BeOne Medicines Ltd. (ONC) Earnings

Management highlights

- Commercial Performance * Brukinza, the #1 global and U.S. BTK inhibitor, achieved the highest sustained new patient starts since launch 6.5 years ago, with strong growth across all 5 approved indications, and has treated over 300,000 patients across 80+ markets. * Favorable duration of therapy and improved patient adherence (linked to the 2025 tablet formulation launch) have supported demand growth; non-CLL indications contribute meaningfully to growth, with strong market share exceeding their proportional prevalence. * Tevimbra maintains market leadership in China despite steep competition, and global launch traction is growing ahead of a potential first-line HER2-positive GEA approval. * The Amgen in-license portfolio continues to outperform expectations with 25% YoY growth. - Clinical and Pipeline Progress * The Mangrove Phase 3 trial for frontline mantle cell lymphoma (MCL) demonstrated positive results for Brukinza + rituximab, a first chemo-free regimen for this indication; global regulatory submissions are planned for H2 2026. * Brukinza has the most reported and ongoing Phase 3 data of any BTK inhibitor, with 4 additional potential label-expanding Phase 3 readouts planned over the next 3 years; long-term follow-up data confirms superior durable progression-free survival (PFS) versus competing BTK inhibitors and fixed-duration regimens, especially for high-risk unmutated IGHV CLL patients. * The Celestial 301 trial did not meet interim UMRD superiority versus the VIO regimen, but the IDMC recommended the trial continue to its primary PFS endpoint, and management remains confident in achieving PFS superiority. * BTK degrader Tachbrutideg remains on track for a potential accelerated approval submission for relapsed/refractory CLL by the end of 2026, with a Phase 3 combination trial starting in 2027. * In solid tumors, 5 programs have achieved clinical proof of concept and are advancing to pivotal development on a ~2.5 year timeline from first-in-human dosing: - CDK4 inhibitor BGB-43395 is enrolling in Phase 3 for breast cancer, with a best-in-class safety profile showing much lower severe neutropenia rates than approved competitors. - GPC3 4-1BB bispecific BGB-B2033 completed enrollment of a China registration-enabling HCC cohort, with a Phase 3 in second-line HCC planned by the end of 2026, and is exploring accelerated approval pathways with global regulators. - B7H4 ADC BGC-9074 has a best-in-class safety profile, with a Phase 3 in first-line ovarian cancer maintenance planned by the end of 2026. - PRMT5 inhibitor received orphan drug designation for pancreatic cancer, with first proof-of-concept data to be presented at an upcoming medical meeting, and Phase 3 development planned for 2027. - CEA ADC has achieved proof of concept and is targeted for Phase 3 development in 2027. * Additional pipeline advancements include initiation of a PD-1/VEGF/CTLA-4 trispecific clinical study, and a RAS-on inhibitor on track to enter the clinic by the end of 2026, with additional KRAS degrader and RAS-on ADC programs in development. - Financial Performance * GAAP gross profit was $1.5 billion with gross margin near 90%; GAAP operating income was $325 million, GAAP net income was $237 million, and GAAP diluted EPS was $2.05 (up 144% YoY). * Adjusted operating income was $503 million (over 80% YoY growth), adjusted diluted EPS was $3.84 (up from $2.25 YoY), and free cash flow doubled YoY to $435 million.

Guidance

- Management raised full-year 2026 total revenue guidance by $300 million to a new range of $6.6 billion to $6.8 billion, reflecting stronger-than-expected performance led by Brukinza in the U.S., ongoing global expansion, and broader portfolio contributions. - Gross margin is expected to remain in the high 80% range, consistent with prior guidance. - Operating expense guidance was increased modestly to a range of $4.8 billion to $5.0 billion, reflecting continued investment in commercial execution and pipeline advancement. - Full-year 2026 GAAP operating income guidance was raised by $250 million across the range to $1.0 billion to $1.1 billion; non-GAAP operating income guidance was raised to $1.7 billion to $1.8 billion. - All other underlying assumptions remained unchanged from prior guidance.

