UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________

FORM 10-Q

___________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission File Number: 001-37686

BEIGENE, LTD.

(Exact name of registrant as specified in its charter)

Cayman Islands	98-1209416
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o Mourant Governance Services (Cayman) Limited
94 Solaris Avenue, Camana Bay
Grand Cayman
Cayman Islands	KY1-1108
(Address of principal executive offices)	(Zip Code)

+1 (345) 949-4123

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
American Depositary Shares, each representing 13 Ordinary Shares, par value $0.0001 per share	BGNE	The NASDAQ Global Select Market
Ordinary Shares, par value $0.0001 per share*	06160	The Stock Exchange of Hong Kong Limited

*Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited (HKEX).

As of October 31, 2022, 1,349,640,180 ordinary shares, par value $0.0001 per share, were outstanding, of which 946,295,584 ordinary shares were held in the form of 72,791,968 American Depositary Shares, each representing 13 ordinary shares, and 115,055,260 were RMB shares.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐     No  ☒

BeiGene, Ltd.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	5
Item 1.	Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4.	Controls and Procedures	51
PART II.	OTHER INFORMATION	52
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	114
Item 3.	Defaults Upon Senior Securities	114
Item 4.	Mine Safety Disclosures	114
Item 5.	Other Information	114
Item 6.	Exhibits	114
SIGNATURES		116

2

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in our American Depositary Shares ("ADSs") listed on Nasdaq, our ordinary shares listed on The Stock Exchange of Hong Kong Limited ("HKEX"), and our ordinary shares issued to permitted investors in China and listed and traded on the Science and Technology Innovation Board ("STAR") of the Shanghai Stock Exchange ("SSE") in Renminbi ("RMB Shares") speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, are summarized in “Part II – Item 1A – Risk Factors” and should be carefully considered, together with other information in this Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), before making an investment decision regarding our ADSs, ordinary shares or RMB Shares.

•Our medicines may fail to achieve and maintain the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success.

•We have limited experience in launching and marketing our internally developed and in-licensed medicines. If we are unable to further develop marketing and sales capabilities or enter into agreements with third parties to market and sell our medicines, we may not be able to generate substantial product sales revenue.

•If we are not able to continue to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize our medicines and drug candidates, and our ability to generate revenue will be materially impaired.

•We face substantial competition, which may result in others discovering, developing, or commercializing competing medicines before or more successfully than we do.

•We have limited manufacturing capability and must rely on third-party manufacturers to manufacture some of our commercial products and clinical supplies, and if they fail to meet their obligations, the development and commercialization of our medicines and drug candidates could be adversely affected.

•We depend substantially on the success of the clinical development of our medicines and drug candidates. If we are unable to successfully complete clinical development, obtain regulatory approvals and commercialize our medicines and drug candidates, or experience significant delays in doing so, our business will be materially harmed.

•Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results.

•If clinical trials of our drug candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

•All material aspects of the research, development, manufacturing and commercialization of pharmaceutical products are heavily regulated, and we may face difficulties in complying with or be unable to comply with such regulations, which could have a material adverse effect on our business.

•The approval processes of regulatory authorities in the United States, China, Europe and other comparable regulatory authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our drug candidates, our business will be substantially harmed.

•Even if we are able to commercialize our medicines and any approved drug candidates, the medicines may become subject to unfavorable pricing regulations or third-party reimbursement practices or healthcare reform initiatives, which could harm our business.

•We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future and may not become profitable.

•We have limited experience in obtaining regulatory approvals and commercializing pharmaceutical products, which may make it difficult to evaluate our current business and predict our future performance.

•We may need to obtain additional financing to fund our operations, and if we are unable to obtain such financing, we may be unable to complete the development of our drug candidates or achieve profitability.

3

•If we are unable to obtain and maintain patent protection for our medicines and drug candidates through intellectual property rights, or if the scope of such intellectual property rights is not sufficiently broad, third parties may compete against us.

•We rely on third parties to manufacture some of our commercial and clinical drug supplies. Our business could be harmed if those third parties fail to provide us with sufficient quantities of product or fail to do so at acceptable quality levels or prices.

•We have entered into licensing and collaboration arrangements and may enter into additional collaborations, licensing arrangements, or strategic alliances in the future, and we may not realize the benefits of such arrangements.

