 | 97 |
Short-term investments | 597,914 | 280,660 |
U.S. Treasury Securities | ||
Short-term investments | ||
Available-for-sale securities, amortized cost | 561,733 | 280,757 |
Available-for-sale securities. gross unrealized losses | 406 | 97 |
Available-for-sale securities | 561,327 | $ 280,660 |
U.S. Agency Securities | ||
Short-term investments | ||
Available-for-sale securities, amortized cost | 17,651 | |
Available-for-sale securities, gross unrealized gains | 12 | |
Available-for-sale securities | $ 17,663 |
Inventories (Details)
Inventories (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Inventory Disclosure [Abstract] | |
Finished goods | $ 10,930 |
Total inventories | $ 10,930 |
Property and equipment, net - T
Property and equipment, net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Property and equipment, at cost | $ 50,070 | $ 18,395 |
Less accumulated depreciation | (13,627) | (7,473) |
Construction in progress | 26,125 | 15,055 |
Property and equipment, net | 62,568 | 25,977 |
Manufacturing Equipment | ||
Property and equipment | ||
Property and equipment, at cost | 15,737 | |
Laboratory Equipment | ||
Property and equipment | ||
Property and equipment, at cost | 15,596 | 7,536 |
Leasehold Improvements | ||
Property and equipment | ||
Property and equipment, at cost | 15,298 | 9,446 |
Electronic Equipment | ||
Property and equipment | ||
Property and equipment, at cost | 1,244 | 647 |
Office Equipment | ||
Property and equipment | ||
Property and equipment, at cost | 1,597 | 449 |
Computer Software | ||
Property and equipment | ||
Property and equipment, at cost | $ 598 | $ 317 |
Property and equipment, net - C
Property and equipment, net - Construction in Progress (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property and equipment | ||
Construction in progress | $ 26,125 | $ 15,055 |
Laboratory Equipment, Manufacturing Equipment, and Leasehold Improvements | ||
Property and equipment | ||
Transfer to property and equipment | 24,537 | |
Construction in Progress | ||
Property and equipment | ||
Transfer to property and equipment | $ (24,537) |
Property and equipment, net - D
Property and equipment, net - Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment | |||
Depreciation and amortization expense | $ 4,340 | $ 1,909 | $ 1,545 |
Manufacturing facility in Gua85
Manufacturing facility in Guangzhou (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | Nov. 24, 2017 | Oct. 24, 2017 | May 04, 2017CNY (¥) | Apr. 14, 2017CNY (¥) | Apr. 13, 2017CNY (¥) | Mar. 07, 2017CNY (¥)Asset | Dec. 31, 2017USD ($) |
Organization | ||||||||
Capital contribution from noncontrolling interest | $ | $ 14,527 | |||||||
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | ||||||||
Organization | ||||||||
Capital contribution from noncontrolling interest | ¥ 100,000 | |||||||
GET's equity interest in BeiGene Biologics (as a percent) | 5.00% | 5.00% | 5.00% | |||||
Cash and cash equivalents and short-term investments | $ | $ 139,505 | $ 139,505 | ||||||
Shareholder Loan | Convertible Debt | Investor | ||||||||
Organization | ||||||||
Principal amount | ¥ 900,000 | |||||||
Shareholder loan | ¥ 900,000 | |||||||
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | ||||||||
Organization | ||||||||
Ownership percentage (as a percent) | 95.00% | |||||||
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | BeiGene (Hong Kong) Co., Limited.(“BeiGene HK”) | ||||||||
Organization | ||||||||
Cash capital contribution, agreed amount | ¥ 200,000 | |||||||
Minimum number of biologics assets to be contributed | Asset | 1 | |||||||
Ownership percentage (as a percent) | 95.00% | |||||||
Cash capital contribution | ¥ 2,415 | ¥ 137,830 | ||||||
BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | GET | ||||||||
Organization | ||||||||
Cash capital contribution, agreed amount | ¥ 100,000 | |||||||
BeiGene (Hong Kong) Co., Limited.(“BeiGene HK”) | ||||||||
Organization | ||||||||
Ownership percentage (as a percent) | 100.00% | |||||||
BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”) | ||||||||
Organization | ||||||||
Ownership percentage (as a percent) | 95.00% | |||||||
BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”) | BeiGene (Hong Kong) Co., Limited.(“BeiGene HK”) | ||||||||
Organization | ||||||||
Ownership percentage (as a percent) | 95.00% | 100.00% | ||||||
BeiGene (Shanghai) Co., Ltd. (“BeiGene (Shanghai)”) | BeiGene Biologics Co., Ltd. (“BeiGene Biologics”) | ||||||||
Organization | ||||||||
Ownership percentage (as a percent) | 100.00% | 100.00% |
Land use right, net - Tabular D
Land use right, net - Tabular Disclosure (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Land use right, net | |
