BeOne Medicines Ltd. American Depositary Shares 2026 Q2 Earnings Call

Hello and welcome. Thank you for joining us today. I'm Dan Maller, Head of Investor Relations at BeOne Medicines. Before we begin, please note that you can find additional materials, including a replay of today's webcast and presentation, on the investor relations section of our website, ir.beonemedicines.com. I would like to remind all participants that during this call, we may make forward-looking statements regarding, among other things, the company's future prospects and business strategy. Actual results may differ materially from those indicated in the forward-looking statements as a result of various factors, including those risks discussed in our most recent periodic report filed with the SEC. Please also carefully review the forward-looking statements disclaimer in the slide deck that accompanies this presentation.

Reconciliations between GAAP and non-GAAP financial measures discussed on this call are provided in the appendix to our presentation, which is posted to our investor relations website, along with our earnings release. All information in this presentation is as of the date of this presentation, and we undertake no duty to update such information unless required by law. Turning to today's call as outlined on slide three. John Oyler, our co-founder, chairman, and CEO, will provide a business update. Aaron Rosenberg, our CFO, will provide an update on our second quarter financial results and 2026 financial guidance. Lai Wang, President and Global Head of R&D, will discuss our R&D and pipeline progress. We will open the call to questions.

Joining the team for the Q&A portion of the call will be Dr. Wu, President and Chief Operating Officer, Matt Shaulis, General Manager of North America, Mark Lanasa, Chief Medical Officer for Solid Tumors, Amit Agarwal, Chief Medical Officer for Hematology. I'll now pass the call over to John.

John? Thank you, Dan, and welcome everyone.

Q2 was a very strong quarter across every dimension of our business. From a financial perspective, we achieved $1.7 billion in total revenues and $2.05 in GAAP earnings per ADS. This represents growth of 30% and 144% compared to the prior year, respectively. BRUKINSA, our foundational BTK inhibitor, continues to exceed our high expectations in the marketplace. More than six and a half years after its initial launch, BRUKINSA is seeing its highest level of sustained new patient starts, showing favorable early trends in duration of therapy, and it is showing strong growth across all five approved indications. On the back of these strong results, we are raising our 2026 guidance ranges for revenue and GAAP operating income by $300 million and $250 million respectively. Aaron will detail this later.

As impressive as our financial performance was in the quarter, our pipeline progress was equally significant. This is highlighted by the FDA approval of BEQALZI as the first and only BCL-2 inhibitor in mantle cell lymphoma, the success of the phase III MANGROVE study of BRUKINSA, which is so exciting that it warrants the entire next slide. We also announced a $300 million expansion of our flagship U.S. manufacturing site in Hopewell, New Jersey. MANGROVE is yet another example of the growing body of evidence supporting BRUKINSA as the foundational BTK inhibitor. We are excited about MANGROVE for two key reasons. The first is because it represents the first chemo-free treatment option for patients with frontline mantle cell. Secondly, because when you see the data, we believe the efficacy will speak for itself.

We are confident that this BRUKINSA-based chemo-free regimen has the potential to become the future standard of care for the roughly 21,000 new patients diagnosed with MCL each year in the major markets. Global submissions are planned for the second half of 2026. We are looking forward to sharing the full data at an upcoming medical meeting. Let's now turn to BRUKINSA's commercial performance. In Q2, BRUKINSA's global revenues reached over $1.2 billion, representing growth of 31% year-over-year. BRUKINSA is the number one BTK inhibitor, both in the U.S. and globally. It has the broadest label of any BTKI, with approvals in five B-cell malignancies. We often talk about BRUKINSA in the context of CLL, with good reason. It is important to remember that BRUKINSA is a very important option for patients with other B-cell malignancies, including MCL, Waldenstrom's, marginal zone, and follicular lymphoma.