•We have significantly increased and expect to continue to increase our research, development, manufacturing, and commercial capabilities, and we may experience difficulties in managing our growth.

•Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

•Our business is subject to complex and evolving industry-specific laws and regulations regarding the collection and transfer of personal data. These laws and regulations can be complex and stringent, and many are subject to change and uncertain interpretation, which could result in claims, changes to our data and other business practices, significant penalties, increased cost of operations, or otherwise adversely impact our business.

•We manufacture some of our medicines and intend to manufacture some of our drug candidates, if approved. Delays in completing and receiving regulatory approvals for our manufacturing facilities, or damage to, destruction of or interruption of production at such facilities, could delay our development plans or commercialization efforts.

•Changes in the political and economic policies of the PRC government or in relations between China and the United States or other governments may materially and adversely affect our business, financial condition, and results of operations and may result in our inability to sustain our growth and expansion strategies.

•The PRC government has significant oversight and discretion over the conduct of the business operations of our PRC subsidiaries or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, and may intervene with or influence our operations, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless, as the government deems appropriate to further regulatory, political and societal goals.

•The audit reports included in our Annual Report on Form 10-K filed with the SEC have historically been prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board (the "PCAOB"), and as such, investors have previously been deprived of the benefits of such inspections.

•Our ADSs may be delisted and our ADSs and ordinary shares prohibited from trading in the over-the-counter market under the Holding Foreign Companies Accountable Act, or the HFCAA. On December 16, 2021, PCAOB issued the HFCAA Determination Report, according to which our previous auditor is subject to the determinations that the PCAOB is unable to inspect or investigate it completely. Under current law, delisting and prohibition from over-the-counter trading in the U.S. could take place in 2024. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.

•The trading prices of our ordinary shares, ADSs and/or RMB Shares can be volatile, which could result in substantial losses to you.

4

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

BEIGENE, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

		As of
		September 30,	December 31,
	Note	2022	2021
		$	$
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		4,197,132	4,375,678
Short-term restricted cash	5	191	328
Short-term investments	5	871,998	2,241,962
Accounts receivable, net	10	189,170	483,113
Inventories	6	290,911	242,626
Prepaid expenses and other current assets	10	199,766	270,173
Total current assets		5,749,168	7,613,880
Long-term restricted cash	5	3,189	6,881
Property, plant and equipment, net	7	681,914	587,605
Operating lease right-of-use assets		110,340	117,431
Intangible assets, net	8	40,849	46,679
Deferred tax assets	9	—	—
Other non-current assets	10	140,553	163,049
Total non-current assets		976,845	921,645
Total assets		6,726,013	8,535,525
Liabilities and shareholders' equity
Current liabilities:
Accounts payable		252,071	262,400
Accrued expenses and other payables	10	410,255	558,055
Deferred revenue, current portion	4	144,984	187,414
Tax payable	9	22,665	21,395
Operating lease liabilities, current portion		24,340	21,925
Research and development cost share liability, current portion	4	115,721	120,801
Short-term debt	11	441,275	427,565
Total current liabilities		1,411,311	1,599,555
Non-current liabilities:
Long-term bank loans	11	208,058	202,113
Deferred revenue, non-current portion	4	149,899	220,289
Operating lease liabilities, non-current portion		36,904	43,041
Deferred tax liabilities	9	15,249	14,169
Research and development cost share liability, non-current portion	4	204,252	269,561
Other long-term liabilities	10	45,169	54,234
Total non-current liabilities		659,531	803,407
Total liabilities		2,070,842	2,402,962
Commitments and contingencies	18
Equity:
Ordinary shares, US$0.0001 par value per share; 9,500,000,000 shares authorized; 1,349,640,180 and 1,334,804,281 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		135	133
Additional paid-in capital		11,451,566	11,191,007
Accumulated other comprehensive (loss) income	15	(161,523)	17,950
Accumulated deficit		(6,635,007)	(5,076,527)
Total equity		4,655,171	6,132,563
Total liabilities and equity		6,726,013	8,535,525

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

(Unaudited)