Land use right, cost | $ 12,633 |
Accumulated amortization | (168) |
Land use right, net | $ 12,465 |
Land use right, net - Amortizat
Land use right, net - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Land use right, net | |||
Amortization expense of land use rights | $ 168 | $ 0 | $ 0 |
Land use right, net - Expected
Land use right, net - Expected Amortization Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Land use right, net | |
2,018 | $ 253 |
2,019 | 253 |
2,020 | 253 |
2,021 | 253 |
2,022 | 253 |
2023 and thereafter | $ 11,200 |
Intangible assets - Intangible
Intangible assets - Intangible Assets Outstanding (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Intangible assets | |
Gross carrying amount | $ 7,500 |
Accumulated Amortization | (250) |
Intangible assets, net | 7,250 |
Product distribution rights | |
Intangible assets | |
Gross carrying amount | 7,500 |
Accumulated Amortization | (250) |
Intangible assets, net | $ 7,250 |
Intangible assets - Useful Life
Intangible assets - Useful Life (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Product distribution rights | |
Other intangible assets | |
Useful life | 10 years |
Intangible assets - Amortizatio
Intangible assets - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets | |||
Amortization expense | $ 250 | $ 0 | $ 0 |
Intangible assets - Expected Am
Intangible assets - Expected Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Expected amortization expense | |
2,018 | $ 750 |
2,019 | 750 |
2,020 | 750 |
2,021 | 750 |
2,022 | 750 |
2023 and thereafter | $ 3,500 |
Income taxes - Hong Kong (Detai
Income taxes - Hong Kong (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | |||
Loss before tax | $ (91,064) | $ (119,163) | $ (57,102) |
Hong Kong | |||
Income taxes | |||
Loss before tax | $ 0 | $ 0 | $ 0 |
Inland Revenue, Hong Kong | |||
Income taxes | |||
Income tax rate (as a percent) | 16.50% | 16.50% | 16.50% |
Withholding taxes | $ 0 | $ 0 | $ 0 |
Income taxes - China (Details)
Income taxes - China (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
China | |||
Income taxes | |||
Withholding tax rate (as a percent) | 10.00% | ||
State Administration of Taxation, China | |||
Income taxes | |||
China statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Income taxes - Australia (Detai
Income taxes - Australia (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | |||
Loss before tax | $ (91,064) | $ (119,163) | $ (57,102) |
Provision for income taxes | $ 2,235 | $ 54 | $ 0 |
Australian Taxation Office | |||
Income taxes | |||
Income tax rate (as a percent) | 30.00% | 30.00% | 30.00% |
Australia | |||
Income taxes | |||
Loss before tax | $ 0 | $ 0 | $ 0 |
Provision for income taxes | $ 0 | $ 0 | $ 0 |
Income taxes - United States (D
Income taxes - United States (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Jersey | |||
Income taxes | |||
State income tax rate (as a percent) | 9.00% | ||
California | |||
Income taxes | |||
State income tax rate (as a percent) | 8.80% | ||
Massachusetts | |||
Income taxes | |||
State income tax rate (as a percent) | 8.00% | ||
Internal Revenue Service (IRS) | |||
Income taxes | |||
Income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Income taxes - Switzerland (Det
Income taxes - Switzerland (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | |||
Loss before tax | $ (91,064) | $ (119,163) | $ (57,102) |
Provision for income taxes | 2,235 | $ 54 | $ 0 |
Switzerland | |||
Income taxes | |||
Loss before tax | 0 | ||
Provision for income taxes | $ 0 | ||
Swiss Federal Tax Administration (FTA) | |||
Income taxes | |||
Income tax rate (as a percent) | 10.00% |
Income taxes - Income_(Loss) Be
Income taxes - Income/(Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income / (loss) before income taxes | |||
PRC | $ (59,590) | $ (7,352) | $ (5,253) |
Loss before income tax expense | (91,064) | (119,163) | (57,102) |
United States | |||
Components of income / (loss) before income taxes | |||
Foreign | 6,928 | 678 | 35 |
All Other Countries Except China and The United States of America | |||
Components of income / (loss) before income taxes | |||
Foreign | $ (38,402) | $ (112,489) | $ (51,884) |
Income taxes - Current and Defe
Income taxes - Current and Deferred Components Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current Tax Expense (Benefit): | |||
PRC | $ 2,477 | ||
U.S. | 5,695 | $ 822 | |
Total | 8,172 | 822 | |
Deferred Tax Expense (Benefit): | |||
PRC | 115 | ||
U.S. | (6,052) | (768) | |
Total | (5,937) | (768) | |