BRUKINSA has now treated more than 300,000 patients across 80-plus markets. Market share alone doesn't tell the full story. The reason we are winning is scientific. That story has three chapters. Differentiated design, differentiated clinical outcomes, differentiated real-world evidence. At BeOne, we are committed to generating and sharing the evidence needed to fully characterize our medicines for the patients and physicians that we serve. On the left side of this slide, you can see the highlights of the breadth of phase III data generated for BRUKINSA as a single agent. Here you can see BRUKINSA has reported the most phase III data of any single agent BTK. The right side illustrates the substantial body of data currently being generated in combination, where you can see that BRUKINSA has the most reported and ongoing phase III data of any BTKI agent.

This slide demonstrates the scale of BRUKINSA's development plan compared to the more curated efforts of our peers. In addition to MANGROVE, BRUKINSA has four more potentially market-expanding phase III readouts in the next three years. A major wave of data is coming that will extend BRUKINSA's evidence base and its label well into the future. One quick reminder of why BRUKINSA performs the way it does. From day one, BRUKINSA was designed to deliver complete and sustained BTK inhibition through its potency and its PK profile. Our hypothesis was simple. Continuous BTK coverage would translate into a superior therapeutic profile, and over a decade of clinical and real-world evidence has really borne that out, and that's what the next few slides show. Let me remind you now that BRUKINSA is the only BTK inhibitor that has demonstrated PFS superiority versus ibrutinib in a head-to-head randomized trial.

In ALPINE, BRUKINSA delivered a hazard ratio of 0.69, that separation has been sustained to a median follow-up of 42.5 months. In ELEVATE-RR, Acala showed early separation from ibrutinib, that separation was not sustained. The curves crossed, the final hazard ratio was one. In BRUIN 3.1.4, Perto reported a hazard ratio of 0.845. Put simply, there was very little differentiation between the two arms, with 48 PFS events reported for Perto versus 50 for ibrutinib. With respect to tolerability, Perto showed numerically more discontinuations due to AEs than ibrutinib, whereas both BRUKINSA and Acala each showed markedly fewer discontinuations than ibrutinib in their respective head-to-head trials. When comparing AFib rates of next generation BTK inhibitors across studies, it's important to understand the protocol differences that may affect patient selection and event reporting.

As you can see on the left, both BRUKINSA and Acala studies in frontline CLL used highly similar eligibility criteria and AFib reporting. In contrast, the Perto studies utilized more restrictive eligibility criteria that may have resulted in a fitter study population, they also incorporated sponsor adjudication of AFib events. As a reminder, AFib events and rates are known to rise substantially with age. In a large study of more than 17,000 adults in U.S. primary care clinics, the absolute prevalence of AFib was nearly 4% higher among those aged 70-74 as compared to 65-69. Factoring for this level of age difference in studies really matters.

Despite the differences in inclusion criteria, which may have led to roughly half the percentage of patients above the age of 75 in BRUIN 3.1.3, a four-year lower median age in the Perto studies, despite the differences in AFib reporting methods, AFib rates were generally similar in the active treatment arms across studies. Interestingly, if we applied the more restrictive BRUIN 3.1.3 and 3.1.4 eligibility criteria to the SEQUOIA population, 15 of the highest risk patients would have been excluded from the BRUKINSA arm. In fact, those 15 patients had roughly twice the rate of serious Grade 3 or higher infections and more than twice the rate of deaths due to AEs compared to the overall study. This analysis underscores the extent to which differences in protocol inclusion criteria may play a key role in the clinical narrative.

Although some have suggested that pirtobrutinib may be well-suited for use in older patients due to lower AFib risk and improved tolerability, it is the least studied BTK inhibitor in that population. It lacks relevant long-term data with only 28 months of follow-up, and the narrative about being more tolerable and having less AFib are not supported by the data. The totality of evidence continues to support BRUKINSA's best-in-class profile. One of the key lessons we've recently learned in CLL trials is that long-term follow-up matters. Many regimens can appear highly effective in the first three years, but that's not enough time to understand their true durability. This slide shows the reported landmark PFS at years three through six across the respective frontline CLL phase III trials for the frontline treatment regimens. Recognizing the limitations of cross-trial comparisons, a few items jump out.