		Three Months Ended		Nine Months Ended
		September 30,		September 30,
	Note	2022	2021	2022	2021
		$	$	$	$
Revenues
Product revenue, net	12	349,506	192,461	915,590	437,202
Collaboration revenue	4	38,122	13,979	120,236	525,102
Total revenues		387,628	206,440	1,035,826	962,304
Expenses
Cost of sales - product		76,543	47,413	212,953	116,361
Research and development		426,363	351,937	1,194,485	1,028,754
Selling, general and administrative		322,892	269,227	948,868	683,622
Amortization of intangible assets		187	188	563	563
Total expenses		825,985	668,765	2,356,869	1,829,300
Loss from operations		(438,357)	(462,325)	(1,321,043)	(866,996)
Interest income (expense), net		12,759	(2,230)	34,261	(11,275)
Other (expense) income, net		(125,640)	31,477	(243,290)	26,487
Loss before income taxes		(551,238)	(433,078)	(1,530,072)	(851,784)
Income tax expense	9	6,318	5,036	28,408	15,354
Net loss		(557,556)	(438,114)	(1,558,480)	(867,138)
Net loss per share		(0.41)	(0.36)	(1.16)	(0.72)
Weighted-average shares outstanding—basic and diluted		1,345,303,747	1,205,971,284	1,337,976,853	1,196,391,201
Net loss per American Depositary Share ("ADS")		(5.39)	(4.72)	(15.14)	(9.42)
Weighted-average ADSs outstanding—basic and diluted		103,484,904	92,767,022	102,921,296	92,030,092

 The accompanying notes are an integral part of these condensed consolidated financial statements.

6

BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

(Unaudited)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2022	2021	2022	2021
	$	$	$	$
Net loss	(557,556)	(438,114)	(1,558,480)	(867,138)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(80,326)	664	(168,411)	6,528
Pension liability adjustments	—	(111)	—	250
Unrealized holding loss, net	1,253	(68)	(11,062)	(1,140)
Comprehensive loss	(636,629)	(437,629)	(1,737,953)	(861,500)

 The accompanying notes are an integral part of these condensed consolidated financial statements.

7

BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

(Unaudited)

		Nine Months Ended September 30,
	Note	2022	2021
		$	$
Operating activities:
Net loss		(1,558,480)	(867,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		48,262	33,336
Share-based compensation expenses	14	225,036	177,701
Unrealized losses (gains) on equity investments	5	16,413	(17,166)
Acquired in-process research and development		20,000	53,500
Amortization of research and development cost share liability	4	(70,389)	(82,846)
Deferred income tax benefits		380	2,474
Other items, net		7,762	17,719
Changes in operating assets and liabilities:
Accounts receivable		284,717	(69,174)
Inventories		(75,632)	(61,686)
Other assets		30,325	(92,489)
Accounts payable		4,203	(12,376)
Accrued expenses and other payables		1,628	(44)
Deferred revenue		(112,820)	124,898
Other liabilities		167	2,407
Net cash used in operating activities		(1,178,428)	(790,884)
Investing activities:
Purchases of property, plant and equipment		(204,076)	(147,963)
Purchases of investments		(14,735)	(2,062,879)
Proceeds from sale or maturity of investments		1,352,398	2,758,391
Purchase of in-process research and development		(95,000)	(8,500)
Other investing activities		—	(7,500)
Net cash provided by investing activities		1,038,587	531,549
Financing activities:
Proceeds from sale of ordinary shares, net of cost	16	—	50,000
Proceeds from long-term loan	11	37,372	16,838
Proceeds from short-term loans	11	163,774	143,456
Repayment of short-term loans	11	(145,428)	(40,229)
Proceeds from option exercises and employee share purchase plan		35,677	82,192
Net cash provided by financing activities		91,395	252,257
Effect of foreign exchange rate changes, net		(133,929)	6,769
Net decrease in cash, cash equivalents, and restricted cash		(182,375)	(309)
Cash, cash equivalents, and restricted cash at beginning of period		4,382,887	1,390,005
Cash, cash equivalents, and restricted cash at end of period		4,200,512	1,389,696
Supplemental cash flow information:
Cash and cash equivalents		4,197,132	1,383,310
Short-term restricted cash		191	330
Long-term restricted cash		3,189	6,056
Income taxes paid		25,006	15,214
Interest paid		19,865	23,398
Supplemental non-cash information:
Acquisitions of equipment included in accounts payable		47,310	41,897
Acquired in-process research and development included in accrued expenses		—	45,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