Income Tax Expense/(Benefit) | $ 2,235 | $ 54 | $ 0 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of the Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the statutory tax rate | |||
Loss before tax | $ (91,064) | $ (119,163) | $ (57,102) |
Expected taxation at China statutory tax rate | (22,766) | (29,791) | (14,275) |
Foreign tax rate differential | 23,275 | 27,830 | 12,686 |
Non-deductible expenses | 3,597 | 593 | 576 |
Impact of U.S. statutory tax rate change | 2,642 | ||
Deductible intellectual property from intercompany transfer | (29,438) | ||
Change in valuation allowance | 30,356 | 1,627 | 1,013 |
Research and orphan drug tax credits | (5,431) | (205) | |
Income Tax Expense/(Benefit) | $ 2,235 | $ 54 | $ 0 |
Effective tax rate (as a percent) | (2.50%) | (0.10%) | 0.00% |
State Administration of Taxation, China | |||
Reconciliation of the statutory tax rate | |||
China statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Income taxes - Significant Comp
Income taxes - Significant Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets: | |||
Accruals and reserves | $ 7,756 | $ 1,102 | |
Net operating losses carryforward | 29,801 | 6,987 | $ 7,146 |
Stock compensation | 4,639 | ||
Research and orphan drug tax credits | 2,449 | ||
Gross deferred tax assets | 44,645 | 8,089 | 7,146 |
Less valuation allowance | (36,600) | (7,307) | $ (7,146) |
Total deferred tax assets | 8,045 | 782 | |
Deferred tax liabilities: | |||
Depreciation and amortization | (370) | (14) | |
Total deferred tax liabilities | (370) | (14) | |
Net deferred tax asset | $ 7,675 | $ 768 |
Income taxes - Valuation Allowa
Income taxes - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income taxes | |||
Increase in the valuation allowance | $ 30,356 | $ 1,627 | $ 1,013 |
Net operating loss expiration | $ 1,637 | $ 1,466 |
Income taxes - Net Operating Lo
Income taxes - Net Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income taxes | ||
Net operating loss carryforward | $ 209,979 | $ 27,948 |
State Administration of Taxation, China | ||
Income taxes | ||
Net operating loss carryforward | 57,507 | |
Swiss Federal Tax Administration (FTA) | ||
Income taxes | ||
Net operating loss carryforward | $ 152,431 |
Income taxes - Tax Credit Carry
Income taxes - Tax Credit Carryforwards (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Internal Revenue Service (IRS) | |
Income taxes | |
Tax credit carryforwards | $ 2,449 |
Income taxes - Gross Unrecogniz
Income taxes - Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Gross unrecognized tax benefits | ||
Beginning balance, as of January 1 | $ 110 | $ 0 |
Additions based on tax positions related to prior tax years | 234 | |
Reductions based on tax positions related to prior tax years | (91) | |
Additions based on tax positions related to the current tax year | 665 | 110 |
Ending balance, as of December 31 | $ 918 | $ 110 |
Income taxes - Unrecognized Tax
Income taxes - Unrecognized Tax Benefits that Would Impact Effective Tax Rate (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Income taxes | |
Unrecognized tax benefits that would impact the consolidated income tax rate if ultimately recognized | $ 751 |
Accrued expenses and other p107
Accrued expenses and other payables - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other payables | ||
Compensation related | $ 17,051 | $ 3,980 |
External research and development activities related | 18,721 | 14,198 |
Sales rebates and returns related | 3,997 | |
Professional fees and other | 9,829 | 4,119 |
Total accrued expenses and other payables | $ 49,598 | $ 22,297 |
Accrued expenses and other p108
Accrued expenses and other payables - Accrued Sales Rebates and Returns (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accrued sales rebates and returns | |
Accrual | $ 4,000 |
Payment | (3) |
Ending Balance | $ 3,997 |
Warrants and option liabilit109
Warrants and option liabilities - Option to Purchase Shares by Rental Deferral (Details) - USD ($) $ in Thousands | Feb. 08, 2016 | Sep. 01, 2012 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Option to purchase shares by rental deferral | |||||
Loss from the increase in fair value of the option or warrants | $ 1,514 | $ 1,826 | |||
Option to purchase shares by rental deferral | |||||
Option to purchase shares by rental deferral | |||||
Rental expense deferral period (in years) | 1 year | ||||
Number of shares purchased upon exercise (in shares) | 1,451,586 | ||||
Option to purchase shares by rental deferral | $ 2,540 | ||||
Loss from the increase in fair value of the option or warrants | $ 0 | $ 1,151 | $ 1,263 |
Warrants and option liabilit110