Segment performance

B1 Medicines reported total Q2 2026 revenue of $1.7 billion, 30% year-over-year (YoY) growth. By product segment: 1. Brukinza (BTK inhibitor): Global revenue of $1.2 billion, 31% YoY growth, accounting for ~70.6% of total revenue. U.S. Brukinza sales were $893 million, 31% YoY growth. 2. Tevimbra: Global revenue of $229 million, 18% YoY growth, accounting for ~13.5% of total revenue. 3. Amgen in-license portfolio: Revenue of $157 million, 25% YoY growth, accounting for ~9.2% of total revenue. By geographic segment: 1. U.S.: Revenue of $899 million, 31% YoY growth, 52.9% of total revenue. 2. China: Revenue of $500 million, 17% YoY growth (7% of growth from forex), 29.4% of total revenue. 3. Europe: Revenue of $208 million, 37% YoY growth, 12.2% of total revenue. 4. Rest of World: Revenue of ~$73 million, over 100% YoY growth, 4.3% of total revenue.

Risks & headwinds

- Actual results may differ materially from forward-looking statements due to a range of unstated factors, consistent with disclosures in prior SEC filings. - Brukinza faces ongoing competitive pressure from new fixed-duration CLL regimens and competing BTK inhibitors, though management has not observed meaningful market share impact to date. - The Celestial 301 trial failed to meet the interim UMRD superiority endpoint, and while management remains confident in the final PFS endpoint, trial success is not guaranteed. - Potential future competition for the Amgen in-license portfolio's XGIVA product could impact performance beyond 2026, though no material impact is expected in 2026. - Clinical trial success is not guaranteed; all late-stage pipeline assets still require completion of pivotal trials and regulatory approval to reach market.

Analyst Q&A

• Q: How much of Brukinza's growth comes from non-CLL vs CLL indications? What impact has the Acala/Venetoclax launch had, and what is the current status of the Celestial 301 trial hazard ratio?

  A: Brukinza is seeing strong durable growth across both CLL and non-CLL indications. Non-CLL indications account for ~1/3 of total patient prevalence, and Brukinza has above-weighted share in these segments. Long-term real-world data confirms Brukinza has much longer treatment duration than competitors, leading the company to update internal planning to reflect longer duration, which is driving stronger demand than expected. As of Q2, there is no meaningful impact from the new Acala/Venetoclax launch, and long-term data for this fixed regimen shows much lower 6-year PFS (especially in high-risk patients) than Brukinza. B1 remains unblinded to Celestial 301 data after the interim UMRD analysis, so the hazard ratio is not available, but management remains confident in meeting the primary PFS endpoint.

• Q: What early feedback have you received on the Mangrove study for frontline MCL, and why is there no rituximab maintenance arm? How does this compare to the approved ECHO regimen?

  A: The Mangrove study is the first trial testing a full chemo-free regimen for frontline MCL, unlike the ECHO regimen which adds a BTK inhibitor to existing chemotherapy. Mangrove showed Brukinza + rituximab was superior to standard chemo with a hazard ratio of 0.57, an unprecedented result for a chemo-free regimen. Treating physicians and KOLs have reacted very positively to the data, as it allows patients to avoid chemotherapy toxicities and rituximab infusions, and there is strong interest in the maintenance-free design. Full data will be presented at an upcoming medical congress.

• Q: What is the timeline for the BTK degrader Tachbrutideg registration study, what efficacy bar is needed for approval, and how does it position versus competing degrader programs?

  A: Tachbrutideg remains on track for an accelerated approval submission for relapsed/refractory CLL (after at least two prior lines of therapy: BTK and BCL2 inhibitor) in Q4 2026, if data supports. Phase 1 data to date shows encouraging response rates and durability that meet the bar for accelerated approval, consistent with prior accelerated approvals in this setting. A head-to-head Phase 3 trial versus pertabrutinib is enrolling well, and a combination Phase 3 trial with venetoclax is planned for early 2027. Management is confident Tachbrutideg will become a foundational new asset for B1's CLL franchise.

• Q: What changed materially to drive the upward guidance revision, and what is the development plan for the CEA ADC?

  A: The upward guidance revision was driven by stronger-than-expected Brukinza performance: higher new patient starts, broad strength across all indications, and new data confirming longer treatment duration than previously planned, all of which exceeded the company's beginning-of-year expectations. For the CEA ADC, initial first-in-class proof-of-concept data in non-small cell lung cancer will be disclosed at the upcoming ESMO meeting, and the data compares favorably to other investigational ADCs in the space. The initial registration pathway will focus on later-line non-small cell lung cancer to leverage first-mover advantage, with development also planned for earlier-line settings based on emerging data.