BEIGENE, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in thousands of U.S. Dollars (“$”), except for number of shares and per share data)

(Unaudited)

	Ordinary Shares		Additional Paid-In Capital	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Total
	Shares	Amount
		$	$	$	$	$
Balance at December 31, 2021	1,334,804,281	133	11,191,007	17,950	(5,076,527)	6,132,563
Cost from issuance of ordinary shares	—	—	(152)	—	—	(152)
Use of shares reserved for share option exercises	(2,850,328)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	2,851,316	—	11,880	—	—	11,880
Share-based compensation	—	—	65,555	—	—	65,555
Other comprehensive loss	—	—	—	(496)	—	(496)
Net loss	—	—	—	—	(435,198)	(435,198)
Balance at March 31, 2022	1,334,805,269	133	11,268,290	17,454	(5,511,725)	5,774,152
Use of shares reserved for share option exercises	5,016,518	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	9,817,938	1	7,091	—	—	7,092
Share-based compensation	—	—	81,305	—	—	81,305
Other comprehensive loss	—	—	—	(99,904)	—	(99,904)
Net loss	—	—	—	—	(565,726)	(565,726)
Balance at June 30, 2022	1,349,639,725	134	11,356,686	(82,450)	(6,077,451)	5,196,919
Use of shares reserved for share option exercises	(3,971,942)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	3,972,397	1	16,704	—	—	16,705
Share-based compensation	—	—	78,176	—	—	78,176
Other comprehensive income	—	—	—	(79,073)	—	(79,073)
Net loss	—	—	—	—	(557,556)	(557,556)
Balance at September 30, 2022	1,349,640,180	135	11,451,566	(161,523)	(6,635,007)	4,655,171
Balance at December 31, 2020	1,190,821,941	118	7,414,932	6,942	(3,618,711)	3,803,281
Use of shares reserved for share option exercises	(123,097)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	6,623,773	1	25,753	—	—	25,754
Share-based compensation	—	—	45,833	—	—	45,833
Other comprehensive loss	—	—	—	(3,738)	—	(3,738)
Net income	—	—	—	—	55,580	55,580
Balance at March 31, 2021	1,197,322,617	119	7,486,518	3,204	(3,563,131)	3,926,710
Use of shares reserved for share option exercises	(1,599,676)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	8,844,082	1	9,846	—	—	9,847
Share-based compensation	—	—	64,791	—	—	64,791
Other comprehensive income	—	—	—	8,891	—	8,891
Net loss	—	—	—	—	(484,604)	(484,604)
Balance at June 30, 2021	1,204,567,023	120	7,561,155	12,095	(4,047,735)	3,525,635
Proceeds from issuance of ordinary shares, net of cost	2,151,877	—	50,000	—	—	50,000
Use of shares reserved for share option exercises and RSU releases	(3,644,641)	—	—	—	—	—
Exercise of options, ESPP and release of RSUs	10,159,942	1	46,590	—	—	46,591
Share-based compensation	—	—	67,077	—	—	67,077
Other comprehensive income	—	—	—	485	—	485
Net loss	—	—	—	—	(438,114)	(438,114)
Balance at September 30, 2021	1,213,234,201	121	7,724,822	12,580	(4,485,849)	3,251,674

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

BEIGENE, LTD.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of U.S. Dollar (“$”) and Renminbi (“RMB”), except for number of shares and per share data)

(Unaudited)

1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies

Description of business

BeiGene, Ltd. (the "Company", "BeiGene", "it", "its") is a global biotechnology company focused on developing and commercializing innovative affordable oncology medicines to improve treatment outcomes and expand access for patients worldwide.