Warrants and option liabilities - Warrants in Connection with the Promissory Notes (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |||
Feb. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warrants in connection with the promissory notes | |||||
Loss from the increase in fair value of the option or warrants | $ 1,514 | $ 1,826 | |||
Warrants to purchase convertible preferred shares in connection with the promissory notes | |||||
Warrants in connection with the promissory notes | |||||
Percentage of convertible promissory notes' principal amount that my be purchased with warrants (as a percent) | 10.00% | ||||
Aggregate principal amount | $ 2,410 | ||||
Preferred shares issued upon warrant exercise (in shares) | 621,637 | ||||
Shares converted to ordinary shares (in shares) | 621,637 | ||||
Warrants in connection with the convertible promissory notes | $ 1,148 | ||||
Loss from the increase in fair value of the option or warrants | $ 0 | $ 363 | $ 563 |
Short-term loan (Details)
Short-term loan (Details) $ in Thousands | Mar. 28, 2017USD ($) |
Investor | Loans Payable | Short-term Loan | |
Short-term loan | |
Principal amount | $ 2,470 |
Long-term bank loan (Details)
Long-term bank loan (Details) - Long-term Bank Loan, September 2, 2015 - Loans Payable - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 02, 2015 | |
Long-term bank loan | ||||
Principal amount | $ 18,444 | |||
Fixed annual interest rate (as a percent) | 7.00% | |||
Long-term debt | $ 18,444 | |||
Loan security | 23,788 | |||
Loan amount repayable on September 30, 2018 | 9,222 | |||
Loan amount repayable on September 30, 2019 | 9,222 | |||
Interest expense | $ 1,260 | $ 851 | $ 140 |
Shareholder Loan (Details)
Shareholder Loan (Details) - Shareholder Loan - Investor - Convertible Debt ¥ in Thousands, $ in Thousands | Apr. 14, 2017CNY (¥) | Mar. 07, 2017CNY (¥) | Dec. 31, 2017USD ($) |
Shareholder Loan | |||
Principal amount | ¥ | ¥ 900,000 | ||
Shareholder loan | ¥ | ¥ 900,000 | ||
Shareholder loan interest rate (as a percent) | 8.00% | ||
Debt instrument term (in years) | 72 months | ||
Interest expense incurred due to a related party | $ | $ 7,649 | ||
Interest capitalized | $ | $ 614 |
Other long-term liabilities (De
Other long-term liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other long-term liabilities | ||
Government grants or incentives received and deferred | $ 31,804 | $ 564 |
Others | 155 | |
Total other long-term liabilities | $ 31,959 | $ 564 |
Product revenue, net (Details)
Product revenue, net (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Product revenue, net | |
Product revenue - gross | $ 28,428 |
Less: Rebate and sales return | (4,000) |
Product revenue, net | $ 24,428 |
Loss per share (Details)
Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||
Net loss attributable to BeiGene, Ltd. | $ (93,105) | $ (119,217) | $ (57,102) | ||||
Denominator: | |||||||
Weighted average number of ordinary shares outstanding for computing basic and diluted loss per ordinary share | 543,185,460 | 403,619,446 | 110,597,263 | ||||
Net loss per share attributable to BeiGene, Ltd., basic and diluted (in dollars per share) | $ (0.08) | $ (0.08) | $ (0.06) | $ (0.07) | $ (0.17) | $ (0.30) | $ (0.52) |
Share-based compensation - Shar
Share-based compensation - Share Options and Incentive Plan (Details) | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2016$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares | Jan. 01, 2017shares | Jan. 14, 2016shares | Dec. 31, 2014shares | |
Share options | |||||||
Share-based compensation | |||||||
Contractual term of award (in years) | 10 years | ||||||
Employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 62,085,462 | 38,921,219 | 32,814,267 | ||||
Exercise price (in dollars per share) | $ / shares | $ 3.73 | $ 2.32 | $ 0.49 | ||||
Share based awards to purchase ordinary share | 127,002,897 | 77,079,743 | 44,109,990 | 21,779,991 | |||
Restricted shares | |||||||
Share-based compensation | |||||||
Vesting period of award (in years) | 4 years | ||||||
2011 Plan | |||||||
Share-based compensation | |||||||
Shares cancelled or forfeited (in shares) | 4,893,601 | ||||||
2011 Plan | Share options | |||||||
Share-based compensation | |||||||
Exercise price (in dollars per share) | $ / shares | $ 1.85 | ||||||
2011 Plan | Employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 1,685,152 | 15,663,600 | |||||
2011 Plan | Non-employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 732,000 | 1,950,000 | |||||
2016 Plan | |||||||
Share-based compensation | |||||||
Awards that may be granted (in shares) | 65,029,595 | ||||||
Automatic annual increase in shares reserved and available for issuance as a percentage to outstanding number of shares (as a percent) | 5.00% | ||||||