The Company currently has three approved medicines that were discovered and developed in its own labs, including BRUKINSA®, a small molecule inhibitor of Bruton’s Tyrosine Kinase (BTK) for the treatment of various blood cancers, tislelizumab, an anti-PD-1 antibody immunotherapy for the treatment of various solid tumor and blood cancers, and pamiparib, a selective small molecule inhibitor of PARP1 and PARP2. The Company has obtained approvals to market BRUKINSA® in the United States, the People's Republic of China (China or the PRC), the European Union (EU), the United Kingdom ("UK"), Canada, Australia and additional international markets, and tislelizumab and pamiparib in China. By leveraging its China commercial capabilities, the Company has in-licensed the rights to distribute 13 approved medicines for the China market. Supported by its global clinical development and commercial capabilities, the Company has entered into collaborations with world-leading biopharmaceutical companies such as Amgen Inc. ("Amgen") and Novartis Pharma AG ("Novartis") to develop and commercialize innovative medicines.

The Company is committed to advancing best and first-in-class clinical candidates internally or with like-minded partners to develop impactful and affordable medicines for patients across the globe. Its internal clinical development capabilities are deep, including a more than 2,500-person global clinical development and medical affairs team that is running close to 80 ongoing or planned clinical trials in over 40 medicines and drug candidates. This includes more than 30 pivotal or potentially registration-enabling trials across its portfolio, including three internally discovered, approved medicines. The Company has enrolled in its clinical trials more than 16,000 subjects, of which approximately one-half have been outside of China.

The Company has built, and is expanding, its internal manufacturing capabilities, through its state-of-the-art biologic and small molecule manufacturing facilities in China to support current and potential future demand of its medicines, and is building a commercial-stage biologics manufacturing and clinical R&D center in New Jersey. The Company also works with high quality contract manufacturing organizations ("CMOs") to manufacture its internally developed clinical and commercial products.

Since its inception in 2010, the Company has become a fully integrated global organization of over 9,000 employees in 29 countries and regions, including the United States, China, Europe and Australia.

Basis of presentation and consolidation

The accompanying condensed consolidated balance sheet as of September 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 and 2021, the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, and the condensed consolidated statements of shareholders' equity for the three and nine months ended September 30, 2022 and 2021, and the related footnote disclosures are unaudited. The accompanying unaudited interim condensed financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including guidance with respect to interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report").

The unaudited interim condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all normal recurring adjustments, necessary to present a fair statement of the results for the interim periods presented. Results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full fiscal year or for any future annual or interim period.

10

The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

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 variable consideration in product sales and collaboration revenue arrangements, identifying separate accounting units and determining the standalone selling price of each performance obligation in the Company’s revenue arrangements, assessing the impairment of long-lived assets, valuation and recognition of share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions, valuation of inventory, estimating the allowance for credit losses, determining defined benefit pension plan obligations, measurement of right-of-use assets and lease liabilities 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 and reported amounts of revenues and expenses. Actual results could differ from these estimates.

Revision of prior period financial statements

The Company evaluates the recoverability of its deferred tax assets on a jurisdiction-by-jurisdiction basis by assessing the adequacy of future expected taxable income from all sources, including reversal of temporary differences, forecasted operating earnings and available tax planning strategies in accordance with ASC 740. This assessment is subject to a high degree of subjectivity, as the sources of income rely heavily on estimates that are based on a number of factors, including historical experience and short-range and long-range business forecasts. A valuation allowance is provided when the Company determines that it is more-likely-than-not that some portion or all of a deferred tax asset will not be realized.

Prior to the third quarter of 2022, the Company determined that the majority of its net deferred tax assets (primarily in the U.S.) were realizable on a more-likely-than-not basis, primarily due to cumulative pre-tax income at the taxpaying entity and the weighting of available positive and negative evidence. Accordingly, no valuation allowance was previously recorded related to those deferred tax assets. In October 2022, in connection with the preparation of its condensed consolidated financial statements for the three and nine months ended September 30, 2022, the Company reassessed its position on the realizability of its net deferred tax assets and determined that the negative evidence associated with cumulative losses at the consolidated financial statement level are not able to be overcome by other positive evidence, and therefore, a valuation allowance should be applied to its net deferred tax asset balance. The Company determined the previous conclusion to not apply a valuation allowance to certain net deferred tax assets was an error.

In accordance with Staff Accounting Bulletin (SAB) No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the error and determined that the related impact was not material to any of its previously issued financial statements, but that correcting the cumulative impact of the error would be significant to its statements of operations for the three and nine months ended September 30, 2022. Accordingly, the Company has revised the first and second quarters of 2022 and the quarterly and annual periods of fiscal year 2021 condensed consolidated financial statements and related notes included herein to record a valuation allowance against the Company’s net deferred tax asset balance for all periods presented. A summary of revisions to previously reported financial statements is presented in Note 2, Revision of Prior Period Financial Statements. Note 9, Income Taxes and Note 13, Loss Per Share have been updated to reflect the revision. The Company will also correct previously reported financial information for this error in its future filings, as applicable.

Recent accounting pronouncements

New accounting standards which have not yet been adopted

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This update is effective for annual periods beginning after December 15, 2021, and early application is permitted. This guidance should be applied either prospectively to all transactions that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or retrospectively to those transactions. The Company does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

11

Significant accounting policies

For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited interim condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2021.

There have been no material changes to the Company’s significant accounting policies as of and for the nine months ended September 30, 2022, as compared to the significant accounting policies described in the Annual Report.

2. Revision of Prior Period Financial Statements

As discussed in Note 1, the Company revised certain prior period financial statements to correct an error related to the valuation of net deferred tax assets, the impact of which was immaterial to our previously filed financial statements in the first and second quarters of 2022 and the quarterly and annual periods of fiscal 2021 (See Note 1). Specifically, a valuation allowance should have been recorded on all net deferred tax assets and such a valuation allowance was not previously recorded. A summary of revisions to the Company’s previously reported financial statements for the comparative periods presented within this Quarterly Report on Form 10-Q is presented below.

Condensed Consolidated Balance Sheet (unaudited)

	As of
	December 31, 2021
	As Reported	Adjustments	As Revised
	$	$	$
Deferred tax assets	110,424	(110,424)	—
Total non-current assets	1,032,069	(110,424)	921,645
Total assets	8,645,949	(110,424)	8,535,525
Accumulated deficit	(4,966,103)	(110,424)	(5,076,527)
Total equity	6,242,987	(110,424)	6,132,563
Total liabilities and equity	8,645,949	(110,424)	8,535,525

Condensed Consolidated Statements of Operations (unaudited)

	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
	As Reported	Adjustments	As Revised	As Reported	Adjustments	As Revised
	$	$	$	$	$	$
Income tax expense (benefit)	(19,223)	24,259	5,036	(24,083)	39,437	15,354
Net loss	(413,855)	(24,259)	(438,114)	(827,701)	(39,437)	(867,138)
Net loss per share	(0.34)	(0.02)	(0.36)	(0.69)	(0.03)	(0.72)
Net loss per American Depositary Share ("ADS")	(4.46)	(0.26)	(4.72)	(8.99)	(0.43)	(9.42)

Condensed Consolidated Statements of Comprehensive Loss (unaudited)

	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
	As Reported	Adjustments	As Revised	As Reported	Adjustments	As Revised
	$	$	$	$	$	$
Net loss	(413,855)	(24,259)	(438,114)	(827,701)	(39,437)	(867,138)
Comprehensive loss	(413,370)	(24,259)	(437,629)	(822,063)	(39,437)	(861,500)

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Condensed Consolidated Statement of Cash Flows (unaudited)

	Nine Months Ended
	September 30, 2021
	As Reported	Adjustments	As Revised
	$	$	$
Operating activities:
Net loss	(827,701)	(39,437)	(867,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income tax benefits	(38,408)	40,882	2,474
Changes in operating assets and liabilities:
Other assets	(92,938)	449	(92,489)
Accrued expenses and other payables	819	(863)	(44)
Other liabilities	3,438	(1,031)	2,407
Net cash used in operating activities	(790,884)	—	(790,884)

Condensed Consolidated Statement of Stockholders' Equity (unaudited)

	Accumulated Deficit			Total Equity
	As Reported	Adjustments	As Revised	As Reported	Adjustments	As Revised
	$	$	$	$	$	$
Balance at December 31, 2021	(4,966,103)	(110,424)	(5,076,527)	6,242,987	(110,424)	6,132,563
Net loss	(434,274)	(924)	(435,198)	(434,274)	(924)	(435,198)
Balance at March 31, 2022	(5,400,377)	(111,348)	(5,511,725)	5,885,500	(111,348)	5,774,152
Net loss	(571,449)	5,723	(565,726)	(571,449)	5,723	(565,726)