Exercise price (in dollars per share) | $ / shares | $ 0.07692 | ||||||
Share based awards to purchase ordinary share | 25,791,680 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,090,472 | ||||||
2016 Plan | Employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 61,921,249 | 35,317,139 | |||||
Exercise price ratio | 0.07692 | ||||||
2016 Plan | Non-employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 3,604,080 | ||||||
2016 Plan | Restricted shares | |||||||
Share-based compensation | |||||||
Granted (in shares) | 300,000 | 1,075,000 | |||||
2016 Plan | Restricted Share Units (RSUs) | |||||||
Share-based compensation | |||||||
Granted (in shares) | 1,469,442 | ||||||
Outside equity incentive plans | Employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 11,400,500 | ||||||
Outside equity incentive plans | Non-employee Stock Option | |||||||
Share-based compensation | |||||||
Granted (in shares) | 3,800,167 | ||||||
First tranche | Share options | |||||||
Share-based compensation | |||||||
Vesting period of award (in years) | 1 year | ||||||
First tranche | Restricted shares | |||||||
Share-based compensation | |||||||
Vesting period of award (in years) | 1 year | ||||||
Minimum | Share options | |||||||
Share-based compensation | |||||||
Vesting period of award (in years) | 3 years | ||||||
Maximum | Share options | |||||||
Share-based compensation | |||||||
Vesting period of award (in years) | 5 years |
Share-based compensation - S118
Share-based compensation - Share Options - Activity Table (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Options | |||
Outstanding at the beginning of the year (in shares) | 77,079,743 | 44,109,990 | 21,779,991 |
Granted (in shares) | 62,085,462 | 38,921,219 | 32,814,267 |
Exercised (in shares) | (5,887,193) | (610,116) | (7,757,383) |
Forfeited (in shares) | (6,275,115) | (5,341,350) | (2,726,885) |
Outstanding at the end of the year (in shares) | 127,002,897 | 77,079,743 | 44,109,990 |
Weighted Average Exercise Price | |||
Outstanding at the beginning of the year (in dollars per share) | $ 1.31 | $ 0.35 | $ 0.03 |
Granted (in dollars per share) | 3.73 | 2.32 | 0.49 |
Exercised (in dollars per share) | 0.82 | 0.10 | 0.01 |
Forfeited (in dollars per share) | 2.52 | 0.92 | 0.28 |
Outstanding at the end of the year (in dollars per share) | 2.45 | 1.31 | 0.35 |
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ 2.65 | $ 1.60 | $ 0.28 |
Additional Disclosures | |||
Weighted Average Remaining Contractual Term - Outstanding | 8 years 6 months | ||
Aggregate Intrinsic Value - Exercised (in dollars) | $ 24,723 | $ 1,353 | $ 12,496 |
Aggregate Intrinsic Value - Outstanding (in dollars) | $ 643,396 | ||
Number of Options - Exercisable (in shares) | 32,504,762 | ||
Weighted Average Exercise Price - Exercisable (in dollars per share) | $ 1.01 | ||
Weighted Average Remaining Contractual Term - Exercisable | 7 years 2 months 12 days | ||
Aggregate Intrinsic Value - Exercisable at the end of the period (in dollars) | $ 211,537 | ||
Vested and Expected to Vest | |||
Number of Options - Vested and expected to vest (in shares) | 117,553,084 | ||
Weighted Average Exercise Price - Vested and expected to vest (in dollars per share) | $ 2.68 | ||
Weighted Average Remaining Contractual Term - Vested and expected to vest | 8 years 5 months 16 days | ||
Aggregate Intrinsic Value - Vested and expected to vest (in dollars) | $ 600,210 |
Share-based compensation - S119
Share-based compensation - Share Options - Additional Information (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation | |||
Number of unrecognized share-based compensation costs (in shares) | 85,048,322 | ||
Unrecognized share-based compensation costs | $ 166,355 | ||
Period of unrecognized share-based compensation cost over average amortization (in years) | 3 years 6 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.65 | $ 1.60 | $ 0.28 |
Total fair value of the employee share option awards vested | $ 20,440 | $ 2,821 | $ 72 |
Share-based compensation - Fair
Share-based compensation - Fair Value of Options (Details) - Share options | 12 Months Ended | ||
Dec. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | |
Significant unobservable inputs used in the fair value measurement | |||
Risk-free interest rate, minimum (as percent) | 2.20% | 1.50% | 1.50% |
Risk-free interest rate, maximum (as percent) | 2.60% | 2.60% | 2.40% |
Expected exercise multiple, minimum | 2.2 | 2.2 | 2.2 |
Expected exercise multiple, maximum | 2.8 | 2.8 | 2.8 |
Expected volatility, minimum (as percent) | 99.00% | 98.00% | 94.00% |
Expected volatility, maximum (as percent) | 100.00% | 102.00% | 106.00% |
Expected dividend yield (as percent) | 0.00% | 0.00% | 0.00% |
Contractual life (in years) | 10 years | 10 years | 10 years |
Minimum | |||
Significant unobservable inputs used in the fair value measurement | |||
Fair value of ordinary share (in dollars per share) | $ 2.39 | $ 1.85 | $ 0.33 |
Maximum | |||
Significant unobservable inputs used in the fair value measurement | |||
Fair value of ordinary share (in dollars per share) | $ 8.71 | $ 2.84 | $ 1.62 |
Share-based compensation - Rest
Share-based compensation - Restricted Shares - Activity Table (Details) - Restricted shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | |||
Outstanding at the beginning of the year (in shares) | 1,075,000 | 44,445 | 577,778 |
Granted (in shares) | 300,000 | 1,075,000 | |
Vested (in shares) | (268,750) | (44,445) | (533,333) |
Forfeited (in shares) | (300,000) | ||
Outstanding at the end of the year (in shares) | 806,250 | 1,075,000 | 44,445 |
Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 2.16 | $ 0.05 | $ 0.05 |
Granted (in dollars per share) | 2.95 | 2.16 | |
Vested (in dollars per share) | 2.04 | 0.05 | 0.05 |
Forfeited (in dollars per share) | 2.95 | ||
Outstanding at the end of the year (in dollars per share) | $ 2.16 | $ 2.16 | $ 0.05 |
Additonal disclosures | |||
Number of Shares - Expected to vest (in shares) | 725,625 | ||
Weighted Average Grant Date Fair Value - Expected to vest (in dollars per share) | $ 2.16 |
Share-based compensation - R122
Share-based compensation - Restricted Shares - Additional Information (Details) - Restricted shares $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share-based compensation | |
Unrecognized share-based compensation costs | $ 1,465 |
Period of unrecognized share-based compensation cost over average amortization (in years) | 2 years 6 months |
Share-based compensation - R123
Share-based compensation - Restricted Share Units - Activity Table (Details) - Restricted Share Units (RSUs) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Shares | |
Granted (in shares) | shares | 1,469,442 |
Outstanding at the end of the year (in shares) | shares | 1,469,442 |
Weighted Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 7.55 |
Outstanding at the end of the year (in dollars per share) | $ / shares | $ 7.55 |
Additonal disclosures | |
Number of Shares - Expected to vest (in shares) | shares | 1,322,498 |
Weighted Average Grant Date Fair Value - Expected to vest (in dollars per share) | $ / shares | $ 7.55 |
Share-based compensation - R124
Share-based compensation - Restricted Share Units - Additional Information (Details) - Restricted Share Units (RSUs) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share-based compensation | |
Unrecognized share-based compensation costs | $ 10,418 |
Period of unrecognized share-based compensation cost over average amortization (in years) | 3 years 9 months 18 days |
Share-based compensation - S125
Share-based compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation | |||
Compensation expense | $ 42,863 | $ 10,625 | $ 10,211 |
Research and development | |||
Share-based compensation | |||
Compensation expense | 30,610 | 8,076 | 9,593 |
General and administrative | |||
Share-based compensation | |||
Compensation expense | $ 12,253 | $ 2,549 | $ 618 |
Accumulated other comprehens126
Accumulated other comprehensive income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in accumulated other comprehensive loss | ||
Balance at the beginning of period | $ 352,907 | $ (101,765) |
Balance at the end of period | 684,231 | 352,907 |
Accumulated Other Comprehensive Loss | ||
Movement in accumulated other comprehensive loss | ||
Balance at the beginning of period | (946) | (1,809) |
Other comprehensive income before reclassifications | 510 | (552) |
Amounts reclassified from accumulated other comprehensive income | (44) | 1,415 |
Net-current period other comprehensive income | 466 | 863 |
Balance at the end of period | (480) | (946) |
Foreign Currency Translation Adjustments | ||
Movement in accumulated other comprehensive loss | ||
Balance at the beginning of period | (847) | (602) |
Other comprehensive income before reclassifications | 762 | (245) |
Net-current period other comprehensive income | 762 | (245) |
Balance at the end of period | (85) | (847) |
Unrealized Losses on available-for-Sale Securities | ||
Movement in accumulated other comprehensive loss | ||
Balance at the beginning of period | (99) | (1,207) |
Other comprehensive income before reclassifications | (252) | (307) |
Amounts reclassified from accumulated other comprehensive income | (44) | 1,415 |
Net-current period other comprehensive income | (296) | 1,108 |
Balance at the end of period | $ (395) | $ (99) |
Shareholders' equity - Public O
Shareholders' equity - Public Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 16, 2017 | Nov. 23, 2016 | Feb. 08, 2016 |
Initial public offering | |||
Shareholders' equity | |||
Share price, ADS (in dollars per share) | $ 24 | ||
Share price (in dollars per share) | $ 1.85 | ||
Number of shares sold, ADS (in shares) | 6,600,000 | ||
Shares issued (in shares) | 85,800,000 | ||
Net proceeds | $ 166,197 | ||
Follow-on public offering | |||
Shareholders' equity | |||
Share price, ADS (in dollars per share) | $ 71 | $ 32 | |
Share price (in dollars per share) | $ 5.46 | $ 2.46 | |
Number of shares sold, ADS (in shares) | 2,465,000 | 5,781,250 | |
Shares issued (in shares) | 32,045,000 | 75,156,250 | |
Net proceeds | $ 188,517 | $ 198,625 | |
Selling shareholders | |||
Shareholders' equity | |||
Number of shares sold, ADS (in shares) | 468,750 | ||
Shares issued (in shares) | 6,093,750 | ||
Over-Allotment Option | |||
Shareholders' equity | |||
Number of shares sold, ADS (in shares) | 369,750 | 850,000 | 990,000 |
Shares issued (in shares) | 4,806,750 | 11,050,000 | 12,870,000 |
Shareholders' equity - Share Su
Shareholders' equity - Share Subscription Agreement (Details) - Private Placement $ / shares in Units, $ in Thousands | Aug. 31, 2017USD ($)$ / sharesshares | Aug. 31, 2017USD ($)$ / sharesshares |
Shareholders' equity | ||
Shares issued (in shares) | shares | 32,746,416 | 32,746,416 |
Aggregate purchase price | $ | $ 150,000 | $ 150,000 |
Share price (in dollars per share) | $ / shares | $ 4.58 | $ 4.58 |
Share price, ADS (in dollars per share) | $ / shares | $ 59.55 | $ 59.55 |
Celgene Shanghai | ||
Shareholders' equity | ||
Transaction cost | $ | $ 72 | $ 72 |
Shareholders' equity - Conversi
Shareholders' equity - Conversion of preferred shares and senior promissory note (Details) $ / shares in Units, $ in Thousands | Feb. 08, 2016USD ($)$ / sharesshares |
Initial public offering | |
Shareholders' equity | |
Share price (in dollars per share) | $ / shares | $ 1.85 |
Ordinary Shares | |
Shareholders' equity | |
Shares issued upon conversion of preferred shares | shares | 199,990,641 |
Amount reclassified from mezzanine equity to stockholders' equity | $ | $ 176,084 |
Ordinary Shares | Senior Notes | Senior Promissory Note, February 2, 2011 | |
Shareholders' equity | |
Shares converted from debt (in shares) | shares | 7,942,314 |
Amount reclassified from current liability to shareholders' equity | $ | $ 14,693 |
Ordinary Shares | Initial public offering | Senior Notes | Senior Promissory Note, February 2, 2011 | |
Shareholders' equity | |
Share price (in dollars per share) | $ / shares | $ 1.85 |
Shareholders' equity - Exercise
Shareholders' equity - Exercise of Warrants and Option (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 08, 2016 | Feb. 29, 2016 |
Shareholders' equity | ||
Carrying value and the Option and Warrants reclassified from current liability to shareholders' equity | $ 3,687 | |
Warrants to purchase convertible preferred shares in connection with the promissory notes | ||
Warrants in connection with the promissory notes | ||
Preferred shares issued upon warrant exercise (in shares) | 621,637 | |
Preferred shares converted to ordinary shares (in shares) | 621,637 | |
Shareholders' equity | ||
Preferred shares issued upon warrant exercise (in shares) | 621,637 | |
Option to purchase shares by rental deferral | ||
Option to purchase shares by rental deferral | ||
Number of shares purchased upon exercise (in shares) | 1,451,586 | |
Baker Bros | Warrants to purchase ordinary shares | ||
Shareholders' equity | ||
Ordinary shares issued upon exercise of warrants (in shares) | 2,592,593 | |
Exercise price (in dollars per share) | $ 0.68 | |
Executive Officer | Warrants to purchase convertible preferred shares | ||
Warrants in connection with the promissory notes | ||
Preferred shares issued upon warrant exercise (in shares) | 57,777 | |
Preferred shares converted to ordinary shares (in shares) | 57,777 | |
Shareholders' equity | ||
Exercise price (in dollars per share) | $ 0.68 | |
Preferred shares issued upon warrant exercise (in shares) | 57,777 |
Restricted net assets (Details)
Restricted net assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Restricted net assets | |||
Minimum required statutory reserve of annual after-tax profit (as a percent) | 10.00% | ||
Required statutory reserve as a percentage of registered capital (as a percent) | 50.00% | ||
Appropriation to statutory reserves | $ 0 | $ 0 | $ 0 |
China | |||
Restricted net assets | |||
Restricted net assets | $ 29,920 | $ 9,955 |
Employee defined contributio132
Employee defined contribution plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
PRC mandated defined contribution | |||
Employee defined contribution plan | |||
Employer contribution to retirement plan | $ 4,103 | $ 2,148 | $ 1,443 |
401(k) Plan | |||
Employee defined contribution plan | |||
Employer contribution to retirement plan | $ 455 | $ 79 | $ 0 |
Matching contribution of employee's contribution (as a percent) | 50.00% | ||
Participant's compensation matched (as a percent) | 3.00% |
Commitments and contingencies -
Commitments and contingencies - Expense Under Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating lease commitments | |||
Total expense under operating leases | $ 3,810 | $ 1,974 | $ 1,136 |
Commitments and contingencie134
Commitments and contingencies - Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Future minimum payments under non-cancelable operating leases | |
2,018 | $ 7,346 |
2,019 | 9,120 |
2,020 | 7,880 |
2,021 | 4,755 |
2022 and thereafter | 4,078 |
Total | $ 33,179 |
Commitments and contingencie135
Commitments and contingencies - Capital Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Capital Addition Purchase Commitments | |
Capital commitments | |
Capital commitments for the acquisition of property, plant and equipment | $ 43,175 |
Selected quarterly financial136
Selected quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Selected quarterly financial data (unaudited) | |||||||||||
Revenue | $ 18,174 | $ 220,213 | $ 393 | $ 677 | $ 238,387 | $ 1,070 | $ 8,816 | ||||
(Loss) /income from operations | (103,798) | 114,905 | $ (58,022) | $ (51,542) | $ (37,270) | $ (34,828) | (24,628) | (20,334) | (98,457) | (117,060) | (56,745) |
Net (loss) /income | (99,280) | 117,284 | (60,680) | (50,623) | (37,598) | (35,494) | (24,124) | (22,001) | (93,299) | (119,217) | (57,102) |
Net income/(loss) attributable to BeiGene, Ltd. ordinary shareholder | $ (99,323) | $ 117,386 | $ (60,545) | $ (50,623) | $ (37,598) | $ (35,494) | $ (24,124) | $ (22,001) | $ (93,105) | $ (119,217) | $ (57,102) |
Basic net income/(loss) per share | $ (0.17) | $ 0.21 | $ (0.12) | $ (0.10) | |||||||
Diluted net (loss) /income per share | $ (0.17) | $ 0.20 | $ (0.12) | $ (0.10) | |||||||
Net loss per share attributable to BeiGene, Ltd., basic and diluted (in dollars per share) | $ (0.08) | $ (0.08) | $ (0.06) | $ (0.07) | $ (0.17) | $ (0.30) | $ (0.52) |
Segment and geographic infor137
Segment and geographic information - General Information (Details) - segment | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment information | |||
Number of operating segments | 1 | 1 | 1 |
Segment and geographic infor138
Segment and geographic information - Tabular Disclosure (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net product revenues by geographic area | |||||||
Revenue | $ 18,174 | $ 220,213 | $ 393 | $ 677 | $ 238,387 | $ 1,070 | $ 8,816 |
China | |||||||
Net product revenues by geographic area | |||||||
Revenue | 24,428 | ||||||
United States | |||||||
Net product revenues by geographic area | |||||||
Revenue | 138,423 | ||||||
All Other Countries Except China and The United States of America | |||||||
Net product revenues by geographic area | |||||||
Revenue | $ 75,536 | $ 1,070 | $ 8,816 |
Subsequent events - Follow-on P
Subsequent events - Follow-on Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 22, 2018 | Aug. 16, 2017 | Nov. 23, 2016 | Feb. 08, 2016 |
Follow-on public offering | ||||
Shareholders' equity | ||||
Share price (in dollars per share) | $ 5.46 | $ 2.46 | ||
Shares issued (in shares) | 32,045,000 | 75,156,250 | ||
Over-Allotment Option | ||||
Shareholders' equity | ||||
Shares issued (in shares) | 4,806,750 | 11,050,000 | 12,870,000 | |
Subsequent Event | Follow-on public offering | ||||
Shareholders' equity | ||||
Shares issued, American Depository Shares (in shares) | 7,425,750 | |||
Share price (in dollars per share) | $ 7.77 | |||
Share price, ADS (in dollars per share) | $ 101 | |||
Shares issued (in shares) | 96,534,750 | |||
Deferred IPO costs | $ 758 | |||
Subsequent Event | Over-Allotment Option | ||||
Shareholders' equity | ||||
Shares issued, American Depository Shares (in shares) | 495,050 | |||
Shares issued (in shares) | 6,435,650 |
Subsequent events - Share-based
Subsequent events - Share-based Compensation (Details) | Jan. 01, 2018shares |
2016 Plan | Subsequent Event | |
Share-based compensation | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 29,603,617 |